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Will any states actually opt out of the public plan?

Andrew Sullivan takes a look at what will happen if the Senate actually does pass an opt-out plan and sees disaster on the horizon for the Republicans. "Imagine Republicans in state legislatures having to argue and posture against an affordable health insurance plan for the folks, as O'Reilly calls them, while evil liberals provide it elsewhere," says Sullivan. "Now, of course, if the public option is a disaster in some states, this argument could work in the long run. But in the short run? It's a political nightmare for the right as it is currently constituted. In fact, I can see a public option becoming the equivalent of Medicare in the public psyche if it works as it should. Try running against Medicare."

My opinion on this is, I admit, a minority opinion, but I don't think there will be any real fight over the public option, and I think that virtually no states will opt-out.

Consider, for a moment, the individual mandate. In January of 2008, nothing was more divisive. It was a central controversy in the Democratic primary. People who had never given a moment's thought to the structure of insurance markets developed extremely strong opinions on the topic. Fast forward a year, and the controversy is gone. Obama has quietly reversed his position. His supporters are totally uninterested in battling an individual mandate. Once the issue left the center of the political discussion, it never returned, even though it's much closer to passage now than it was during last year's primary campaign, and even though the candidate who opposed it won the election.

My prediction is that the public option, if it passes, will be much like that. States wouldn't be able to opt out till 2014. By 2014, we'll be arguing over all manner of things, but a public insurance option for the small sliver of the population with access to the health insurance exchanges will be one of those things. In that scenario, where there's very little controversy over the public option, I don't believe that state legislatures and governors are going to go to the trouble of rejecting it, and I don't believe that anyone will manage to reinvigorate the controversy around it. The controversy around the public option is an expression of the controversy around Barack Obama's presidency in general, and health-care reform in particular. Once those issues are essentially settled, the underlying policy isn't going to hold people's attention.

By Ezra Klein  |  October 29, 2009; 11:20 AM ET
Categories:  Health Reform  
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Comments

First of all, an individual mandate without effective cost control is not progressive reform. Obama's supporters may not care, but they are not being progressive. I DO NOT want people to pointing at me when this whole thing blows up over affordability and saying it was all the liberals' idea.

I do think many states will opt out of the PO. It is very easy to make arguments that the PO will not lower costs and may in fact increase them. And now that it has become an ideological football it becomes tempting for people who do not like it to sabotage it.

Posted by: bmull | October 29, 2009 11:35 AM | Report abuse

I'd like to hear why you believe there will be an opt-out plan in the final Senate legislation. Reconciliation as trump card?

Also, you've yet to post on the H1N1 vaccine's colossal distribution problems. I think this poses a real risk to Obama politically as well as to healthcare reform, with the meme emerging that Sibelius dropped the ball and therefore the government can't do healthcare right. (Just check out today's lead story in the NYTimes.) As the parent of a child with significant medical issues, I can't get any information on the vaccine from hospital clinicians, pediatricians, any body. NO ONE HAS ANY INFORMATION, let along vaccine -- and I live in New York City, Tom Friedan's old beat. There's been voluminous reporting, too, that shows that the small number of available dosages have bypassed some of the higher-risk populations (children, the disabled, pregnant women) and gone to comparatively healthy patients.

So what's going on here, Ezra?

Posted by: scarlota | October 29, 2009 11:36 AM | Report abuse

Ezra is probably right for most of the country -- the blue and purple states. I'd still expect that in the deep red states governors and legislatures will pick fights over the public option in 2014. After all they are certifiably crazy ideologues who see the pathetic weak public option that Congress might actually pass as nevertheless some kind of totalitarian slippery slope to Communism (not to mention some of those governors will be burnishing their credentials for a Presidential run in 2016).

Posted by: redwards95 | October 29, 2009 11:42 AM | Report abuse

I agree- the only people I think who would fight to opt out would be the politicians in the pocket of insurance companies and providers. The public option is just another choice for consumers- its simply another insurance company. To me it would be the same conversation as trying to pass legislation to bar a certain insurance company from doing business in the state. I just can't see where the groundswell of people opposing the public option will come from.

I can certainly see where providers might not want the public option in the state. But they have full veto power because they can always choose to simply not accept the public option- in the end its just like any other insurance company that wants to pay below market rates.

Posted by: spotatl | October 29, 2009 11:44 AM | Report abuse

Ezra (and Andrew Sullivan) hold reasonable positions for residents of the East Coast/DC area. Why would any state opt out? What politician would withold something from his/her constituents that others have access to? My worldview was the same when I lived on the east coast.

Then I moved to Kansas. There's no doubt in my mind that Kansas legislators will vote to opt out; there's already a movement to pass a state constitutional amendment to "exempt" the state from any federal health care mandates (that such an amendment itself wouldn't be upheld in court isn't the point).

Hard conservatism, with a strong tinge of right wing Christianity, is the bedrock political view of much of the south, midwest, and west. Ideology is what matters. States will opt out in droves and the citizens of those states, particularly the poor and lower-middle class, will be the victims (as usual).

Posted by: poppies | October 29, 2009 11:51 AM | Report abuse

I hope you're right, but I think the silence on individual mandates is more about a fair accompli. My wife, for example, is mad at hell about it and considers it a horrible betrayal by Obama (who she otherwise loves.) If that's how she feels about (and she has health insurance anyway) I bet the people who are going to get bills are going to be extremely upset.

The sad fact is that Democrats seem to be unconcerned with adopting policies that screw individual voters as long as they make the companies happy.

Posted by: Hopeful9 | October 29, 2009 11:54 AM | Report abuse

You are wrong. The battle over the public option IS the battle over the mandate. It gives people an option place to buy mandated insurance besides paying it to the people who killed their husband or sister or brother and kept them on the phone for days at a time.
The fight over subsidy rates is also the fight over mandates. There have been plenty of liberals pointing out that the best way to lose the presidency is to force people who make 60 grand a year to buy junk insurance with money they don't have.

Posted by: flounder2 | October 29, 2009 11:58 AM | Report abuse

I agree with the comments above about the mandate. In general, part of cost control is making everybody part of the health insurance pool so that young and/or healthy people won't stay out and drive up the costs for everybody else. But that won't be enough to control costs so that universal health care can be generous and affordable. We need to do something more, whether it be single payer, a robust public option on the Hacker model with 100 million plus potential enrollees, or a very strictly regulated for-profit or non-profit health-care market, to achieve that. Otherwise, we're just sticking people who can't afford it with a bill they can't pay and making the insurance companies happy as the money rolls in. Although Ezra may be right. Given how toothless the eventual product is going to be on these affordability issues, it might be worth thinking about whether a mandate, forcing people to be looted under these circumstances, is the liberal thing to do. It probably isn't.

Posted by: redscott | October 29, 2009 12:09 PM | Report abuse

I think including the public option is good strategy: "If your state doesn't want it, you can opt out" - has the effect of partially disarming the opposition to a national plan. (As long as the plan is national, not state by state).

I think we can predict pretty well where both houses of the state legislature plus the governor might opt out for essentially ideological reasons: SC, GA, AL, MS, LA, AR, TX, KS, AZ (maybe ID, UT, SD, WY too) - the reddest states that are way out of tune with the other states on issue after issue.

I see them opting out as a benefit to to the national plan. They have low incomes, high disease rates, and a tendency to avoid the MD until way too late. We will save money, net. They will also loose influence on the direction the public plan will take for the future, after the plan is actually operating.

Given where we are now and the agony that the civil war imposed on the whole nation for more than 100 years, we should have let the confederate states leave the union in 1860. And maybe let them go now, if they want. Heck, even the pledge of allegiance could be simplified by removing "indivisible, under God". I'd even be ready for a separate Republic of the Pacific Northwest.

Here's a snippet from the latest WSJ/NBC poll that makes clear how far the south is from the north-east, midwest, and west.

Republican Party favorability

Fav Unfav

All 21 67

South 48 37
NE 6 87
Midwest 10 78
West 12 75

Posted by: JimPortlandOR | October 29, 2009 12:14 PM | Report abuse

By 2014, people might begin to realize how ridiculous it is for states to opt out of an option.

Posted by: bcbulger | October 29, 2009 1:00 PM | Report abuse

I am not sure whether Ezra is understanding Sully the way he intended. Sullivan wanted to indicate 'nasty politics' of Schumer plan and how in the end it is not an option at all. Ezra rejoinder to that - I am not sure what does it add or addresses.

The surprising thing is why no one, especially from GOP, is attacking this plan as nothing but what it is - essentially forced Public Option for all states. As someone pointed it is like you can opt from national highway system; but you will have to keep on paying taxes!

Public Option will be seeded by Fed money; which is contributed by all States and then we are asking a State to go away from that investment? What financial / tax payer incentive is there? If it is not there, then why dis-honesty of calling it 'opt-out'? If that dis-honesty is maintained, then why it is not different than 'thug politics like Chicago'?

States which want to opt-out; should demand compensation or money from Fed. Then we will see whether all go in or not.

I guess next week after the Virginia Governor race win, GOP will start firing on this one.

On policy front, actually bit honest plan is from a dishonest Senator - Nelson of Nebraska. He is advocating 'opt-in'. On similar lines, let any states come together and decide to start a plan on some agreed terms; seeded by State monies. That would give the 'experimentation edge' all necessary in this endeavor.

Otherwise we all are locked in a national plan.

Posted by: umesh409 | October 29, 2009 1:02 PM | Report abuse

Poppies has it right. I assume that states south of Virginia and east of New Mexico will uniformly reject any public option AND act to cut funding to Medicaid or its successor (except for providing middle-class access to extended care in nursing homes).

Posted by: DaveoftheCoonties | October 29, 2009 2:14 PM | Report abuse

I may be mistaken, but I had thought at least one state (Arizona) opted out of the federal Medicaid program for several decades. Does anyone know the details on this? How many states opted out of Medicaid (the fed-state program to provide medical services to poor populations) after it was enacted in 1965, and for how long?
Thanks,
Tom

Posted by: twbparkslo | October 29, 2009 2:14 PM | Report abuse

Opting out might actually have some unforeseen benefits. This would be a good way to encourage the indigents and illegals to leave your state for greener pastures.

Also, might be a way to attract more successful workers who might flock to a state with minimal class conflicts.

Posted by: RealTexan1 | October 29, 2009 2:59 PM | Report abuse

My Andrew Sullivan't clever argument has gotten a lot of attention. So should our hosts argument that few States will actually opt out. To blow my own horn, I made both arguments on September 4th (that is long before Carper and Schumer came up with opt out and long before any other reference to opt out on the web as far as I know).

http://tinyurl.com/yhnm77n

"As with governors refusing stimulus spending, I predict there will be few takers. [some silliness deleted here I admit]

So they will be in the position of saying it's evil and horrible and my constituents have to have it.

Some ideologues will say no to the public option for their constituents, but then how can they claim the authority to decide what people in other states or districts can buy. Also in a year or so their constituents will be pissed as hell."

That post was entitled "public option harder ball." I have moved on to "public option hardest ball."
http://tinyurl.com/yknhfny

Who knows, maybe it willl be all the rage in a month and a half.

Posted by: rjw88 | October 29, 2009 4:06 PM | Report abuse

These are the 10 states with the highest levels of adult obesity, according to a 2007 survey by the Centers for Disease Control and Prevention.

1. Mississippi, 32.0 percent
2. Alabama, 30.3
3. Tennessee, 30.1
4. Louisiana, 29.8
5. West Virginia, 29.5
6. Arkansas, 28.7
7. South Carolina, 28.4
8. Georgia, 28.2
9. Oklahoma, 28.1
10. Texas, 28.1

Source: Associated Press

then there is the future costs projections....

Posted by: angriestdogintheworld | October 29, 2009 5:01 PM | Report abuse

www.notintexas.org

What do you think ?

Posted by: billbrann | October 29, 2009 5:26 PM | Report abuse

Great,let most of these Gooberland,Flat Earth Society Strongholds opt out of the 20th Century,and for that matter,let them leave the United States,once and for all.
They can form their own nation,based on the Bible and become a "Christian" Version of Iran,and take turns waiting on hills and mountain tops for the return of Jesus.
They are a drag on our progress,and contribute little to our future. They are more worried about the "End of Days",then any attempts at progress or the future.Why would you try to learn to read or write,or even invest in Health Care,if the "Rapture" is just around the corner?
Give back all the land we stole from Mexicoto Mexico,that solves the Illegal Problem,ask the Russians to take back Alaska,if fact,pay them to take it back,and let the Doctor Pepper and Moon Pie Groups form their our very own sorry union,the dream they talk about;"We want our( All White ) country back"
New England and the Middle Atlantic States,the upper Midwest perhaps,and the Pacific Northwest,would do better without these clowns.

Posted by: jeromejmarkiewicz | October 29, 2009 7:23 PM | Report abuse

Actually, at least several red state legislatures would waste no time in getting down to wasting time rejecting the public option. It won't cease to be an issue in the nuttier environs of red state Republican politics. I agree that in the long run, there won't be any opt-outs. But it won't be because of constituent pressure, as Sullivan believes, because in the red states, with their lower average per-capita incomes, jobs trump all. So my prediction: we'll see at least a couple of nutty red-state legislatures opt-out of the public option, then come back 2 or 3 years later to opt back in, as soon as it becomes clear that they can't attract business to their state thanks to uncontrolled medical coverage costs. Businesses will instead choose to locate in states where competition is keeping prices lower to hold the line on one of their biggest expenses.

Jobs are where the rubber meets the road in red state politics. Their legislators wouldn't think twice about giving the citizens the shaft - but when it costs jobs, they'll change their tune in a hurry.

Posted by: JennOfArk | October 29, 2009 9:59 PM | Report abuse

So the individual mandate doesn't kick in till 2013? Is the plan that maybe enough conservative justices will have retired before any plaintiff has standing to challenge the mandate's constitutionality?

If we have to wait 4 years for universal coverage, at which time this year's health reform act is thrown out becaue it imposes an unconstitutional direct tax... yeah, that would be awkward.

Posted by: beowulf_ | October 30, 2009 1:55 AM | Report abuse

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