Obama and the Public Plan

Yesterday's top story was that the White House was backing off of the requirement that insurance reform include a public plan. My reaction was that if this was true, it meant that Obama would get his package. By today the message it more mixed. It may be off the table. It may still be on the table. It may even be on the table but hidden to be revealed at the last second.

If the public option is not dropped and Obama's health care plan passes then this will be the biggest reason for the failure. Pundits will talk about death boards and town hall meetings but the public option is the real reason that health care is in trouble.

To conservatives and insurance companies, the public option is a back-door way of implementing single-payer. Conservatives don't want the government running such a large portion of the economy and the insurance companies are sure that they will be forced out of business. There is good reason for these fears. European countries that offer the public/private mix have the majority of the population enrolled in the public plan. The private plans sometimes exist only for the wealthy and government workers.

If you think that the public plan will be comparable to private coverage then explain why the Democrats have consistently rejected amendments that would force them and their staffs to switch to the public plan?

Here's another factoid - when it passed, Social Security only covered around half of the population. Once government programs start, they tend to expand.

Obama's justification for the public plan is that private, for-profit insurance companies can't be trusted. They need competition from the government to "keep them honest". Other, high-ranking Democrats have admitted that the public plan is a back-door to single-payer, just as the other side fears. They tend to say this quietly. I have seen them quoted but I couldn't find and of the quotes when researching this post.

So, by including a public plan, the Democrats have energised conservatives who are willing to work against the reform package. They have also mobilized the insurance companies who are providing the financing. In the meantime the drug makers are funding the pro-reform movement in exchange for not being subject to price controls.

If Obama dropped the public option for real then much of the opposition would vanish. He could make a deal with the insurance companies. They stand to gain millions of new customers from the universal coverage requirement. If they switched sides then the conservatives would find themselves heavily out-spent and missing one of their central arguments against reform.

It shows how heavily Obama was influenced by Saul Alinsky and other socialists in his youth that he is willing to give up easy passage because of an innate distrust of for-profit companies.

There is one possibility why the White House is being so coy about the public plan. Howard Dean suggested that both Houses of Congress pass a measure without a public plan then insert it during the budget reconciliation process. This would only require 51 votes instead of 60 to pass the Senate and wouldn't give health care opponents enough time to re-mobilize. That would be a betrayal of Obama's promises of open government but he turned his back on that one with the first bill he signed.