With Max Baucus pledging to move forward on health insurance reform with or without Republican backing, the GOP may have backed itself into an interesting corner.
The strange thing about all of this negotiating has always been, for me, that the rules of the Senate actually allow for far better (and more progressive) reform with fewer votes, although you may end up having to lose some good ideas along the way. The reconciliation process, for example, actually requires a stronger public option over a weaker one, in order to get the cost savings that can justify using the reconciliation process.
In other words, the main thing the teabaggers and GOP leadership are gaining by forcing people like Grassley out of the process is a good chance that whatever passes will be even more progressive.
That also means that people like Lieberman who have threatened to oppose any bill with a public option may have some incentive now to agree to vote against a filibuster to support a bill that could include health insurance exchanges, meaningful insurance regulation, etc., as well as a weaker public option, in favor of ending up with a bill lacking exchanges but containing a Medicare-like public option.
If you're not at the table, you're on the menu. The right-wing has apparently opted for being on the menu.
It's very simple. The public option gives Americans the option to switch to a government-provided health insurance plan. The public option gives Americans a real choice for their health insurance. Otherwise, we'll be limited to whatever health insurance the government and private insurance companies decide we should have. Which pretty much means the status quo.
(Hey! How's your health insurance? Cheap? Always pays out its claims? Never dumped you off the policy for little or no reason? Never lost a job?)
That's not so hard to understand.
But apparently it's still a mystery to some. It's a funny kind of "freedom," isn't it? If, as Kent Conrad claims, the public option is "dead," then you'll be free to STFU and take the insurance they design especially for you.
Of course the public option isn't "dead," as Conrad claims. If the public option is stripped from the Senate bill, it's not likely to pass the House without support from the Progressive Caucus, which vowed to vote against any reform legislation without the pubic option.
It's time to start thinking about we can do to support the progressives in Congress, and go after centrist and conservative Democrats to at least stay out of our way. Right now, the question isn't whether someone like Kent Conrad or Max Baucus would favor, support, and fight for a public option, but whether they would filibuster a democratic health care bill from a Democratic president.
To do so, I'll start disseminating information here to groups that are advocating for health care reform, as well as events you can attend. In the meantime, feel free to post the website and information about your favorite organizations in the comments...
Competition from the public option must be unfair because government does not need to make a profit and has enormous pricing and negotiating powers. Besides, unless the point of a government plan is to be cheaper, it is pointless: If the public option conforms to the imperatives that regulations and competition impose on private insurers, there is no reason for it.
Believe it or not, Will is actually using this point to attack a public option. Yet he never explains why cheaper health insurance is a bad thing.
(Will also explains away the nation's 45 million uninsured as a "'snapshot' of a nation" where workers often change jobs. That is, to Will, these folks are only temporarily uninsured. Of course, temporarily uninsured or no, it's still a financial kiss of death for these folks to be ill...not to mention that insurance companies use this "temporary" period to ensure they don't pay claims when they are insured, thanks to the ol' pre-existing condition clause...)
IMHO, that's the essential difference between a contemporary conservative and a progressive: a George Will conservative will always oppose something based on theoretical grounds, even if the proposal in question will actually improve things. A modern progressive is pragmatic. If having a government-run health insurance option means cheaper health insurance...let's have it!
As Nate Silver points out, there aren't many goods or services that government provides better than the private sector. But the insurance racket is unique:
he profits the insurance industry is making, of course -- profits artificially boosted by an enormous backdoor tax subsidy -- don't seem to be buying the customer much of anything in terms of improved service or cost savings. On the contrary, health care costs are rising by as much as 9-10 percent per year, without any concomitant increase in the level of service. If JetBlue were raising the cost of its fares by 10 percent per year, they'd be out of business.
The reason the insurers are staying in business, though, is because barriers to entry in the health insurance industry are in practice quite high. Insurers benefit from pooling risk. The larger the pool, the better in terms of the insurer's ability to hedge its risk and build negotiating leverage with its providers. That makes it very difficult for a Five Guys or a JetBlue type of start-up to compete: they'll have trouble getting together enough customers to pool their risk adequately, and even if they do, they won't have as much negotiating leverage as the big guys. Health care providers may demand a better deal or refuse to accept them. As such, they'll never get off the ground.
Insurance, in other words, is a volume business, the main requirements for which are that (1) you have a lot of money pooled together and that (2) you've been around for awhile.
I'd also add that insurers increase profits, not by streamlining the production of insurance or making it with cheaper materials, but by decreasing the amount of claims they pay out. That is, private insurance is only bound to get worse...for consumers, that is. So you have an industry whose nature prohibits new competition, and the existing players one up each other by providing an increasingly worse product to their customers.
Whatever. A public option, if robust enough, would probably provide better coverage at a cheaper rate than current private plans. Plus it'd be portable, allow small businesses to compete for workers with larger companies, and encourage entrepreneurship.
To blithely label this as an argument of "capitalism" versus "socialism" ignores the myriad flavors of capitalism. If your flavor of capitalism must needs be an economic system dominated by monolithic multinational corporations, you're probably against the public option. If, on the other hand, you prefer a system where small, local businesses and the self-employed thrive alongside (or, better yet, dominate) big corporations, you probably support the public option.
So it's good to see that Obama today say that a public option is "non-negotiable." Ezra:
There were two ways he could have responded to the press corps' queries. The first would be a procedural reply: "All ideas are on the table," or something of that nature. But that wasn't his approach. Instead, he defended the plan's substantive merits. His answer was, in other words, an effort at persuasion rather than diversion. The implication was that he, at the least, is genuinely convinced by the case for a public insurer.
It's also smart politically, as well as policy-wise. And now - finally - there's signs in Congress that a public option will be a part of reform. The question now is, what will it look like?
Kent Conrad, for example, has moved away from his idea of small co-ops towards a coalition of co-ops that could negotiate health care prices as a single, national body, which is becoming ever closer to a public option. And even Conrad had his "wake-up moment" about GOP Senators: when the Republicans feared a public option because it would be competing unfairly as a subsidized body, they still didn't like it when the idea of a co-op without a subsidies was suggested. "They really don't want a competitive model," admitted the North Dakota Democrat, "at least some of them."
As dday pointed out, Democrats are now realizing that, "...like in 1993, (the Republicans') mission is to kill health care reform, period. Why Why anyone would think that any alternative would be true is beyond me, but Senate Democrats obviously needed to play Tic-Tac-Toe with the computer endlessly until they realized what a strange game it all is, and that 'the only winning move is not to play.'" Apparently some Democrats had considered "nixing" the public option in hopes that they would find Republican support for reform.
But now I think Democrats are realizing they own health care reform. They no longer have any incentive, or reason, to find common ground with Republicans. There can be none. And if the push for reform fails, it will be seen as a Democratic failure. The sooner Congessional Democrats realize this, the better. And if they do band together and implement a Democratic health care reform bill, they might actually realize they are the majority power and are calling the shots. This health care reform could be the issue Democrats...well...start acting like Democrats And it's long past time for them to start acting in concert in DC. Who knows? This could be the start of a beautiful friendship...
You've probably already seen this, but the New York Times published a poll this weekend that showed overwhelming public support for a public health insurance option, and are willing to pay higher taxes for it:
Americans overwhelmingly support substantial changes to the health care system and are strongly behind one of the most contentious proposals Congress is considering, a government-run insurance plan to compete with private insurers, according to the latest New York Times/CBS News poll.
The poll found that most Americans would be willing to pay higher taxes so everyone could have health insurance and that they said the government could do a better job of holding down health-care costs than the private sector.
Yet the survey also revealed considerable unease about the impact of heightened government involvement, on both the economy and the quality of the respondents' own medical care. While 85 percent of respondents said the health care system needed to be fundamentally changed or completely rebuilt, 77 percent said they were very or somewhat satisfied with the quality of their own care.
Yup. Sounds about right. People want better insurance coverage, but are happy with their care. I know I've paraphrased Uwe Reinholdt on this topic a half-dozen times, but it's worth repeating here: the health-care crisis essentially is about how we pay for our health care, not with the care we receive.
Then, like me, you're probably frustrated by where health reform policy seems to be heading. Nate Silver:
The bottom line is that the health care debate is not really being played out in the court of public opinion. If it were, Congress would pass a robust plan with a public option that was funded by raising taxes on cigarettes, booze, and people making over $250,000, and we'd live happily ever after (or not). Rather, this is a behind-the-scenes fight at the committee level, where certain senators who have ample financial incentives to please the insurance industry have a disproportionate amount of control over the process.
I'm generally not one to carp about special interest money -- seeing politics through that lens is often an overly reductive formulation that serves as a catch-all excuse any time Congress does something you don't like. But on something like the public option, which has broad public support and which would probably reduce -- not increase -- the long-run bill to the taxpayers, it is just about the only way to explain what's going on in Washington.
Not that I believe that special interest money is solely at fault here. For example, Paul Krugman is right on when he writes:
The real risk is that health care reform will be undermined by "centrist" Democratic senators who either prevent the passage of a bill or insist on watering down key elements of reform. I use scare quotes around "centrist," by the way, because if the center means the position held by most Americans, the self-proclaimed centrists are in fact way out in right field.
And while he does categorize Republicans as "spoilers" betting all-in on the failure of health care reform, I think he underestimates the power that they wield in the Senate. Yes, we're all quick to blame Democrats for the imperiled reform, but isn't that the result of lowered expectations? If we had real, responsive representation from the minority party, we'd have a workable plan. It's the Republican intransigence that's putting the Ben Nelsons ad Kent Conrads in the driver's seat.
And digby noticed that Blanche Lincoln decried a public option because it would "ursurp" competition in the market - only Blue Cross Blue Shield owns 75 percent of the market in Arkansas. To which Krugman responds:
The truth is that the notion of beneficial competition in the insurance industry is all wrong in the first place: insurers mainly compete by engaging in "risk selection" - that is, the most successful companies are those that do the best job of denying coverage to those who need it most. But in any case, Arkansas is in effect a one-insurer monopoly state, with no competition at all - unless a public plan is created.
In fact, I may have a new hypothesis about the political economy of the health care fight. One thing that's obvious, if you look at the balking Democrats I chided in today's column, is that almost all of them come from states with small population. These are also, by and large (pdf), states in which one or at most two private insurers dominate the market.
So here's a suggestion: while the opponents of a private plan say that they're trying to defend market competition, what they're actually doing is defending lucrative local monopolies.
Didn't Matt already point out that Blue Cross Blue Shield controls 75 percent of the market in Montana?
Ezra Klein interviewed Sen. Kent Conrad (D ND) about his compromise to a public option. Essentially he's proposing a that a series of "federally-chartered co-ops" play the role as public health insurance in opposition to for-profit insurance. That is, they're not-for-profit health insurance alternatives that aren't controlled by the government.
Klein and Robert Reich both express concern that the co-ops "won't have any real bargaining leverage to get lower prices because they'll be too small and too numerous." Klein also thinks this compromise won't appease those seeking a full public option, "because, quite frankly, co-ops don't represent what they're looking for: A chance to test the thesis that government is a superior provider of medical coverage."
To put it most crudely, the available evidence appears to overwhelmingly indicate that governments can provide health insurance of equal quality at lower cost to the private sector. It's also true that a certain kind of ideological dogma says this can't possibly be true. The view behind the public insurance option is that the dogma ought to be put to the test through competition. Proposals that aim to do something, not that don't aim to put the dogma to the test, are not a compromise. Indeed, the idea of a "public option" is itself a compromise between ideological dogma and the evidence in favor of single payer. The health co-ops seem like an interesting idea to me, but anything that drops the public plan is a proposal to drop the public plan not really a public plan "compromise." That said, insofar as Congress is inclined to do this it ought to be done well.
Personally, as an avid supporter of a robust public option, I don't give a rat's *ss what proves whose theory. I just want access to portable, affordable, and reliable health insurance, which I ain't getting on the market. That is, if the public option is public, fine. If it's a federally-chartered co-op, fine.
In Yglesias' post, he quotes Ivor Volsky's requirements for such a co-op to ensure it's not set up for failure from the beginning - which includes making it a national co-op large enough to negotiate low prices.
Of course all this talk about co-ops could very well be moot:
House Speaker Nancy Pelosi told the Huffington Post Thursday that a health care overhaul that did not include a public option wouldn't make it through the House because it 'wouldn't have the votes.'
...Asked by HuffPost if she would allow a reform package without a public option out of the House, she responded: 'It's not a question of allow. It wouldn't have the votes.'
The bill would lack the votes because the GOP generally opposes Democratic reform proposals, and the 77 member Congressional Progressive Caucus -- rarely heard from on the Hill -- has been particularly vocal in its commitment to oppose any reform that doesn't include a public option. The public plan's popularity extends beyond progressives and is broadly popular with the Congressional Black Caucus, Congressional Hispanic Caucus and even two-fifths of Blue Dogs, the conservative Democratic coalition.
Pelosi, during the press conference, also rejected a compromise proposal by Sen. Kent Conrad (D-N.D.) to create private, nonprofit, regional health care cooperatives instead of a national public option.
Pelosi wasn't having it: "Not instead of a public option, no," she said.
Sometimes those of us that write about bills or reforms working through Congress forget there's another body other than the Senate, a forgivable error given the difficulty of finding 60 votes in the more conservative body to avoid filibuster. But it looks as if House Democrats are going to insist on real health care reform. Looks like we'll have an intra-Congressional tussle to watch...
Update: Naturally Ezra's already posted an interview with Rep. Lynn Woolsey, leader of the 80-member House Progressive Caucus on the group's insistence a public option be included in any health reform bill. Woolsey: "There are 80 members. And we have drawn a line in the sand. And we're serious about it."
Good news in the U.S. Senate, where an agreement has been reached to keep reconciliation available as an option on health care reform.
The aggressive approach reflects the big political claim that President Obama is staking on health care, and with it his willingness to face Republican wrath in order to guarantee that the Democrats, with their substantial majority in the Senate, could not be thwarted by minority tactics.
While some Democratic senators were reluctant to embrace the arrangement, Mr. Obama made clear at a White House session on Thursday afternoon that he favored it, people with knowledge of the session said.
The reason for the reluctance is understandable. Reconciliation is not an ideal process and the Republicans are pledging holy war over the use of this tactic (such pledges are, of course, way ironic because Republicans have also used reconciliation for major policy changes).
That said, taking reconciliation off the table would be absolutely foolish. Former President Clinton said it was his biggest mistake. And taking reconciliation off the table leaves Republicans able to kill any reform bill simply by holding strong -- and they have every political incentive to kill reform.
Here's what our senior Senator had to say (in the NYT article linked above)
Senator Max Baucus, Democrat of Montana and chairman of the Finance Committee, said Friday that he would prefer not to pursue health legislation through the reconciliation process.
"I think it gets in the way," Mr. Baucus said, explaining that his goal was to produce a health care bill that could "get significantly more than 60 votes."
"If we jam something down somebody's throat, it's not sustainable," he said.
Here's the good news for Republicans. The Senator responsible for writing the bill is wisely trying to avoid using the reconciliation process, take a broad array of input, and write a bill that can get bipartisan backing. But the Republicans can't just stonewall now, nor can they hold hostage a process and a bill demanding massive concessions that would render the bill worthless.
It is important that Republicans not be allowed to run amok on health care, especially considering their treatment of Kathleen Sebelius, the moderate Governor of Kansas nominated to head the Department of Health and Human Services. The fact that Republican Senators are proposing filibustering Sebelius is another sign of how crazy the modern GOP has become. Sebelius only got two Republican votes on the Finance Committee -- a Senator from her home state of Kansas (where Sebelius is quite popular) and Olympia Snowe, the Senate Republicans' only true moderate.
