Government-Run ‘Public Option’ in Pelosi Health Bill Threatens to Kill Hospitals, Says Democrat Who Voted Against the Bill

By Terence P. Jeffrey | November 8, 2009 | 12:18 PM EST

Rep. Rick Boucher (D.-Va.) (Congressional photo)

( - Rep. Rick Boucher (D-Va.), who voted against the Pelosi health care bill that was approved by the House of Representatives Saturday night, said he fears that the government-run “public option” health insurance plan the bill would create could kill the hospitals in his congressional district.

Boucher announced in a statement released before the vote the he intended “to oppose the bill because of my concern that a government operated health insurance plan could place at risk the survival of our region's hospitals.”

The bill—the “Affordable Health Care for America Act”—passed the House late on Saturday evening.  The final vote was 220 to 215. Thirty-nine Democrats voted against the proposal and only one Republican, freshman Rep. Cao of Louisiana, voted for it.

Boucher said he another reason he opposed the bill was because he believes it perpetuates a system for Medicare reimbursements that treats rural areas unfairly.

“I intend to oppose the health care reform legislation recently debated by the U.S. House of Representatives for several reasons including the continued existence of disparities in Medicare reimbursements between urban and rural areas under the House bill,” said Boucher.

Boucher noted that non-profit hospitals receive payments from Medicare and Medicaid that do not cover the costs of treating the Medicare and Medicaid patients they take in. Thus, the losses incurred in treating these patients must be made up in the payments the hospitals receive from patients paying their bills with private insurance. Because the House health care bill would drive many patients out of private insurance and into government insurance that will pay rates that approximate Medicare, he argued, this will threaten the survival of the hospitals in his district.

“I also intend to oppose the bill because of my concern that a government operated health insurance plan could place at risk the survival of our region's hospitals,” said Boucher. “Most of our hospitals are operated on a non-profit basis for the benefit of the community. While most of their receipts are from Medicare and Medicaid payments, they lose money on each Medicare or Medicaid patient they treat. These programs reimburse hospitals at rates below the actual cost of providing patient care.

“The financial viability of our hospitals comes from the payments they receive from privately insured patients,” Boucher explained. “A government operated health insurance plan competing with private insurance will attract patients who are privately insured today, with the result that the hospitals would treat less privately insured patients and lose the critical revenues that are essential to their survival.

“A government operated plan would reimburse health care providers at rates approximating Medicare rates, and hospitals would lose money on each of their patients insured under the government plan,” said Boucher.  

“I am concerned that for these reasons the creation of a government operated insurance plan as envisioned in the House bill could result in the closure of hospitals in our region,” said Boucher. “Families depend on our community hospitals for health care services, and financially healthy hospitals are essential to the health of Southwest Virginians.

“Many of our hospitals are financially stressed in normal times, and two hospitals in the district I represent closed for periods of time in recent years for financial reasons,” said Boucher. “The government owned insurance plan as outlined in the House bill could push many more over the edge. I cannot support legislation that could lead to that result.”

Boucher said he believes health care reform is needed and would like to see the bill changed as it moves forward in the legislative process so that it does not threaten the survival of hospitals. “I look forward to future steps in that process offering an opportunity for my concerns to be resolved,” said Boucher.