Democrats Should Bring Back The Public Option

06/28/2017 08:29 pm ET Updated Jun 29, 2017

Up until now, congressional Democrats have been smart to merely stand on the sidelines and watch Republicans flail on their “repeal and replace Obamacare” efforts. This follows the sound political theory of: “When your opponent is digging his own grave, don’t interrupt him.” But at some point in the near future, Democrats are going to have to offer up their own better ideas for what to do next on health care. There are already many pushing for single-payer or (as Bernie Sanders likes to call it) “Medicare for all.” This, however, is quite likely a bridge too far ― even within the Democratic Party. Instead of such a radical change, Democrats would do much better to rally around a more transitional idea that was jettisoned during the drafting of the Obamacare law: the public option.

The biggest political selling point about this is that a public option would be just that ― optional. Call it “Medicare for all, if that’s what you want,” perhaps. Or rebrand it entirely as something like “Medichoice,” to take its place alongside Medicare and Medicaid. By doing so, Democrats could avoid a tsunami of Republican negative ads which screamed: “Washington bureaucrats are going to force you into their plan!” But unlike universal single-payer, Medichoice might actually have a prayer of garnering Republican votes and passing this Congress.

If the Senate Republican bill fails (which is by no means assured, even at this point), then Mitch McConnell has already expressed an interest in working with Democrats to fix some of the worst problems with Obamacare, because McConnell knows that if the system collapses at this point, Republicans will be held accountable for letting it happen. Fixing Obamacare mostly means addressing the problems with the individual market exchanges (a relatively small part of Obamacare, but also the most publicly visible). This could probably be quickly accomplished with a good-faith effort by both parties, and it may indeed be all that happens to Obamacare for the next two years. But Democrats should at least make the attempt at something more ambitious in these negotiations. Even if they fail, they will at least have created a campaign platform for the 2018 midterm elections ― a positive message of change instead of just “we’re not as bad as those evil Republicans.”

Many Democrats ― including, now, Elizabeth Warren ― are convinced that this next step should be a push for single-payer. But while they’re right that this should be the ultimate goal, to push too hard for it now only sets Democrats up for another round of massive disappointment. In the first place, to get anything passed now would require not just a unified Democratic Party, but also peeling off a significant amount of Republican votes in both the House and Senate. Does anyone expect any single-payer plan to clear this very high bar in the next year and a half? I don’t.

Regular readers of mine know that I am not generally a big fan of incrementalism. I regularly take Democrats to task for being too timid and for not thinking big enough (including, most prominently, Hillary Clinton). But with the congressional math Democrats currently face, at this point it seems like the best that could even be reasonably hoped for. So while I would support an eventual move to single-payer, I just don’t now see it as a realistic possibility, unless Democrats have a spectacular midterm election and regain control of both houses of Congress. Until that comes to pass, though, I think the public option is what Democrats should focus on.

The recent history of single-payer efforts at the state level bears this out. At least two states have attempted to move to this liberal Utopia of health care for all. They both failed, when confronted with the cost. Politically, single-payer couldn’t even get enough support in deep-blue Vermont and California, so it’s hard to see the entire country getting behind the idea at this point.

The political problem isn’t so much the cost as it is the disruption to the system. This disruption wouldn’t just impact the insurance companies and health care providers, it would also radically change everyone’s paychecks. Even if your take-home pay turned out to be exactly the same as before, how it got to that figure would be very different. Change scares people, to state the obvious, and it’s clear that not everyone’s take-home pay would be exactly the same. There would be winners and losers, most likely. It would be incredibly disruptive to everyone’s paycheck, even if you turned out to be one of the winners.

Another political problem is the sheer size of the numbers involved. Take the case of California. This year, the state senate passed a single-payer bill. The only problem? It didn’t address the funding for the program at all. They were trying to punt that thorny problem to the state assembly (which, in response, just refused to deal with the bill). Single-payer care in California would cover everyone, at a projected total cost of $400 billion per year. Of that, something like $200 billion would be from federal funds, and the rest would have to be made up with a new income tax. This tax would replace all the money now paid by both employers and employees for health insurance. An academic study found that doing so ― even while insuring all the currently-uninsured people in the state ― would successfully save California something like $37 billion each year. Even so, that $400 billion number is huge. By comparison, California’s entire state budget (including federal aid) is currently only $250 billion a year.

What true single-payer systems lack is choice. Absent that choice, everyone is forced into the new system. But American voters aren’t crazy about being forced into much of anything. The liberal dreamers insist that since the new system will be so much better, everyone just needs to bite the bullet, adapt to the change, and happiness will then ensue for all. But such technocratic “we know what’s best for you, trust us” thinking is not exactly a proven winner at the ballot box. This reason alone is why the better route for Democrats to take would be a public option, or Medichoice ― in other words, “we think it’s better, but the choice is totally up to you.” This is a much easier political message to sell, for obvious reasons.

Which is why more attention should have been paid to what recently happened in Nevada, rather than to California and the other states attempting true single-payer. Because Nevada attempted to create a “Medicaid-for-all” system, which is just another way of saying “a public option.” It passed the statehouse, but the governor vetoed it, mostly due to lack of specifics (the entire bill was reportedly only four pages long). But what was proposed is exactly what Democrats should consider proposing nationwide.

The Republicans have been complaining about Obamacare since before it was even written. Most of their criticisms were wildly inaccurate, designed merely as scary stories to frighten the public (see: death panels, Sarah Palin). But since Obamacare has become law, they have had to refocus their complaints on the reality of Obamacare. In the health care debate this year, their complaints have focused on three flaws with the exchanges: rising premiums, lack of choice in certain counties and states, and large deductibles.

Introducing a public option would seem to address all of these problems. It would provide a choice for everyone in every county. It would stabilize the premiums and deductibles by giving the private insurance companies a baseline to shoot for. It would guarantee that Republicans couldn’t complain that there were “zero” choices on the exchanges in certain parts of the country.

Of course, the insurance companies would howl, but they had their chance ― and in the places that currently only have one or zero choices, the private marketplace has obviously failed to deliver. Perhaps the system could be phased in, initially only covering markets with fewer than three insurers on the exchanges. But eventually, everyone in the country should get the same choice ― buy private health insurance in some fashion (through employer-provided insurance or through the exchanges), or sign up for the public option instead.

The Nevada legislators obviously weren’t completely serious about their new idea. Four pages? That’s not much detail. Studies would have to be done to figure out how many people would choose a public option if offered, what such a public option would actually cover, and what all the expected costs would be (premiums, deductibles, and other out-of-pocket costs for consumers; as well as the government’s costs to run the system). But at least Nevada moved the debate forward in a significant way. They have shown there may be a possible compromise to be struck between those demanding single-payer health systems and those who just want to fix the worst problems of the Obamacare system already in place.

Over time, if enough people migrated to the public option, either through choice on the exchanges or through employers deciding to sign their workers up for the idea, then the American insurance market would have to change to adapt. It would move towards a system already in use in several European countries (France or Ireland, for instance), where basic health insurance is provided on a single-payer basis, but private insurance also exists for a whole range of extras ― lower out-of-pocket costs, better hospital rooms (private instead of shared), and other enticements. American insurance companies would turn to concentrating on selling such extras, and the public option could begin to morph into a basic guarantee of health insurance for all (a real universal single-payer system instead of an optional one).

Because health insurance is such a contentious issue, this would seem to be the better path forward. Defining it as Medichoice rather than single-payer would be a lot more appealing to a lot more people, perhaps on both sides of the political divide. It would only be an incremental step forward, not the giant leap towards single-payer some now wish to see, but it would be a lot more possible politically. A few Blue Dog Democrats killed the possibility of the public option in Obamacare (Max Baucus and Joe Lieberman, to name the two most prominent), but it now seems like an idea whose time has come. The national Democratic Party should closely examine what Nevada just tried to do, and then dive deep into the details to see how plausible such a system could be, nationwide. Then when the time is ripe (when either the Republican plan dies in the Senate or passes and begins throwing people off their insurance by the tens of millions), Democrats would have a solid plan ready on a better way to move forward. For now, it’s fine that they’re content to sit back and watch Republicans shoot themselves in the foot, but at some point in the very near future, Democrats are going to need to be ready and willing to offer a way forward that actually solves problems with the health care system by making it better for more people, rather than (as with the GOP plan) making all the problems much worse.

 

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