Man, it's been frustrating to watch insider pundits one-by-one abandon the idea of the public option. I've been arguing for months now that the public option is crucial to reform. Most of the reform proposals that don't include the public option concentrate solely on getting the uninsured an insurance policy. There are no cost controls. There are no real protections for consumers against their insurers. In fact, the proposals the Senate Finance Committee have been mulling would degrade the quality of private insurance, force millions to change their insurance policies, and probably increase out-of-pocket and premium costs.
Krugman claims the public option would achieve three things: keep costs down, provide the only real competition in many markets, and offer a buffer for consumers from an individual mandate.
Klein - one of the targets of Krugman's column - objects to the idea that the public option would help tamp down costs. He sees the public option's customer base as being too small to negotiate prices down - but then one assumes, also, that the public option wouldn't implement a pay-for-service model, but a patient-centric payment model, which would lead to lower costs and better care. And Krugman also notes the public option wouldn't be burdened by the private insurers' administrative costs. The public option wouldn't have to worry about profit, either. The public option would be cheaper - and private insurers would have to react in order not to lose customers as soon as their customers have access to the health insurance exchange.
Josh Marshall addressed Krugman's point about the political necessity of the public option on Monday:
Am I the only one who thinks that if the Dems pass a bill with mandates and subsidies for poor and moderate income people to purchase it but no public option or competition with the insurers, that it will be pretty much a catastrophe for the Democrats in political terms?
You 'solve' the problem of the uninsured by passing a law forcing them to buy health insurance which, by definition, most a) cannot afford or b) are gambling they won't need because they're young and healthy. Either you end up with low subsidies which still leave it onerous to buy, thus creating a lot of disgruntled people, or you get generous subsidies, which cost a lot of money.
It's sort of like reform with all the cool political downsides but none of the reform.
Under an individual mandate - what Baucus is currently threatening us with - the effect is increased exponentially, as some employers will no doubt dump their workers from their expensive benefits packages and let them fend for themselves. (RJ Eskow makes it clear that a mandate without reduced costs is madness, and explains how misguided progressives put us in this awkward position.)
Backlash understates the impact. But there's also a core values and morality component here that feeds the backlash. The politics are bad, yes. And the backlash will be significant. But the Democratic Party and the White House will be asking us to do something that is morally impossible for many of us. A compulsory corporate giveaway is unthinkable.
Righties are calling the public option "a Trojan Horse" for a single-payer system. In a sense, they're right, although their fears are absurdly overblown.
For one, the public option would allow the American people to decide for themselves what kind of healthcare payment system they want. If the public option is efficient, provides good service, and costs a fraction of a private policy, consumers will use it. If the fears of the right are realized - the public option, as a government program, is bloated, inefficient, expensive, and inhumane - consumers will not use it. If the public option is what they say it is, it will die.
It's not a top-down mandate. No one's being forced to buy a government-provided policy. No one's being forced to abandon their private insurance. The public option won't transform the way we deliver health care - this isn't a plan to implement socialized medicine.
The public option is just that - an option to buy insurance that is provided by a public institution. It's that simple. The public option will allow Americans to drive healthcare reform at their own pace and in the way that they like.
But without the public option, reform is merely a (temporary?) brake on the degradation of service from private insurance, and an expensive bribe to private insurers to cover some of the costs of our sick.
It is no secret that this page is all for competition in the marketplace. If indeed that's the goal, allow us to suggest a path to it that will be a lot easier than erecting the impossible dream of a public option: Let insurance companies sell health-care policies across state lines....
Affordability would improve if consumers could escape states where each policy is loaded with mandates. "If consumers do not want expensive 'Cadillac' health plans that pay for acupuncture, fertility treatments or hairpieces, they could buy from insurers in a state that does not mandate such benefits," Mr. Herrick has written.
A 2008 publication "Consumer Response to a National Marketplace in Individual Insurance," (Parente et al., University of Minnesota) estimated that if individuals in New Jersey could buy health insurance in a national market, 49% more New Jerseyans in the individual and small-group market would have coverage. Competition among states would produce a more rational regulatory environment in all states.
Sounds so innocuous, doesn't it? Yeah, hey! Why can't I buy that cheap other-state plan?
A "more rational regulatory environment" is a synonym for a much smaller regulatory environment. If I were in charge of a state with a dying city (say, Michigan), the first thing I would do is get rid of every single restriction on health insurance in state law, and then encourage tax abatements or even permanent tax restructuring for health insurance companies who wanted to locate in Detroit. Within ten years, every major insurer in the nation would be located on Woodward Avenue, and Detroit would be the Wilmington, Delaware of the health insurance industry.
I mean, there are some little downsides. Virtually every base-level insurance plan in the country would become a high-deductible plan with high coinsurance rates. So-called "Cadillac" plans (you know, the ones that cover you when your neighbor decides to play "Elvis Watches The Teevee" but misses because of his undiagnosed glaucoma) would invariably become more expensive as the lack of any regulatory structure allowed pool-splitting. If you hate insurance company bureaucracy today, imagine what happens tomorrow when massive call centers are handling policies from all over the country. Guaranteed issue rules would die, meaning that when you bought into the cheapest insurance and got any of the conditions that it didn't cover - for instance, sickness - you would now likely be barred from ever being insured by a private insurer for those conditions....
To wit: Senate Bill 234, which mandates insurance coverage for children with autism. If the WSJ had its way, healthy Montanans could buy insurance policies from other states that didn't mandate coverage of autistic kids - and every other "niche" illness you could name - and insurance companies operating in the state would either wither and die, or move to a less regulatory "environment." And autistic kids would no longer be able to find coverage.
We know this would happen, because we've already got a model: the credit-card industry's move to Delaware to take advantage of its laws:
These powers include the ability to charge interest rates not subject to any legal ceiling, to raise interest rates retroactively, to charge variable interest rates, to levy unlimited fees for credit card usage and to foreclose on a home in the event of default for credit card debts.
Worked great! Not for the consumer, mind you, but for the credit card industry!
In short, allowing consumers to buy insurance across state lines would likely result in lower insurance rates - for only those that qualify for insurance, of course, a necessarily smaller number than those that do today. But it would also likely result in higher out-of-pocket expenses for those that do have insurance, more declined claims, and no brake on escalating health care costs.
In short, it would only make the status quo worse.
Which reminds me of Paul Krugman's column yesterday on Washington's odd enthrallment to an unworkable economic policy - Reaganomics ("an ideology that says government intervention is always bad, and leaving the private sector to its own devices is always good") - which, in practice, increased wealth for the ueber-wealthy and stagnated - or worse - growth for everyone else. And which brought on the "worst recession since the 1930s."
The debate over the public option has, as I said, been depressing in its inanity. Opponents of the option - not just Republicans, but Democrats like Senator Kent Conrad and Senator Ben Nelson - have offered no coherent arguments against it. Mr. Nelson has warned ominously that if the option were available, Americans would choose it over private insurance - which he treats as a self-evidently bad thing, rather than as what should happen if the government plan was, in fact, better than what private insurers offer.
But it's much the same on other fronts. Efforts to strengthen bank regulation appear to be losing steam, as opponents of reform declare that more regulation would lead to less financial innovation - this just months after the wonders of innovation brought our financial system to the edge of collapse, a collapse that was averted only with huge infusions of taxpayer funds.
So why won't these zombie ideas die?
Krugman blames industry contributions engineered to maintain the status quo and president Obama's reluctance to use his office to challenge financial "government-is-bad fundamentalism." I'd argue, though, that he overlooks the role of the traditional media, which, in its glaring sycophancy, still sucks up to the power elite in DC, and also operates in fear of being out of touch with "ordinary" Americans (explaining its reluctance to challenge Tea Baggerism, for one).
Can't expect change without a change in discourse.
But there's also, it seems, growing opposition to cap-and-trade from people who should be on the side of progress - but whose reaction is basically "Eek! Markets!Wall Street! Speculation! Bad!"
We don't need this.
So let me talk a bit about why this reaction is 99% wrong, and bad for the planet....
By all means keep a watchful eye on speculators and regulate derivatives - and make market manipulation illegal, as Waxman-Markey does. But don't apply standards to emissions trading that you don't apply to any other market.
The solution to climate change must rely to an important extent on market mechanisms - it's too complex an issue to deal with using command-and-control. That means accepting that some people will make money out of trading - and that yes, sometimes trading will go bad. So? We've got a planet at stake; it's crazy to cut off our future to spite Goldman Sachs's face.
I've been suspicious of this meme since rightie concern trolls showed up here and elsewhere bragging about how Wall Street is already planning how to make a killing on cap-and-trade. For one, speculators typically don't explain how they're going to manipulate markets before they do.
...if the consensus of the economic experts is grim, the consensus of the climate experts is utterly terrifying. At this point, the central forecast of leading climate models - not the worst-case scenario but the most likely outcome - is utter catastrophe, a rise in temperatures that will totally disrupt life as we know it, if we continue along our present path. How to head off that catastrophe should be the dominant policy issue of our time.
American prosperity has always been driven by the steady supply of abundant, affordable energy. Particularly in Alaska, we understand the inherent link between energy and prosperity, energy and opportunity, and energy and security. Consequently, many of us in this huge, energy-rich state recognize that the president's cap-and-trade energy tax would adversely affect every aspect of the U.S. economy.
There is no denying that as the world becomes more industrialized, we need to reform our energy policy and become less dependent on foreign energy sources. But the answer doesn't lie in making energy scarcer and more expensive! Those who understand the issue know we can meet our energy needs and environmental challenges without destroying America's economy.
...we're facing a clear and present danger to our way of life, perhaps even to civilization itself. How can anyone justify failing to act?
Well, sometimes even the most authoritative analyses get things wrong. And if dissenting opinion-makers and politicians based their dissent on hard work and hard thinking - if they had carefully studied the issue, consulted with experts and concluded that the overwhelming scientific consensus was misguided - they could at least claim to be acting responsibly.
But if you watched the debate on Friday, you didn't see people who've thought hard about a crucial issue, and are trying to do the right thing. What you saw, instead, were people who show no sign of being interested in the truth. They don't like the political and policy implications of climate change, so they've decided not to believe in it - and they'll grab any argument, no matter how disreputable, that feeds their denial.
Indeed, if there was a defining moment in Friday's debate, it was the declaration by Representative Paul Broun of Georgia that climate change is nothing but a "hoax" that has been "perpetrated out of the scientific community." I'd call this a crazy conspiracy theory, but doing so would actually be unfair to crazy conspiracy theorists. After all, to believe that global warming is a hoax you have to believe in a vast cabal consisting of thousands of scientists - a cabal so powerful that it has managed to create false records on everything from global temperatures to Arctic sea ice.
Yet Mr. Broun's declaration was met with applause....
Still, is it fair to call climate denial a form of treason? Isn't it politics as usual?
Yes, it is - and that's why it's unforgivable.
Do you remember the days when Bush administration officials claimed that terrorism posed an "existential threat" to America, a threat in whose face normal rules no longer applied? That was hyperbole - but the existential threat from climate change is all too real.
Of course, not quite understanding that Krugman was turning the right-wingers' use of the word "treason" against them - pointing out the hypocrisy of an earlier, hyperbolic use of the term for a threat that wasn't quite all that it was made out to be, by contrasting it with the same folks' laconic attitude towards an all-too real and present catastrophic threat - naturally the usual people went completely bath*t.
Mac: "...how can you look at a plan to save the planet and decide that it's too expensive?"
And Dan Savage has a d*mn good point as he mulls Kristof's column on the increasing number of male genital deformities and the ever-decreasing sperm cell count for which scientists think a certain class of chemicals found in "agriculture, industry, and consumer products" may be responsible. Savage:
Sperm counts are falling and birth defects in boys are increasing... and to address these problems we're going to need to change the way we grow food and eliminate certain chemicals used in tens of thousands of industrial and consumer products. These kinds of big systemic changes seem unlikely when you consider that making the simplest and most obvious changes to benefit the environment-things like banning plastic shopping bags-are nearly impossible, to say nothing of taking action on climate change. We're fucked. The planet is going to roast and our sons' penises are going to fall off.
And it's because of the selfish intransigence of consumers who threaten rebellion over sparkly dishes and the politicians that feed their ignorance and misdirect their anger. I mean, shouldn't these people be p*ssed at the corporations that put the poison into our environment, the businesses and ad agencies that conned consumers into believing that easy livin' was theirs for the low, low price...? Well, it turns out easy livin' does have a price. And the long-term payment plan is a b*tch.
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?
Paul Krugman probably wouldn't have a won a Nobel Prize unless ACORN committed voter registration fraud with the committee that awards the honor.
Now, two real thoughts on Krugman's very real and very deserved honor:
No, he didn't win it for his harsh criticism of the Bush Administration in the New York Times. In fact, this honor has been expected for some time for his work on international trade theory, an issue on which I think he is fairly characterized currently as a centrist (not in the BS sense, but in a very real sense).
The biggest question with Krugman's very active role in the contemporary political debate was whether he would become too politicized to ever win this prize, despite a long-time consensus within the economic community that he is among the most brilliant in its ranks. Atrios nicely mocks the CW of 5 years ago that Krugman was on the fringe. Turns out the CW of 2003 was pretty stupid. All that being said, I was having a couple beers down at Flipper's watching the Red Sox on Saturday night with Sean Morrison. Sean's a former organizing fellow at Forward Montana and an economics student at UM. He and I were talking about the lack of economists speaking publicly about economic issues, especially mainstream economists (who tend to be to the left of the outspoken economists who tend to be third-rate economists embarrassing the Chicago school they claim to represent). Our country is facing a massive financial spell right now and the economics community is largely AWOL. That's in part because many smart economists focus on work that has little to do with macroeconomics and global financial markets. But it has something to do with the fact that a lot of people thought that Krugman had cost himself a Nobel by refusing to keep his mouth shut about an idiot President. Hopefully this Nobel does something to defray those concerns and even encourage some more economists to consider the life of the public intellectual.
Today's - or really yesterday's - must-read is Paul Krugman's call to arms against the system that created George W. Bush and propelled him into the White House, not the man himself. (Here's Mark T's take.)
Like my audacious claim today that Missoula 's liberal values are congruent with the rest of the state's, Krugman claims that the nation is moving leftward on a number of key economic and foreign policy issues:
But if you look at peoples' views on actual issues, as opposed to labels, the electorate's growing liberalism is unmistakable. Don't take my word for it; look at the massive report Pew released earlier this year on trends in "political attitudes and core values." Pew found "increased public support for the social safety net, signs of growing public concern about income inequality, and a diminished appetite for assertive national security policies." Meanwhile, nothing's the matter with Kansas: People are ever less inclined to support conservative views on moral values-and have become dramatically more liberal on racial issues.
This shouldn't surprise anyone. The Republicans have clearly demonstrated that they can't govern. They're tied to their tax-cutting rhetoric (and unable to muster the political courage to balance tax cuts with spending cuts), unable to come up with a coherent foreign policy, and so corrupt that they've staffed the entire federal government with incompetent political hacks.
So what to do with this "new-found" liberalism? Go on the offensive. Forget the "middle" bipartisan way. Fight for our beliefs in a partisan manner:
But any attempt to change America's direction, to implement a real progressive agenda, will necessarily be highly polarizing. Proposals for universal health care, in particular, are sure to face a firestorm of partisan opposition. And fundamental change can't be accomplished by a politician who shuns partisanship.
I like to remind people who long for bipartisanship that FDR's drive to create Social Security was as divisive as Bush's attempt to dismantle it. And we got Social Security because FDR wasn't afraid of division. In his great Madison Square Garden speech, he declared of the forces of "organized money": "Never before in all our history have these forces been so united against one candidate as they stand today. They are unanimous in their hate for me-and I welcome their hatred."
So, here's my worry: Democrats, with the encouragement of people in the news media who seek bipartisanship for its own sake, may fall into the trap of trying to be anti-Bushes-of trying to transcend partisanship, seeking some middle ground between the parties.
That middle ground doesn't exist-and if Democrats try to find it, they'll squander a huge opportunity. Right now, the stars are aligned for a major change in America's direction. If the Democrats play nice, that opportunity may soon be gone.
Good stuff.
(Also check out Krugman on Charlie Rose. Rose bullies him quite a bit; he's the consummate insider and devotee to Beltway Conventional Wisdom. Still, Krugman makes his points.)
All in all, the Graeme Frost case is a perfect illustration of the modern right-wing political machine at work, and in particular its routine reliance on character assassination in place of honest debate. If service members oppose a Republican war, they're "phony soldiers"; if Michael J. Fox opposes Bush policy on stem cells, he's faking his Parkinson's symptoms; if an injured 12-year-old child makes the case for a government health insurance program, he's a fraud.
Meanwhile, leading conservative politicians, far from trying to distance themselves from these smears, rush to embrace them. And some people in the news media are still willing to be used as patsies.
Politics aside, the Graeme Frost case demonstrates the true depth of the health care crisis: every other advanced country has universal health insurance, but in America , insurance is now out of reach for many hard-working families, even if they have incomes some might call middle-class.
That about sums it up.
EJ Dionne tackles the incoherence from the right on the issue:
The left is accused of all manner of sins related to covetousness and envy whenever it raises questions about who benefits from Bush's tax cuts and mentions the yachts such folks might buy or the mansions they might own. But here is a family with modest possessions doing everything conservatives tell people they should do, and the right trashes them for getting help to buy health insurance for their children.
Most conservatives favor government-supported vouchers that would help Graeme attend his private school, but here they turn around and criticize him for...attending a private school. Federal money for private schools but not for health insurance? What's the logic here?
Conservatives endlessly praise risk-taking by entrepreneurs and would give big tax cuts to those who are most successful. But if a small-business person is struggling, he shouldn't even think about applying for SCHIP.
Conservatives who want to repeal the estate tax on large fortunes have cited stories -- most of them don't check out -- about farmers having to sell their farms to pay inheritance taxes. But the implication of these attacks on the Frosts is that they are expected to sell their investment property to pay for health care. Why?
That's right, not only is CHIP a stupid political fight to get in -- polling in at about 80%, according to one GOP strategist -- it doesn't make sense ideologically.
