Saturday, June 6, 2009

The Key Fight in Health Care Reform Is On a “Public Plan" Option, & Prospects Still Uncertain. Will Republicans Hold?

Some observers, including me, believe that many leading Democrats would ultimately prefer to have a straight up national health insurance plan in the US, akin to that of Britain or even Canada, but realize that political support for such a radical switch is insufficient. So their tactic at the moment is to introduce the seed for national health insurance, thinking that once in place the move to truly national health insurance would be inexorable. The plan is to introduce in health care “reform” what will ultimately become national health insurance through the Trojan Horse of a “public plan” option that the federal government would run in competition with private health care plans.

The theory behind a public plan option is good. As President Obama recently wrote, it could give Americans “a better range of choices, make the health care market more competitive, and keep the insurance companies honest.” But reality is different. The problem is that private insurers, which must navigate through and comply with 50 sets of state insurance regulations and must negotiate reimbursement rates with providers, could never compete with a government run plan that did not have to operate at a profit and that could dictate reimbursement to providers. Democrats would make sure that premiums for a government run plan would be far cheaper than those of private plans, and so private plans would soon be extinct. Private plans are far from perfect, and many reform proposals can improve things, but government run national health insurance, like that of Britain or Canada, would undoubtedly mean rationing of care through government-imposed cost-driven medical protocols, poorer service, and stifling of medical innovation.

The public plan option is where the important fight is. Can Republicans hold firm as a group to refuse support for any reform plan that includes it? And if so, will Democrats want to pass on a party line vote, which they could do, a reform plan that would be one of the most sweeping and consequential laws in American history, and be wholly responsible when things go sour with the scheme, as would happen eventually? Or if Republicans hold firm, will Democrats blink and drop the public plan option? We’ll all see.

The latest update I’ve seen is an Associated Press report from two days ago titled “GOP Senators Say Bipartisan Health Deal in Jeopardy -- President Obama's declared support for a public insurance plan, which would compete with private insurers, is opposed by nearly all Republicans” (link):
President Obama's hopes for a bipartisan health deal seemed in jeopardy Thursday [June 4] as GOP senators protested his renewed support for a new public health insurance plan, and a key Democratic chairman declared that such a plan would likely be in the Senate's bill…. A public plan that would compete with private insurers is opposed by nearly all Republicans.
Congress might be able to pass a health overhaul bill with little, if any, GOP support. But Obama and Democrats including Finance Committee Chairman Max Baucus have said repeatedly they want to avoid that outcome because such a measure would be less widely supported and less sustainable over time…. There appears to be little room for compromise, with Republicans contending that no matter how a public plan is designed, it would inevitably balloon and crush the private market…. Many Democrats, meanwhile, insist that a final bill must contain a public plan.

John M Greco