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Latest Twists on the Public Option

By Matthew Yglesias  

"Latest Twists on the Public Option"

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I think that probably too much is being made of the latest comments from administration officials regarding the public option. My understanding is that the White House’s position has always been that it favors a public option, thinks a public option is a good idea, wants to see a public option in a bill, and also wants to sign a health reform bill that passes congress, covers the uninsured, and reduces long-run health cost inflation relative to current baseline projections. I haven’t heard anything new from the White House. They never said the president would refuse to sign a bill that doesn’t include a public option, and they’re not saying now that they don’t favor a public option.

So to me, this sounds like the status quo:

The “public option,” a new government insurance program akin to Medicare, has been a central component of Mr. Obama’s agenda for overhauling the health care system, but it has also emerged as a flashpoint for anger and opposition. Kathleen Sebelius, the health and human services secretary, said the public option was “not the essential element” for reform and raised the idea of the co-op during an interview on CNN.

Mr. Obama himself sought to play down the significance of the public option at a town-hall-style meeting on Saturday in Grand Junction, Colo., when a university student challenged him on how private insurers could compete with the government.

All of this is about the fact that private insurers are very powerful, and there’s not sixty votes in the senate for a robust public plan. As Jonathan Zasloff says, it’s extremely annoying to hear this argument from Kent Conrad who refuses to acknowledge that “the reason why ‘there are not enough votes in the Senate’ for a public option is because Kent Conrad opposes it.” At the same time, public plan advocates have gotten a whole bunch of progressive members of the House of Representatives to at least say they won’t vote for a bill that doesn’t include a robust public option.

Nominally at least that means that health reform is now in a legislative dead zone—there aren’t the votes in the House for a bill without a public option and there aren’t the votes in the Senate for a bill with them. If it comes right down to it and the senate is prepared to pass a bill that:

(a) subjects insurance companies to tough new restrictions,
(b) taxes employers who don’t provide decent health insurance to their employees,
(c) creates a new regulated marketplace in which individuals and small business employees can buy quality health insurance,
(d) expands Medicaid eligibility, and
(e) offers subsidies to ensure the affordability of insurance for middle class families

I have a hard time believing that House liberals will really kill the bill. But maybe they will.

One thing I wonder about is this. Given that adding a robust public option into the mix would reduce costs, if you set up a system without a public option wouldn’t you be able to add the public option in later years as an uncontroversial application of the reconciliation process? It seems to me that doing so would count as a 100 percent legitimate deficit reduction play. The public option concept also polls substantially better than does health reform as a whole. Under the circumstances, the odds for securing 50 senate votes for adding one strike me as pretty good.

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