Is the weak public option bad politics?
The public option written into both the House and Senate bills is a pale shadow of the policy many liberals initially envisioned. Cut off from Medicare's payment rates and networks and limited to the small sliver of Americans eligible to use the insurance exchanges, the Congressional Budget Office predicts the public option will actually cost a bit more than competing private insurers.
That's not because the public option will do a poor job. Quite the opposite, actually. The public option will be cheaper than private plans for what it offers and whom it insures, but CBO believes it will end up with a somewhat sicker clientele, and it will be less restrictive than private insurers, and the two will combine to hike its premiums about 5 percent higher than the private plans it's pitted against.
As time goes on, you could see this playing out a couple of different ways. One potential path is expansion: The public option might secure a reputation for offering a kinder, gentler form of insurance, and with the policy's popularity assured, another Democratic majority might eventually pair it with Medicare in a bid to save money.
But another potential path is that it discredits, or strikes a blow against, the idea of public insurance. If the public option costs more and, for that reason, performs poorly, it will be hard for future liberals to argue that the problem with the insurance market is a surfeit of for-profit competitors. Conservatives will point toward the anemic public options and brand that idea a decisive failure, and intricate arguments about risk selection and bargaining power will be cold comfort for liberals and too complex for the country. Indeed, it's evidence of how much of this debate is philosophical that conservatives haven't recognized the opportunity embedded in a crippled public option.
Then, of course, there's the third path, which I regard as the likeliest of the three: The public option doesn't do much either way, and for all the hubbub it's attracted this year, it's largely absent in the public debate come 2016, or 2019, when it's serving a mere percent or two of the country and hasn't performed well enough or poorly enough to serve as the centerpiece in anyone's argument.
November 23, 2009; 9:18 AM ET
Categories: Health Reform
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