Sens. Tim Kaine, Micheal Bennet propose new type of Medicare to compete with private insurers

Oct. 18--Sen. Tim Kaine is proposing to fix a problem with high-priced health insurance at marketplace exchanges by offering a lower-priced public option to compete against private companies.

Legislation introduced Tuesday by the Virginia Democrat and Sen. Michael Bennet, a Colorado Democrat, would create "Medicare X." It would be an insurance option for individuals, families and eventually small businesses who in most parts of Virginia can only buy health coverage on an Affordable Care Act exchange from one company.

If approved, the bill would establish an insurance plan using the Medicare infrastructure -- but not its trust fund -- to set up a health care plan that can be offered to the millions of Americans, including hundreds of thousands of Virginians, who buy their insurance on marketplace exchanges because they don't have coverage through their employer or by other means. Almost all Americans are required to have health insurance under the law, popularly known as Obamacare.

The senators' bill initially would offer the public option to those who live in counties or cities that have only one or no private company offering plans at the local exchange. All of Hampton Roads and most other localities in Virginia only have one insurer in their local exchanges.

While most Virginians used employer-based insurance, where the average worker's premiums have risen gradually over the years, the cost of marketplace coverage has skyrocketed. In Hampton Roads, for example, the company participating in the local exchange, Optima Health, raised its average monthly premium 91 percent this year and is raising it 83 percent next year, according to the state Bureau of Insurance.

"We have a crisis and we're trying to solve it," Kaine said in a phone call with reporters. "We're interested in bringing down the cost of health care."

Kaine and Bennet argued that Medicare X can offer more-competitive rates because the federal provider has substantially lower administrative costs since it doesn't pay state and local taxes or large executive salaries and would be able to negotiate price agreements with prescription drug manufacturers.

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