Against Giving Up on the Public Option
My colleague Steve Pearlstein has a column today counseling Democrats to "give up on the public option." I wouldn't go nearly that far. The public option should be kept in perspective. As Steve says, "it is not the be-all and end-all of health-care reform." But it's not time to give up on it. Not nearly.
First, Steve undersells its advantages. "If, as many liberals hope, it turns out to be nothing more than Medicare for All, it won't do anything to hold down long-term growth in health spending," he writes. The problem is the opposite: if it doesn't turn out to be Medicare for All, as many liberals hope, it won't do much to curb spending. But if it does turn into a behemoth of a program, it can use monopsonistic bargaining power -- as Medicare does now, and as other countries do -- to hold down costs. Many people don't like idea of the government using its weight to pay providers less money and impose reforms on the system. But there's little doubt that it could save money doing so.
That said, the public plans under consideration now don't have the features necessary for that transformation. They're limited to the small slice of Americans able to use the health insurance exchanges and can't partner with Medicare to secure better prices or broader networks. Maybe expansion will come with time. But maybe it won't. And it's entirely possible that the public plan will become a dumping ground for sicker and older patients, thus discrediting the idea that the government can run a superior insurance option.
Steve's other point is that "the public option is a political non-starter that threatens the entire reform effort." Letting it go will smooth the path to victory. But will it? The co-op plans, which were supposed to be the compromise to the public option, endured a blistering attack from the GOP yesterday. When Republicans are attacking the compromise of a compromise, it's worth wondering whether their opposition is based on a dislike of particular provisions or a desire to doom the whole bill. I'd say the evidence increasingly favors the latter.
Loudly letting go of the public option wouldn't necessarily secure additional votes so much as it would increase the confidence of opponents and depress supporters. If the forces arrayed against health-care reform could spend two weeks assailing end-of-life counseling, they can find another provision in the bill, too. Maybe the exchanges, Or the subsidies. Or MedPAC. They're committed to defeating Barack Obama and the Democrats, not erasing a particular section of the bill. Reform's advocates, however, are substantially -- maybe overly -- committed to the public option. Dropping it from the effort is likely to wound them while emboldening the opposition.
For all that, it's one thing to fight for an uncertain, but promising, policy experiment. It's another thing to sacrifice health-care reform on its altar. In July, Families USA released a paper explaining "10 Reasons to Support Heath-Care Reform." The public plan is one of the reasons. But only one of them. And it's not even the most convincing.
If the public option needs to be dropped to secure passage of the final bill, then that may be the unfortunate reality of the situation. But that's the context in which you drop something like the public option: A context in which you get something significant for the concession, like passage of everything else, or much more money in subsidies and much stronger exchanges. You don't drop it in the hopes that the compromise will be seen by opponents as reasonableness rather than weakness. The public option is good policy and, if it comes down to it, the largest bargaining chip. You don't give it away lightly. But you do have to keep it in perspective.
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