Why the Public Option Matters, Really

The standard talking point from proponents of the public option is that, contrary to the Republican fear-mongering, it is absolutely not a stalking-horse for an eventual shift to a single-payer health care system.

To say anything else would be to play directly into the right’s time-honored reform-killing warnings about “government takeovers,” “socialized medicine,” and government bureaucrats making life-and-death decisions for patients.

But, if we’re to be honest, it’s disingenuous. The public option that, in varying forms, Democrats in Congress are now pushing absolutely is a stalking-horse—either for (way down the road) single-payer or at least a much different, far more expansive version of the public option than anything that can possibly make it through Congress today.

If it wasn’t, there’d be no reason for so many on the left—both in and out of Congress—to make the inclusion of a public option in any final health care package a bottom-line issue.

Howard Dean, for instance, has warned that without a public option, reform would be “less than worthless” and “very painful and bad for America.” And dozens of progressive Democrats in the House are threatening to vote against any compromise that doesn’t include a “robust” public option, even if it means sinking the centerpiece item on President Obama’s first-year agenda.

But this posturing seems wildly disproportionate when you consider what any public option that Congress might pass this year would actually do. Right now, the public option exists in several different forms, depending on which side on Capitol Hill you’re on and which particular committee’s draft you’re looking at.

A more aggressive version is likely to emerge from the House, where Speaker Nancy Pelosi has apparently backed off a deal with conservative Blue Dogs and is now pushing a public option that would use Medicare to set reimbursement rates for providers—which would provide clear cost savings for consumers and which is opposed fiercely by the health care industry.

The Senate, as usual, is on a more cautious course. If a public option emerges there, it definitely won’t use Medicare rates—and it may include a “trigger” clause, meaning that it wouldn’t come into existence unless private insurers fail to meet a set of benchmarks over the next few years.

But no matter what version finally emerges, it won’t mean anything to the overwhelming majority of Americans. That’s because no plan that has any chance of passing Congress would allow more than 25 million Americans to participate. The public insurance option would be limited to individuals who can’t find private insurance and to small businesses with less than 20 employees. The other 280 million or so of us would be shut out, no matter how much we might want to participate.

And with so few Americans taking part, the public program wouldn’t have the power in numbers needed to negotiate deep cost reductions—meaning that private insurers wouldn’t face any competitive pressure to bring their own rates down.

Which brings us back to the stalking-horse concept. Democrats have decided that passing a real public option—one that all Americans can buy into if they want—is too radical to achieve now. But they also know that, if they can get some watered-down, skeletal version on the books now, the door will open for future expansion.

This explains why Chuck Schumer, known for his pragmatic legislative savvy, initially led the charge a few months ago to water down the public option to a passable form. But more recently, as conservative Democrats like Max Baucus have pushed to do away with it altogether, Mr. Schumer has drawn the line, insisting that it be included in some form.

This, as Mr. Schumer is surely aware, is how it usually works with socially and economically transformative legislation: the first domino is the toughest one to make fall. Congress, for instance, failed for nearly a century after the Civil War to pass civil rights legislation—until finally a watered-down, toothless bill cleared both chambers in 1957. That law didn’t achieve much—except to set in motion an eight-year march to the enactment of the Voting Rights Act of 1965.

That example, and many others like it, is surely on the minds of many liberals today. Real change has to start somewhere. Enacting a feeble, watered-down public option this year will make it possible to come back in a few years and turn it into a real one.