THE HISTORY OF THE PUBLIC OPTION.

As progressives mourn the likely death of a public insurance option in health care reform, it's worthwhile to trace the history of exactly where this idea -- a compromise itself -- came from. The public option was part of a carefully thought out and deliberately funded effort to put all the pieces in place for health reform before the 2008 election -- a brilliant experiment, but one that at this particular moment, looks like it might turn out badly. (Which is not the same as saying it was a mistake.)

One key player was Roger Hickey of the Campaign for America's Future. Hickey took UC Berkley health care expert Jacob Hacker's idea for "a new public insurance pool modeled after Medicare" and went around to the community of single-payer advocates, making the case that this limited "public option" was the best they could hope for. Ideally, it would someday magically turn into single-payer. And then Hickey went to all the presidential candidates, acknowledging that politically, they couldn't support single-payer, but that the "public option" would attract a real progressive constituency. Here's Hickey from a speech to New Jersey Citizen Action in November 2007:

The good news is that people are ready for big change. But the hard reality, from the point of view of all of us who understand the efficiency and simplicity of a single-payer system, is that our pollsters unanimously tell us that large numbers of Americans are not willing to give up the good private insurance they now have in order to be put into one big health plan run by the government.

Pollster Celinda Lake looked at public backing for a single-payer plan - and then compared it with an approach that offers a choice between highly regulated private insurance and a public plan like Medicare. This alternative, called "guaranteed choice" wins 64 percent support to 22 percent for single-payer. And even the hard core progressive part of the population, which Celinda calls the "health justice" constituency, favors "guaranteed choice" over single-payer. ...

Starting in January, we began to take Jacob Hacker to see the presidential candidates. We started with John Edwards and his advisers -- who quickly understood the value of Hacker's public plan, and when he announced his health proposal on "Meet The Press," he was very clear that his public plan could become the dominant part of his new health care program, if enough people choose it.

The rest is history. Following Edwards' lead, Barack Obama and Hillary Clinton picked up on the public option compromise. So what we have is Jacob Hacker's policy idea, but largely Hickey and Health Care for America Now's political strategy. It was a real high-wire act -- to convince the single-payer advocates, who were the only engaged health care constituency on the left, that they could live with the public option as a kind of stealth single-payer, thus transferring their energy and enthusiasm to this alternative. It had a very positive political effect: It got all the candidates except Kucinich onto basically the same health reform structure, unlike in 1992, when every Democrat had his or her own gimmick. And the public option/insurance exchange structure was ambitious.

But the downside is that the political process turns out to be as resistant to stealth single-payer as it is to plain-old single-payer. If there is a public plan, it certainly won't be the kind of deal that could "become the dominant player." So now this energetic, well-funded group of progressives is fired up to defend something fairly complex and not necessarily essential to health reform. (Or, put another way, there are plenty of bad versions of a public plan.) The symbolic intensity is hard for others to understand. But the intensity is understandable if you recognize that this is what they gave up single-payer for, so they want to win at least that much.

The alternative history question would be: What if they had pushed for single-payer all along? Could the political process then have sold them out and compromised by supporting the public option we now look likely to lose?

--Mark Schmitt

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