I doubt it. Progressives are in the middle of a long negotiation with conservatives that will end in conference committee late this fall, where politicians will merge the Senate and House versions of the bills, hammering out the differences. We know that the House bill contains a strong public sector plan. It seems likely that the Senate plan will offer, at best, a weak public sector alternative. What will happen then?
No one knows. But as I have suggested in the past, conference is what matters. Whatever compromises Senator Max Baucus does or doesn’t make in the Senate Finance Committee’s version of the bill may not, in the end, be that important.
So why would the administration throw in the towel now, during this August half-time, when the game is far from over? A few weeks ago, the president spelled out what he expected to happen in conference:
“Conference is where these differences will get ironed out. And that's where my bottom lines will remain: Does this bill cover all Americans? Does it drive down costs both in the public sector and the private sector over the long term? Does it improve quality? Does it emphasize prevention and wellness? Does it have a serious package of insurance reforms so people aren't losing health care over a preexisting condition? Does it have a serious public option in place? Those are the kind of benchmarks I'll be using. But I'm not assuming either the House and Senate bills will match up perfectly with where I want to end up.” (Thanks to Ezra Klein for calling my attention to this statement.)
The Media Wants an Answer Now
Nevertheless, the media has been quick to interpret remarks made by President Obama and Health and Human services Secretary Kathleen Sebelius last weekend as proof that the administration is folding—giving up on the public plan. Why?
Because editors need headlines, and some reporters are fixated on getting “scoops.” A headline that tells us: “Still Not Clear Whether the Administration Will Insist on a Public Option” does not sell newspapers. So the media has been pressing the president to tell them exactly where he will “draw a line in the sand.”
But as the president pointed out to reporters at a press conference not long ago: “You guys are on a news cycle, I’m not.” In other words, the media would like a definitive answer in time for “News at 5.” The president is under no such pressure to announce his bottom line. He’s playing poker with the conservatives—why would he throw down his cards first? It makes much more sense for him to keep them close to his vest.
Nevertheless, many perfectly honest reporters believe that President Obama was sending a “signal” last weekend, when he told a Town Hall meeting: “The public option, whether we have it or we don’t have it, is not the entirety of health care reform. This is just one sliver of it, one aspect of it.” Then, during an interview on CNN, Health and Human Services Secretary Kathleen Sebelius, suggested that the public option is “not the essential element” for reform. To many in the media, that clinched the story: the administration is backing-tracking on the public option.
Monday, The New York Times ran the headline that summed up the media consensus: “Public Option’ in Health Plan May Be Dropped.”
But, to the Times’ credit, the piece that followed made it clear that most news reports were simplifying the story. At the town meeting the Times’ reporters observed, the president “strongly defended the public option” before saying that it’s not the “entirety of health care reform.” In fact if you look at the speech, you’ll find that the president devoted over 700 words to explaining why the critics of the public option are wrong. Click here to read the speech. Scroll down to the phrase “So far, so good” to see the president’s full argument in favor of a public-sector insurance plan.
Here he makes it clear that taxpayers will not be supporting the public plan; it will fund itself with the premiums it collects. He explains why the public plan would be less expensive; pointing out that over the past ten years, healthcare spending under Medicare has not been climbing nearly as quickly as spending under private insurance plans. Medicare has been trying to rein in health care inflation, while private insurers have been paying drug-maker and hospitals whatever they ask—and then passing the costs on in the form of higher premiums.
At the same time, the president stressed, the public plan would not save money by slashing payments to providers. The House bill is clear the public plan will not simply adopt Medicare or Medicaid rates. It will negotiate rates with hospitals and doctors—just as private insurers do. No doctor would be forced to accept public insurance. The public plan would be forced to offer reasonable reimbursements, or it will lose in the competition with private insurers. Finally, the president suggests that the only real reason to oppose the public plan is if you agree with Ronald Reagan: “government is always part of the problem, never part of the solution.”
But if you share Reagan’s ideology, this means that you are essentially against any type of health care reform. And in fact, that is where most Congressional conservatives stand. They want to preserve the status quo—and the profits that our exorbitantly expensive health care system generates for those special interests have been contributing to the conservatives’ campaigns. For the conservatives, universal coverage is not a priority unless it is going to lead to more revenues, and fatter profits. But, if it does that, we won’t be able to afford universal coverage. Indeed, we won’t be able to afford the insurance we have today.
Last weekend, the president’s defense of the public plan was clear and articulate. One can only wonder: why did the media ignore that section of the speech and focus almost exclusively on those two sentences that said it was one part of health care reform—not the whole enchilada? Maybe it’s because those two sentences fit so nicely into a sound bite.
The Liberal Response
If you read the entire Times story which appeared Monday, you’ll find that much of it is devoted to how liberal Democrats have reacted to media reports that the administration might give up on the public plan.
Senator John D. Rockefeller IV, Democrat of West Virginia, affirmed his support for the public option. “I believe the inclusion of a strong public plan option in health reform is a must.”
“I am not interested in passing health care reform in name only,” Senator Russ Feingold of Wisconsin said in a statement issued on Monday. “Without a public option, I don’t see how we will bring real change to a system that has made good health care a privilege for those who can afford it.”
Former Governor Howard Dean of Vermont said on Monday that he saw a public plan as inextricably linked to a health overhaul. “I don’t think it can pass without the public option,” Mr. Dean, who is a physician and a former chairman of the Democratic National Committee, said on “The Early Show” on CBS. “There are too many people who understand, including the president himself, the public option is absolutely linked to reform,” he said. “You can’t have reform without a public option. If you really want to fix the health-care system, you’ve got to give the public the choice of having such an option.”
The Times summed up the progressive reaction: “Dropping the public option might weaken support for a health care overhaul among Democrats in Congress.” The paper added that, in an interview on Sunday, the Times reported, Mr. Obama’s senior adviser, David Axelrod, assured progressives that the president remained convinced that a public plan was “the best way to go.”
Reading about the responses on both sides, I couldn’t help but wonder: was Secretary Se
belius asked to float a trial balloon? Was the president also testing the water, to see how many prominent liberals might declare: “I won’t vote for a plan without a public option”? If so the White House got its answer. The president’s comments rallied liberals around the public sector option.
The next day, Tuesday’s Times reported: “on Monday [the White House] sought to allay concerns by emphasizing that President Obama still supported a so-called public option and had not decided whether to drop that concept to make legislation more palatable to moderate Democrats. The president will avoid committing to either path until at least next month, aides said, in hopes of keeping the issue from overtaking the entire health care debate.
“The White House, administration officials said, increasingly believes it will have to rely almost entirely on Democratic votes to advance the health care legislation as Republicans move to solidify their stance against it.”
Do They Have the Votes to Pass the Public Sector Option?
That last sentence is important. While Max Baucus continues to scrounge for Republican votes, the White House has acknowledged what has seemed clear to many for a while: Republicans do not want health care reform. It is pointless to try to cobble together a bill that will please them.
Could the White House pass a plan without progressive Democrats on board? I doubt it. Legislators like Senators Rockefeller and Dodd are among the strongest voices in Congress. The Blue Dogs just aren’t that popular—and when they stand for re-election, they will need the White House’s support. Put it this way, they do not want to face primaries in their home states.
Unlike the vast majority of reporters, Ezra Klein understands that the White House has not caved on the public sector option. Today, in his Washington Post column, Klein offers this provocative analysis of what may happen in Conference:
“The members of the conference committee” who will merge the House and Senate bills “ are chosen by the leadership. They include the relevant chairmen of the committees — Max Baucus will be there, and Chris Dodd will probably serve in Ted Kennedy's stead, and they will meet with Henry Waxman and Charlie Rangel and George Miller — and a handful of others. The final bill needs a majority of both the House and Senate negotiating teams. . . If Harry Reid stacks the Senate team with enough left-leaning senators to ensure a majority for a liberal-leaning bill (this is where Jay Rockefeller, chairman of Finance's health care subcommittee, and Barbara Mikulski, chairwoman of HELP's retirement and aging subcommittee, could play a role), a liberal-leaning bill, with a public option, is a pretty good bet.”
If such a bill comes out of conference, it would pass the House, no problem. What would happen in the Senate? Klein reminds us: the rules say that the Senate cannot amend a bill that has come out of conference. They can’t edit it; they can’t hold it up in committee. Senators can vote against the whole bill. And they can attempt a filibuster. “If three Democrats opposed the legislation and wanted to kill it, they would literally have to filibuster it (this is assuming that Democrats have 60 votes, which is not certain given Kennedy's health)” Klein observes. “That would be a very hard thing to do at that stage in the game. It would isolate the obstructionists, ensuring funded primary challenges and the enduring enmity of the Senate leadership and the White House. Kent Conrad can say that there aren't enough votes for a public option and imply that he's just protecting the final bill from defeat. But is he willing to be one of those "no" votes? Is he willing to filibuster? That's a different game indeed.”
Conrad’s has been the loudest voice declaring the public option is dead. “The fact of the matter is, there are not the votes in the United States Senate for the public option,” Mr. Conrad said on “Fox News Sunday.” “There never have been. So to continue to chase that rabbit, I think, is just a wasted effort.”
Let me suggest that the mainstream press should be wary of amplifying anything that Fox News says. It’s clear to many observers that Fox has its own ideological agenda. The fact Fox says the public sector plan is dead does not make it true.
Conrad has a vested interest in knocking the public plan. He has been pushing for an alternative: non-profit co-ops that would try to compete with for-profit insurers. The problem is that these non-profit co-ops would be small. This would be a David vs. Goliath contest– sham competition. (The co-ops would be very much like consumer credit unions going up against big banks.) The Times quotes White House advisor David Axelrod, “from Mr. Obama’s point of view. . .one downside of a co-op [is] that it might be unable to ‘scale up in such a way that would create a robust competitor to private insurers.’”
He is absolutely right.
Is the Public Option Necessary?
Could we have affordable, high quality health care for all without a public insurance option? Perhaps, if insurers were tightly and fairly regulated. But the chances of that happening are slim, particularly if Max Baucus and other conservative Democrats play a major role in writing this bill.
As Paul Krugman wrote in the New York Times Monday: “Look, it is possible to have universal care without a public option; Switzerland does. But there are some good reasons for the prominence of the public option in our debate.
“One is substantive: to have a workable system without the public option, you need to have effective regulation of the insurers. Given the realities of our money-dominated politics, you really have to worry whether that can be done — which is a reason to have a more or less automatic mechanism for disciplining the industry.”
The U.S. is not Switzerland. Here, we practice what the French call the “le capitalisme sauvage”—unfettered capitalism. Our captains of industry resist regulation. They pride themselves on finding loopholes. They employ armies of lawyers to do just that. No doubt, they will be assiduous in trying to figure out ways to cover less—while charging patients more.
A public sector insurance plan could serve as an “automatic mechanism for disciplining the industry,” by setting a high bar that private insurers would have to compete with. A public plan would not have to please Wall Street—or shareholders looking for earnings growth. It would have one goal: to offer Americans comprehensive, affordable care at a reasonable price. The House bill suggests that the public sector plan will follow Medicare in beginning to pay doctors for the quality of care that they provide, rather than volume. Better outcomes will bring bonuses. The House bill would let Medicare negotiate for discounts on drug prices. Presumably the public sector plan would follow suit.
Finally, a public plan is likely to use comparative effectiveness research to determine which treatments provide the greatest benefit to patients who fit a particular medical profile. Traditionally, for-profit insurers have said “no” to treatments based on price, without investigating benefits and risks. At the same time, if a treatment is very popular they will cover it—whether or not it is effective. They don’t want to lose market share. This is why for-profit insurers continued to cover the pain-killer Vioxx –even though medical research suggested that it might be causing fatal strokes and heart-attacks.
By contrast, the VA, which is a government plan, along with Kaiser and the Mayo
Clinic (both non-profits) stopped prescribing Vioxx for most patients when they discovered that the pricey pain-killer was not more effective for most—and might well be riskier. The VA, Kaiser and Mayo pulled Vioxx from their formularies more than a year before the manufacturer was finally forced to take Vioxx off the market.
Insofar as for-profit insurers try to bring premiums down, experience tells us that they will do this by shifting costs to patients. Their least expensive plans are likely to carry very high deductibles and co-pays, just like the high-deductible plans that for-profit insurers offer on the menu of Federal Employees Health Plans. In New York State, only 60% to 70% of customers say that they are satisfied with these plans. Satisfaction rates among patients on traditional Medicare are much higher.
The problem is that when low and middle-income families buy high-deductible plans, often they cannot afford to use them. Some months ago, Consumers’ Union reported on a woman in the Midwest who had a miscarriage, and an insurance plan that carried a $4,000 deductible. This plan was all that she could afford. But when she had the miscarriage, she didn’t dare go to a doctor. She couldn’t afford to pay for the doctor’s visit. And what if he put her in the hospital for observation? Instead, she reported “I just stayed in bed for a couple of days, and tried not to move around too much.”
This is not universal coverage.
If there were a public plan, there is an excellent chance that this woman would have been able to afford it. According to the Commonwealth Fund, under health care reform, a public sector family plan is likely to cost $2500 less than comparable private sector insurance. That $2500 difference, plus a subsidy that will be available to both low-income and middle-income families, could make all of the difference.
In the end, we cannot trust for-profit insurers to set priorities for our national health care system . We need a public sector insurance option to set a high standard for the marketplace.