Chuck Schumer's Public-Private "Public Option"

According to an article on LoHud.com, New York Senator Chuck Schumer has been designated the point-person on the Senate Finance Committee for making sure the public option – a government-administered plan that would directly compete with private insurance – is part of the health reform bill in the Senate.  Normally this would be a good thing – Schumer has a sterling reputation for getting his legislation through, no matter the obstacles.  But he’s already suggesting that he may be willing to compromise by redefining the public option so it’s not public at all.

Don’t get me wrong – I’m normally a member of the Chuck Schumer Appreciation Society (there’s even a group on Facebook).  Indeed, in the article on LoHud quotes Schumer as saying, “"If competition works, why not have a public entity?”  Still, the public option is shaping up as one of the major fault lines in the Senate, but it’s also somewhat ambiguous.  Although Jacob Hacker and others have described the how and why of how a public option is essential to changing the game of coverage and necessary for market-based cost control, the president himself has always been somewhat ambiguous about how the program should work.  Indeed, while John Edwards and Hillary Clinton would never say the words “public plan” without immediately saying, “similar to Medicare” and explaining that it would function like a Medicare you’d pay subsidized premiums for, Obama never quite defined what he meant during the campaign.  With so many conservatives crying foul, that it was unfair to private insurance companies (by the way, I thought the goal was to extend coverage, lower costs and save lives, not avoid hurting the feelings of some very rich CEOS) and the usual malarkey about socialized medicine, it looks like a tough fight.

But it’s a fight worth having – it’s not a fight worth skirting through re-definition.  Schumer made some waves about musing aloud to Kathleen Sebelius during her confirmation hearing about the idea of a “public option” that would actually more resemble the benefits plans offered at the state-level to State Employees.  Indeed, Sebelius seemed somewhat open to the idea, since Kansas has it’s own Kansas Health Policy Authority which Sebelius herself pushed through four years ago.  All of the state’s public health programs, government health programs (including Medicaid and SCHIP), and the benefits plans for all state employees are under the authority, and employees get to choose which plan they want from a menu of options, with good transparency in the documentation on which plan covers you for what at what costs.

All that’s great – it’s similar to the National Health Exchange that is the other part of Obama’s plan to cover the uninsured – but it’s explicitly not a public option.  Just because the government is in the role of the employer in dealing with private insurance doesn’t meant the government is running it.  At best, the state government is using its buying power to negotiate a better deal with a minimum standard package – also a good idea, but it’s just not anything resembling the public plan.

Schumer’s musings about the possibility of a public plan that follows the model of state employee benefits seems to be missing the point entirely.  Forcing everyone into the private insurance options doesn’t do anything to force them to become more competitive, lower costs, or provide better quality.  Administrative costs will remain the same.  A business that relies to a certain extent on finding reasons not to pay for care will remain in place.  At the most, we won’t allow the worst offenders to participate, but you still don’t have a “public plan” – just a public market for private insurance.  And a plan that's public-private is still, at its core, private insurance only

Let’s hope these are just musings.  This isn’t reform – it’s changing the name for the system we have already and finding a way to get everyone into it.

(Photo credit:  psilver on Flickr.)