Public Option Compromise May “Indeed Be Better Imperfect Solution”

December 9, 2009

After senior Senate Democrats reached a “broad agreement” on Tuesday night to drop the public option in favor of a compromise plan, David Coates, political science professor at Wake Forest University and author of the forthcoming book, “Answering Back: Liberal Responses to Conservative Arguments,” offered the following commentary. To interview Coates, email Carol Cirulli Lanham at carol@sternersedeno.com or call 972-818-0895.

For most liberals fighting for health  care reform, the idea of the ‘public option’ was never to put the government in the driving seat of health care provision. That claim was a piece of conservative hyperbole. The use of the public option as the thin end of a wedge that would ultimately take us to a single-payer system, was long recognized by many liberals as a non-starter, given the weight of conservatives within the Democratic coalition in Washington.

Instead, the role of the public option was to strengthen the forces of competition in the health insurance market, to make private insurance companies offer more generous and more reliable health care coverage without increasing the cost of premiums.  Conservatives pushed the public option back for precisely that reason – that it would hurt the profits of the insurance companies – by squeezing them between consumers with wider choices and a government plan with real teeth.

By steadily denuding the public option of those teeth – restricting access to the public option only to those without health insurance, and obliging the public option to negotiate its prices with health care providers in exactly the same manner as private insurers, conservatives have already seriously undermined the capacity of the public option to bring private insurers into line.

That is why dropping it in favor of tighter direct regulation of the private insurance companies through the Office of Personnel Management may indeed be the better imperfect solution.

It all depends (a) on the detail of the regulations that the OPM will set; (b) the nature of the threshold set before a government scheme can be introduced; and (c) the staying power of the OPM. If that office falls into Republican hands, the regulations can go  backwards, as all sorts of regulations did during the Bush years.

The devil here will literally be in the details. Chances are Lieberman and co. will try now to gut them of content. If the conservatives prevail, and the final bill creates a structure of regulation without potency, the fight will then be on again, to give the regulations real force.

The shell of a tighter regulatory structure may be all that can be salvaged this time round. That would be better that than nothing – giving us a framework to defend and a set of regulations to thicken. Health reform in this generation is clearly going to be a process rather than a moment!

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