The Public Option for Obamacare Was Not Impossible

The public option was never plausible. It could never even be defined. It was a ploy to stifle progressive opposition to the ACA and make sure Medicare for All stayed off the table. The following is a long edited excerpt from my Obama Scandals List on the option written at the time:

In the selling of this plan, the public option was meant as a sop to liberals in lieu of the single payer option. It was successful in leveraging liberal organizations like HCAN and Moveon into support for Obamacare. In theory, at least, it was an important part of the reform debate, but it also became a metaphor for the interests of ordinary Americans which were ignored elsewhere in the process.

At the same March 5, 2009 healthcare forum, the shape of the debate with regard to the public option was already clear. Senator Chuck Grassley (R-IA) said,

there’s a lot of us that feel that the public option that the government is an unfair competitor

To which, Obama gave a lukewarm passive voice response, citing competition, but then went on to say somewhat incoherently,

I recognize, though, the fear that if a public option is run through Washington, and there are incentives to try to tamp down costs and — or at least what shows up on the books, and you’ve got the ability in Washington, apparently, to print money — that private insurance plans might end up feeling overwhelmed.

In succeeding months, Obama would repeat these contradictory messages, that the public option would provide competition although not, apparently, serious competition. Even for Obama, it was not the poor service and sky-rocketing costs of the private insurers, but only the government “printing money” that made the public option a threat to the private companies.

The public option was a concept of Jacob Hacker, a political scientist. He envisioned it as covering 129 million Americans or half of the non-Medicare population. It was to be available on Day One to all and use Medicare rates. His version of the public option did not come close to making it into any of the bills in the House or Senate. Indeed the public option throughout the debate remained nebulous. It became a kind of Rohrschach test reflecting the hopes and fears of supporters and detractors. In keeping with the debate’s focus on money, the content of the public option was left deliberately undefined.
Who could sign up for the public option was unclear for much of the summer as well. At a July 28, 2009, AARP tele-townhall, Obama seemed to imply that registration in the public option would be open:

So you could still choose a private insurer, but we’d also have a public plan that you could choose from

and on August 20, 2009 in remarks before the Organizing for America national health care forum:

Now, one of the options will be a public option because we think that potentially could be a better deal for consumers. But nobody is going to force you into that option. It will, however, help keep the private insurers honest because if they’re charging a lot more — higher profits, higher overhead, worst deal in terms of insurance — then a lot of people will say, well, I might as well take advantage of the public option. But it will be the choice of the individual.

This changed rather radically in Obama’s September 9, 2009 speech to a joint session of Congress:

But an additional step we can take to keep insurance companies honest is by making a not-for-profit public option available in the insurance exchange. (Applause.) Now, let me be clear. Let me be clear. It would only be an option for those who don’t have insurance.

And as Obama continued, it would cover only about a tenth of those in the original Hacker public plan:

In fact, based on Congressional Budget Office estimates, we believe that less than 5 percent of Americans would sign up.

This raised questions not only about how such a small plan split among 50 state exchanges could keep the larger privates honest but also about whether it would have sufficient market share to negotiate lower prices with health providers. In a word, would such a public option even be viable? These concerns were heightened by moves in both the Congress and the White House. The public option was divorced from the Medicare rating structure meaning that it became even less competitive. It would have to pay more for services and therefore charge higher premiums to its customers. Its startup costs would have to be paid back, again resulting in higher premiums. On top of this, its rollout would be delayed until 2013, ostensibly to make the 10 year cost projections for the overall healthcare plan come in on budget. Any possible expansion of its availability would not come before 2015.

It was all a recipe for failure, but that was rather the point. As I said, even at the beginning of the debate Obama’s support of the public plan was less than wholehearted. At a June 23, 2009 press conference, when asked if the public option was non-negotiable, Obama replied,

we are still early in this process, so we have not drawn lines in the sand

He again downplayed it on August 15, 2009 at a townhall in Grand Junction, Colorado,

All I’m saying is, though, that the public option, whether we have it or we don’t have it, is not the entirety of health care reform. This is just one sliver of it, one aspect of it.

This remark created quite a storm and Obama backed off of it. On August 20, 2009, he was more positive:

I continue to support a public option, I think it is important…
The only thing that we have said — and this continues to be the truth — and I mean, sometimes you can fault me maybe for being honest to a fault — is that the public option is just one component of a broader plan.

However this did not prevent the White House from supporting various efforts, such as co-ops, triggers, and opt-outs to kill the public option entirely. The object here was to do it without the Administration taking the blame for it.

…

On October 20, 2009, at a OFA webcast of a DNC fundraiser in New York, in response to cries of “Single payer” and “Public option” from the audience, Obama responded:

Among Democrats and progressives there are a whole set of views about how we should do health care. But understand that the bill you least like in Congress right now, the one you least like of the five that are out there would provide 29 million Americans health care — 29 million Americans who don’t have it right now would get it. The bill you least like would prevent insurance companies from barring you from getting health insurance because of preexisting conditions. (Applause.) Whatever the bill you least like would set up an exchange so that people right now who are having to try to bargain for health insurance on their own are suddenly part of a pool of millions that forces insurance companies to compete for their business and give them better deals and lower rates. (Applause.)

… Tellingly Obama never mentioned a public option although that was what initiated his comment. It just is not something he supports. Looking past the fact that his statement was filled with errors and omissions, it is also striking that Obama tried to sell his core audience on a “the bill you least like” rather than one they should have been able to wholeheartedly support.

On October 23, 2009, in typical fashion for this Administration, Obama was reported to have told Congressional leaders that he favored a trigger for the public option. This was subsequently denied by the White House and then re-confirmed by other sources. Currently, the public option is not slated to begin in even a limited form until 2013. A trigger would delay startup until 2018. But in reality a trigger is a political gimmick. Triggers in Washington are never pulled and so by attaching one to the public option, the option would be effectively dead. Ostensibly, the White House has moved to support of a trigger in an effort to win the vote of Olympia Snowe (R-ME), the lone potential Republican vote in the Senate for a healthcare plan. But the real objective is to kill the public option and keep the support of the insurance industry. Meanwhile in the Senate, Majority leader Harry Reid (D-NV) was trying to put together 60 votes for a public option which would allow individual states to opt out of it.

…

On January 19, 2010, Coakley lost to a Republican with teabagger connections, Scott Brown, and with it Senate Democrats lost their 60 vote super-majority. A healthcare bill looked dead. Considering how bad the Senate and House bills were, this was not a bad thing. However the Obama Administration did not give up. On February 22, 2010, it came out with its own proposal which was essentially the Senate bill with a few tweaks. Notably it contained no public option and this underlines the cynicism of Obama’s approach from the beginning, supporting this option in public and doing everything he could to kill it behind the scenes. Healthcare has become very much a no win situation for Obama and the Democrats. They will look either completely ineffective or completely bought, and 2010 is an election year.

After this, reconciliation which had been dismissed as a means of passing a strong healthcare bill, suddenly became the preferred vehicle. The idea was that the House in a leap of faith would pass the Senate bill and then follow this with a reconciliation measure that would make minor adjustments to it. Obama and the House leadership were greatly facilitated in passing this bad bill with the total cave of the entire House Progressive Caucus, including even Dennis Kucinich. Almost all of these had pledged in writing not to support any bill that lacked a public option, and their defection blew most of their credibility. They were not alone in this. Many liberal organizations, unions, and bloggers opted for loyalty to party and President in supporting a bill that only a few short months previously they had excoriated. Not all did, however, and this exposed a long latent schism on the left between liberals who primarily identify as Democrats and progressives who do not. With “progressives” out of the way, the last stumbling block was a group of anti-choice members led by Bart Stupak (D-MI). Their opposition was overcome by Obama signing an Executive Order, much to the consternation and chagrin of the pro-choice caucus, affirming the Hyde amendment (no federal funds for abortions). On a practical level, the EO does not change that much, but the spectacle of a Democratic President publicly endorsing restrictions on a woman’s right to choose are, to say the least, extremely damaging. It illustrates once again that Obama and the Democrats simply have no core principles. That is something that all those groups that went out of their way to support a bad bill should keep in mind. What the Democrats did in abandoning women’s rights they will have no compunction in doing to any and every other group that makes up their base.

Late Sunday March 21, 2010, the House passed the Senate version 219-212, and moved on to consideration of the reconciliation bill which passed 220-211 a few minutes later.

@ Hugh

I just want to thank you again for your diligent work in compiling the Bush and Obama Scandal Lists. You may have awakened more people politically than any other private actor in the past decade.

I shamelessly promote both lists to the politically benighted.

The big problem with financing health care whether paid by taxes or billed to the patient is the everincreasing cost due to the doctor monopoly and the acquisition of new equipment. This is exacerbated by the ageing of the boomer population. In Quebec it is said that 40% of lifetime medical costs is incurred in the last year of life. This is resulting in a high financial burden being borne.

The politically unpalatable solution for publicly funded health care is to bill the estates of recently deceased patients for the health costs for their last twelve months of life.

2009
https://www.healthcare-now.org/blog/weak-public-option-myths-that-liberals-believe/
http://www.pnhp.org/change/Public_Option_Myths_and_Facts.pdf

2016
http://www.pnhp.org/news/2016/september/the-public-option-is-back

“The Affordable Care Act drew support of much of the progressive community as it seemed to them to be the only politically feasible approach at the time. Thus the clamor for comprehensive reform died down. We are hearing again that single payer is not feasible, but the public option is. When the public option is enacted, it will be mislabeled as single payer, and then it will be exposed for the miserable failure that it will be because it was designed by the private insurance industry to fail (like the co-ops). The single payer concept will have been tarnished, and it could be decades before our nation would recover and be ready for reform that really works. In the meantime, millions would have gone broke, suffered, and died merely because we didn’t think single payer was feasible.”

Albertde, healthcare costs are going up because there is no monopsony (single buyer) like Medicare for All to keep them under control. Instead we have BigPharma, BigInsurance, and BigMedical trying to maximize their profits rather than provide healthcare and at affordable prices. Nowadays doctors are mostly employees, well paid employees, but still employees of larger health groups.

You bring up two issues. I support increasing the number of doctors in the US by increasing enrollments in medical schools and targeting graduates to needed areas in the healthcare system. End of life care is a thorny issue because people are very unwilling to address death, and it can be, but does not need to be, very, very expensive. Ask pretty much any healthcare professional and they will tell you that the last place they would want a loved one to die is in a hospital. But the last time end of life care was raised in the Great Healthcare Debate, it was scuttled by cries of “death panels”. Obligation and guilt drive a lot of the demand for heroic end of life measures on the part of families, and fear of lawsuits in physicians’ acquiescence to them. For my part, I am a big supporter of hospice care which allows for a much more caring and dignified death, and yes, is a lot cheaper.

The coddled need to be un-coddled first.

“What I can’t sort out is why the [R]’s are so opposed to what should be considered a win…forced participation…seems to be the golden goose for free-marketeers.”

I have a friend who works in DC as a drug company lobbyist, he’s a hard core [R] and he was delighted with Obamacare…but would never state that in a public forum. Indeed, he has been delighted with Obama, he’s gotten everything [R]’s would want, but [D]’s get ALL the blame for disastrous policies. I’d note, in passing, I am sure he voted for Hillary.

It’s why, while I once was a liberal, I mock “liberals” today. “Liberal” has become a sardonic antonym.

We will get a PO, because it is the least of the evils.

The death of the Public Option killed Obamacare’s popularity with leftists. Since the GOP hated Obamacare from the beginning, a majority of Americans disliked the ACA from Day 1. Moreover, you could tell that Obama thought is was a piece of shit because he made sure it wouldn’t take effect until after his reelection campaign was over.