Over at ThinkProgress, Faiz Shakir reports that “in an emailed statement to Bloomberg News, Health and Human Services Secretary Kathleen Sebelius said she’s open to the idea of dropping a public health insurance option in favor of a medical-insurance cooperative,” even if the proposed co-operative is a mosaic of state-based programs.
Sebelius explained that the administration was open to any proposal that would “have a comprehensive approach that lowers costs” and provides “coverage for everyone.” “The administration remains open to all serious ideas including national and state co-ops as well, public plans modeled on Medicare, as long as such plans achieve the president’s goals of reducing cost, improving quality and giving Americans real health-care choice,” Sebelius said.
But it’s a unclear that a national cooperative — much less state-based cooperatives — would be able to lower costs. A single health insurance plan has limited scope to influence the practices of providers and other insurers. It lacks the clout of Medicare — which can drive system innovations and payment reforms — Medicare-like administrative efficiencies, or the ability to use Medicare leverage to ensure a large provider network that accepts Medicare prices. A new cooperative health care plan won’t be able to lower costs and drive private insurers to aggressively bargain with providers (and pass the saving on to its beneficiaries in the form of lower premiums). Multiple cooperatives — operating as non-profit health insurance plans — would have even less market leverage to bargain for lower prices.
In fact today, during a press briefing with reporters, former Sen. Tom Daschle — who has been criticized for failing to strongly advocate on behalf of the public plan — argued, “I can’t think of a tool that more effectively controls costs than a public option. I mean every study that has been done on a public option shows what remarkable cost savings you can derive”:
Actually as I said at the beginning, the degree to which Republicans make themselves less and less relevant is the degree to which a public option is more and more likely, because we are negotiating with the Democrats rather than the Republicans who oppose it. So I would say that a reconciliation vehicle would probably have a pure public option just because most likely it will only involve Democrats deciding what that reconciliation package will be.
Health care reform isn’t all about a public option, but a public option may be essential to sustaining the effort. Progressives certainly shouldn’t allow the perfect to be the enemy of the good — a health care bill that provides coverage to more Americans but lacks a public option is better than no reform at all. But Democratic lawmakers should be careful not to sacrifice good policy for the sake of winning one or two Republican votes. As the New York Times reports this morning, there is “Little Hope for G.O.P. to Support Health Bill.” Republican opposition is rooted in ideological stubbornness and a political unwillingness to allow Democrats to win on the issue, not sound policy rebuttals. As GOP word-smith Frank Luntz has conceded, Republicans will label Obama’s reform effort a “government takeover” of health care regardless of the actual proposal and they continue to misrepresent and lie about the consequences of a public option.
But as Daschle points out, if Republicans continue to lie and obstruct reform, they may push Democrats into reconciliation and, ironically, contribute to the creation of a robust public option. Unfortunately, it’s not yet clear that everyone in the administration agrees that this is good policy.
I can’t think of a tool that more effectively controls costs than a public option. I mean every study that has been done on a public option shows what remarkable cost savings you can derive. I hope I haven’t given people the wrong impression, I don’t think the public option is dead at all. I think it is very much alive. So, I think that there is a reasonable belief that we are going to have a very good public option at some point. Actually as I said at the beginning, the degree to which Republicans make themselves less and less relevant is the degree to which a public option is more and more likely, because we are negotiating with the Democrats rather than the Republicans who oppose it. So I would say that a reconciliation vehicle would probably have a pure public option just because most likely it will only involve Democrats deciding what that reconciliation package will be. I find it amazing to me that the insurance companies, when given the choice between competition and regulation, say we prefer regulation. And I have never seen an industry publicly express the hope that they can be regulated more aggressively but that’s what they argue. That’s the second thing we need less regulation, if you get more competition and that is what the public option provides. Third thing is that you’ve got plans all over the country that use this already and we know it works. And then the fourth thing is that it is remarkably popular, even among Republicans, 68%, according to one poll I saw recently, of Republicans say they think it is a good idea. So there is broad widespread support. So for all those reasons, its popularity, its efficacy, its cost containment and its precedence, there is a strong argument made for a public plan.
So why put it off for five years?
Well again you have got to look at it in the context of how much support is there for a public option and what can we do to get it done? That would be my first, second third or fourth option, but if it’s a way to resolve this to get the larger package of health reform completed, that’s on the table.