Why is the Public Option in Danger of Stalling?

AFTER BELATEDLY expressing his post-election support for a publicly run health insurance program “similar to Medicare,” President Obama continues to say that he “won’t insist on it.” How can we explain the disparity between huge public support for a Medicare-like option that polls show and the fact that so few with power in Washington will stand up for it?

This is particularly puzzling in the face of the [June 12-16, 2009] NY Times/CBS poll that documented an astonishing 72 percent of respondents favoring ”a government administered health insurance plan—something like Medicare.” There are two reasons for this seeming paradox: first, neither the President nor Congress has given people anything to be passionate about, and second, the legislative proposals currently emerging bear no resemblance to what Americans say they actually want.

In 2005, in the lead up to the defeat of the ill-conceived and ill-fated plan to invest Social Security funds in the stock market, outrage was palpable. The plan foundered when several Republican members of the House became convinced that a vote in favor would cost them their seats.

So far, the public option has not had the force of a career breaker for members of Congress who oppose it—the passion and outrage are missing. Where is the eloquence of candidate Obama when we need it? President Obama utters merely the technocratic phrase: “The public plan, I think, is an important tool to discipline insurance companies.”(1) These are not exactly words to rouse popular support. If President Obama said that a family would save at least $1,000 a year on premiums, as conservatively suggested by University of California professor Jacob Hacker, who developed the public option model, that would excite people—$1,000 can represent a lot of groceries, a vacation, or a new refrigerator.(2) If the President said that the public option would throw in two visits to the dentist and a pair of eyeglasses, then its opponents would start to have something to fear on Election Day.

Moreover, legislative proposals now emerging from House and Senate committees do not remotely resemble what the public wants and only weaken the potential of a public option. When Americans tell pollsters they want a plan like Medicare, they know what they are talking about—across the country, everyone is either enrolled in it or has a family member who is. We all know that Medicare is universal, paid for out of taxes, and is a single payer system available in most of the industrialized world.

Legislation drafted by the House Ways and Means and two other committees contains a “Level Playing Field” provision that prevents the public plan from exceeding the benefits of for-profit alternatives. Legislation drafted by the Senate’s Health, Education, Labor and Pensions Committee won’t cover more than a fraction of the uninsured; its formula for reimbursement rates does not do nearly enough to reign in health care costs.(3) So great is Washington’s fear of the insurance lobby and its desire for continued campaign contributions that the public option is being stripped of its potential advantages.
There are two ways to conceive of implementing a national health care system like Medicare. In the mixed public/private mode now under consideration, instead of insurance premiums, everyone would pay a (presumably lower) progressive health care income tax and would be automatically enrolled in the public program. If they wanted to, they could then transfer to a private insurance company and take their payments with them.

The second, wholly public version, eliminates private for-profit health insurance altogether, except for procedures and services not covered by the public plan. This version is known as Single Payer National Health Care; polls show that a majority of Americans have favored it for years.(4) In fact, single payer legislation, H.R. 676, is languishing in the Ways and Means Committee while the House struggles with less practical and less popular alternatives for which no one knows how to pay.

Here is the bottom line. When the current draft House bill was released, a statement from the three participating committee Chairs termed it “uniquely American,” as though a catchy phrase could redeem its weaknesses. But every proposal put forth to pay for health care is less acceptable than the preceding one. There is little support for cutting Medicaid and Medicare, reducing hospital reimbursements, taxing employer-based health benefits or instituting a regressive sales tax. The most recent proposal from the House, a tax on higher incomes, is truly worthy of popular support and should be adopted. Unfortunately, Senator Schumer said this morning on Meet The Press that he didn’t think the Senate will go for it.

Why have the obvious cost advantages of a true Medicare-type system disappeared from public discourse? Why has testimony from single payer experts been largely omitted from Congressional hearings? Most likely because any thorough discussion of a Medicare-type system such as single payer would herald the demise of for-profit health insurance in America. Democrats may fear that any such discussion would cause Republicans and industry lobbyists to mount a public relations campaign replete with the usual scare tactics in an attempt to defeat any bill designed to bring about meaningful change.

But if Democrats want to pass a bill that would provide quality, affordable health care for all Americans, it is time to declare what the vast majority of Americans already know: that a plan truly similar in structure to Medicare will be less expensive, cover more people and yield better benefits than for-profit insurance. Let Democrats present legislation that the people want; they already have the support they need to pass it.

Steve Max, Health Committee Chair, Daniele Gerard, President, and Cynthia Doty, District Leader, are members of Three Parks Independent Democrats, a 34-year old progressive Democratic club that has been advocating for Single Payer and a strong public health care option.

Footnotes:
1) Reuters (Web site), June 23, 2009
2) The Case for Public Plan Choice in National Health Reform: Key to Cost Control and Quality Coverage, Jacob S. Hacker, Ph.D., p. 13 (http://institute.ourfuture.org/files/Jacob_Hacker_Public_Plan_Choice.pdf)
3) Preliminary Analysis of Title I of the Affordable Choices Act, Congressional Budget office, July 1, 2009
4)http://www.wpasinglepayer.org/PollResults.html