Monday, August 17, 2009

White House appears ready to drop ‘public option'

From the AP via the Houston Chronicle:

Bowing to Republican pressure, President Barack Obama’s administration signaled on Sunday it is ready to abandon the idea of giving Americans the option of government-run insurance as part of a new health care system.

Facing mounting opposition to the overhaul, administration officials left open the chance for a compromise with Republicans that would include health insurance cooperatives instead of a government-run plan. Such a concession probably would enrage Obama’s liberal supporters but could deliver a much-needed victory on a top domestic priority opposed by GOP lawmakers.


Under a proposal by Sen. Kent Conrad, D-N.D., consumer-owned nonprofit cooperatives would sell insurance in competition with private industry, not unlike the way electric and agriculture co-ops operate, especially in rural states such as his own.

With $3 billion to $4 billion in initial support from the government, the co-ops would operate under a national structure with state affiliates, but independent of the government. They would be required to maintain the type of financial reserves that private companies are required to keep in case of unexpectedly high claims.


Rep. Eddie Bernice Johnson, D-Texas, said it would be difficult to pass any legislation through the Democratic-controlled Congress without the promised public plan.

“We’ll have the same number of people uninsured,” she said. “If the insurance companies wanted to insure these people now, they’d be insured.”

More here.

If the liberals I've been reading on this subject are right, and some of them are economists, this may very well signal the end of any kind of real health care reform. The whole point to the "public option" is to use federal economic force, by offering inexpensive health care to the currently uninsured, to make insurance companies lower upward spiraling costs for everybody else. You kill two birds with one stone, cover the uninsured while putting the brakes on insurance rates that for years have outpaced inflation at frightening rates.

I don't understand how these "co-ops" are supposed to accomplish the same thing. Indeed, without the federal purse, it seems highly unlikely that this exotic compromise idea has any chance of undercutting the existing insurance market. I can see them offering slightly less expensive health insurance, which, of course, won't do much in the way of universal coverage. Likewise, for-profit insurance companies will have no incentive to reign in costs because "co-ops" can't rock the market. That is, "co-ops" will still be pressured by the same fucked up "market" realities that pressure for-profit companies, you know, staying away from the people who really need insurance because they're either very young or very old or very sick.

Only the federal government has enough economic power to deal with this, which is why the only real solution to America's health care shame is the single-payer solution, or if you prefer, Medicare for everybody. Personally, "co-ops" remind me of the bizarre market driven ideas offered by the likes of right-wing think tanks such as the Heritage Foundation or the American Enterprise Institute, ideas that look interesting on paper but have no chance of working in the real world. Remember "health care savings accounts"?

This is all one big fucked up mess. House liberals may very well kill the bill altogether if there's no public option, and I don't blame them one damned bit. Meanwhile, Senate Republicans are denouncing the "co-ops." Apparently, there's just no pleasing the conservatives. And that's why the President needs to just ignore them and get this thing passed, with the public option. Bipartisanship means no reform, no matter what compromises the Democrats make.

You know, I've purposely kept my expectations for our new President low because I've not for one moment believed he's a liberal. But I had hopes for health care reform. I thought he was serious about pulling it off. That's what I get for hoping. Damn my audacity.