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Has the public-option fight been good for health-care reform?

Most health-care wonks agree that the immense controversy generated by the public option has deflected attention from other important elements of the bill. You can draw only so many lines in the sand before a couple begin getting washed away. But there's a split on whether that distraction has been a good or bad thing.

The case against goes something like this: The success of the plan is going to depend much more on adequate subsidies than any of the public option compromises on the table, and letting all the energy go into the public option has left fairly little organizing capacity for things like tax credits for people making between 300 and 400 percent of poverty. The liberal obsession with the public option -- and not even a very strong public option! -- has distracted them from these more important policies, making it more likely that they'll fall a bit short of where they otherwise could be.

The case for goes something like this: The success of the plan is going to depend much more on adequate subsidies and the individual mandate than on any of the public option compromises on the table, and diverting all of the conservative base's energy into fighting around the margins of the public option has left them with fairly little organizing capacity to go after the revenues or the mandate or the total cost of the bill. The conservative obsession with the public option -- and not even a very strong public option! -- has distracted them from these more important issues, making it more likely that health-care reform survives with its basic structure intact.

I'm in the second camp. That's not to say this was the plan, or that the public option isn't worth achieving in its own right. But insofar as it's drawn fire away from the potentially unpopular elements that can't be sacrificed -- elements like the revenues and the mandate -- and toward a popular element that can be compromised, it's been a boon for the bill.

By Ezra Klein  |  November 3, 2009; 11:02 AM ET
Categories:  Health Reform  
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I just hope all this liberal organizing capacity will still be around to push the many, many quick-fix statutes and agency decisions that will be needed to fill the holes and gray areas in the bill as it currently stands.

I do believe this is about the best that could be achieved in our currently dysfuntional and anti-majoritarian political system, but it really is more of a loose skeleton for future reform than a real end point.

Posted by: NS12345 | November 3, 2009 11:48 AM | Report abuse

Health care reform is not a liberal vs conservative problem: it's about the long term physical and financial stability of families, companies, and governments.

The public option has ZERO to do with that. It will not change the fundamental problems one whit and political junkies who have framed the debate around it have done a disservice to the overal objectives. Supporters and opponents of the public option believe that it represents a step toward universal healthcare; both are wrong. There is nothing "universal" about delivering a captive market-- made up of powerless individuals and small businesses-- to the insurance industry (w/wo a government sponsored high-risk pool) and there is no *care* there.

The uninsured that you and the rest of the political classes have been writing about are not *the* problem to be solved. They are one of many symptoms of a dysfunctional financing model. Convoulted budgeting tricks to pay for more of that dysfunction is not going to help us at all.

This is not a game between liberals and conservatives. By treating as such, journalists and legislators have guaranteed that no matter which side "wins", the citizenry will lose big time.

Posted by: Athena_news | November 3, 2009 11:49 AM | Report abuse

I agree totally. I would not be surprised if it was a calculated move from the beginning to make the public option the shiny object to get all the birds to peck at while the MedPAC reforms, guaranteed issue, community rating, exchanges, subsidies and mandates slipped in through the side door.

Posted by: Rick00 | November 3, 2009 12:01 PM | Report abuse

Maggie Mahar says the exchanges are initially (2014) open to up to 25% of the population.

Further, since exchanges will progressively be open to larger businesses, etc., what is in the exchanges (for instance, what public option, etc.) will matter more and more over time.

It's easier to get many of these pieces right initially, while reform is hot.

Posted by: HalHorvath | November 3, 2009 12:09 PM | Report abuse

Man, you are full of mavericky contrarianism today - shouting out stuff that isn't supposed to be said out loud (I hope not too many Senators get inspired by your earlier words and begin preening as they hold HCR hostage just as I hope the teabaggers don't read this post and start talking about insurance subsidy queens or some such nonsense).

Granted, I am also in your camp on the political importance of the public option.

Posted by: reader44 | November 3, 2009 12:26 PM | Report abuse

Commentator 'Athena_news' got it right.

I do not understand Ezra logic here. He essentially thinks PO 'baited' away Conservatives and that helps to sustain more Liberal (affordability and coverage) side of the reform.

But then are these 'saved' Liberals doing the necessary work of concentrating on failure to control costs and true containment of deficits?

Clearly they are not. And what if these Conservatives were really lousy in not being smart to realize where to locate the real problems of this bill? That is the case. Just because Palin faction in GOP is on ascendant does not mean we Americans are served better, we are rather screwed here because this Palin faction is not doing the right job of Opposition. It is equivalent of most Dems (except Ted and Finegold types) when they sucked up with Bush for War resolution and we went into the mess.

Also I want to take an issue with Ezra's earlier contention that this country passes very easily Defense budget of $650B per year but is reluctant to add $100B per year in essentially new entitlements. The issue is this Republic is primarily founded to 'secure folks' and 'defend people here'. That is how George Washington did. Even in those early days Americans went begging Europe to fund wars against British. For good or bad, that is how this Republic is formed. Hence, 'entitlement' is for sure 'add-on' to this basic ethos. Look at the way we operate - maximum mandate, flexibility and power to an institution which can be effective for a war. We do not do wars by committee nor we are Parliamentary or emerging European System (death by details) which are all fundamentally geared towards Welfare.

But considering the fact Medicare and Social Security are good to us, we are open for more interventionists policies; but why would we not do those in more budgetary disciplined manner, responsible manner? Just because one is Democrat, does it mean one has to be fiscally irresponsible?

Failure to do that, if PO has caused it; then actually is bad for all of us. Ezra implying to say that it is good for Liberals - how different is he there than a partisan hack?

Posted by: umesh409 | November 3, 2009 12:28 PM | Report abuse

Insurance Exchanges, with or without a public option, are a side show. Competition among insurers may reduce the cost of the financial product known as insurance in the form of lower premiums. It has ZERO to do with controlling the cost of care or financial stability for anyone.

Remember, 78% of people who filed for bankruptcy last year had health insurance and yet 62% listed medical debt as a precipitating factor in their insolvency.

A largely ignored effect of the Massachusetts experiment reflects the same reality: a significant proportion of the previously uninsured --those who were supposedly helped by the new insurance mandate-- were unable to afford the co-pays and avoided needed treatment. An additional portion of that group incurred significant medical debt.

Insurance is not care. Mandated insurance for a segment of the population is not universal and it does not ensure adequate treatment for anyone.

Posted by: Athena_news | November 3, 2009 12:45 PM | Report abuse

I'm worried about long-term viability. Can't subsidies, etc be whittled down in the name of deficit reduction? At least with the PO, there'd be a constituency to make sure reform survives GOP administrations....

Posted by: Chris_ | November 3, 2009 12:47 PM | Report abuse

Rick00: "the public option the shiny object to get all the birds to peck at while the MedPAC reforms, guaranteed issue, community rating, exchanges, subsidies and mandates slipped in through the side door"

1. MedPAC is a double black diamond reform. They're having trouble with comparative effectiveness in England--and the public is already on board with NHS. Does that augur well for us here? No.

2. Were all the other things mentioned above the preferred outcome of the health care lobby from the beginning? Yes.

3. Was the public option watered down by those who understand that no health care system has ever succeeded in controlling costs without administered rates? No.

Posted by: bmull | November 3, 2009 12:53 PM | Report abuse

I think it's mixed. I think the overall debate has resulted in more people today knowing the difference between Medicare and Medicaid than did 6 months ago; and I view that as a good thing, almost irrespective of their position.

But I actually mourn the death of several debates that I think fall somewhere to the right of single payer but to the left of the proposed plan. I still have concerns about Medicare Advantage and the assumptions around the excise tax and those are debates I don't think we'll ever see elevated with the public option taking up all the column inches.

Also, those fights you're talking about around the subsidies and the fights I'm talking about around Medicare Advantage and the excise tax, if they're addressed later on it looks bad politically (and that could end up being closer to the 2010 elections); like we got it wrong the first time and are patching it up post-haste.

Posted by: ThomasEN | November 3, 2009 1:00 PM | Report abuse

Chris_: "Can't subsidies, etc be whittled down."

They don't have to be whittled down. There's a built-in mechanism which causes taxes to auto-increase and benefits to auto-erode. It's pure genius from the standpoint of doing deficit reduction and entitlement reform on the sly.

Posted by: bmull | November 3, 2009 1:01 PM | Report abuse

I think the entire health care debate has been great. This bill is nothing more than a prelude to single payer, and I say the sooner the better.

Listening to the floor debate in the House today where the recurrent opposition isnt that people shouldnt receive medical care if they cant afford it, but this canard that the bill is 2,000 pages, weighs 22 lbs, has tens of thousands of words....this is great!

Posted by: zeppelin003 | November 3, 2009 2:12 PM | Report abuse

I think that both sides were duped by the fixation on the Public Option.

Conservatives spent a lot of their energy on policy when they would have been better served by the usual red meat arguments around spending.

Liberals spent a lot of their energy on whether 10% of the population could buy into a public plan that might not do anything for them, let alone control costs for the rest of us.

In the end, it was Democrats doing the duping, so Liberals have come off better than conservatives in this fight, being in spitting distance of the Holy Grail of Liberal politics since Teddy Roosevelt.

But we were all duped to think that the status quo for the 90% of us with almost no choice was a win.

I wish the exchanges were open to all, public or private. Keeping them closed was clearly the real devil's bargain that the D's cut. But it's better than no reform, and they can be opened up later. In theory.

Posted by: itstrue | November 3, 2009 2:14 PM | Report abuse

Is Ezra intentionally disingenuous or just an idiot? The argument over the public option is about controlling our absurdly high health-care costs so that the mandates won't be punitive and the need for subsidies will be reduced. As his own data showed yesterday, this country is being looted in terms of how much we spend on health care relative to other industrialized countries. Why is that? Because the government of their countries heavily controls what's charged, either through single payer or strict regulation. The argument over the public option, at least the way Hacker and his ilk sold it, was to try to achieve comparable results through competition between the market and a robust public option with 100 million plus enrollees. Feeble as it has now become, in no small way due to the "the perfect is the enemy of the good" guys like Ezra and Yglesias, the public option was an attempt to cushion the blow that forcing people to buy overpriced health insurance represented. We could have done that more cheaply and more humanely with single payer or a public option that had some teeth and authority to set prices, but we were told by Ezra incessantly that competitive exchanges would solve everything and lower costs significantly (even though they haven't and won't). We could have made a popular argument that we're being screwed and that the people screwing us need to be controlled, at lower cost to the consumer, but our liberal "leaders" decided that the private health-market was A-OK and to accommodate themselves to it. Now (according to Ezra) the mission is to sell the country on subsidies larger than they had to be because we lacked the courage to say that the market had failed. Good luck with that!

Posted by: redscott | November 3, 2009 2:27 PM | Report abuse

Unfortunately the cost of these political concerns has distracted almost everybody in Washington, including you Ezra, from designing a policy that will really work. Furthermore not STARTING with single payer as a potential option has narrowed the debate and left us with a huge hill to climb in terms of cost reductions. Even if we ended up with something like what looks like we MIGHT have, the debate would have been framed in terms of the real functional options as opposed to the non-functional public option idea (with exchanges etc.) As it stands people are repeating and reinforcing, including yourself, literally false "memes" about how costs are contained in healthcare.

Posted by: michaelterra | November 3, 2009 2:38 PM | Report abuse

Interesting and complex issue politically.

Here's another hypothesis:

All of the attention on the public option has created a lot of public awareness and learning. And polls have shown it to be very popular. And the CBO has shown it to be a big cost saver (at least the strong version).

All of this will make it a lot easier to get a strong public option in later. And if costs do not come down, the Democrats will be able to now much more credibly say that a big reason is no strong public option with strong price ceilings, so we need one now.

Posted by: RichardHSerlin | November 3, 2009 9:47 PM | Report abuse

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