House Dems pitch public option as deficit buster

Democrats have a new angle as they argue for passage of a public health insurance option that would be open to all Americans: It’s the fiscally responsible thing to do.

Armed with a new score from the nonpartisan Congressional Budget Office showing their public plan saves $68 billion between 2014 and 2020, liberal Democrats vowed Thursday to fight for their proposal’s passage next year. The CBO also says premiums in the public plan would be 5 percent to 7 percent lower than the premiums offered by private plans in the state health insurance exchanges that are due to begin operating in 2014.

“For those who care about federal deficits, small and large businesses, individuals and families, the healthcare of our country,” Rep. Jan Schakowsky (D-Ill.) said at a press event announcing the bill, “the public option is the way to go.”

The bill to create a so-called “robust” public option that would pay doctors and hospitals Medicare rates plus 5 percent was introduced Wednesday evening; it has 128 original co-sponsors, with Reps. Lynn Woolsey (D-Calif.), Pete Stark (D-Calif.) and Schakowsky in the lead.

“I think, today, as we debate the extension of unemployment compensation and are concerned about the deficit ... can you imagine what we could do with $68 billion in terms of creating jobs and paying for schools and our teachers in our own country now?” said Rep. Barbara Lee (D-Calif.).

California was over-represented at the press conference because voters from that state voted for the creation of a public option in the 1990s. Insurance companies oppose the public option, as do physicians and hospitals worried that it would bring down payment rates. But the lawmakers said the American public supports the option and would make its voice heard next year since the provision will be disassociated from passage of healthcare reform as a whole.

The $68 billion figure is lower than last year’s $110 billion savings score for the provision because of differences in the House bill and the Senate version that made it into law; in particular, the Senate has less generous subsidies for people to buy private insurance, so shifting about 13 million into less expensive public coverage saves less money than it would have under the House bill.

At the urging of Blue Dogs and other conservative Democrats, the House-passed bill replaced the “robust” public plan with a version that would have the Secretary of Health and Human Services negotiate rates with providers. That provision would have saved $25 billion.

The bill that made it into law did not have a public option at all.