Pulling the Trigger on a Loaded Gun

The Wall Street Journal reports that the President will call for a public option in tonight’s health reform speech:

President Barack Obama, in a high-stakes speech Wednesday to Congress and the nation, will press for a government-run insurance option in a proposed overhaul of the U.S. health-care system that has divided lawmakers and voters for months. […] The president is likely to say that a government-run insurance plan, known as the “public option,” will not provide a level of subsidies that give it an unfair advantage over private insurers, according to aides familiar with the speech preparations.

Something I’m not entirely certain public option supporters really understand this, but the President’s not lying when he offers those reassurances to the insurance industry. As I’m watching Senator Ron Wyden explain on television right now, under the House and HELP bills something like 80 to 90 percent of the population wouldn’t actually have the option of enrolling in the public option. And of the minority of people who could enroll in the public option, most won’t, since the public option has been crafted specifically so as to avoid giving it an “unfair” advantage over private health insurance.

Recall Nick Beaudrot’s health care flow chart:

The bottom two gray boxes represent new clients for private industry under health reform. The little orange boxes inside those boxes represent new clients for the public option. In other words, even if the public option is put into place private industry is going to be fine. Indeed, this will be a bonanza for private industry one way or the other. The vehemence with which they’re fighting against the public option can be a bit misleading in this regard — it makes it appear to be the case that this is a make-or-break issue for their bottom line, but realistically they’re taken care of one way or the other.


But of course it doesn’t have to be that way. The public option doesn’t need to be designed to be so solicitous of the interests of private industry. Which is one reason I liked this idea from Nancy Pelosi that Brian Beutler flagged yesterday:

But I said it before and I’ll say it again: The health insurance industry, which is out there fighting the public option tooth and nail because it does increase competition, which they don’t want. They’d be better getting a public option now than one that is triggered because if you have a triggered public option, it’s because the insurance industry has demonstrated that they’re not cooperating, they’re not doing the right thing, and I think they’ll have a tougher public option to deal with.

In other words, industry could face a guarantee of a fairly weak public option or they could the dice, trigger-wise, and face the risk of much more robust public option.