Public option redux

Look around you — green shoots are suddenly sprouting up on behalf of a public healthcare option. The public plan is back from the dead, not only holding steady in public opinion polls but earning healthcare reform’s version of the Good Housekeeping Seal of Approval: a decent score from the Congressional Budget Office.

Indeed, the CBO ruled this week that a new bill drafted by the House of Representatives costing $871 billion over 10 years that contains a public option would drastically reduce healthcare costs and lead to the coverage of 96 percent of Americans. The House is poised to pass a public plan of some kind in the coming weeks, due to an unwavering push by House Speaker Nancy Pelosi (D-Calif.). Pelosi has emerged as the undisputed leader of the Democratic left, which has championed a public option as a compromise in its push for a single-payer system, and no matter how many times the Obama administration has wavered on a government healthcare program, she continues to fight like hell for one.

The public option, long considered untenable in the U.S. Senate, has been revived there as well. It could overcome a huge hurdle this week if Senate Majority Leader Harry Reid (D-Nev.) and other Senate Democratic leaders — who are merging the more liberal bill from the Senate HELP Committee, which includes a public plan, with the more conservative Senate Finance Committee bill, which does not — choose to include it.

There are many obstacles in a long road ahead for the public option, a concept that has become a fundamental in the Democratic push to overhaul the nation’s healthcare system despite the fact that President Barack Obama didn’t campaign on it last year. There are still centrist and conservative Democrats in the House and Senate who remain leery of an expanded federal commitment in healthcare, as the government struggles to cover Medicare, Medicaid and veterans benefits. Assuaging concerns of those swing-state Democrats skeptical of what a public plan will cost the government, and whether it could truly be sustained by premiums alone, is an uphill battle for public plan proponents. The current battle over halting Medicare reimbursements for doctors — Democrats want to spare physicians cuts passed in 1997 but they can’t find the money for $250 billion in payments — highlights just how unsustainable existing government healthcare is.

But the very Democrats who rejected a public option in the Senate Finance Committee last week may have actually provided its greatest boost yet.

By passing a bill that reduced fines levied for failure to buy coverage, the committee weakened the individual mandate enough to send the insurers packing. A PricewaterhouseCoopers study, underwritten by the industry, was released immediately following the committee vote warning that premiums would become more expensive under the new regulations than without them.

Now that the insurance industry has bolted the reform coalition, Democrats are brandishing their last cudgel, threatening to revoke the industry’s exemption from federal antitrust laws. For most of this year it seemed the public option would be the sacrificial lamb; Democrats could dangle it but drop it at the eleventh hour in exchange for industry’s support for new regulations to protect the consumer that industry has long resisted. But perhaps the prospect of losing their protection from antitrust laws could bring insurers back to the table, hungry for a trade: support for a watered-down public option, and one that wouldn’t be available to those already covered by their employers.

None of this is likely, because nothing in the minefield of healthcare reform is likely. But it’s possible.

Stoddard is an associate editor of The Hill.