But before we go onto that, let's review the President's quote:
"Every single criteria for reform that I put forward is in this bill," Obama said. "It is true that the Senate version does not have a public option, and that has become, I think, a source of ideological contention between the left and the right.
I agree with the President. Both because I can show that the battle over the public option has set off a fierce battle between the left and the right, and also because of what became of the public option. I'll talk about the latter first.
Robust to mediocre to weak-kneed to symbolic public option
Let's look back a little at the history of the public option and how it devolved. As originally imagined, we were looking at a public option that anyone in the open market could buy into, the premiums of which would be lower than the private options in the exchange, and that would have its rates set based on Medicare reimbursement rates.
In its analysis for the public option included in the original House Tri-committee health care bill, HR 3200, the CBO stated, clearly as daylight:
Another significant feature of the insurance exchanges is that they would include a public plan that largely pays Medicare-based rates for medical goods and services. CBO estimates that the premiums for that plan would generally be lower than the premiums of the private plans against which it would be competing... on average the public plan would be about 10 percent cheaper than a typical private plan offered in the exchanges.The originally envisioned 3200 public plan would also have as many as 10 million subscribers, according to the above CBO analysis.
From that, we went to the actual bill that the House passed, HR 3962, that would had a public option based on negotiated, not Medicare-based, rates, dropping the number of potential enrollees to 6 million. What's more, it will tick up the premiums:
That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges.Why? Because it would "probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees." In other words, HR 3962's public option would have turned HR 3200's public option into a less managed, higher-cost option, and maybe even a dumping ground.
Then came the Senate version. They added a new twist. They took the House bill, took the public option - or whatever was left of it - and said states could opt out of it. As celebratory corks popped from champagne bottles - if only proverbially - in the hearts and minds of us liberals, the Senate bill's public option came down to this:
Roughly one out of eight people purchasing coverage through the exchanges would enroll in the public plan, CBO estimates, meaning that total enrollment in that plan would be 3 million to 4 million.Let's recap, shall we? We went from a robust public option with Medicare based rates that would cover as many as 10 million people and would have 10% lower premiums than private insurance companies to a skimpy, weakened, and in my judgment, symbolic, public option that would cover as little as 3 million people, would have higher premiums than private insurers and cost the government more money in layouts due to "negotiated rates" rather than Medicare based rates.
And through every step of that dressing down, we liberals - myself included - have celebrated and cheer-lead that something called a "public option" was in the bill. Overall, there was no pervading anger or accusations of the ultimate betrayal. To be sure, there was some criticism based on the policy being watered down, but we did not hear the clarion calls to "kill the bill" back then when the public option was going through the process of being watered down to the point where one could hardly taste it in the House, failing to lower premiums and reducing the number covered. We did not hear FDL and PCCC stand up and scream about how HR 3962 should be defeated because the public option in it is merely a shadow of its former self. We didn't even hear them ask people to sign petitions to kill the bill, and even issue a threat to challenge the most liberal member of the Senate in a primary when the Senate bill whittled it down further, making a mockery its former self.
No, we hear the calls now. Now that a weak-kneed, symbolic, public option has been dropped from the bill completely. The only reason I can see behind it is that something with the name "public option" no longer appears in the bill. Obviously, the strength of the public option was never an issue in terms of killing the bill or deriding lifelong progressives such as John Lewis as sellouts. It is now. If this isn't ideologically based outrage, I don't know what is.
Public Option a business construct?
The diarist (kck) of the diary referenced above claims that the public option is a business construct. I don't think it is, or that it ever was. The exchanges are a business construct, the insurance reforms are a business construct, but the public option itself is not.
To justify this claim, the diarist states that the public option would free employers from their health care burden. This is absolutely not true. Here is what the Senate bill does with regards to this:
The Senate bill has no employer mandate. But large firms with more than 50 workers would have to pay a fine of $750 annually per worker if any of their employees obtain federally subsidized coverage on the exchange.Given that the presence of absence of a public option in the exchange would not affect any of the above provisions, it is not related to freeing employers from the burden of health care costs.
Workers who have employer-sponsored plans with costs that are deemed unaffordable -- exceeding 9.8 percent of salary -- may drop that coverage and purchase federally subsidized insurance on the exchange. In those cases, the employer would have to pay a fine up to $3,000 per worker receiving the insurance subsidy. Given the subsidies do not vary depending on whether the plan one chooses is private or public, the presence of a public option in the exchange does absolutely nothing, one way or another, to help or hurt businesses in terms of their ability/necessity to provide coverage to their employees.
In some cases the Senate bill would require employers with health plans to provide cash vouchers to lower-income workers to obtain insurance on the exchange.
Individual and national transformation (this in fact IS ideological):
As for the public option setting a path for people to vote with their dollars out of the morass of the private insurance industry, and the country to move towards a uniform, universal coverage system by citizen action, this is absolutely correct. However, that is ideological. Just because it's ideological, does not mean it's bad or that it's unimportant. Quite the contrary. Our ideology is informed with logic, reason and helping people. That is why we liberals are ideologically predisposed to a publicly run, single payer, health insurance system. And that is the model that has largely worked out for most countries with lower costs and better health outcomes than the United States. While we cannot get such a system now, we would have loved to see some sort of a step provided so people could move toward it on their own. The fact that we have an ideological love-affair with a public option does not diminish the importance of the public option - namely, the first step towards single payer health care. That's good policy, but it's also ideological.
Lastly, the battle royale that ensued between the left and the right has been largely on the public option. Our ideological fondness pit against their ideological abhorrence of it. And as a consequence of it, we were able to save most all of the insurance reform while the public option was out front taking all the shots. And we are not done with the public option. We'll be back. We'll fight to get it until we do get it, even after a health care bill is signed into law.