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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.

By Ezra Klein  |  August 19, 2009; 9:53 AM ET
Categories:  Health Reform  
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Comments

Congratulations, Ezra! Yesterday, you adopted the Beltway style of reporting when you said that Howard Dean was wrong about something just because he wasn't a public option proponent in 2004. I remember Dean's promises. He promised quality coverage to everyone.

Attacking someone for not being in favor of something in years past as your sole argument against an idea is pathetic and if I were you, I'd be embarrassed to be the author of such a woefully inadequate debate tactic.

Perhaps you should abandon blogging about health care reform and stick to writing about food.

Posted by: cab91 | August 19, 2009 10:20 AM | Report abuse

Ezra, You write: "the largest bargaining chip. You don't give it away lightly. But you do have to keep it in perspective."
It is not a "bargaining chip" it's a mandatory component to true reform. You don't give it away at all! The only person having trouble with "perspective" is you. Watching and reading what you say lately I can't help but think of the old tale of the oblivious frog sitting in a pot of soon to be boiling water...you seem to already be succumbing to the conventional Washington beltway idiocy. Broder will be proud. Even if you're right and the public option is only 1 of 10 reasons that health care reform is needed it still is in the top 10 and considering what the Republicans rammed down the country's throat over the previous administration it's time we flexed some muscle and showed some backbone. We have the power, we won the election, the Repub's have no credibility when it comes to actual bipartisanship and good faith negotiation so to advocate giving an inch on one of the most important aspects of the healthcare bill is contemptible.

Posted by: patrickinIL | August 19, 2009 10:25 AM | Report abuse

Cook or get cooked. We don't care care. Profit is life gained and loss is a real undertaker. The Obama Cash for Cancer plan should get more play because he's a playa. We lost $40 billion today. No trouble, just dial 666 and ask for an armored truck from Timmy.

Posted by: Dermitt | August 19, 2009 10:30 AM | Report abuse

cab91:

I don't agree with that. Ezra's point, as I saw it, wasn't a gotcha--even though on cable it could have looked that way--but instead was a shorthand way of saying, "Healthcare reform is important, you had a good plan in 2004 that made major improvements but it didn't have a public option, wouldn't it be better to get some of what you wanted then rather than nothing at all?"

Posted by: Castorp1 | August 19, 2009 10:30 AM | Report abuse

"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."

I think this is exactly right. We need to be hard and shrewd bargainers for the best bill we can get, which means not giving any ground just due to noise from the other side (including the Business Dog Dems).

If the ultimate price of passage is giving up the bargaining chip of the public plan, then I'm good with that. The reforms don't even start taking effect for a few years; we've got multiple shots at getting the public plan back in there via budget reconciliation (only 50 votes needed) before then.

Posted by: rt42 | August 19, 2009 10:39 AM | Report abuse

I'm at the place where I feel certain that any currently proposed public option, if enacted, would fail and such failure would have severely negative ramifications. But I'm also at the place where I feel like some other alternative might be practical and prudent.

If legislators can break the present 'mutually assured destruction' strategy cycle (which I find 'weird'), some good might come out of the whole thing. I'm delighted to see the truly brilliant people among us (and I can think of few examples, but won't inflate their egos by citing them) seeming to be more willing to come to the table with minds ready to at least consider multiple alternatives -- to actually //think// about plans and ramifications, rather than making silly posters and speeches about them.

I'll readily admit that I'm not wise enough to wrap my mind around all of the complexities of health insurance reform; however, the guidance (albeit screetchy, at times) of a reasonable-but-liberal friend has led me to put five points at the top of my own personal 'think about' list:

1. Heath care decisions are, in the largest part, private, personal matters in which Government should not interfere.

2. Our system of governance does not provide for irrevocability; therefore, no proposal can claim to absolutely "guarantee" future benefit and, equally important, no proposal should enable even the slightest potential abuse by Government.

3. To participate in heath care as an insurer or as a provider is to participate in a public calling subject to non-negotiable regulation.

4. Personal freedom includes the freedom to fail and implies personal responsibility. Sons should not be required to bear the financial burdens of their fathers: payers should not be made to wait in line behind those for whom they pay.

5. No citizen should be denied life-saving medical treatment due to an inability to pay.

I'm surprised at what does and doesn't make my own personal top five.

While I can't come to the conclusion that "The public option is good policy", I do agree that perspective -- and recognition of the perspectives of others -- is necessary.

Posted by: rmgregory | August 19, 2009 10:54 AM | Report abuse

All of this gibberish means nothing, healthcare reform is dead in the water. The insurance companies, big pharma, the useless republicans and the blue dog so-called democrats have seen to that.

Posted by: mtravali | August 19, 2009 11:05 AM | Report abuse

Ezra

The problem with no public option is that the principles the President holds so dear will do pretty much nothing to help the majority of Americans. The principles don't appear to contain any limits on premium costs, on the rates of premium change or provide a minimum acceptable level of coverage that an insurance plan most provide. So most people's insurance premiums will be allowed to continue to rise at rates much faster than wages are rising and insurance companies will be continued to allow to slash the benefits those plans provide. Combine that with a mandate, and you have a recipe for disaster, both politically and from a policy standpoint.

A public plan will not change this overnight, but the "good example" of a public plan coupled with the threat of and expanded public plan are, absent the kinds of regulations that do not appear to be contemplated in these bills, is the only way I see to prevent that scenario form coming true. How can that not be considered essential?

Posted by: kcraybould | August 19, 2009 11:07 AM | Report abuse

ezra:
Apparantly Obama is having trouble with woman voters related to healthcare. As a 58 year-old old broad who took care of my mother for 5 years, the answer is simple. The message must change to insurance reform for those who have insurance from their employers, and the rest get a real security blanket---medicare for all. Simple, understandable, affordable and with the benefit of adding some needed healthier people to the rolls. I am talking about the self insured, small business owners etc. Frankly, as I have been self-insured for years, medicare is the only trustworthy option. I am paying 600 a month with huge caps etc. I would jump at a chance to buy into medicare. It was in baucus's white paper. Let's get it done. Debra

Posted by: altmangrp | August 19, 2009 11:50 AM | Report abuse

So the public option won't work unless it leads to a single payer system? I don't care whether you take 8 steps or 10 steps to get to a single payer system. It's still the wrong way to go.

I think the new strategy will be to regulate private insurers to the point that they become identical behemoths like Fannie and Freddie. The problem is that doing that won't create more choices for consumers and it won't improve the quality or efficiency of health insurance delivery systems.

Aren't reform efforts supposed to improve things?

Posted by: fallsmeadjc | August 19, 2009 11:57 AM | Report abuse

The problem with saying no to any bill unless it includes a public option is that you prevent passage of other needed reforms that require 60 votes to get through this or any later Senate for something that only requires 50 votes to get through a later Senate, and which wouldnt take effect until a later year anyway. That makes no sense. A public plan is a budget matter and can always be passed in the future, as, say, Medicare Part E. Lets get the rest of it done while we have the 60 votes to do it. In saying that, I am assuming that whether or not Sen Kennedy is able to vote, Sens Collins and Snowe are agreeable to the other reforms, as I think they are, although they have indicated opposition to the public option, although I think Sen Snowe has said she would go along with a triggered public option so maybe we should go with that. I suspect that some of the continued effort to reach out to other GOP senators as if they would actually be helpful is to give Sens Collins and Snowe some cover for when they support the conference bill. What we really have in the Senate now is a governing coalition of 57 Dems(w/o Sen Kennedy), the Lieberman, an Independent(Bernie Sanders) and the Maine Republican Party. I think what may happen here is that the House passes a bill with a public option while the Senate passes a bill that doesnt have a public option and a weak employer mandate, and too little subsidy, but maybe gets more GOP votes than just Collins and Snowe, then at conference the subsidies are increased to where they really need to be and the employer mandate is strengthened, which I believe Collins and Snowe are ok with. The public option is dropped or maybe included as Sen Snowe's trigger option, which the Mainers can then trumpet as their accomplishment of old line Yankee republicanism.

Posted by: gregspolitics | August 19, 2009 12:05 PM | Report abuse

Use the so-called public option as a bargaining chip to get "the rest"? That's like using your car's engine as a bargaining chip to get the rest of the car. Republicans and blue-dog dems seem to believe there is a God-given right for owners of insurance companies to profit from everyone's illness. The debate should be about health care for all (for which insurance is not necessary) rather than health insurance for all (which does not ensure health care will be provided). There is no reason we cannot, as a nation, provide collective "self-insurance" in the sense that we all chip in a little to make sure everyone gets the health care they need without carving out a huge chunk of health care dollars to feather the nests of owners of stock in health insurance companies (who in turn feather the nests of the members of Congress that assist them in obtainig this corporate welfare).

Posted by: lautaro | August 19, 2009 12:17 PM | Report abuse

It pains me to say it but I have slowly come around to Pearlstein's position. Holding on to the public option could well derail the entire effort, including all the other very positive aspects of reform.

It is time for Obama to say we heard you, and although we think you have been mislead and no public option will not bend the curve, we will play it this way.

What is left are all the aspects of the bill that Repubs (and industry) have agreed to already. This puts the Repubs in the position of having to back reform, or truly being exposed as the party of no.

Posted by: scott1959 | August 19, 2009 12:41 PM | Report abuse

The arrogance with which this administration approached the most intimate and important issue that is central to every American--healthcare--should be a lesson for future. The political opposition aside, it was amateurish to assume that Americans would latch unquestioningly on to a "public option" that was clearly being rammed down our throats.

Obama should have said at the outset, "While fixing our healthcare system is an extremely urgent situation, we are not going to rush into a fix without first hearing from you all. I want to listen to you all at length about what you like about the current healthcare system, what you would like changed, and what you would absolutely not tolerate. If this process takes a year, so be it. But I understand how important this matter is to you, and I will do everything I can to make sure you are heard before we present a solution. The solution itself might be phased in over time, so we can make corrections as needed."

This could have led to a series of Townhalls, which, even if they did not meet with bipartisan support, would have signaled the administration's willingness to listen and learn.

Instead, the muddling of artificial deadlines with confused messaging ensured that universal healthcare did not meet universal approval.

Posted by: georgetown_dc | August 19, 2009 1:31 PM | Report abuse

"This could have led to a series of Townhalls, which, even if they did not meet with bipartisan support, would have signaled the administration's willingness to listen and learn."

And a pony.

Really, you're presuming a political environment in which Bill Kristol, Dick Armey and others don't consider humiliating the White House over healthcare -- any reform -- the key to restoring the GOP's electoral fortunes. That's either naive or disingenuous

Posted by: pseudonymousinnc | August 19, 2009 4:21 PM | Report abuse

If anyone can tell me how we're going to control costs, absent a public option, I might agree that it's not an absolutely necessary part of reform.

The problem is, no one can explain how costs are going to be controlled without it. I've not seen a politician or a pundit explain any alternative cost control mechanism while breezily proclaiming that the public option just really isn't all that important.

But it IS important; it's one of the most important issues we have to address. A reform that mandates coverage but offers no cost-controlled public option equals a huge wet kiss to the private insurance industry. We - and the government, via those subsidies for low-income people - will be paying 30% more for care than we would in a single payer system. And even as we're paying a premium to ensure that shareholders have a way to rake money off the top, the private insurers will have their lobbyists at work day after day, chipping away at any provision of reform that in any way reins in their profits or power.

That's why the public option is necessary - because the private insurers can't lobby their way around it. They'll have to compete on some level, and that will require them to be, well, competitive.

The only other way to control costs would be to impose caps, or like in the Swiss system, prohibit private insurers from profiting on basic care plans. How likely is it that either of those provisions will make it past the phalanx of insurance industry lobbyists, Ezra?

Keeping it in perspective, it appears to me that we will either get a public option or we'll have another Medicare prescription benefit plan on our hands - a program that makes things worse by costing more than it would if the goal was to craft the plan that works the best and costs the least while serving everyone, instead of seeking to placate private business interests, which will inevitably lead to higher costs without improving the system in any measurable way.

Posted by: JennOfArk | August 19, 2009 6:09 PM | Report abuse

I agree with patrickinIL -- the public option is not a bargaining chip. It's the compromise already made from single-payer, and it should not be given up, lightly or otherwise.

Posted by: member8 | August 19, 2009 11:41 PM | Report abuse

BRAVO to Ezra Klein. I don't know what Steve Pearlstein was thinking when he wrote that. There is no amount of compromise that will bring Republicans on board. If Obama still does not realize that then I don't know where his head is.

FDR brought us Social security. LBJ brought us Medicare. Obama is complaining to religious leaders that the public option is bigger than his presidency.

It is true when people say "They don't make 'em like that anymore."

Posted by: Single_Payer | August 20, 2009 1:28 AM | Report abuse

"Slow down, Mr. President: We can't afford to get health care wrong," said the memo.

"Slow down, Mr. President: We can't afford to get health care wrong," said the RNC chairman.

Gotta love all you country first folks!

What does 4 hours on the house floor ranting about Criminal Acorn have to do w/healthcare?

That is what R-IA King did the night of 7-27-09! 2 hrs

That is what R-IA King did the night of 7-29-09! 2 hrs

Bash Unions and Union workers

Push the likes of Rick Scott-

This is what GOP support-
THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY

Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994.

Richard Scott, "the former CEO of HCA Inc," had formed the non-profit organization Conservatives for Patients' Rights

THEY WANT THEIR COUNTRY BACK!!!

Conservatives for Patients' Rights - Rick Scott and his WALMART CLINICS is what you want?

WOW! Ram this down our throats?

We think not - keep it stupid is done!

Do I have this correct?

BASH UNIONS!

PROMOTE RICK SCOTT AND HIS FRAUD!!!

Go find another country to destroy- and take Rick Scott with you !

Ben Nelson (D-Neb)- Blue Dawg!
BENDING THE COST CURVE? (I wonder how many Americans truly understand what this means-unfortunately not enough)

According to Nelson- Public Option ' would drive the price down '

Exactly Nelson- Thanks!

Now we can move forward with ‘your’ intentions and un truths- and find solutions!

This is the moronic mentality of too many policy makers on the take!

We all know a public option is to bring health costs down-

That is what the Public Option is for- to bring costs down

Now Nelson states-
“…if we went with a full public option -- which he called a government plan -- it would drive the price down and hurt private companies.”

Yes Senator- DRIVE THE PRICE DOWN!

THAT IS IT SENATOR- THAT IS WHAT we call BENDING THE COST CURVE

A term that those on the take do not want to educate the American people on-
Bending the Cost Curve?

Posted by: sasha2008 | August 20, 2009 9:33 AM | Report abuse

THE HYPOCRICY is astounding!

Or is it just plain old ignorance?

Monday Gene Taylor D-MS at TOWN HALL- on C Span

A Blue Dog- states the ONLY WIND INSURANCE in the state of MS is GOVERNEMNT RUN INSURANCE!

All other insurance companies left state. (So much for Public Option KILLING the INDUSTRY)

If another catastrophe with wind damage occurs in their state without insurance - the Federal Government their state would be bankrupted immediately.

This is unbelievable! I guess that government takeover is ok!

All anti-HC Reform- many seniors complain about all the fraud reported and nothing done- But- they are all ANTI HC REFORM!

8 yrs of Bush- DOJ IGNORED! 8 yrs!

One person brought it up and stated the last 6 months...

Please!! Yes I am sure TRILLIONS of DOLALRS of FRAUD all happened under Obama-
Rick Scott ripped a lot of Mississippians back in the 90's!

THURSDAY, JUNE 26, 2003; WWW.USDOJ.GOV;
HCA Inc. (formerly known as Columbia/HCA and HCA - The Healthcare Company)
LARGEST HEALTH CARE FRAUD CASE IN U.S. HISTORY
Note: Hospital Corporation of America (HCA) was acquired by Columbia in 1994.

Richard Scott, "the former chief executive of HCA Inc," had formed the non-profit organization Conservatives for Patients' Rights

I guess their home insurance is ok with the only option- A PUBLIC OTION- but not HEALTHCARE!

"The ONLY WIND INSURANCE in the state of MS is GOVERNEMNT RUN INSURANCE!"

Posted by: sasha2008 | August 20, 2009 11:53 AM | Report abuse

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