Is Obama Slow-Walking the Public Competitor?

Sharp-eyed bloggers like Brian Beutler and DrSteveB of Daily Kos notice something absent from the “principles for reform” contained in the recently-released FY09 Budget Overview.  There is no mention of a public competitor, based on Medicare and providing benefits comparable to a member of Congress, that would compete with private insurance options.  Said sharp-eyed bloggers, and many others, are apoplectic at what appears to be a signal that the public competitor, anathema to the private insurance industries, might be an element that gets negotiated away – particularly in the overly-cautious Senate.  If the Obama Administration is even considering health care reform without a public option, we should all be furious – and we should do everything we can to prevent it.

Here’s the relevant principle from the budget – one where the authors could easily have mentioned a choice between public and private plans:

Guarantee Choice. The plan should provide Americans a choice of health plans and physicians.  They should have the option of keeping their employer-based health plan.

But I have to admit, this phrasing doesn’t make me mad.  Instead, I’m feeling a bit like I’m doing a close reading of a T.S. Eliot poem.  There’s an extent to which this is “eye of the beholder” stuff.  One the one hand, most of the specifics of the Obama plan are also not in the budget document, including the income-based subsidies for those who cannot afford insurance, which is just as important to his coverage plan as the private competitor.  Instead, “affordability” is mentioned, just as “choice” is a principle not a policy.

Second, there’s a chance we’re just being thrown by the phrasing, which shouldn’t be surprising -- Obama has always described his public competitor differently than other Democrats.  In the speech in Iowa when he launched his plan almost two years ago, he didn’t make reference to it being publicly funded or similar to Medicare, although his policy paper eventually made that clear.  He talked of a “new health insurance plan” as comprehensive as what members of Congress receive.  Only later on, does he add, “If you want more choices, you will also have the option of purchasing a number of affordable private plans that have similar benefits and standards for quality and efficiency.”  This has lead some – including David Cutler, one of Obama’s own advisers -- to suggest that the public plan isn’t a competitor; it’s the default.  That would actually be more progressive than what anyone else has proposed.  In a nutshell, compared to Edwards, who you could probably time as he was saying "a public plan, similar to Medicare" in his stump and he'd always hit the same time, Obama has always expressed his support for the competitor oddly.  Not weaker, just oddly.

Finally, we know Sen. Max Baucus is committed to the public option.  Rep. Pete Stark has said that without the public option, there is no health care reform.  Howard Dean (h/t Igor Volsky in the Wonk Room) made the best point of all – that if there’s no public option, we’ll spend the next twenty years trying to fix it.



Why is it so essential?  There can be no health care reform unless we cause the private insurance industry to change its most odious and destructive business practices.  We know being amorally and immorally obsessed with profits and shareholder price is just not necessary for insurance companies to stay in business – insurance companies in Japan, Switzerland, Germany, New Zealand and Australia are all productive members of those countries universal health care plans.  But we also know there’s no way insurance companies will do it themselves.  So we must either dismantle the profit-based industry entirely (the single-payer option), completely change the environment they operate in so individuals have more negotiating power (the Wyden-Bennett plan, and the theories of Ezekiel Emmanuel), or create a model plan that operates the way we would like insurance to operate and competes with them, threatens to steal their customers, and forces them to reform to stay in business (the public competitor.)  Regulation won’t be enough – guaranteed issue (no pre-existing conditions) and community rating (no charging someone in remission for cancer 5x more) are essential but insufficient.  It won’t change the denial of claim process, it won’t change the appeal process, it won’t change the culture of administrative waste, it won’t cause the insurance industry to become innovative in terms of making people healthier or reforming how we pay for health care, etc.  The only thing that will is the threat of losing customers.  And it’s an empty threat if those of us with employer-based coverage have nothing better to leave for.

So yes, we should be angry.  Even if your personal Rorschach test concludes that there’s nothing to worry about in the budget, there is very much something to worry about in the fight for quality, affordable, health care for all.  We know the insurance industry will fight against the public competitor.  And we can guess that some self-appointed moderate will eventually suggest we table it for now to break the impasse.

If we do, it will never get off the table.