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Monday, August 10, 2009

Selling the "public option" better

The "public option" idea has not gained as much public traction as it should have, and once again, poor communication by supporters, including Obama, bear at least some of the blame. Opponents have had free rein to put out the idea that it will amount to a government takeover, but even excluding the crazies, insurance companies and their captive Senators have said with virtually no response, and with some plausibility, that a government-run plan – i.e., a plan that is funded in part by taxpayers -- will destroy competition. Who, after all, can compete with a plan where the spigot can be turned on anytime by a willing Congress and President?

What is meant by a "public option"? One critical aspect that nobody has pushed to the forefront, at least in the Energy and Commerce Committee bill (Dingell, Waxman et al), is that the plan is required to be run "fully" out of revenue from premiums (Section 222(a)(1)(B). That puts it on the same competitive footing from a pricing standpoint as any other nationwide non-profit health insurance plan that can spread out its costs over a wide swath of the population.

There should in principle be no objection to this by sane Republicans or Democratic Blue Dogs. At the very least, even if the public option ultimately has to be shelved (at least for now), this talking should be pushed simply for the purpose of winning points in the national debate. If the public realizes that the objection to the public option is not reasonable – i.e., will not destroy competition because it must be funded out of premiums like any other plan, and is opposed solely to allow insurance companies to maximize their profits out of your hide – giving in on that (for now) will be seen as a huge concession that might reduce the need to cave on something else. It will also start greasing the way for introducing a public option later.


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