a citizen’s journal by Thomas Nephew

Never say never: more debate about the public option

Posted by Thomas Nephew on September 22nd, 2009

Congress, why do you ignore the majority
Click to  pledge that if incumbents vote against
both a “public option” and “single payer,” you’ll
work against them in 2010.  More here.

There’s a lot to unpack in Aziz Poonawalla’s post “Baucus bill follies: the public option is anti-progressive.” In it, he levels a blast at people like me who are insisting that at least a public option be part of health care reform, writing that the “public option” does “exactly zero” towards bringing affordable coverage to all Americans.  He bases this in part on the contention that

“…the public option would only be available to a small fraction of citizens who are either ineligible or unable to afford private insurance.…”

This isn’t entirely clearly written, so while Aziz and others may not disagree, let’s make sure: the public option* will eventually be available to anyone who can enroll for the “Health Insurance Exchange” risk pooling market, i.e., anyone who…

  • is not a full time employee with a qualified employer health benefits plan (QHBP), i.e., affordable and meeting benefits and consumer protections standards, and
  • is not “enrolled in another qualified health benefits plan or other acceptable coverage,” with”acceptable coverage” including things like Medicare, Medicaid, Department of Defense “TRICARE,” and approved state health benefits risk pools like (perhaps) the Massachusetts “Connector.”

Redrafting, then, “the public option will eventually be available to citizens ineligible for more heavily subsidized health insurance plans, and also not covered as a full time employee of a company with an adequate plan.”

The definition is convoluted, but as Medicaid recipients are for the most part unable to afford private insurance, and many full time employees are able to, the public option is clearly aimed at an “in between” financial situations.  However small its target groups turn out to be, they’re logically part of the puzzle of bringing everyone in to a health insurance system.  A public health insurance option also isn’t just “mopping up” the halt and the lame, as one commenter at Aziz’s post seemed to imply — a pool of the unemployed, the self-employed, and employees of small businesses would generally be about as healthy as the rest of the country.

Aziz concludes:

“So the scope of the public option is limited to begin with, and certainly will be constrained so heavily that it will never, ever be the stealth road to single-payer that most of the progressives who are intent on making it a litmus test seem to think it will.”

Now it’s true that I would have much preferred the public option to be available immediately, rather than by 2013, and I’d have preferred to be able to switch into it from my current employer based health insurance if I so desired.  Both improvements would have made the public option a much more direct competitor with private insurance companies instead of an indirect one I’ll only be able to choose if unemployed.  But Aziz’s prediction still combines at least two assertions I question.

First, never say never: just because public option version 1.0 is limited to people who fall through the cracks of the current and future health care insurance system, that doesn’t mean it will always be constrained that way.

Second, while I do favor a long term goal (heck, even a short term one!) of single-payer health care, that’s not why I’m intent on making “public option” a litmus test.  For better or (likely) worse, the single payer bill is not going to pan out this year — (no) thanks to Baucus taking it off the table and Obama retreating from it at near warp speed since becoming a force on the national scene.

Absent a single payer framework, the “health insurance exchange” approach is necessary for this alternative path to health insurance reform to work.  It’s a smart mechanism for pooling risk for those currently outside the insurance system.  Yes, its pricing should have been Medicare-based — and given CBO estimates that the public option would then have cost about 10% less than other participating health plans in the exchange, that may happen sooner than we think.

But only if there’s a public health insurance option in the first place. And even before then, such an option will be important.  As I’ve tried to argue before, the insurance exchange idea isn’t enough by itself because it’s a static system, a sitting duck for the private insurance market to game and defeat while regulators sleep or are co-opted.  A”public option” would be a built-in, public check on the client recruiting, premium and deductible pricing, and claim payout strategies of private insurance competitors.

Much of Aziz’s post (including the prominently displayed chart) is actually a critique of the Baucus plan per se, which makes no mention of a “public option.”  Thus, he and others seem to see the fight over the “public option” as a low-value, no-value, or even counterproductive distraction from the real work of working our way up the family household income ladder — i.e., should subsidies begin at 1.5,  2, or 3 times the poverty rate?  Don’t get me wrong: making as many people as possible eligible for those subsidies is a worthy goal, too.  But given that we’re staying in a framework where private insurance continues to operate, a “public option” would — at least it could — change the whole health care insurance playing field for the better, in ways no other health care reform short of a “single payer” system would.

At the beginning of his piece, Aziz Poonawalla writes:

“…progressives seem to be losing sight of the main goal of health care: to bring affordable coverage to 100% of all Americans. This is a goal that the vaunted public options does exactly zero to achieve, and it strikes me might actually be undermining these basic principles instead.”

As designed, the public option may not do enough to achieve those principles, but it does its part, and it may do it very well.  I have no more of a crystal ball than Aziz does, but I think that far from undermining the goal of universal and affordable coverage, the “public option” advances it.  And I won’t let the shortcomings of the Baucus plan distract me from that.

Accordingly, I hope you’ll join me in signing the pledge linked above, about which more another time.  Basically, it says that you’ll vote, work, and/or fundraise against any Congressional incumbent who votes for a plan that doesn’t include an unconditional public option.

* Warning! These links all take a while to load, since they pull up the entire text of H.R. 3200; if you’re interested, load just one, and mouse over the others to get the section of the bill.

One Response to “Never say never: more debate about the public option”

  1. Thomas Nephew Says:

    Aziz hasn’t answered (yet) — of course, he’s busy like everyone else, and of course responses aren’t required in the first place. But re-reading this it may also be because

    (1) I couldn’t cut to the chase, and
    (2) I dwelled too long on the beginning of his post and not enough on the end where he summarized his points:
    …liberals should be arguing for more spending on the reform bill, new taxes like a VAT (coupled with other measures to make it palatable), and drug pricing negotiation, so as to ensure that we reach the 100% coverage mark and we do not raise taxes on the middle class. Instead, they remain obsessed about the public option. It’s a tragedy, and if and when reform dies and we are stuck with the status quo, the progressives’ ideological purity won’t mean a thing to the family who still doesn’t have a way to pay their medical bills for Timmy’s cancer.

    Re (1): the HR 3200 calls for an individual mandate to buy health insurance, much as car drivers have to buy car insurance. I agree with that, because that’s necessary to create the largest possible risk pool. But both politically and as a matter of fairness, that can’t be a simple windfall to the insurance “industry” (hate that word for paper pushers, but there it is). A public option feels to me like the right solution for that: make the mandate as little of a windfall as possible, and “keep the insurance companies honest,” as Obama has put it.

    Re (2): if after all of this is done, we’re stuck with the status quo, it seems to me “cui bono” (who benefits) analysis should apply. And that will be insurance companies, not progressives who voted down a package that stood to make insurance companies even *more* money than they already do.

    I’ll also ask just one time: if Obama supports it at least conceptually, and Dean supports it with every fibre of his political being, why does Aziz — among the biggest supporters of both candidates I’m aware of — feel the “public option” is such a nonstarter?

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