AMA Adopts Standards for “Public Option”
By Amy Lynn Sorrel


Addressing what is expected to be a top agenda item for incoming President Joe Biden and his administration, delegates at the virtual Special Meeting of the American Medical Association passed new policy allowing AMA to advocate that any so-called “public option” proposal to expand health insurance coverage to the nation’s uninsured and underinsured must adhere to a set of standards that include protections for patients and physicians. 

But the final decision did not come easily. And for physicians who participated in the fiery Affordable Care Act debates on the floor of the AMA House of Delegates meeting a decade ago, the 2020 interim meeting may have felt like déjà vu. 

Testimony reflected strong feelings from many delegates, including the Texas Delegation to the AMA, that the complicated issue required more deliberation than a virtual meeting could provide and should have been referred for more study until the AMA’s next annual meeting in June 2021. Seeing that the house had no plans to postpone the vote, Texas physicians got to work and were instrumental in securing at least some, if not all, of the changes they asked for to ensure comprehensive guardrails. 

TMA policy supports the expansion of affordable health insurance coverage for those with little to no access, and the Texas delegation expressed its support for establishing standards for future health reform discussions. 

However, in anticipation of what is expected once again to be a flashpoint in the debate – and  to give states like Texas more flexibility in such negotiations – Texas delegates, in collaboration with other state delegations, argued against use of the term “public option.” 

Austin ophthalmologist Michelle Berger, MD, proffered an amendment favoring instead use of more general terminology that would allow for various “expanded” health insurance options. 

“We in Texas want every American patient and physician to have minimal worries about coverage of their health care,” she testified before the House. But “good sound policy,” she said, should incorporate “expanded and broadened terminology to include any changes in coverage and different points of view so we do not have to keep returning to the House amending our policy for the politically popular program-du-jour.” 

Delegates in the end voted to retain the term “public option” by a vote of 308 to 134. 

The AMA policy “has some very good guidelines, and we’re not opposed to using those standards," San Antonio pathologist David Henkes, MD, chair of the Texas Delegation to the AMA, told Texas Medicine Today

But the policy still leaves Texas physicians with some concerns, he said. “We felt ‘public option’ was too politically charged to use and best removed,” Dr. Henkes said. “And it’s a term without a definition. It’s a non-specific entity that could be anything from ‘Medicare-for-all’ to all different types of subsidized health care plans.” 

However, after five days of meetings that involved hours of passionate debate, deliberation, politicking, and fine-tuning, supporters of the public option concept won their bid for AMA to take a more definitive stand on the issue sooner rather than later. 

In addition to political momentum for the concept, delegates expressed concerns that the COVID-19 pandemic continues to expose the shortcomings of the private health insurance market, pointing to the spread of high-deductible plans providing limited coverage, and losses in employer-sponsored coverage. 

“The AMA believes that now is the time to build upon the ACA to cover more of the uninsured,” AMA President Susan R. Bailey, MD – an allergist from Fort Worth – said in a statement. “We look forward to being at the table to represent physicians and our patients to ensure that our patients are able to secure affordable and meaningful coverage and access the care that they need. A public option should not be seen as a panacea to cover the uninsured. It should not be used to replace private insurance; rather it can be used to maximize competition. With appropriate guardrails, the AMA will examine proposals that would provide additional coverage options to our patients.” 

The new AMA policy states, “the primary goals of establishing a public option are to maximize patient choice of health plan and maximize health plan marketplace competition.” Among the other standards a public option must follow: 

  • Eligibility for financial assistance is restricted to “individuals without access to affordable employer-sponsored coverage that meets standards for minimum value of benefits.”
  • Physician payments are established “through meaningful negotiations and contracts” and “must be higher than prevailing Medicare rates and at rates sufficient to sustain the costs of medical practice.”
  • Physicians can choose whether to participate in the public option, and their participation should not be tied to Medicare or Medicaid participation.
  • The public option should be “financially self-sustaining” and “not receive advantageous government subsidies” compared to other health plans.
  • In states that don’t expand Medicaid, the public option must be available to uninsured individuals who fall into the “coverage gap,” meaning those individuals make too much money to qualify for Medicaid but not enough to qualify for subsidies in the ACA exchanges. 

The AMA policy also lays out standards for auto-enrolling uninsured individuals who have other coverage options available to them – such as Medicaid or the ACA exchanges – but do not take advantage of them Those standards include allowing patients to opt out; not penalizing them for auto-enrollment in plans they are not eligible for; notifying patients of any cost-sharing; and incentivizing health plans to offer pre-deductible coverage, including for physician services. 

Despite efforts to the contrary, supporters of the public option concept also won their bid to keep the option open to people who already have access to employer-sponsored insurance, but find it unaffordable, rather than restricting the public option to those without access to any kind of health coverage. 

As in past reform debates, testimony was split over whether a public option that was too broad would crowd out employer-sponsored insurance alternatives from the private market. There was significant concern from the Texas Delegation and others that the move could discourage employer coverage altogether and, in turn, reduce physician payments because employer plans tend to pay higher rates. 

The House did, however, ultimately incorporate changes that Dr. Henkes said will “give AMA flexibility and discretion [in negotiations] if elements other than standards listed turn out to be not so good for patients and doctors.” 

Delegates also approved the stronger language that Texas physicians helped craft to ensure adequate physician payments. 

When all was said and done, AMA Speaker of the House Bruce Scott, MD, recognized the “strong emotions on both sides” of the public option issue but praised the house for “the collegial nature of that debate.” 

Other socioeconomic policies adopted

The Texas delegation also was vocal in the development of new AMA policy advocating that pharmacy benefit managers and health plans use a transparent process in formulary development and administration, include practicing physicians in such determinations, and share pharmaceutical company rebates with patients. 

Texas physicians also joined delegates in their broad support for adoption of a multi-pronged approach to addressing the role non-medical social factors that play in patients’ health. A series of new policies aim to tackle social determinants of health through multi-stakeholder partnerships that go beyond the health care arena, through health insurance benefit design, and through improved data collection. 

“I am lucky to be [completing] my clinicals in a safety net hospital that can often provide what our patients need,”Rajadhar Reddy, a third-year student at Baylor College of Medicine in Houston, testified on behalf of the AMA’s Medical Student Section “However, I also know too well from growing up in the Rio Grande Valley that well-funded safety net systems are few and far between, and private hospitals and practices generously pick up the slack at financial risk to themselves.” 

Other new socioeconomic policies adopted direct AMA to: 

  • Establish a Private Practice Physicians Section;
  • Continue to advocate for reimbursement to physicians for extra expenses incurred during the COVID-19 public emergency;
  • Work on alternative methods to reimburse physicians and hospitals for the cost of Medicare Part B drugs, including vaccines; and
  • Support increases in states’ Federal Medical Assistance Percentages or other funding during significant economic downturns to allow state Medicaid programs to continue serving Medicaid patients and cover rising enrollment.

Last Updated On

November 18, 2020

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