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Why the Public Option Is Not "Fading" -- Just the Contrary

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The Sunday New York Times ran a front page story headlined "The Fading Public Option." Since the beginning of the health care debate in April, the main stream media and purveyors of Conventional Wisdom have regularly pronounced the public option dead and gone. But in fact they continue to be dead wrong.

In fact, the prospects that there will be some form of public option in the final health insurance reform measure this fall have actually increased over the last month. Here is why:

1). The odds have dropped that some sort of "bipartisan" consensus will become the final template for a bill. That has reduced the ability of Republicans to tube a public option as a condition of their support.

From day one, the Republicans were never going to support a public health insurance option for everyday Americans. The Republican party staunchly opposed Medicare forty years ago. Despite former House Speaker Newt Gingrich's hope that it would "wither on the vine," Medicare is now an unassailably popular public health insurance option for seniors. The Republicans and private insurance industry will do everything they can to prevent the American people from having access to another -- undeniably superior -- public health insurance plan.

The insurance industry desperately wants to protect its "right" to raise prices and take home huge profits -- to skim off as large a portion as they can of every dollar spent on health care.

So the insurance industry and Republicans were never going to agree to a public option. What has changed is that the Republican decision to try to block health insurance reform has completely eliminated their leverage over what will be in the final bill. In the end, Democrats are increasingly clear that they will have to pass health insurance reform with Democratic votes -- which we can -- either by using reconciliation rules or by securing 60 votes for cloture from Democrats and 50 votes for final passage.

2). The pundits ignore the legislative facts on the ground. Four of the five committees with jurisdiction in this debate have reported out bills with a strong public option. The bill that passes the House at the end of this month will include a strong public option. Whether or not the bill that passes out of the Senate has such a provision, the House-Senate conference committee will likely send a final bill with some form of public option to both chambers for final passage. That's because a bill without a public option will have a hard time passing the House and a bill with a public option can, in fact, get more than 50 votes in the Senate.

3). The president has made it very clear that he not only supports a public option, but he will demand some mechanism to assure a competitive market place and drive down costs.

The Republicans played right into his hands with their new talking points on this week's Sunday news shows. Virtually every Republican argued that the Massachusetts plan -- that requires everyone to purchase health insurance -- has the highest health care costs in the country. Precisely. You can't force everyone to purchase insurance from private health insurers unless you create competitive pressure to control costs by giving consumers the right to choose a public health insurance plan.

The private insurers would love the government to require every citizen and most businesses to buy their product -- who wouldn't? What they don't want is regulation, or worse yet, competition, that prevents them from doing whatever they can to make as much as they can. And remember that the insurance companies are exempt from the anti-trust laws that seek to assure competition in other markets. They can collude, divide up territories and drive up prices until they're blue in the face.

An AMA survey, released in late January, gives a score gauging the concentration of the commercial market for 314 metropolitan statistical areas. The report showed 94% had commercial markets that were "highly concentrated" by standards set by the Federal Trade Commission and Justice Department.

In Maine, for instance, one company -- Wellpoint -- had 71% of the market. The second competitor was Aetna with only 12%.

There is another way to control the behavior of the private insurance companies when we mandate coverage -- serious rate regulation -- treat them like regulated public utilities.

Rate regulation is an even more serious political lift than a public option -- which is also a much more efficient means of assuring competitive prices than rate regulation.

The pundits, insurance companies and Republicans need to get used to one idea. Many Democrats -- including the president -- will ensure that the final bill have some robust means of ensuring competition and controlling prices, and a robust public health insurance plan is the best option on the table.

4). Giving Americans a choice of a public health insurance option remains incredibly popular. A poll conducted for Americans United for Change by the respected firm of Anzelone and Liszt -- completed last Friday -- shows that, by a 62% to 28% margin, likely 2010 voters would be more inclined to support President Obama's healthcare reform plan if it included a public option that gave people a choice between private insurance plans and a public health insurance plan.

Voters like the idea of making a choice themselves -- and not having the choice made for them by Republicans who are trying to defend the profits of private health insurers. The voters have been unaffected by the insurance industry-generated talk that giving them that choice would prove the demise of the private health insurance industry.

There are three major forces that keep pushing the notion that "public option is dead." First are the Republicans and insurance industry that want to weave a "public option is impossible" narrative in order to create a self-fulfilling prophecy. They hope that if public option proponents think it is impossible, they will give up. That motivation is completely understandable, but Progressives shouldn't fall for it -- or contribute to it.

The second is a desire in the media to create a story that President Obama has "mishandled" the health care debate. That is simply wrong. President Obama has moved us closer to giving America universal health care than any other president in 60 years, and the odds are very good he will succeed where all others have failed.

But the third is the most insidious. It is the cynicism in the media -- and Washington Conventional Wisdom -- that anything fundamental cannot pass out of Congress. That there isn't any hope that everyday Americans can defeat the special interests. It is the same cynicism that convinced most of the "sophisticated" in-the-know Capitol Hill insiders that Barack Obama could never be elected president. And to that cynicism I give the same answer that we gave then, and that thousands gave at the president's Minneapolis health care rally on Saturday: "yes, we can."


Robert Creamer is a longtime political organizer and strategist, and author of the recent book: Stand Up Straight: How Progressives Can Win, available on Amazon.com.