T Nation

Public Option Dead?



Momentum behind a new government-run health care plan appeared to slow considerably Sunday, as a lead Democratic negotiator called the option a "wasted effort" and President Obama's health secretary suggested the White House is ready to accept a health care reform package without it.

Sen. Kent Conrad, D-N.D., one of six negotiators trying to hammer out a bipartisan compromise measure on the Senate Finance Committee, told "FOX News Sunday" that the so-called public option simply does not have the votes to pass.

"The fact of the matter is there are not the votes in the United States Senate for the public option. There never have been," he said. "So to continue to chase that rabbit I think is just a wasted effort."

Conrad and other negotiators on the finance committee are instead pushing a system of nonprofit insurance cooperatives, as an alternative to the public plan.

"Co-ops are very prevalent in our society," Conrad said. "They've been a very successful business model."

Health and Human Services Secretary Kathleen Sebelius also told CNN's "State of the Union" Sunday that a public option is "not the essential element" in reform legislation.

The White House indicated it could jettison the contentious public option and settle on insurance cooperatives as an acceptable alternative.

"I think there will be a competitor to private insurers," Sebelius said. "That's really the essential part, is you don't turn over the whole new marketplace to private insurance companies and trust them to do the right thing. We need some choices, we need some competition."

The statement comes after Senate Majority Whip Dick Durbin, D-Ill., said last week that he's "open" to a bill with no public option.

The finance committee is the last of five committees to consider such legislation.

Conrad had previously cast doubt on the chances that a public option could ever pass the full Senate. But with opposition to Democrats' bill growing, other top officials are starting to leave wiggle room for legislation that does not include the option as Conrad and other negotiators push hard for a co-op system.

As proposed by Conrad, the co-ops would receive federal startup money, but then would operate independently of the government. They would have to maintain the same financial reserves that private companies are required to keep to handle unexpectedly high claims.

The idea has met a mixed reaction among Republicans.

On Sunday, Sen. Richard Shelby, R-Ala., said a co-op system would be a step in the right direction.

"We ought to look at it. I think it's a far cry from the original proposals," he told "FOX News Sunday."

White House Press Secretary Robert Gibbs told CBS' "Face the Nation" Sunday that the "bottom line" for the president is "choice and competition in the insurance market."

"The president has thus far sided with the notion that that can best be done through a public option," Gibbs said.

The Associated Press contributed to this report.


From all appearances, it is dead - and the Obama administration is now attempting to claim that while it loved the Public Option, it wasn't in love with the Public Option.

I don't think anyone is buying it - not more than a month ago, he was stating that any bill he would sign would have to have a public option.

I think the debate will shift to the co-op arguments, as both Baucus and some Republicans are considering it.

From a political theater point of view, it will be interesting to see how this impacts the Left's support for Obama. There is already some gnashing of the teeth that a "progressive" president with both Houses of Congress in his pocket and very high approval ratings/political capital couldn't get get a Public Option enacted.

Obama has lost independents and moderates over the issue, and now the left-wing of his party is very disappointed and, in some cases, possibly quite mad at him. A terrible political footing to be on this early in his administration.


The public option was a large part of his campaign when he was running in '08. I kinda feel like he lost some cred with this move.


Among the many principles abandoned was Obama's expressed preference (from 2003 onward) for a single-payer model. Forgotten now, I suppose. How many more such stands will be abandoned? As this happens, his Congressional support (those that have outstretched necks) will be left out hanging to twist slowly in the wind.


All the more strange because no one has a clue as to how these would work. Like Hillarycare in 1994? No...voluntary associations? No.

Here's why. Let's look at who is not insured and in most need: those that have been denied for pre-existing conditions, who have been dropped from commercial insurance, and those who have been dropped from employement-based insurance because Obama has made it disadvantageous to offer it. Some of these folks might be able to find a a co-op risk pool and premiums that are affordable, most others, not. (Because is such a risk-pool could exist, there would already have a market in private insurers.)
Everyone else--illegals, the poor, the marginally employed--are out of luck. No co-ops--for profit or not--could be self-sustaining for them.

Co-ops--a patchwork to cover everyone in the US--could include the destitute under one condition, one to which I have elsewhere alluded: vouchers.

If we must have welfare--a proposition which some here will reject out-of-hand--it need not be an entitlement. Vouchers (for premiums and copays) limited to the needy can be used by them to participate in the market for insurance as equals. Individuals could then seek the package that best serves them. See...the free market can be used to serve social welfare as well.


I don't know if it's dead yet. I think it largely depends on how the republicans play it, to be honest. He seems to be offering to remove it from the table. If he does this and enough moderate republicans come on board, then he'll do it. But if he offers to remove it and still can't find republican support, he'll turn to the far left wing to try to get something done and we may see reconciliation.

Will we see Republicans work with the administration to get something done? Or will we be hearing more about "death panels" (as we did today on from Orrin Hatch)? Perhaps this week will show.


Dr. you explained my point much better than I. If he caves in on this issue, what's next? You know the GOP is looking at this and taking notes on putting massive pressure on Obama on future issues. I really don't feel like the GOP is "behind" the opposition to the Health Care Bill, but more so that people know that the government is the quintessential king of cluster fucking something up.


What stops prices from creeping up? Say I have customers that I know have a gifted 4k they can spend, per year. Why wouldn't I, over time, raise my prices? If the government is going to give out vouchers, it's probably going to give them in amounts that reflect cost right? Otherwise, what's the point of even giving them out if the vouchers don't make up the difference? So, I know my prices can keep going up and the government will have to keep up, right?


Why don't you think competition would solve that problem?


Targeted vouchers seem a good idea. Is anyone proposing them? Opposing them?


Elsewhere I have mentioned a welfare economist, Mark Pauly. I have not kept up with 36 years of his publications, but the rough theory is as follows:

Public support, in the form of vouchers for co-pays, deductibles, premiums, are graded progressively. For example, the truly destitute get more than the merely poor, because a marginal dollar has more value. (This is "Pareto optimal," and a more targeted use of public funds.) But each family bargains to get the best value for their voucher/cash mix. Yes, there is more capital--because more families will now be in the market--but there is still market competitive incentive to keep prices down. Secondarily, in theory, the more families join in the risk pool, the lower expenses become for all.

I do not know if Mrs. Sibelius, or for that matter, Mr. Obama, has ever thought of this or even heard of this approach for national insurance. But it seems that at this point, no one is in charge of this carnival.


Because you've got a free vending machine. One that has made a committment to providing the funds needed to acquire a plan. It's free money. Some might argue the providers would be shooting themselves in the foot by making it too expensive for customers who'd previously been able to afford their own, without a voucher. So these customers would have to drop their insurance. But then, being uninsured, they'd now qualify for a voucher. Hell, I'd send them the forms and provide assistance in filling them out.


Obama used the Post Office as an analogy. It's cheaper, and inevitably, crazier than using Fed Ex or UPS. Everyone knows why and dreads going to the Post Office, the lines are long, and they move slow. Imagine that with health care. It is already a long wait, sometimes I have waited to see my doc for 5-6 weeks and this is for something pretty major. Imagine making the wait longer.

The lines and wait would be so long, it would be insanity to think you would get healthcare on a timely basis. I heard about my grandfather's experience with Socialized Medicine, he had to wait a full year for surgery. That's 1 year of misery, not to mention that the condition may change and get worse after waiting so long. Cancer is best dealt with ASAP, do you want to give it a year or thereabout to get worse, where it has spread? You are a dead duck with shit like that man.


How many people are really "in need"? How many of those "in need" cannot have their needs met by charitable giving? How many of those left over and "forgotten by the system" could just be a tax deduction for health providers to cover out of pocket? (if we didn't have to pay any taxes these people would have better care than current middle-class people who pay for government mandated HMO care).

I have said it before and I will say it again: The current problem with health care is that the current demand is not being met by the supply and thus it is expansive for those who can "afford" it and nonexistent for those who cannot. The question then is how can we increase the supply of it and deliver it to those people "in need"?

The answer lies in promoting voluntary associations between free people, spontaneously ordered by a free and unfettered market.


the most interesting thing is why does obama feel like he needs broad republican support when pelosi has already stated that she has the votes in both the house and senate? Whats the matter, obama, dont want to be left holding the bag?


I am just basking in the enjoyment of the moment...The system worked. People were heard.


Exactly. This is awesome news for more reasons than just the program getting killed.


I agree , but I remain the right to change my mind or agree with you more :slightly_smiling:


I think the one that were heard have the biggest mouth, the squeeky wheel syndrom


From a blog I read earlier...

OBAMA = One Big Ass Mistake America