The Trigger Option: An Ultimatum To Insurers

10/20/2009 05:12 am ET | Updated May 25, 2011

For what is beginning to feel like forever, government's role in health reform has been hotly contested. So much so, in fact, that at times people seem to have forgotten that the public option is merely one piece of a much larger reform bill. Forgive me, but I'm going to perpetuate that way of thinking for some, by writing more about the public option.

I think most everyone can agree that the public option is an ideological lightning rod. Conservatives tend to hate it, viewing it as unnecessary government involvement and a slippery slope to "socialized medicine." Progressives tend to love it, claiming that without a public option, health reform will be meaningless. Then there are moderates, a group with which I occasionally like to side, who seem willing to compromise some of the policy specifics in order to increase the political feasibility of actually passing reform. The problem with that has been that so far, Republicans have made it clear that they are not willing to reach a bipartisan consensus, making it appear as if the Democrats are needlessly diluting reform. After all, if you're not gaining votes by dropping parts of the bill, why drop them? The more steadfast liberals are actually growing angry towards certain Democrats who they perceive -- perhaps rightly -- as "selling out" their base.

As evidence of the anger being generated on the left: Not long ago, I was the target of some less than kind comments when I posted an article suggesting that perhaps the public option could be limited to enrolling only certain groups of individuals. Suffice it to say, people were not persuaded by my argument.

In the interim, there has been talk of deep-sixing the public option entirely or replacing it with a series of health insurance co-operatives. Now, however, there's something I like even better than my own idea of a restricted public option: The Trigger Option.

What is the trigger option? Well, it's hard to be specific about it, because it exists only as an idea among some White House staff right now, but essentially it would work like this: Congress passes reform without an immediate public option, which includes increased regulatory controls over private insurers. As long as the insurers comply with the regulations as required, there will be no public option. If, however, the insurers fail to comply with the regulations, it would trigger the creation of the public option. Again, specifically what these "regulations" would be is hard to say, but I assume they would include consumer protections that require insurers to offer some standard benefits at a reasonable price. I also suspect that insurers would not be able to cut benefits or raise prices significantly within a short period of time.

Here's why I think this approach is so fantastic. It takes the public option off the table for the moment, but holds it over the heads of the insurers as a looming threat if they don't get their act together. In some ways, it creates not a mechanism of competition, but an enforcement mechanism, which I believe private insurers are likely to respond to. But the great thing is, if they don't respond to it, then we get a public option we can opt into.

It's really a fantastic ultimatum. With the trigger option, the government is essentially saying, "Okay, private insurers. Here's your chance to prove us wrong." This should appease folks who are anti-government, without alienating the folks on the left. After all, the primary goal is fixing the system, and the trigger option has that goal firmly in its sights. Either private insurers step up and start acting like they ought, or government will intervene to do the job private insurers failed to do. Personally, I don't care whether the public or private sector gets credit for solving the problem as long as the problem is solved, and I think reform with a trigger option stands a fantastic chance of doing just that.

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