Obama: Leaning Toward Limited "Regional" Public Option?

In a brief press conference aboard Air Force One Monday morning, White House Press Secretary Robert Gibbs seemed to hint at a new twist in the debate over whether a government-operated health insurance program, similar to Medicare but open to any citizen who wants to join it, will be one of the options available in any new health reform legislation.

Until now, the question has been whether the president will insist on such a "public option" (which he has said he prefers) or whether, instead, he will capitulate to the demands of conservative "Blue Dog" Democrats in Congress, one Republican senator (Olympia Snowe), and some advisors in his own administration by accepting either a public option "trigger" (activating the public option only if private insurers do not cut costs sufficiently over the next two or so years) or regional, non-governmental "co-ops."

Many progressives are coming to see public option as the litmus test for the president's commitment to honoring his campaign promises of relatively bold "change." Speaker Nancy Pelosi has declared that House Democrats will not support any bill lacking a "public option," and the House Progressive Caucus has threatened to vote against any reform bill that does not contain it. (The White House responded by indicating they need to be "good soldiers" and support any bill that emerges.)

A "regional public option" proposal was first circulated four days ago by House Majority Whip Jim Clyburn (D-SC), who earlier this year predicted that comprehensive health reform would not pass at all this year and proposed an "incremental" approach. Gibbs' comments Monday morning suggest that Obama may be planning to endorse Clyburn's "incrementalist" approach in a pivotal speech he is scheduled to give Wednesday.

A region-by-region public plan could be a compromise proposal, an effort to mollify progressives while stopping short of the the nationwide, open-to-all proposal that has caused stiff opposition from the insurance industry and conservative lawmakers. It is questionable whether a regional plan would mollify progressives, however. Regional groups would have less purchasing power, and thus less ability to reduce costs, than a nationwide plan would have, and other trial balloons that fall short of making the option universal, including triggers and regional co-ops, have not garnered much support.

The complete text of the portions of Gibbs' Q&A today concerning health care reform is set forth below:

Q: Yesterday you called the public option -- or said the president thinks the public option is a valuable tool. Same time, Mr. Baucus's committee doesn't have -- his draft bill doesn't have a public option in it. What are your thoughts on that?

MR. GIBBS: Well, I have not -- I mean, I've seen reports about a Finance Committee proposal. Obviously we'd be pleased if the Finance Committee, throughout the course of the next few days, came up with a proposal to -- that can get through their committee, hopefully with bipartisan support.

Q: Would you be displeased if they didn't?

MR. GIBBS: Well, look, we're in a process at this point where the President will speak on Wednesday, and as I also discussed yesterday, pull together the strands of many different pieces of legislation to come up with a plan that improves health care for all Americans.

The reason the president thinks it's a valuable tool -- and let me -- I'll try to explain this as I did yesterday. For 160 to 180 million Americans that get their insurance primarily through their employer, the public option will not in any way affect them. What we're talking about is the increased choice and competition that is needed in an individual -- in the individual and small business market that often is dominated in many areas and states in the country with only one insurance carrier.

The story I used yesterday was a friend of mine who lives in Alabama who started a small business. One of the first things he had to do was go out and get insurance for he and his family. And he's lucky. His family is healthy. And 89 percent of the market in Alabama, the individual market, is controlled by Blue Cross and Blue Shield -- one insurance company.

He was lucky. But he's talked to a lot of friends, other people in small business, that have started small businesses or that are working in small businesses, that haven't been as lucky; they were denied coverage. He understands, my friend does, that if somebody in his family gets sick or for some reason if he loses his insurance, he's going to have a very hard time covering his family.

For markets where that is the case, having an option, government option, public option, that provides increased choice and competition and that provides a check on insurance companies, the President continues to believe is an important part of this proposal.

***

Q: Is the President asking the union leaders not to draw lines in the sand about the public option?

MR. GIBBS: Again, the President thinks it's a very valuable tool. I think the President thinks we have to have choice and competition. So I think we're -- we all understand the importance of getting health care reform done quickly and getting it done this year.

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Comments

[RZoroaster]

As Obama said last week its only one facet of the plan. A national, government regulated co-op would be pretty much just as good! I'm afraid we're overemphasizing the benefits of the public plan the way conservatives are magnifying its negatives. See this:

http://thefactofmyignorance.com/politics/all-about-healthcare-co-ops/

I'd rather have 95% of what we want than nothing at all!

[CindyLugo]

“A no-public-option bill would mandate every American buy health insurance ensuring skyrocketing premiums. What sane politician would vote for a bill like that? … opponents propose we pass a bill that will spike the cost of health insurance and require everyone by law to buy it.” ~ Darcy Burner



United Health Group will run successful non-profits: write off billions in advertising, exorbitant salaries and lobbyists. Forcing us to subsidize the massive increase of profits without "triggering" a government run public option for years, if ever.



Co-ops do not affect Insurance Industry pricing (GAO study done March 2000). Successful co-ops take decades ot build (e.g. blue cross/blue shield) and are bought up and run as non-profits by the Insurance Industry.



Tort reform benefits Insurance companies and doctors at the expense of the patient. Doctors pay less. If a health insurance company is sued for refusal of treatment, or tests requested by a doctor for their patient, they will literally have zero consequences;. Suggested limit of $250,000 per patient.



Competition across state lines becomes "a rush to the bottom." Companies move to states with the least regulations. You buy insurance thinking you’re covered, but it's not required in the state where the insurance company is located = less coverage, outrageous "out of pocket" expenses" and overall cost is higher.



"Pitting Profits against Patients" is economically unsound, unethical and a conflict of interest. When you think about this, it is outright ghastly.

[bmull]

Does the White House realize that none of their proposals will actually work? Most of the serious health care experts and economists gave up in disgust a long time ago. It's come down to know-nothing politicians arguing about what might pass. But let's suspend disbelief for a moment:

What would this regional public option look like? Take this extremely market oriented scenario: The federal government gives Kaiser Permanente an interest-free loan to set up shop in Alabama. Kaiser's premiums are 80% of the market average. Combine that with an individual mandate. A significant number of uninsured would choose Kaiser because they're looking for the most cost-effective option. Would the health care lobby ever accept this seemingly reasonable compromise? Not in a million years. The only regional plan the industry would ever accept is a co-op plan, because co-ops have been proven ineffective.