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A Tale of Two Public Options

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The Senate Finance Committee is fighting the public option wars today. Senator Jay Rockefeller's public option was voted down, 8 to 15. Max Baucus, Blanche Lincoln, Kent Conrad, Tom Carper and Bill Nelson all voted with the Republicans. But some of them could flip sides to vote for Chuck Schumer's coming public option.

Weird, right?

Rockefeller's public option is the "strong" public option. It attaches itself to Medicare's payment rates and provider network. The CBO estimates that it would save the government $110 billion over 10 years, and it would save even more for consumers and businesses. But that money would come out of the health-care industry's pocket. The plan's superior pricing power would take customers from private insurance. Rural senators already feel that Medicare shortchanges their hospitals, and fear that this would only further depress reimbursements.

Schumer's public option is the "weak," or "level-playing field," incarnation. It can't attach itself to Medicare. It's not expected to produce much in the way of savings or attract much in the way of customers. It'll be a competitor to the private insurance industry, but not a particularly potent one. That means it's not much of a threat to the private industry, and it doesn't harm rural hospitals, or really anyone else. That makes it easier for some Democrats to support.

The end result of all this is that Rockefeller's amendment is the one with the best chance to work, but Schumer's is the amendment with the best chance to pass.

Update:: Schumer's amendment failed, 10-13. Nelson and Carper flipped to support it. Conrad, Baucus, and Lincoln voted against.

Photo credit: By Win McNamee – Getty Images


By Ezra Klein  |  September 29, 2009; 3:45 PM ET
Categories:  Health Reform  
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Next: Will Medicare -- And the Public Option -- Bankrupt Us?

Comments

Mary Landrieu is not on the committee. I think you mean Blanche Lincoln of Arkansas.

Posted by: hannah-pd | September 29, 2009 3:55 PM | Report abuse

Why should things like cost or effectiveness matter? What's important is that our senators' masters in the insurance industry are satisfied.

Posted by: RaccoonDog | September 29, 2009 3:56 PM | Report abuse

I suspect that the health care reform debate is going to persuade a lot of liberals to get behind public financing of campaigns.

Posted by: valeskoi | September 29, 2009 3:59 PM | Report abuse

CBO's estimate on Rockefeller's bill was $50 billion over ten years. It only attached itself to medicare rates for the first two years and then had to bid for rates just like the private insurance companies-hence the reduction in savings.

Posted by: hannah-pd | September 29, 2009 3:59 PM | Report abuse

On an interesting note, Schumer's failure was less spectacular than Rockefeller's loss (8 aye to 10 nay). As one Senator said, "The public option is on the march".

Posted by: rmgregory | September 29, 2009 4:06 PM | Report abuse

It's a good job you put the squeeze on K*nt Conrad by pointing out that his positions were facile, ignorant, disingenuous or a combination of all three.

Oh.

It's been fun. Ezra. Enjoy the Village.

Posted by: pseudonymousinnc | September 29, 2009 4:10 PM | Report abuse

I thought baccus supported the public option but thought it couldn't get through the Senate. Is that a justification to vote against it? Shouldn't he be voting for what he believes in? Oh yeah, he voted with his insurance buddies, who he REALLY believes in.

Posted by: srw3 | September 29, 2009 4:12 PM | Report abuse

Oh, we democrats are not going to forget who voted against the public option. We expected the republicans to vote no. But the democrats have just shot themselves in the foot. I am so done with them!

Posted by: sandnsmith | September 29, 2009 4:21 PM | Report abuse

Call insurance what it is. It is gambling, and gambling is tightly regulated by states, with the states and local communities exacting a share of the profits. Why should insurance be any different? States become involved in lottos all the time, and no one calls it "socialism". Why not run insurance like lotto, single payer with many private companies bidding for a share of the business.

Posted by: gss49 | September 29, 2009 4:26 PM | Report abuse

lincoln is not a democrat,she has never voted like a democrat.shes been a disappointment to her constituents .but not to the health industry.hope arkansas can find a liberal democrat to run against her

Posted by: donaldtucker | September 29, 2009 4:31 PM | Report abuse

I can't say I'm all that surprised that the votes went down the way they did, but I still don't understand Conrad or Baucus voting against Schumer's amendment. I don't think a yes would be a vote that their constituents would punish them for (I mean even liberal scourge Ben Nelson voted for it, come on), and both of them are experienced Senators who seem to have studied these issues to some extent. The Schumer amendment was so toothless that I can't imagine their corporate supporters would punish them for it either. So what's the deal here? Is it just straight up following the bidding of corporate interests? Or just a compulsion to always be seen as holding the moderate center of any debate, even when the so-called "liberal" proposal represents a significant compromise? I be interested in hearing any possible explanations.

Posted by: ricky_b | September 29, 2009 4:36 PM | Report abuse

It is not Ben Nelson. He is a loon and a problem to even vote for cloture but he is not on this committee. It is Bill Nelson from Florida who was an insurance commissioner at one time. Ben Nelson is from Nebraska and was the governor.

Posted by: hannah-pd | September 29, 2009 4:40 PM | Report abuse

A public option will not force private insurance companies out of business, we'll just subsidize them the same way we're subsiziding medicare advantage plans.

Posted by: scottilla | September 29, 2009 5:15 PM | Report abuse

I hate the gang of six.

Posted by: zosima | September 29, 2009 6:13 PM | Report abuse

Why is Blanche Lincoln of Arkansas hiding to vote? She had NO guts to casts her NO votes in front from the american people. Shame on her!

Posted by: healthinsuranceripoff | September 29, 2009 6:23 PM | Report abuse

If we do not have a public option, we can kiss our economic development in this country goodbye.
Without a public option, insurance companies will rake in all the dollars that we pay in taxes, as they see to it their rates skyrocket in the next decade by 500 percent, just as it did in the past decade, and everyone else in this country can and will suffer and continue to suffer.
Today I met some Republican small business owners.
They don't have insurance; they say they can't afford it.
They say their business is hanging on by the fingernails.
They oppose any change.
Their kids get Medicaid.
They think they should be eligible for food stamps.
But they oppose any change in the system as it exists today.
Does that make ANY sense whatsoever?
What they are saying (without saying so) is that they are informing me that us taxpayers will have to pay for any treatment they need.
And at the most expensive -- because they land up in ERs all the time.
And since they commute 50 miles per day and their business often stays open late at night, they are rolling accidents waiting to happen.
These are good "middle-class" Republicans, folks.
They sit there and smugly say, "I'm independent but I vote Republican."
The economic survival of this country depends on the Democrats passing this bill.
Without it, plus passing regulation on financial institutions, we will lose our country and our way of life and, I might add, our capitalistic business world.

Posted by: Judy-in-TX | September 29, 2009 6:50 PM | Report abuse

The fact that the weak Schumer amendment couldn't even get over the threshold is a statement unto itself. It is actually pretty amazing that it got the support it did given the level of financial clout that the Bigs exert in the upper chamber.

This recent series of events also helps to illustrate, once again, that the GOP's love of corporate welfare far exceeds any love that it has for the American citizenry, taxpayers, or consumers.

A handful of Dems are exhibiting their own Profile in Cowardice.

Well, well, well.

Posted by: JPRS | September 29, 2009 8:18 PM | Report abuse

As a side note, over 50 Americans died today, because the entire GOP and some Dems felt that protecting some Big industry players was more important than the lives of those Americans.

Some org should create a running national "death" clock to track the number of Americans who don't make it, because legislators dither over passing legislation that makes health care in this country timely, affordable, and available for every citizen -- just like every other developed, democracy.

Posted by: JPRS | September 29, 2009 8:43 PM | Report abuse

As a corollary to the "death clock" a public advocacy org could also tally up the number of families each day that are forced into bankruptcy because of our perverse health care system.

Posted by: JPRS | September 29, 2009 8:46 PM | Report abuse

EZRA'S A FUNNY KID

" .. But that money would come out of the health-care industry's pocket. The plan's superior pricing power would take customers from private insurance .."

Funny, kid. Reminds me of ol' Bwarney Fwrank, six weeks before the collapse of FANNIE/FREDDIE -- "They're OK. Quit picking on them."

"Superior pricing power?" Don't you mean COMMUNISM? And MEDIOCRE?

You funny, kid. Try comedy -- less stressful.

Posted by: russpoter | September 29, 2009 8:50 PM | Report abuse

I do not understand how these turncoat democrats get money that I donate to my party! they don't vote for what is best for us they are just in it for the MONEY. Shame on them! Get the hell out of our party! Lets all face it there are wolves in sheep's clothing in our party and they are planted there by the repudlicans and big business and the states they come out of are red states. How long do we have to put up with these plants sent to make sure the the middle class continues to be held hostage. Where is our Town meeting! I want a chance to scream down these A--H---s!

Posted by: dahlimama | September 29, 2009 8:52 PM | Report abuse

russpoter,

It's a good thing you haven't tried your hand at comedy -- the market forces would be pretty brutal.

As far as your health care, fiscal analysis goes, my sense is that this is probably a pretty good time for you to finish getting that GED first.

Posted by: JPRS | September 29, 2009 8:55 PM | Report abuse

YOUR BRAIN ON DRUGS

"As far as your health care, fiscal analysis goes, my sense is that this is probably a pretty good time for you to finish getting that GED first."

Congrats on your STUPIDITY with numbers. MESSIAH can now name you Treasury Secretary, you're so dumb.

Keep looking for that COMMIE bottomless pit of money, Chuckles. You're that dumb, to try it.

Posted by: russpoter | September 29, 2009 9:14 PM | Report abuse

Btw russpoter,

Here's some material for your "Night at the Improv!"

Russpoter: So this guy was saying to me the other day, "but the earth is shaped like a sphere -- almost egg-shaped" and I said: "that's the stupidest thing I've ever heard! If the earth was round, you'd fall off it!"

Let me tell you something about these people with their "education". They don't know anything.

"So this guy tells me: 'if you drop a feather and a hammer in a vacuum they'll fall at the same rate of speed.' Now this may be the stupidest thing I've ever heard! A feather and a hammer falling in a vacuum cleaner?!?!"

Listen folks, everything I know I get from the experts. People like Rush and Sean and Glenn. They are absolutely genius. And they make me laugh, because what they say is so true!

(heckler: "they're a bunch of college drop-outs who know as much about economics as I know about heart surgery")

Russpoter: Oh, that's just stupid. They know EVERYTHING, because that's what they tell me!

Posted by: JPRS | September 29, 2009 9:16 PM | Report abuse

FOOL

"As a corollary to the "death clock" a public advocacy org could also tally up the number of families each day that are forced into bankruptcy because of our perverse health care system."

What a moron. Citing a study written by a LAWYER and a SOCIALIST MD - both politicians. Not numbers-people.

You are a great moron. Congrats.

Posted by: russpoter | September 29, 2009 9:17 PM | Report abuse

PROOF OF LIB-STUPIDITY

(heckler: "they're a bunch of college drop-outs who know as much about economics as I know about heart surgery")

---

Hey, ninny --

More than 70% of medical costs are SELF-INFLICTED -- smoking, gorging, dope, booze and Bwarney Fwrank-inspired "extreme living."

You and the Kennedys can pay that bill -- you that dumb. Moron.

Posted by: russpoter | September 29, 2009 9:21 PM | Report abuse

There have actually been a couple studies done by universities and think tanks. (yeah, yeah, I know universities are "socialist institutions" and only the good Nazi's resist education by dropping out early).

I also have a family friend who was a casualty of our system dead at 54 before he was Medicare eligible; yet another friend's father had to deal with the same nightmare when he developed early onset Alzheimer's; my own Dad's experience with prostate cancer (Medicare gives him options, his private insurance gives him headaches); another friend works at a university hospital and tells me what he sees.

I'd be a moron if I thought a guy like russpoter, could distinguish his various orifices from one another. Let alone distinguish between capitalism, a hybrid capitalist system, a socialist system, and a communist system.

Posted by: JPRS | September 29, 2009 9:25 PM | Report abuse

You and the Kennedys can pay that bill -- you that dumb. Moron.

Posted by: russpoter

/////////////////////////////

Btw, yeah, I have no problem paying the bill.

I just don't know why I need to pay for some useless CEO's 9 figure salary, for billions in marketing costs, for hundreds of millions in political lobbying, for unnecessary procedures for doctors -- i.e. stuff that has absolutely nothing to do with health care.

I don't know why I'm paying to preserve largely unregulated private monopolies.

I don't know why I'm paying for corporate subsidies for care that is demonstrably more expensive than Medicare's standard coverage plan.

I don't know why there isn't portability to coverage.

I do know that there are people like russpoter who let industry players bleed good middle class and working class families dry, because his love of wingnut doctrine exceeds his pretty Spartan level of intelligence.

Posted by: JPRS | September 29, 2009 9:36 PM | Report abuse

Oops, thanks hannah-pd for clearing up my confusion of Bill and Ben Nelson; certainly not the first time I've made the mistake, and probably not the last time either. Makes more sense now.

Posted by: ricky_b | September 29, 2009 9:57 PM | Report abuse

its amazing to me that those on the left on here (which represents almost everyone) don't pay attention. Liberals are not the center of the universe even though they are in your universe. Do they really think a state like Arkansas would elect a liberal democrat? The best they could hope for in the current times is what they have, a republican masquerading as a democrat. Check those who voted against the Rockefeller ammendment. All states that either would be severely affected by Medicare's low reimbursement in their states. You can whine all you want about lobbying groups and you may be right to a point but each of those senators put justifiable reasons why they didn't vote for it.


JPRS,

please let me know what health insurer pays their CEO more than $100,000,000. I'd love to know. Billions in marketing, really? I agree that they've paid a lot in lobbying but what about pharma that the administration bought for 20 cents on the dollar with their $150 million in advertising to push reform.

As I just saw on CNN i can't believe some Democrats will push away an end to pre-ex for their public option. That being said a MLR needs to be added to the Baucus bill and I'm sure and I hope that its added in committee.

Posted by: visionbrkr | September 29, 2009 10:44 PM | Report abuse

visionbrkr,

1. CEO info -- stock options for United Health CEO Stephen Helmsley clock in at over $700,000,000. Of course he has to pay money to exercise those option, but that's still healthy compensation.

In reference to marketing, WellPoint's tally for 2008 alone was over $1.7 bill.

http://economix.blogs.nytimes.com/2009/09/25/how-much-money-do-insurance-companies-make-a-primer/#more-33027

Of course these expenses aren't just for TV, and print ads -- some of the marketing expense involves giving gifts to potential large clients.

2. The issue with Blanche Lincoln is what it is. I get the politics and I understand that there is still a little bit of the plantation economy at work in her state (e.g. the big players dominate).

This isn't an issue of "liberal" and "conservative" in my view -- it's an issue of Big Vested interests versus everyone else.

If my future economic well-being was tied up exclusively in Pharma stocks, or if I worked for a media company that benefited from the massive inefficiency, or if I was a politician who relied on a quasi-tax on my constituents to cover one-tenth of my re-election expenses from those political donations, those factors probably would color my views too.

That doesn't make it right, but I appreciate that that's the reality as it is, and some people accept it.

3. As a taxpayer and consumer this isn't a "liberal" or "conservative" question, it's a question of: "Do I want to pay more for lower quality product and do I want to get better ROI"?

When people haggle for a car they don't say "Well, did you get a socially liberal or a socially conservative deal?" The numbers ultimately are what they are. And the economics is what it is. And the morality is what it is.

The public option is an important component. As far as things like the pre-ex factor go, I understand the line of reasoning that says: "first get everyone in, then deal with the cost". I think credibility matters though. If you get healthy middle and working class folks essentially getting an additional 10 percent whacked out of their incomes to pay for an overpriced mandated product, there will be hell to pay for the Dems no matter how well intentioned. Private insurers will have more bargaining leverage in a system where they have a captive market without competition.

Regulations are only as strong as the person overseeing the process, and it would take an absolute russpoter to think that the next GOP administration will show concern for things like "consumer protections". They sure as heck didn't in the last one.

Posted by: JPRS | September 29, 2009 11:14 PM | Report abuse

The 13 senators who voted against Schumer's public option proposal today represent a total of 55 million Americans--about one-sixth of the population. One senator, Cornyn of Texas, represents half those folks all by himself.

So, forget the Republicans, who are blinded by ideology. The three Democrats who voted against it, from Arkansas, Montana and North Dakota, represent a grand total of 4.5 million Americans -- less than 2 percent of the country. And these are the folks who get to decide whether health care is a right or a privilege.

Posted by: jonfromcali | September 29, 2009 11:54 PM | Report abuse

vision,

Arkansas may not want to elect a liberal Democrat, but Blanche Lincoln's constituents strongly FAVOR a public option -- at least when it's described neutrally and not presented as nationalized health care with death panels and everything:

http://tpmdc.talkingpointsmemo.com/2009/09/strong-majority-of-arkansans-support-public-option.php

Posted by: bluejersey | September 30, 2009 12:33 AM | Report abuse

The public option doesn't have to be a cost cutter to serve its purpose, to give the people a choice. Even if it were more expensive than private plans, it will keep the insurance companies honest, and will be a refuge for those who've lost faith in the private insurance cartel.

Posted by: owldog | September 30, 2009 1:22 AM | Report abuse

Baucus played God again, stating as "not able to get 60 votes," as his reason for voting against the public option.

So much for idealism and principles. Who needs character and virtues when you've got caricatures and vultures (to fund your campaigns.)

Posted by: owldog | September 30, 2009 1:33 AM | Report abuse

Liberal hand wringers and panty hose knot tiers: Life will go on.

Posted by: Curmudgeon10 | September 30, 2009 4:02 AM | Report abuse

Well at least now we know at least three of the sixty votes they were talking about.

Baucus and Conrad are the biggest weasels in the Senate.

I give Lincoln a pass since she only has half a brain.

Posted by: cautious | September 30, 2009 5:23 AM | Report abuse

How can we trust the coverage of someone who can't be accurate about the total number of unemployed Americans and who insists on using the inaccurate number that includes roughly 10 million unemployed?

Answer: We can't.

Posted by: dgainor | September 30, 2009 5:26 AM | Report abuse

EZRA'S A FUNNY KID

" .. But that money would come out of the health-care industry's pocket. The plan's superior pricing power would take customers from private insurance .."

Funny, kid. Reminds me of ol' Bwarney Fwrank, six weeks before the collapse of FANNIE/FREDDIE -- "They're OK. Quit picking on them."

"Superior pricing power?" Don't you mean COMMUNISM? And MEDIOCRE?

You funny, kid. Try comedy -- less stressful.

Posted by: russpoter | September 30, 2009 7:14 AM | Report abuse

HOPE YOU GET PUBLIC OPTION


The public option is an important component.

--

Hope you get FORCED into public option.

And taxpayers have life insurance on you.

Because you'll die an earlier death. Loser.


MESSIAH IS A FOOL.

Posted by: russpoter | September 30, 2009 7:18 AM | Report abuse

The public option should be written so that a state could opt of it.

Then Senators opposed to it can say they protected their constituents from its alleged perils and they should have no objection to the rest of the uninsured being allowed to choose it, or not.

Posted by: roberts793 | September 30, 2009 7:34 AM | Report abuse

JPRS,

I get your points but options aren't salary which is what you originally said.


I still come back to the point that insurers profits are much less than the waste fraud and abuse in the medicare and medicaid system. It was estimted to be between $60 and $80 billion dollars per year by government people. I'm sorry but I'm not willing to trust them with the whole system until they clean up their act. They're starting to, but at this point its a drop in the bucket. I wonder how much coverage Ezra will give today to the committee meeting that Senator Carper of Delaware is going to hold on Medicaid fraud and abuse? Probably not as much as the hopes of salvaging the public option.

Oh and I'd be fine if we made laws not allowing advertising of insurers, pharma etc. Advertisers may be up in arms about that but I'd be fine with it. That's an ammendment that should be offered if it fits the jurisdiction and scope of the committee.

Posted by: visionbrkr | September 30, 2009 7:53 AM | Report abuse

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