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Four Reasons Why Giving Consumers the Choice of a Public Health Insurance Plan Is Great Politics for Democrats

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The private health insurance industry and its voices in Congress have begun to spin the narrative that offering consumers a choice of a public health insurance plan is:

a) Never going to pass Congress;
b) A fringe proposal by the Democratic Party's "left wing;"
c) Is generally bad politics for Democrats.

This narrative is flat wrong. In fact, offering consumers the choice of a public health insurance plan as part of health care reform is great politics for Democrats of all stripes, and is absolutely capable of passing Congress. Here are four reasons why:

1) It is very popular. In a poll taken earlier this year by Lake Research, 73% of respondents favored a health plan that gives them the choice between a private plan or a public health insurance plan. Only 15% preferred to have only the choice of a private plan. And the preference for a choice between public and private health insurance plans extends across all demographic and partisan groups, including Democrats (77%), Independents (79%) and Republicans (63%).

In fact, this is one of the most popular parts of President Obama's health care reform proposal -- which a Diageo/Hot Line poll found last week had overall support of 62% of the voters.

What's more, private health insurance companies are very unpopular. Only 7% of Americans say they trust private health insurance companies.

Democrats have the high political ground on the issue of health care reform in general, and the choice of a public health care plan in particular -- with support from the Democratic base, crucial independent voters -- and even Republicans voters. In the coming debate, we need to act like it.

2) Democrats Need the Choice of a Public Plan to mobilize the base to fight for reform. The prospect of escaping from the tyranny of private health insurance firms is enormously motivational to core Democratic voters.

In order for Democrats to maintain a motivated, united front in defense of health care reform, the health care proposal must include the choice of a public health insurance plan. If it does not, elements of the base will oppose the plan and much of the balance will be tepid in their support.

We desperately need that united base of progressive organizations and voters to do battle with the massive number of special interests that will do everything in their power to oppose, disrupt and cripple a serious health reform proposal, as they did in 1993.

The fact is that any health care reform that actually controls cost will gore the oxen of many of the health industry's special interests; they will be very motivated. In order for us to be successful in the face of that motivation, we must mobilize a unified, equally-motivated group of voters to demand change.

We not only need the broad base of support -- which we have -- we will also need intensity to carry the day.

The presence of a public health insurance option in the plan is critical to maintain that unity and motivation.

3) A proposal containing a provision that gives consumers the choice of a public health insurance plan can pass Congress. The rules contained in the budget resolution that passed Congress protect health care reform from a filibuster in the Senate. That means it can pass with just 50 votes. We will have 50 votes in the Senate to pass a provision giving us a choice of a public health insurance plan.

The talking heads keep intoning: "But we won't have any Republican votes." We don't need Republican votes to pass the Senate. In fact we could loose all Republicans and 10 Democrats and still pass a bill. It would be great to pass a bill with bi-partisan Congressional support, but the choice of a public option already has massive bi-partisan support among the voters. Once it's passed, the special interests won't have any more luck taking it away than they had privatizing Social Security or eliminating Medicare.

In fact, there is a real question whether a bill that does not contain the choice of a public plan can pass Congress. Eighty House Democrats have signed a letter saying they won't vote for a bill without a public option.

There is simply no appetite among most Democrats in Congress to pass a new version of the disastrous "Medicare Part D" that provided some pharmaceutical coverage to those on Medicare. It has huge gaps in coverage (a "donut hole"), it gives private health insurers a monopoly on providing coverage, and it prohibits the government from negotiating with pharmaceutical companies to get cheaper prices. It would have been simple and elegant for Congress to extend traditional Medicare coverage to include drugs, but the Republicans that then controlled Congress and the White House -- and the health care and pharmaceutical firms -- would have none of it. Their goal was not to provide a critical, needed service to consumers. It was to make lots of money. The result is a much more expensive approach than coverage through Medicare.

Yesterday in his speech to the AMA, President Obama was dead on when he said, "But what I refuse to do is simply create a system where insurance companies suddenly have a whole bunch more customers on Uncle Sam's dime but still fail to meet their responsibilities." That brings us to point four.

4) The choice of a public option is critical to assure that health care reform actually delivers universal coverage and controls costs.

That is why President Obama says he has included it in his proposal for health care reform.

Those who argue that a public option is not necessary ignore both history and everything we know about structuring incentives for human behavior.

For middle class Americans who don't qualify for Medicare, we have just lived through a private-health-insurance-only world. It has been a disaster. Why do we spend 50% more per person than any other country on earth for health care, yet are 37th in health care outcomes? The only thing that completely differentiates America from every other industrial country on earth is that we are the only country whose health care system is dominated by private health insurance companies.

This is not a speculative question. The jury is in. They had their shot and blew it. And it is no wonder. Do you think any insurance executive spends a minute trying to figure out how to assure universal insurance coverage and control system-wide costs? They spend all of their time figuring out how to maximize their market share, their profit margins and executive salaries. That's why they want to insure healthy people, not sick people. It's why they employ armies of people to decline claims, and why they waste tens of millions on advertising. It's why companies like Cigna spend $26 million on their CEO's salary. It's why the amount they spend on marketing and administrative cost is so much greater as a percentage of the total spent on health care than it is under Medicare.

They don't do these things because they are bad people. They do them because those are the rules of the game in the private insurance market. That's how their success and failure are measured. That will not change unless they are forced to compete with a plan that has different incentives -- one that is in business to assure universal coverage and to control health care costs.

The bottom line for Democrats is that when it comes to health care reform, it's not just the sizzle, it's the steak. Democrats are going to get one shot at reforming health care, and that reform has to actually work to provide universal coverage and control costs. Congress may be able to live off of the optics of a plan that won't work for a while, but it won't be long before it will be obvious that the plan either worked as advertised or not.

We can't afford to screw this one up. Democrats need to pass a health care reform bill this year, and we need to be sure that it will really work. Giving people the choice of a public health insurance plan will do more to assure that the system works as advertised than anything else we can do.

Robert Creamer is a long-time political organizer and strategist, and author of the recent book: "Stand Up Straight: How Progressives Can Win," available on amazon.com.