By Evan Falchuk

I wondered yesterday what coverages a government plan would offer.  Today I read that Congress is wrestling with that question, too, and is getting stuck on a familiar problem:

Abortion.

According to NPR:

Already in the House, 19 Democrats have written Speaker Nancy Pelosi vowing not to vote for any health bill that includes abortion funding.

“We cannot support any health care reform proposal unless it explicitly excludes abortion from the scope of any government-defined or subsidized health insurance plan,” said the letter…

Whether you think abortions should be covered or not, the fact that this is a political issue reveals what happens when politicians get involved in questions of health care coverage.

We can see this in more detail at the state level, where most insurance plans are regulated.  There, we see nearly 2,000 individual mandates for coverage, reflecting the ability of particular groups to convince politicians to cover (or exclude from coverage) particular conditions or procedures.  For example, some states mandate coverage for vitro fertilization, hospice care, HPV vaccine, acupuncture, while others do not.  As you might expect, the combinations vary from state to state and there is no uniform model.  Still, this is the reality of the market that small employers and individuals face when trying to buy health insurance.

What does it mean for a federally-supported public plan?

First, it begs the question of whether the federal plan will be subject to state insurance mandates.  From the discussion in Congress, it seems as if it will not be.  This could provide the federal plan with an important advantage over competitors, whether because it covers more than a local plan or because it covers less and can therefore be cheaper.

Second, it raises the question of how much we really want these kinds of coverage questions decided at the federal level versus the state level, or in the open market.  With a federal plan, an increasingly important share of the health insurance regulatory system will be focused on Washington instead of state capitals.

From the standpoint of how we regulate insurance today, a public plan is a change that is much bigger than it may seem.