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Take the "Opt Out" Public Option--Good Policy, Politics

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In recent days a proposal has emerged in Senate discussions over health care reform legislation. The idea is an adaptation of the much-debated Public Option proposal that would create a government-backed insurance choice for consumers trying to buy coverage.

In this new proposal, called the “Opt Out,” individual states would be able to choose whether they want to participate in the Public Option or not. The method of the “Opt Out” isn’t entirely clear but it could take many forms from executive order to state legislation to ballot measures.

There is a strong case for a Public Option. From a policy perspective, the best outcomes for lowering health care costs would come from a robust, national Public Option choice. This would provide the largest insurance risk pool that allows the cost risks to be spread out among more people thereby lowering the price tag for everybody involved—businesses, consumers and the government. The economics of it are clear. For American consumers sick and tired of being jerked around by their insurance company it also offers an alternative.

The genius of the “Opt Out” version is that it starts from the point of universality. This is not an “Opt In” it is an “Opt Out.” Every state would start IN the Public Option. If Democrats can agree to the “Opt Out” it is a de facto victory for supporters of the Public Option but it also includes a safety valve for conservative Democrats worried about the plan’s success. Conservative Democrats could claim they won the opportunity for their state to set their own course if they want. Win, win.

The downside is that the states who most need a Public Option might be the most likely to opt out—some of our poorest and least healthy states are in the Deep South controlled by conservative Republicans who have sworn against the Public Option. But I think that is a bigger risk if the plan was an opt in instead of an opt out. Taking away health care choices isn’t something politicians like to do once they’re in place. SCHIP, Medicare and the Veterans’ Administration hospitals are as popular in more Republicans states as they are in more Democratic states.

Progressives should see in the “Opt Out” an opportunity to win their policy proposal and create a political bulwark of public support behind the Public Option.
Politically, Republicans should be quaking in their boots over the idea of an “Opt Out” or even an “Opt In.” State-by-state political and legislative fights to stay in the Public Option would give Democrats a rallying cry and mobilization tool. If these fights took the form of ballot measures there would even be Election Day opportunities for health care fights. Progressives would have a soft-money vehicle to mobilize voters most supportive of health care reform, namely progressive votes who make up the Democratic base. Republicans would be better off politically accepting a straight-up Public Option than having an “Opt Out.”

Such crass political calculations aren’t the reason to accept or reject any policy idea. But imagining a political framework to support a policy is what has made some big policy wins sustainable. When Social Security was enacted, President Franklin Roosevelt pushed for the payroll tax that pays for it knowing that it would create a sense of entitlement among the public that politicians couldn’t take back.

There is some precedent to this “Opt Out.” Until the early 1980s local governments, such as counties, had the right of opting out of Social Security and establishing their own retirement plan. This option had been provided when the Social Security Act was passed in the thirties. Today thousands of counties have opted to stay in Social Security while only one in Galveston, Texas has stayed out. Galveston exists as some sort of bizarre libertarian footnote but Social Security is everywhere.

The “Opt Out Public Option” is a great idea—Democrats, and their feisty progressive base, shouldn’t miss this opportunity to take a big step forward. Too often progressives metaphorically suffer from Anhedonia—a psychological condition described as the inability to experience pleasure. Democratic consensus around an “Opt Out Public Option” would be a victory. Embrace it and feel good about it.