The Public Option

Obama Pushes Public Health Care Option At Town Hall

President Obama on Thursday told a town hall audience in Green Bay, Wisc. he continues to support a government-sponsored health insurance option, or a "public plan," as a means to improve health care in the United States.

"One of the options... should be a public insurance option," the president said, addressing one of the most contentious issues in the current health care debate. "The reason is not because we want a government takeover of health care."

He said a public option would keep private companies honest and would keep prices down.

The notion that government-sponsored health insurance is simply another option useful for keeping private companies honest is, of course, beyond dishonest. It is not altogether dis-similar from, for example, Microsoft arguments that bundling its browser expanded consumer choice. It is, likely, however, quite effective politically. It takes to many words to explain how a government option will inevitably crowd out private options eliminating choice, or how this outcome is more then likely what democrats intend.

Instead of opposing choice, Republicans would be better suited embracing+extending. They would be wise to accept, in principle, the creation of a public option, but insist on rigorous oversight to ensure that it is a genuine, self-sufficiently funded, insurance program where prices and coverage are determined by actuaries, not special interests. They could then argue that the Democratic alternative was to put the taxpayers on the line for yet another under-the-table unaffordable welfare program (see: Mae, Fannie et al).

Put simply: If the political story is "Democrats offering more choices, Republicans beholden to entrenched interests," Republicans lose. If the political story is "Both offer additional choice, Republicans demand greater oversight/accountability," Republicans win.

"We've got to admit the free market has not worked perfectly when it comes to health care," Mr. Obama said...

He emphasized that the next eight weeks of debate in Washington will be critical.

"If we don't get it done this year, we're probably not going to get it done," he said.

We, of course, have got to admit no such thing. Or at least, can withhold such agreement until a free market system is, actually, tried. The current system could not be farther from free market. The government, in one form or another, controls virtually every medical decision the private sector nominally makes.

Consider: Beyond even the obvious heavy handed impact of Medicare/Medicaid, State regulations and malpractice law, the government controls how many medical students go into what specialties by funding residencies and fellowships, and through the NIH and NSF has a strong influence on medical research priorities.

Given how tightly the decisions private insurers make are controlled (or, more, precisely, how narrowly their degree of freedom), it is only slight exaggeration to claim that, within our health system, insurers are paid, mostly, to take blame.

The politics, then, become interesting. If Democrats remove the easy scapegoats from the system they become the most natural replacement. Every patient who feels needed treatment was denied or unnecessarily delayed will henceforth be a potential Republican. Some Democrats likely understand that and may feel compelled to publicly advocate for "reform", but would privately prefer it fail.

The president, however, acknowledged that his plan "comes at a time where we don’t have extra to spend. Tax revenues are down, more people are seeking help from the state, so we've got a lot of pressure on our budget."
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Republicans ought be publicly wondering why, if his plan is just new insurance option amongst other options, it bears such a heavy price. Privately run insurance companies do not tax to fund their business, why would a public option?

He also repeated his proposal for limiting tax deductions for the rich back to rates in place during the Reagan administration...

It strangely took the administration a little long to figure out that tax deductions for charity are popular. Invoking Reagan's name is a smart counter-strategy.

That said, the backbone of a free society, or liberal democracy, is a vibrant civil society. Tax deductions for charity are a Government policy that serves, intentionally, to strengthen civil society. It is fair to suspect that seeking to narrow that policy carries the opposite intent.