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The conservative public option

Was out of the office for a few hours at C-SPAN world headquarters, but early reports were accurate and Sen. Reid will include a national public option that states could choose to offer to their residents -- or not! -- in his bill. In the Senate, this is about to become the "liberal" half of the debate. But it's not very liberal at all. It is a compromise, and a conservative one at that.

For the real liberals, the public option was already a compromise from single-payer. For the slightly less radical folks, the public option that's barred from partnering with Medicare to maximize the government's buying power was a compromise down from a Medicare-like insurance plan. For the folks even less radical than that, the public option that states can "opt out" of is a compromise from the straight public option. Access to the public option will be a political question settled at the state level. It is not a settled matter of national policy.

In many ways, this is a fundamentally conservative approach to a liberal policy experiment. It's only offered to individuals eligible for the insurance exchanges, which is a small minority of the population. The majority of Americans who rely on employer-based insurance would not be allowed to choose the exchanges. From there, it is only one of many options on the exchange, and only in states that choose to have it. In other words, it has been designed to preserve the status quo and be decided on the state level. Philosophically, these are major compromises liberals have made on this plan. They should get credit for that.

By Ezra Klein  |  October 26, 2009; 5:25 PM ET
 
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Comments

Pretty good compromise. The question is whether the public options in the states that don't opt out will be able to partner with Medicare on price negotiations. Any word on that?

Posted by: StokeyWan | October 26, 2009 5:31 PM | Report abuse

I thought Sen. Ben Nelson's proposal for States to 'opt-in' was more conservative than this Schumer plan.

Posted by: umesh409 | October 26, 2009 5:34 PM | Report abuse

From a pure policy-wonk viewpoint, this will still go down as a liberal victory if the final bill contains a public option -- opt-out or not -- that reimburses the docs at Medicare-rates-plus-5-percent.

Not coincidentally, if that's what the president signs, I don't see the AMA or their locals letting many states opt out of that. Even in the reddest of states, the docs get listened to in the halls of the capitals.

Posted by: Rick00 | October 26, 2009 5:38 PM | Report abuse

From your mouth to God's ear -- I sense major drama ahead.

Posted by: scarlota | October 26, 2009 5:39 PM | Report abuse

New York City media perma-lancers collectively cheer.

Posted by: cronksty | October 26, 2009 5:41 PM | Report abuse

If the bill passes, it will still be monumental. With this, we get:

(a) 95%+ of Americans insured
(b) A Public Option
(c) Health Care Exchanges

I'd say that's a pretty darn good start!

This is the beginning of a very long process, not the end of it. If they pass this, at least they're laying the right foundation down.

Also, I have to say, it's politically shrewd of Democrats to pass an Opt-Out Public Plan. It forces conservative states to take a stand. If it fails, Democrats can say they did what they could, but will still take some heat for it. But if it works, they can claim a huge victory, and conservative politicians will have to perform the political equivalent of eating crow.

Posted by: JERiv | October 26, 2009 5:41 PM | Report abuse

There is basically zero chance that a Medicare plus five public option winds up in the final package. And if it did, the docs would be frothing at the bit to get states to opt out of that -- they want to be able to negotiate on rates.

Not saying this is bad policy, but the politics are just not there.

Posted by: Mike_Russo | October 26, 2009 5:42 PM | Report abuse

I agree about the conservative nature of the opt-out, but it is an opt-out, not an opt-in. when you say "that states could choose to offer to their residents -- or not! -- in his bill", that's not correct. It's just "or not." The choice for states to offer the public option will have already been made by Congress--at least that's how it should go. Do you think the opt-out will be written in such a way that states will effectively be able to decline from the start?

And also, when you imply that 'conservative' states will definitely opt out, you're glossing over the potential for political pressure against opting out in a given state, as folks see and hear how their neighbors are enjoying the public plan, and internalizing the facts that it's the public plan that is going to do the most to rein in premiums and promote competition. Folks in Alabama, Georgia, Louisiana, Oklahoma, Arkansas, might start to get pretty vocal about their lack of any real, quality choice besides Blue Cross or Wellpoint.

Posted by: andrewlong | October 26, 2009 5:47 PM | Report abuse

Rick, What have you been smoking today to think that doctors would so strongly support a Medicare +5%?

No way that ever passes, that's not in any of the Senate bills anyway, including Reid's compromise.

Posted by: truth5 | October 26, 2009 5:54 PM | Report abuse

Deep thought: when I fly over the flyover states that "opt out" of a Public Option, and I happen to have bought public insurance, will I become temporarily uninsured?

Will the flight attendant make an announcement like:
"Warning - we are about to enter an opt-out zone; in the unlikely event of a forced landing, those who have public health insurance will have to pay for any medical treatment out of pocket. In the next five minutes, if you choose to purchase supplementary coverage for medical injuries that may occur while we are cross this opt-out zone, please ring the call button. Our partners at Humana accept all major credit cards."

Posted by: ArininSF | October 26, 2009 5:55 PM | Report abuse

"They should get credit for that."

I'm afraid the word you're looking for here is "blame."

Posted by: adamiani | October 26, 2009 6:03 PM | Report abuse

So you're saying that liberals should get credit for being willing to compromise enough to pass this ponderous piece of confusing puke. Philosophically, I'm not sure this is the sort of credit I would aspire to, unless I were an amoral politician. A ha, now I get it!!

Posted by: joemken | October 26, 2009 6:08 PM | Report abuse

"these are major compromises liberals have made on this plan. They should get credit for that."

So, they've eliminated the very reasons it was supposed to work, and they want credit for that. Sure, go right ahead.

Posted by: ostap666 | October 26, 2009 6:10 PM | Report abuse

How is this supposed to work?

If I get insured in New York, will my insurance still be in effect if I move to Virginia?

Who will insure me? Is this self-insurance or do I get it through my employer? Can my employer opt out because he needs a single provider to keeps his costs down? I am allowed to opt out of my employer's insurance? If I do, what are the ramifications?

This is probably going to be a self-selecting pool. Are you high risk? Then no one but the "public option" will insure you. If you are low risk, then you will be welcomed by private insurance into the beauty pool. When this is collapsing, the government will move in accusing private insurance of "cherry picking."

Just like with same sex marriage? Fine if you live in MA. If you move out, then you might stay married if you live in California, but not if you are in Nevada?

This seems to be the new Democratic solution for everything. Break up the country into allowed, prohibited and mixed. Then pull the old "house divided" switch. The house will not fall it will just become what the Democrats are pushing for.

Posted by: krush01 | October 26, 2009 6:16 PM | Report abuse

Obama claimed that we need a public option to keep insurance companies "honest." So if they weren't honest, why didn't the government just go after them?

And why is Obama basically shrugging his shoulders now at the idea of a public option?

Nothing has changed in the way the money grubbing insurance companies operate in the past several months, but Obama NEVER fought for public option after claiming we needed it. So why did he ever claim that we needed it in the first place when he was never prepared to fight for it?

The insurance companies will become even more dishonest now.

Thanks for nothing, Obama. And spineless Harry Reid.

Posted by: solsticebelle | October 26, 2009 6:18 PM | Report abuse

For those who keep asking "how will this work if I'm in a state w/o public option", I hope you are part of the uninsured, because if not you clearly do not know how your own health care plan works.

Out-Of-Network. Means if you go to a doctor outside of your prescribed area, you pay out-of-network rates, which are higher than "IN"-network rates. Fairly basic concept.

Happens today, will happen tomorrow. Until the day when networks don't matter, and we can go to whichever doctor we want. Which won't happen until it's a single-payer, would be my guess.

Posted by: JERiv | October 26, 2009 6:26 PM | Report abuse

Ezra,

why not blog post on the 60 minutes piece?

http://www.cbsnews.com/video/watch/?id=5419844n

I'm very disappointed. not surprised. Just disappointed.

Tony's going to love it when he gets out of prison.

Posted by: visionbrkr | October 26, 2009 6:30 PM | Report abuse

Given that the GOP early runners for 2012 are basically ex-governors (including Romney) and sitting governors, a state-based opt-out would be political dynamite.

Posted by: pseudonymousinnc | October 26, 2009 6:53 PM | Report abuse

pseudo,

that would work except for the fact that they have until 2014 to opt out.

I think we've all learned that a politican can say one thing and do another. The difference between candidate Obama and President Obama are abdundantly clear.

Oh and who thinks by 2012 the public option and reform in general will be seen as a good thing??? After a couple years of PAYING for reform without really seeing reform and seeing the economy continuing in the tank I've got to think the Republican's can't ask for a better scenario. Now they just have to have some candidates that have a clue. I'm looking forward for example to the end of Senator Dodd's reign in CT when Peter Schiff unseats him. I can't wait until Spector gets sent to his retirement home finally and Senator Reid loses to "Fill in the blank" Republican.

Posted by: visionbrkr | October 26, 2009 7:08 PM | Report abuse

Jeriv,

you do realize you're mixing metaphors right?

Out of network has NOTHING to do with the reform proposals as it relates to the public option.

oh and that's not what out of network means. The rate is static. What the difference between in and out of network means is that a network or "contracted" provider must be required by contract to accept the discounted fee schedule.

And under single payer I'm guessing we're forcing every doctor to accept a set rate schedule. how do you think they'll like that one??

Posted by: visionbrkr | October 26, 2009 7:11 PM | Report abuse

Bull Puckie

Am I able to 'opt out' of paying taxes?
If the public option plan goes broke due to mismanagement, can I opt-out of having my tax dollars used to bail it out?

Posted by: afpre42 | October 26, 2009 7:24 PM | Report abuse


I see we have a lot of fortune tellers around here these days, all pretending to know what's in a bill that hasn't even been written yet.

Although the piece is titled "The Conservative Public Option" it's misleading to say the least.

I've noticed that there are a lot of misleading articles being planted in the Post these days, all attempting to devine what lies ahead, and for Republifreaks it's all gloom and doom.

For Democrats, it's better days ahead.

Posted by: lindalovejones | October 26, 2009 7:29 PM | Report abuse

People will have to move from state to state for an availabile Public Option, if there is one out of 50 at all. This is a tactic designed by the insurance lobbyists to "Divide and Conquer" USA. It looks good for the politicians, but the public option is guaranteed to fail on its own.

The more limitations a Public Option must suffer, the smaller the insured pool will be. It looks like we are creating a second tier of Medicaid for people with low incomes. Why don't we just raise the qualifying incomes for Medicaid and call it a day?

The best way to take over USA is to take her state by state. This is a big victory for the health insurance industry and its lobbying monster head, AHIP.

http://www.ahip.org/

Ezra is right. Liberals gave up too much and too soon, but I am actually a fiscal conservative and will continue to fight for a strong public option and a universal health care system. With a government insurance option, we will be bankrupt ten times over in less than ten years by these blood sucking private insurers. It's Halloween, isn't it?

Posted by: dummy4peace | October 26, 2009 7:55 PM | Report abuse

"WITHOUT a government insurance option, we will be bankrupt ten times over in less than ten years by these blood sucking private insurers. It's Halloween, isn't it?"

Sorry, I am too upset to type correctly.

Posted by: dummy4peace | October 26, 2009 7:57 PM | Report abuse

dont be an idiot, mr. klein. there is no compromise here. no state would opt out of the public option because they would be effectively subsidizing health care in other states (through their federal taxes and cuts to medicare patients in those states) while getting none themselves.

single payer will never fly in the united states, so you cant even consider that a compromise, because it was never on the table.

the public option (that mythic yet to be precisely defined brain storm from some liberal think tank) is the best the libs can get and they are going to have to give it up to get a deal done.

too many conscientious dems (i didnt think there many left in the age of obama) wont vote for cloture.

Posted by: dummypants | October 26, 2009 8:11 PM | Report abuse

You don't like the car? Wait, what about this one with the hatchback? I'll throw in some michelin tires, wait, what about a moonroof? No? Okay, how here's a sedan. How about four door? No, okay, here's a two door but with a sunroof.....

Posted by: truck1 | October 26, 2009 8:33 PM | Report abuse

"And under single payer I'm guessing we're forcing every doctor to accept a set rate schedule. how do you think they'll like that one??"

Visionbrkr, this isn't a single payer system. It's a multi-payer system where multiple insurance companies will be selling insurance. If a state doesn't opt out of a public option, then there will be a public option plan as well. The rates will be set either through negotiation or by Medicare +5% or however the final bill determines that. Doctors will be able to choose to be in the public option network or not, but the point of the public option is to provide an attractive enough insurance plan for the insureds that the insurance companies will have to seek the same or greater efficiencies from their own networks to compete on price. On that point, I am sure the doctors will be frustrated, but it won't be because they will be in a single payer system.

Posted by: StokeyWan | October 26, 2009 8:36 PM | Report abuse

visionbrkr - CBO's scoring of the Finance bill is at http://finance.senate.gov/press/Bpress/2009press/prb100709.pdf. If you look at the chart on p. 15, you will see when the revenues and subsidies phase in. Through 2013 (i.e. just before everything turns on in 2014), revenue raised does not outpace dollars paid out in subsidies (the net difference is about $15 billion over those four years). The plan is still budget neutral, but it's not true that we're going to be paying lots of increased taxes in years before the subsidies and benefits go online.

dummypants -- the public option will be financed through its premiums, same as a private insurer. There'll be a small loan of taxpayer dollars to set it up, but there's no subsidization. It floats its own boat.

Public option opponents who've realized they can't hide behind this canard any longer have decided to take the tack demonstrated by afpre42: it'll take taxpayer dollars because it will inevitably collapse and need a bail-out, so it's still costing us money! But they have a hard time outlining a scenario in which the public option goes broke but private insurers don't also need a bailout (if it's being outcompeted by the private insurers, definitionally you don't need a bailout because enrollees can simply choose a private option). So it's just a slightly more complicated piece of nonsense.

Posted by: Mike_Russo | October 26, 2009 8:39 PM | Report abuse

And yeah, JERiv is exactly right on what happens if you get sick in a public option-less state -- it's precisely the same thing as what happens when you go to an out of network provider (though given the national scope of this version of the public option, you'd probably expect broader networks than many private plans currently have).

Posted by: Mike_Russo | October 26, 2009 8:40 PM | Report abuse

IS THIS INSURANCE REFORM ...OR THE SCOPES MONKEY TRIAL ?

Posted by: ryan_heart | October 26, 2009 8:53 PM | Report abuse

There shall be no compromise on the health of ordinary Americans! You know in my state of Virginia, the incoming Governor McDonnell will opt out, because that's the bast law abiding plan according to incoming Attorney General Ken CooKooCooKoonelli, Mr. "returning the sovereignty of Virginia". This is just the new states rights.
I guess we'll have to redo the On to Richmond campaign.

Posted by: bflaherty5 | October 26, 2009 9:15 PM | Report abuse

I'll say it again - EVEN IF JESUS COMES DOWN AND BLESSES THIS BILL, REPUBLICANS WILL VOTE AGAINST THIS BILL BECAUSE THEY DON'T LIKE OBAMA. Sorry to say it.

Posted by: ATLGuy | October 26, 2009 9:27 PM | Report abuse

mikerusso,

that would be nice IF the senate finance committee bill is the one that takes effect. I'd actually be FINE with that plan IF it just increased the individual mandate penalty a bit.

But the problem is the liberalization of this bill has JUST BEGUN. They're going to shove this thing so far left its not funny. They already have.

Oh and as far as the public option it still is to be determined but some of the considerations are to have providers required to participate in the public option if they participate in medicare and then let them opt out in two years. Anybody that knows anything about provider credentializing knows that the government will make it VERY difficult for providers to leave.

So much for an even playing field. I don't ever remember any insurer being given hundreds of thousands of providers as in network? To my understanding they had to build their own networks. If you think this is the last of the government perks in the public option you're kidding yourself.

how long before we get a situation like they have with the Chevy Volt where the government is giving people money in the coming years to buy a "government run vehicle".


The only ones in favor of this are the liberals and the crooks who perpitrate medicare fraud. They can't wait to get their claws into the public option.


oh and mikerusso,

is this defecit neutral like Medicare was supposed to be??? Nice shell game. Tout the defeict neutrality of the SFC version but we'll end up more like the progressive house version. Nice bait and switch.

Posted by: visionbrkr | October 26, 2009 9:43 PM | Report abuse

Huh? We should give the commies "credit" because they've decided to destroy America on the installment plan?

Sorry -- but no, thank you, commies! This is America! Get lost!

Posted by: thebump | October 26, 2009 10:06 PM | Report abuse

The Public Option is neither "Dead" nor "Red" as retarded right wing-nuts would have us believe.

What's difference between August & October? Millions of employer-based recipients have just received their 2010 benefit plans for review and the average increase cost for healthcare insurance have increased between 10% to 20% with fewer benefits in an economy with a zero growth rate of inflation.

Posted by: Citi__Street | October 26, 2009 10:21 PM | Report abuse

Obama/Pelosi/Reid/Democrats are incompetent to do ANYTHING, NO GOVERNMENT CRAP CARE AT ALL.

When will health care reform take place?

1) When Americans learn to take care of THEMSELVES and not whine to the government for everything...an expensive, wasteful and freedom losing way to handle most problems. Adult diabetics as well as MANY problems can be solved by LEARNING about your own body and what it needs and what it doesn't need and How to take care of it...no excuses.
If this is NOT serious enough for YOU to take care of, why should anybody else do it.

2) When the government is HONEST and will say that there are about 12 million that really need help and that 177 million are happy with what the present system with some improvements.

3) When the government quits being a bunch of little babies behind the wheel, outrageously vilifying insurance companies and doctors FOR OWN THEIR AGENDA.
Insurance companies are HIGHLY REGULATED by State governments...HIGHLY REGULATED.

4) When this present government GETS OUT OF BED WITH the Ambulance Chasers and the Slip and Slide Lawyers like Edwards. He, like others, bring phony science into court, turn those court rooms into soap operas and wipe out the High risk Obstetricians and drive up the cost of insurance so they can live in Palatial Estates.

5) *Preexisting conditions are NOT a problem in states with Risk Pools.
*End the government ban on Interstate Insurance Competition
*Allow Insurance to be even more portable.
*Allow more groups to form Insurance Pools
*Fix Medicaid to do what it was intended

All the above are very reasonable changes for starters that will help tremendously with out killing businesses or taking away health care from the 130 million Americans who are very happy with their present care.

Last but NOT least. Vote for those that are competent and will READ the trillion dollar bills they inflict on everyone else and FORCE congress to be apart of EVERTHING that they inflict on everybody else.

Posted by: ekim53 | October 26, 2009 10:52 PM | Report abuse

Continue to wait for Obama to clean up those "hundreds of billions in waste and fraud" associated with Medicare, which he preached about in his address to Congress and which "60 Minutes" convincingly verified. Anticipate that those "hundreds of billions" will mushroom with any version of a new public option.

Meanwhile, Medicare still has an unfunded liability of $36 trillion.

Can anyone in the White House or Congress do basic math?

Posted by: judithod | October 26, 2009 11:05 PM | Report abuse

I live in Virginia. I can tell you right now there will be no Public Option for our citizens. We like all of our pot holes. crumbling infrastructure and low paying Business friendly jobs. If we get sick or have an accident we have to learn to quit whining. Thank You, to all my Democratic (Republican-Lite) Representatives.

Posted by: fabricmaven1 | October 27, 2009 12:07 AM | Report abuse

How will the opt-out work?

Posted by: dadada | October 27, 2009 1:14 AM | Report abuse

Unfortunately Ezra, for the sake of telling a simple story of compromise, you overlook that single-payer was essentially forced out of the dialogue early on. I don't think that qualifies as a compromise but a marginalization. The voluntary aspect of compromise is missing unless you think that Obama and Baucus were "compromising" by leaving it out.

Posted by: michaelterra | October 27, 2009 1:58 AM | Report abuse

Reid made Pelosi's job much easier.

Posted by: cautious | October 27, 2009 3:41 AM | Report abuse

Ezra - Perhaps you're just trying to be provocative, but a significant expansion of government is hardly conservative. And i recognize that an opt-out public plan is a major compromise for some liberals, but to give them credit for letting go of single payer doesn't make much sense. Single payer was never a viable option. It was about as likely as conservatives turning Medicare into a voucher program. Are you giving them cresit for comprosing on that?

Posted by: MBP2 | October 27, 2009 9:13 AM | Report abuse

Ugh. If employees can't choose the public "option" over their employer's plan, how will insurance companies be forced to compete?

The public option will be only for the uninsured or uninsurable and insurance companies will get a healthier pool of customers.

Tell me again how this is a good thing for anybody except the insurance industry?

Posted by: vandegraaf | October 27, 2009 11:55 AM | Report abuse

A Medicare+5% public option was doable with the right leadership. Unfortunately Obama didn't live up to the hype. But I try to tell myself Rahm would have been in the White House if Hillary had won and we would have gotten the same lousy bill.

Posted by: bmull | October 27, 2009 12:06 PM | Report abuse

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