The Public Option That Isn't Public At All

| Tue Dec. 8, 2009 4:54 PM EST

As I predicted some time ago, the interminable smoke and mirrors game going on in Congress will most likely end with the adoption a "public option" that isn't public at all. In fact, it resembles the plan first proposed by the Heritage Foundation, premier architects of conservative policy, back in the 1980s under Reagan. Then, as now, the scheme essentially imitates the Federal Employees Health Benefits program, which gives people a choice of various private insurance company plans, sanctioned by an independent authorizing board. There is nothing really public about this program. In fact, it keeps access to health care firmly within the grip of the private insurance industry. And it isn't cheap either: Some federal employees have opted out because they can't afford their share of the costs.

This is the Democrats' idea of a "compromise"--not with the Republicans, but with the so-called moderates within their own party. A group of ten Democratic senators (ten liberal, ten not) huddled over the weekend to work out plan that could get through the Senate, and President Obama paid a "rare Sunday trip" to Capitol Hill to drum up party unity on the issue. What came out of all this is a public option so weak that it seems more like a last-ditch piece of political face-saving than a genuine effort to improve access to health care. Here is how the Washington Post on Tuesday described the deal:

Sen. Ben Nelson, D-Neb., said the idea is on the table as part of an emerging compromise under which liberals would back away from their demand for a new government health insurance plan to compete with private carriers. Instead of a so-called public plan, the compromise envisions private insurers operating under the auspices of the government agency that now manages the federal employee health plan--the same one that covers members of Congress.

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There is a possible secondary piece to this compromise, also described by the Post, that involves opening Medicare to middle-aged people--say from 55-65, at which point they could formally join Medicare. But it's not much of a threat to private insurers, either; in fact, it would probably attract the older, sicker people who presently can't get private insurance at all. This option, too, would be far from cheap, as the Post reports: "A current buy-in available to those 65 and older who don't qualify because of work history costs about $550 a month." And it's unlikely to stick anyway, since Olympia Snowe doesn't seem to like it.

Some media accounts are depicting this FEHB model as a last-ditch, last resort position from an administration and Congress whose more liberal efforts have all been thwarted. But as I've noted in the past, Obama has been talking about the Federal Employee Health Benefits program since his campaign days, and it’s possible that this has been the White House’s back-burner strategy for a "public" option all along. Back in mid-March, Government Executive reported that  ”the Obama administration is looking closely at the federal government’s health insurance program as it undertakes nationwide health care reform, a senior adviser to the president said.” In the same month, Senate Finance chair Max Baucus also hinted that the FEHB might provide the “compromise” that would allow bipartisan support, as consumer watchdog.org reported. 

So we've ended up pretty much just where we should have expected: Liberals are set to back off their demands, showing them to be just so much hot air. Republicans, with a high level of gall even for them, are accusing the Democrats of abandoing bipartisanship. And any genuine, government run public option, which so many saw as the key to true health care reform, is nothing more than a corpse being dragged through the streets.

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