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On Lameness and the Public Option

By Matthew Yglesias  

"On Lameness and the Public Option"

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Kevin Drum looks at the popularity of a public option and ponders the lameness of the Democratic Party:

If Democrats really do lose the House next year (about which more later), this will be why. If they don’t pass a healthcare bill at all, they’ll be viewed as terminally lame. If they pass a bill, but it doesn’t contain popular features that people want — like the public option — they’ll be viewed as terminally lame. At a wonk level, a bill without a public option can be perfectly good. But wonks aren’t a large voting bloc, and among people who do vote, the public option is very popular. So, um, why not pass it?

I’m largely in agreement, but I have a few responses.

One is that the status quo in American health care is very bad. A bill can easily be both “lame” and be an improvement over the status quo. I think politicians would be rewarded for improving on the status quo even with a lame bill. But in terms of the midterms the fact that any bill that’s passed won’t take effect until 2013 is obviously going to change the relevant considerations.

Another thing is that I’ve been pondering this and I actually think it’s wrong, on “a wonk level,” to conceive of effective regulation of private insurance as a second-best alternative to passing a public option. Unless you’re going to totally marginalize private insurance with a Canadian- or British-style system, the first-best alternative is to effectively regulate private insurance as they do in the Netherlands. Trying to introduce a public option is a second-best step that amounts to admitting that you lack confidence in the regulations and the regulators and are going to use the cruder measure of a public option in their place. And the real problem with the Finance bill is that it doesn’t really do either of these things. It improves on a very bad status quo, but the lameness is real.

Last, it’s worth recalling that the public option fight is a kind of proxy for the larger issue of can health reform master the health care interest group complex (which includes but is not limited to health insurance companies) or must it be a handmaiden of said interest group complex. There are other policy levels that can bring the interest groups to heel, but that’s not really what the Senate is debating. If what happened was that you had a block of senators who wanted to achieve this goal through some other method, that would be one thing. But that’s not what’s going on. A reform that works hand-in-glove with health care interest groups can improve on the status quo, but that says more about the lousiness of the status quo than it does about the merits of the bill.

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