Was The Public Option Even Viable?
By Justin Gardner | Related entries in Health Care
As this health care debate has dragged on, Obama has taken a lot of shots from both the left and the right.
From the left comes the charge that he hasn’t taken more control over the debate or the legislation, but I wonder if they’ve forgotten what happened in 1993 or if they’re just ignoring it. Either way, they don’t think he has sold the public option effectively enough, and that’s why it’s going down.
The other shot Obama has taken is from the right about nationalized health care or single payer. Do know that a public option that could compete with private industry was never designed to be a single payer system, but many characterized it as a trojan horse that would eventually lead there. That’s obviously wildly speculative since transitioning a public option into single payer would have taken another massive piece of legislation that would have required an even larger majority of Dems.
And that’s where the number crunchers at FiveThirtyEight come in.
See, they’ve been taking a look at the actual votes in the House and the Senate…and they found is barely enough appetite for a public option, must less single payer.
We estimated based on committee votes that a bill containing a fairly weak public option — like the one approved by the House’s Energy and Commerce Committee — would be a favorite to pass the House but probably only by a slim margin, with between 220-225 votes for passage (a minimum of 218 are required). And arguably, the conditions have worsened somewhat for health care reform since the Commerce Committee’s compromise passed on July 31st.It’s the Senate side, though, where the public option was encountering most of its difficulties. Only 37** Senators, according to the whip count at Howard Dean’s website, were firmly on board with the public option, whereas at least a few Democrats (Mary Landrieu, Joe Lieberman, Kent Conrad) had stipulated their opposition to it. (** EDIT: The information at the Dean website appears to be somewhat out of date. More recent counts show something like 43-45 Dems in favor.) There were nevertheless a number of scenarios under which one can imagine a bill with a public option having passed — Lieberman, Landrieu, et. al. might be nominally opposed to a public option, but is their opposition so firm that they would vote to filibuster any bill that contained one?
Wonder why Obama wasn’t putting the full weight of his popularity behind the public option?
Well, now you know.
The votes simply weren’t there. This is why he asked the Blue Dogs to come up with a bipartisan alternative: the co-ops.
And maybe it’s just me, but the basic idea of the co-ops have more appeal to me on a personal level since they’re so localized, which might actually be better for competition in the long run. In other words, do you think one monolithic provider competing against many localized private companies will do better than many localized public options that are in line with the needs of the community?
In any event, those are my thoughts for now. What are yours?
This entry was posted on Monday, August 17th, 2009 and is filed under Health Care. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
August 17th, 2009 at 10:58 am
Face it-health care reform is in trouble. Obama bobbled the ball starting out by trying to rush it and then Right Wing Republicans started taking pot shots and spreading disinformation. And the Insurance companies are loving it. It’s greed pure and simple.MONEY – the bottom line. And Insurance companies don’t want competition. Say it ain’t so !
August 17th, 2009 at 12:50 pm
The trouble with localized co-ops is they don’t add anything. They’re paying for health insurance. That’s not complicated. A company agrees to a fee schedule with providers, charge premiums, and pay bills. That’s it.
Small local companies are objectively much worse at this than big ones. They have no negotiating clout outside their home base, so there’s no way in hell they’re getting a good deal from providers. Lots of small companies means lots of different bank accounts, billing systems, etc. That adds administrative costs. There’s a reason the Public Option was supposed to save us $150 Billion.
They’re also inherently high-risk. Let’s say one member has triplets prematurely. Total bill $10 million. The company needs to get that $10 million from it’s members, and if it only has 10,000 members because it’s the North Dakota co-op, there are only 600k in the entire state, 80-90% of those 600k are not using the Health Insurance Exchange (total ND market 60,000-120,000), and it’s market share is only 10% all those people are on the hook for $1,000. If nobody else gets sick that year that’s fine, but in insurance terms the risk pool is way too small.
August 17th, 2009 at 2:59 pm
I suspect that the left will eventually go with the co-op idea with the hope that either: A. They fail and the government has to step in. B. You end with huge co-ops that eventually merge into one big one which will basically end up as a public option anyway (think too big to fail).
I don’t think small co-ops will not be particularly cost effective unless the member ship limits itself to low risk members and it unclear under what rules co-ops can be formed. Large national ones may be better, but in the end competition is going to be not going to keep costs down very much since the providers don’t have a reason to keep costs low. You think that United Health Care or Blue Cross is going to let some doctor give some co-op a break they don’t get? Heck no so the provider isn’t going to give it to anyone.
August 17th, 2009 at 6:20 pm
Many did characterize the public option in that way, including the guy who invented the idea and sold it to the Obama campaign in 2007, Jacob Hacker. Get a load of this:
““Someone told me this was a Trojan horse for single-payer. Well, it’s not a Trojan horse, right? It’s just right there. I’m telling you. We’re going to get there, over time, slowly, but we’ll move away from reliance on employer-based health insurance as we should, but we’ll do it in a way that we’re not going to frighten people into thinking they’re going to lose their private insurance.”
Orwellian, isn’t it? It appears you are incorrect Justin, and you fell for the ruse. Its a good thing most of the rest of the public didn’t.
The only reason why private insurance may seem monolithic, is because the government keeps it that way. The only insurance plans the government allows you to buy are local, there is no real competition in the private sector now. The insurance plans the government does allow your employer to buy are so heavily regulated that they have to be big in order to remain solvent.
Besides what does “the needs of the community” have to do with anything? Health care is individual in nature, at least when talking about coverage for injury and illness.
August 17th, 2009 at 9:35 pm
The co-ops will fail. Not due to that being the plan but the fact that they just won’t have the clout to change anything. The awful truth is that insurance won’t help the situation. The entire system needs an overhaul and the private sector won’t do it because the private sector is all about pure self interest. A large number of entities working solely for their own profit will not move us forward as a nation towards a system that will help all us, or even a significant majority.
August 18th, 2009 at 7:44 am
So Jimmy, what is your opposition to single payer anyway? How is it worse than what we currently have?
August 18th, 2009 at 11:02 am
To see a public option as a step to single-payer nationalized health care, you have to believe that . . . it will be so attractive to the majority of the American people that they will be moved to take the next step. I guess the far right believes it is that attractive — but personally, i can’t see it.
August 18th, 2009 at 6:16 pm
wj:
When taxpayer money can be used to subsidize the premiums of those who sign up for the public option, and the government continues to restrict access to private insurance except those plans deemed acceptable by state regulators (with the public option effectively being the only nationally available plan), then the deck is unfairly stacked in the favor of the government option.
Your employer chooses your health insurance anyway, and if their corporate income taxes are subsidizing the public plan, undercutting the cost of private insurance, they will dump you into the public option to save money. The penalties proposed by democrats for doing this are so small that the public plan plus the penalties would still be less than a state approved private plan. That is not “free market competition” at work. It is extortion.