Dems face choices on public option

When it comes to healthcare reform, Senate Finance Committee Chairman Max Baucus (D-Mont.) is fond of saying there’s more than one way to skin a cat.

On the public option, Democrats and one Republican have come up with several methods, but they can’t quite get that cat skinned.

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To liberals, creating a government-run health insurance program to compete with private insurers is the most essential element of reform. Only by forcing private insurance plans to face the muscle and buying power of Uncle Sam will they change their way of doing business, the argument goes.

But Democrats are deeply divided about the policy and politics of the public option. While liberals are adamant it be a part of healthcare reform, centrist Democrats either object to giving the government such a large role or worry voters will perceive the existence of the public option as proof of the Republican claim that the goal of healthcare reform is a complete government takeover of the healthcare system.

They’re going to have to figure something out. President Barack Obama and Democratic leaders in the House and Senate, all of whom support the public option, cannot afford to brush aside the liberals who compose the majority of their party. But the centrists represent a crucial voting bloc in the House and a handful of much-needed votes in the Senate.

Something resembling a public option will inevitably be in the legislation debated. All three House committees working on healthcare legislation wrote the public option into their joint bill. The Senate Health, Education, Labor and Pensions (HELP) Committee did, too. And when the Senate Finance Committee finally advances its bill next week, it will include two possible compromise proposals.

The first choice of the left — many of whom truly want to see a single-payer federal healthcare system that covers everyone — is a nationwide plan available to everyone that bases its payment rates to medical providers on the fees used in Medicare. Pelosi, for instance, points out that that “strong, robust” public option would be cheaper than enrolling people in private insurance.

The initial Democratic attempt to compromise, promoted most heavily by Sen. Charles Schumer (D-N.Y.), provisionally adopted by House Democrats and included in a bill approved by the HELP Committee, is the so-called level-playing-field option.

Under this proposal, the public option would be subject to the same insurance regulations as private companies. It also would not be funded with taxpayer dollars, and instead would have to subsist on premiums. The government would negotiate rates with providers rather than borrowing Medicare’s, which healthcare groups say are too low.

But the level playing field doesn’t answer the chief concern of centrists and Democrats in swing districts or states: It’s still a big, nationwide government insurance plan run out of Washington.

During the course of the bipartisan Finance Committee negotiations that failed to produce an agreement, Sen. Kent Conrad (D-N.D.) came up with something he thought could thread the needle.

Based on the positive experiences with not-for-profit cooperatives in his home state, Conrad proposed that the federal government provide seed money for member-owned healthcare co-ops around the country that would provide an alternative to traditional insurance.

Although Baucus embraced the co-ops and wrote them into his healthcare reform bill, other Democrats offered lukewarm or hostile reactions to the Conrad proposal. Sen. Jay Rockefeller (D-W.Va.) is the most outspoken critic and dismissed the idea out of hand as inadequate. Schumer pushed Conrad to make his co-ops look more like a true public option by being national and available immediately to anyone. Conrad declined to adopt his proposal.

As the Finance Committee worked toward the completion of its debate on the healthcare bill this week, two Democrats stepped in from the background with novel proposals that also seek to bridge the divide.

Sen. Maria Cantwell (D-Wash.) scored a significant win Thursday when her proposal to direct federal dollars to optional state-based public plans was attached to the bill with the support of Baucus, Conrad and all of the panel’s Democrats except Sen. Blanche Lincoln, who is up for reelection in the conservative state of Arkansas.

Meanwhile, Sen. Tom Carper (D-Del.) has been feeling out his fellow Democrats on a kind of all-in-one compromise. Under Carper’s plan, states would decide to use federal money to found a private co-op, set up state-based or regional public plans or allow people to buy into the state employees’ healthcare plan.

And finally, there’s Republican Sen. Olympia Snowe (Maine). Obama and Senate Democratic leaders ardently want Snowe to join their cause and be probably the lone Republican on their side. Snowe opposes a national public option but has floated a proposal that would “trigger” a public option in states where insurance companies are not adequately serving the market.