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Revenge of the Public Option

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"Revenge of the Public Option"

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For the second day in a row Ezra Klein has a post laying out the Democratic Party leadership’s thinking on the public option, and for the second day in a row (here was the first) I’m scratching my head on the morning after to figure out what’s happening.

Here’s how I, personally, see the public option:

— Progressive activists tend to massively overstate the policy merits of the Schumer-style public option, but it’s still a good idea.

— It’s also an idea that polls well.

— It’s also clear that Democrats are itching to characterize their bill as primarily about “taking on” the insurance industry, and the public option would put more meat on the bones of that story.

— I think it’s substantively important to make the House liberals eat an excise tax idea they don’t like, and this will be a lot easier for them to swallow if they get their way on the public option.

— Dropping the public option as the price you need to pay to get 60 votes makes sense, but if you only need 50 votes then you only need 50.

— Offering to drop the public option to make the bill bipartisan also makes sense to me, and the White House should definitely make that offer, but it’s obviously not an offer the GOP will accept.

So putting the public option back in seems like a no-brainer.

An important part of the subtext here, I think, is that interest-group opposition to a public option is considerably broader than most people realize. Insurers don’t like it, yes. But the voters hate insurers. But there’s a very broad array of stakeholders who benefit from the inefficiencies of the status quo—everyone from doctors to hospitals to medical device makers—all of whom like the idea of more customers (mandate/subsidize) but dread the specter of reduced per-unit insurance payouts. And while voters don’t like insurance companies, they do like doctors. And Senators like home-state hospitals and device manufacturers. And the White House doesn’t like public fights with the providers’ lobbies.

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