POLITICS
11/24/2009 05:12 am ET | Updated May 25, 2011

Blue Dog Opposition To Public Option Fades In Whip Count

Blocking a public health insurance option is a relatively low priority for conservative Blue Dog Democrats, according to an ongoing survey of its members. The fading House opposition could clear the way for the public option to move through the chamber.

The Blue Dogs have been surveying their membership over the last several days; coalition co-chair Stephanie Herseth Sandlin (D-S.D.) has been collecting the responses. She listed the four top priorities that have emerged: Keeping the cost under $900 billion, not moving at a faster pace than the Senate, getting a 20-year cost estimate from the Congressional Budget Office and addressing regional disparities in Medicare reimbursement rates.

So, the Huffington Post asked, the public option is not a top priority?

"Right, the group is somewhat split," she said.

That leaves the Senate and the conference committee between the two chambers as the final battlegrounds for the public option. While several Senate Democrats have said they oppose it, no Senate Democrat has yet said publicly that he or she would oppose any bill that included a public option.

House Speaker Nancy Pelosi (D-Calif.) was the catalyst for the Blue Dog self-reflection when she floated the idea that roughly 20 Blue Dogs could support a public option.

"There was some suggestion that there were 20," Herseth Sandlin said. "There clearly are not. From the numbers that I have seen, although not everyone has submitted the surveys, even if they had and they all said yes it wouldn't be 20. Right now it's less than a dozen."

What about a public option not tied to Medicare rates?

"We haven't drilled down on that. I understand the media's focus on the public option, but for the Blue Dogs right now it's much more on cost," she said.

The lack of concerted, ideological opposition to a public option opens the possibility for negotiations in the House. Blue Dogs, along with other rural lawmakers, very much want an increase in Medicare reimbursement rates in certain areas to fix what they see as a disparity.

"If the Medicare rates were adjusted, I think there would be less resistance to tying the public option to Medicare rates," said Rep. Sandy Levin (D-Mich.).

In regions where one insurer has an effective monopoly -- which includes most rural regions, but others, as well -- that insurer pays, on average, a high rate of reimbursement so that it can keep out competition. Health care providers have no incentive to work with a new insurer, which would pay lower rates, and so new competitors can't establish a network. The insurer with the monopoly is therefore free to increase premiums at will. The lack of insurance competition is a key driver of health care costs.

Medicare, however, doesn't operate that way. Its reimbursement is more closely related to the actual cost of care. The disparity between Medicare reimbursements and insurance reimbursements is greater in rural areas, since insurers must keep down premiums and costs in areas where there is greater competition. In urban areas, where the cost of living is higher, Medicare reimburses at higher rates.

Blue Dogs and others representing low-competition areas see the disparity as unjust and want the rates increased. The push for more government spending goes against their core priority of fiscal discipline, but Blue Dogs have never been known for their ideological coherence.

Pelosi told HuffPost after a morning press briefing that no decisions had yet been made on regional disparities. "That's an issue that affects regions, whether people are Blue Dogs or not," she said.

House leadership is currently blending three committee bills into a final package. Pelosi said at the briefing that the bill that passed the House would "definitely" include a public option.

Energy and Commerce Committee Chair Henry Waxman (D-Calif.) said the decision of whether to tie it to Medicare rates -- as the Congressional Progressive Caucus insists on doing -- hasn't been made yet. "The decision will be made by leadership," he said.

Backers of the public option say that it must be tied to Medicare rates in order to be effective and to keep costs down. Requiring the system to negotiate new rates with each health care provider would be unfeasible, they argue.

Herseth Sandlin said that despite the survey, the Blue Dog position remains as it has been. "We have not moved back from the position we took previously, which is: if you're going to include a public option, it should be structured to ensure a level playing field, negotiated rates and [be] subject to a trigger."

The notion of the trigger has been advanced by Sen. Olympia Snowe (R-Maine), a key swing vote in the Senate. A public option would be triggered after a certain time period if private insurers didn't meet certain requirements.

Pelosi rejected the trigger Thursday, saying it is "an excuse for doing nothing." She said that the bill itself was the trigger and when asked a follow up, said, "I don't even want to talk about a trigger."

Herseth Sandlin wasn't sure that adjusting reimbursement rates would bring many Blue Dogs over to a public option tied to Medicare rates.

"While there's a link between the Medicare reimbursement disparities and the public option based on Medicare rates, I don't know that addressing a regional disparity issue necessarily alleviates all the concerns of the public option based on Medicare rates," she said.

The CBO has estimated that tying a public option to Medicare rates could save more than $80 billion over ten years in addition to what would be saved from the public option itself. During the caucus meeting, Rep. George Miller (D-Calif.), chair of one of the committees to pass a health care bill, dangled that cash in front of members who want funds to address regional reimbursement disparities.

That's unfair, said Herseth Sandlin.

"It's a false choice to present this to the Blue Dogs as, 'Well, if you're all about lowering the cost, then you need to be for a public option based on Medicare rates,'" she said. "The point that we continue to make to the Speaker and to others is those savings should not be borne by those of us where our patients and providers have been at a disadvantage for decades. You can't make that argument on your savings because of the inherent disparities and inequities that have existed. So if you're not willing to make the tough choices to deal with that, then your argument for cost savings rings hollow."

True or false, it's the choice they're facing.

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