The OPM plan

THE OPM PLAN…. As part of the drive to overcome the hurdle posed by intra-party division over the public option, Senate Majority Leader Harry Reid (D-Nev.) tasked 10 senators — five from the left, five from the center-right — with working out some kind of arrangement. One of the most talked about ideas is being referred to as the “OPM Plan,” which is an odd sort of compromise on the public option, since it’s not actually a public option.

We talked a bit about this yesterday, but to summarize, the idea is to have a national, non-profit health plan along the lines of the Federal Employee Health Benefits Plan, which offers coverage to members of Congress. It would be administered, not by Health and Human Services, which regulates insurers, but by the Office of Personnel Management, which oversees the plan for federal employees and has experience negotiating with private plans.

The details are sketchy, but Ezra Klein reports on what the plan would likely look like.

Currently, insurance plans are regulated by the states, which means they’re different in every state. That makes it hard for them to achieve certain efficiencies of scale or maximize their leverage against providers. But back in September, I noticed a promising provision in Max Baucus’s draft that would allow for national insurance plans, so long as they met a minimum level of federal regulation. That seemed like a potentially huge change, but I never heard another word about it, so I let it go.

The compromise being discussed is built atop that provision. The idea is that the Office of Personnel Management would choose non-profit plans that met national standards and offer them on every state exchange (unless states opted out). These plans would be private, but the OPM would act as an aggressive purchaser, ensuring that they met high standards and conducted themselves properly. It’s a private option with a public filter, essentially. But more importantly, it’s a menu of national, non-profit plans, which would be much more interesting from a competitive standpoint than state-based, pubic plans.

Whether this approach can or would generate widespread support remains to be seen. Nancy-Ann DeParle, Obama’s top health aide, said, “I think it has potential,” which is a positive-but-noncommittal remark. Two of the strongest opponents from the Democratic caucus of a public option — Blanche Lincoln and Joe Lieberman — have expressed support for the idea, while Olympia Snowe called the approach “a very novel and innovative idea,” without committing either way.

Something to keep an eye on.

Post Script: Also keep in mind, way back in 1998, the Washington Monthly published a piece, making the case for building universal health care around the federal plan , which is pretty similar to the OPM plan that’s generating so much attention right now. The piece is worth reviewing for a look at how this might work.