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Ditching the Public Option

6a00d8341c909d53ef01157023e340970b-pi It looks to me like the popular objections to a health care bill being expressed by voters this month are concentrated in two primary areas:  

  1. A concern about “government control of the health care system”—mostly around the public plan option.
  2. The trillion-dollar cost of a health care bill at a time deficits are swelling and worries about who will really end up paying for it.

As a result of the first concern, we are getting the first indications that some Democratic leaders are ready to ditch the robust Medicare-like public option and are beginning the process of talking the party out of demanding it be included in a health care bill.

This from Politico today:

After the toughest week yet for health reform, leading Democrats are warning that the party likely will have to accept major compromises to get a bill passed this year – perhaps even dropping a proposal to create a government-run plan that is almost an article of faith among some liberals…"Trying to hold the president's feet to the fire is fine, but first we have to win the big argument," former President Bill Clinton said Thursday at the Netroots Nation convention, a gathering of liberal activists and bloggers who will prove most difficult to convince. "I am pleading with you. It is OK with me if you want to keep everybody honest. . . .But try to keep this thing in the lane of getting something done. We need to pass a bill and move this thing forward."

It has been clear to me for months, and I have been saying so on this blog, that the public option has not had the votes even among Democrats to make the finals. With all the heat “a government takeover” of health care has attracted from those at the town hall meetings either the Democrats ditch it or get used to the idea they have no chance of passing health care reform.

Given all of the stridency we have heard from liberals in recent weeks making inclusion of a public plan a litmus test for the minimum health bill they will vote for, it will be interesting to see just how this rolls out.But getting rid of the public option doesn’t make health care reform easy.While there are lots of other issues to sort through, I will suggest that the public’s unease with health care goes beyond the public plan. Voters seem every bit as uncomfortable with the trillion-dollar cost of reform and just how it would be paid for. They just don’t seem to buy the argument that savings from the current system and a tax on someone else will save them from eventually having to pay for it—and I think they are justified in believing that.

With talk about abandoning the public option also comes a discussion about a smaller health care bill that would cost less and just make a down payment on reform—focusing on insurance rules and the insurance exchange.

That is a possibility. However, even that will not be easy.In order to craft an insurance system where pre-existing conditions limits and medial underwriting could be largely or entirely done away with, it would also have to be a fix that got lots of the healthy people to buy coverage. To do that, get a good mix of the sick and the healthy to maintain a viable insurance pool, the subsidies for those now uninsured and unable to afford the thousands of dollars health insurance costs would have to be robust.Those insurance subsidies are what costs so much and make up the better part of the trillion dollar price tag the currentDemocratic health care plans have.So, we can theoretically get rid of the robust Medicare-like public plan option with a stroke of the pen but not the trillion dollar price tag—and with it the voters’ concern about how much a bill costs and who will pay for it.

Robert Laszweski has been a fixture in Washington health policy
circles for the better part of three decades. He currently serves as
the president of Health Policy and Strategy Associates of Alexandria,
Virginia. Before forming HPSA in 1992, Robert served as the COO, Group
Markets, for the Liberty Mutual Insurance Company. You can read more of
his thoughtful analysis of healthcare industry trends at The Health
Policy and Marketplace Blog
, where this post first appeared.

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Roger ThorntonMelodie MillerNancyAnnonymousMary Davis Recent comment authors
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Roger Thornton
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Roger Thornton

It has been interesting listening to the news, US congress, and public outrage about a government run health plan. Knowing most people have known a family member who has been out of work for an extended period of time, denied a needed surgery’s , or just needed comfort care to finish living their last day’s only to be denied. Medical plans help people who have them, and they are not perfect, what is even worse is hearing how people who don’t have medical shouldn’t be covered; everyone could go into a story of how someone they know can’t get treatment.… Read more »

Melodie Miller
Guest

Dear President Obama,
Please do not accept a bill that excludes a public option for health care. It is essential that we have a public option to keep the private insurance companies honest and competitive.
Melodie Miller
Voter

Nancy
Guest
Nancy

Public Option is Competition!!! Cooperatives do not work. Failed in Florida over ten years ago. Public Option will increase competition and price pressure. Come on capitalists — are you afraid it will reduce greed in insurance companies?

Annonymous
Guest
Annonymous

A better idea for health care reform:
-require that insurance companies cover all people with preexisting conditions for a maximum of $200/month more than the price of their plan for those who do not have preexisting conditions.
-make a government “public option” available, but only for family households making under $50,000 a year or individuals making under $35,000 a year.

Mary Davis
Guest
Mary Davis

I believe the current Obama and/or congressional plans are incredibly naive…. and will ultimately result in hurting a lot of innocent people. I worked for an HMO for 22 years and in that time became aware of more and more businesses trimming back on health care benefits as premiums skyrocketed. Big business is just looking for an excuse to get out of the health care benefit business because of this premium issue….If there’s going to be a ‘public option’ they’re ready to hand their employees over to that!! Irrespective of whether there’s a penalty attached to it!!! Additionally, the current… Read more »

Alex Snow
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Alex Snow

Problem is those bluedogs aren’t really democrats and surely not liberals that represent struggling working people,probably shills who’ll find work in the industry when they’re gone. Republicans have gotten so good at politics that even when they’re a minority they influence like a majority.
Yes the party of the corporate lobbies wins at every turn. Amazing what a undereducated overpaid corporate whore can do

Stephen Kardos
Guest

Your understanding of the need for total population participation in order to conttrol health expense is exactly what has been undermined in the evolution of the health insurance industry in our country. http://bit.ly/na9yc In order to overcome high risk for small group insurance, a new insurance company would have to have long term 3+ year contracts to succeed. Any disenrollment prior to that minimal time would have to incurr very large financial penalties. Premiums would have to be set on a rolling go forward basis. The benefit design would have to require preventive health and vlaue based health plan concepts.… Read more »

jacksmith
Guest
jacksmith

NO CO-OP’S! A Little History Lesson Young People. America needs your help. More than two thirds of the American people want a single payer health care system. And if they cant have a single payer system 77% of all Americans want a strong government-run public option on day one (86% of democrats, 75% of independents, and 72% of republicans). Basically everyone. According to a new AARP POLL: 86 percent of seniors want universal healthcare security for All, including 93% of Democrats, 87% of Independents, and 78% of Republicans. And 79% of seniors support creating a new strong Government-run public option… Read more »

HD
Guest
HD

Look, can we all just settle down a little first? We all agree on the following facts: We don’t like doctors, or hospitals. They are scary, intimidating, and complicated. Things we don’t understand are scary! Western Medicine continues to poison the symptom, hopefully killing whatever ails the body, before it kills your body! Let’s all get healthy with crystals, meditation, pilates, and colonics. Most disease comes from parasites and toxins. You just need the right oils and healing ointments, and you will be fine. You don’t even need the permission of your insurance company to use these healing agents! So… Read more »

edward
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edward

I am opposed to the current health care reform plan and the public option specifically. The public option is supposed to be designed to compete fairly and equally with private insurance companies. This is not possible because the public option will never be allowed to go bankrupt. It would be politically impossible to close this program. It can function inefficiently, provide poor service and lose money without the threat of going bankrupt unlike private insurance companies. It will reimburse at an unreasonably low rate and provide limited coverage to compete with the private insurance companies. There will be no incentive… Read more »

joel romo
Guest
joel romo

Look, I’m no internet comment person, but today I had to get on and say something. HEALTH CARE REFORM NOW! With or without the republicans. This was a promise Obama made during the prez race. Let’s follow through!

Tom
Guest

President Obama, we are tired of the Whitehouse trying to sell us health care reform. You know, I know and the American people know this is really about more government power and control. Our biggest problem has become our government! Stop! Just stop all this nonsense! Do not treat U.S. like we are stupid, ignorant morons! Join U.S.! Do Not Sell Out “We the People” of the U.S.A.! We Trusted You! President Obama, great Presidents do Great things! They have great Honor and Integrity! We know you can do it! “We the People” know the truth! We want to hear… Read more »

Old Jim
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Old Jim

It’s amazing to see how far down the road we are without addressing the basic realities needed for such an undertaking. It reminds me of one of those early science fiction movies where people are walking around in space without a space suit or gravity shoes. Business realities of health care must be developed. We cannot just take this pile of medical technology and service 350 million people, unless that is all we as a people want to do. The Mayo Clinic has made a sparkling start in this direction but there effort was not a qualified “design prototype” for… Read more »

Eric Dishman, Intel Digital Health Group
Guest

While all the news sources are abuzz about the dropping of the public option, I’d like to suggest that there are much more fundamental and important questions that we should be focusing on instead. The health reform we so desperately need is about much more than health insurance. We need to focus instead on driving a new vision of personal health that improves care and saves costs by shifting the focus from institution to individual and hospital to home. We need to give clinicians the flexibility they need to give patients the care they need, whether that means in-person visits… Read more »

Deron S.
Guest

Phillip – You made a couple references to other countries. I would suggest using some caution when making those comparisons. While we are more similar to France that we are to say, Namibia, we are also very different. In America, more, bigger and faster is better. The freedom, independence, and diversity that I mentioned previously can be found in other countries, but not to the extent that it can be found in the U.S. We are more obese precisely for that reason. When it comes down to it, this is less of a healthcare problem and more of a deeper… Read more »