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Senators Move To Shred Public Option, Fool Progressives While Unions Fight Back

Art Levine

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Moderate, conservative and even some liberal Senators moved away Monday from the Senate leadership’s already-modest public option to faux compromise” proposals that would leave private insurance companies in charge of any health reforms.

Jacki Schecner, the communications director for Health Care For America Now, told In These Times, These proposals would just allow private insurance companies to compete against each other to jack up rates.”

As first reported in Politico, most of these bogus alternatives, as denounced by the originator of the public option, Yale Political Science Professor Jacob Hacker, would empower nonprofits to offer additional plans to the public. But as Schechner says, Just because it’s a nonprofit doesn’t mean that it’s operating for the public good; it just means it doesn’t have shareholders.”

By Monday afternoon, yet another idea was thrown into the mix as a bargaining chip as the public option seemed on its way out: expanding Medicare eligibility to cover people under 66, to those age 55 or 60. Yet the Medicare buy-in, according to Jonathan Cohn of The New Republic, would likely be restricted to those without any other coverage, so that it would cover only about two to three million people, although still well worth doing.

Union groups, including the AFL-CIO and the Communication Workers of America, are fighting back against abandoning the public option with a lobbying blitz and ads, focused on the excise tax on high-cost plans along with preserving some form of a public option. Health Care for America Now and Moveon​.Org are also sponsoring Tuesday Cost of Delay” vigils outside the Senate and in swing Senators home states to raise awareness on the need to keep alive a robust public option.

As Politico summed up the latest apparent sell-out:

Senate Democrats in search of a health reform compromise Sunday zeroed in on a new alternative to a government-run insurance plan — signaling that the chances a final bill will include a pure public option are diminishing.

The new idea — for the government to create a national health insurance plan similar to the Federal Employee Health Benefits Plan — seemed to gather momentum as the weekend went on, and the differences between liberals and moderates on the public option became even clearer.

The proposal would take the place of a new government insurance plan currently included in the Senate version of the bill, according to officials involved with the negotiations.

The plan would be administered by the Office of Personnel Management, which oversees the federal plan for members of Congress, and all of the insurance options would be not -for-profit ones offered by private companies…

If the Senate goes in this direction, the challenge for Reid is framing this alternative as an acceptable compromise for progressives. Politically, the idea holds appeal for moderates, who have opposed establishing a new government insurance plan, but might also satisfy liberal demands for more choice and competition for private insurers.

Indeed, some Democrats are going to try to essentially fool progressives by invoking some of the 2008 Democratic campaign rhetoric that called for creating health insurance for the public as good as that offered to members of Congress.

The alternative plans under discussion now would, on the surface, seem to just that – except for at least one glaring, obvious difference: the current federal employees health plan is heavily subsidized by the government so it costs employees – and members of Congress – virtually nothing for premiums. These alternatives don’t offer any such extensive subsides, so insurance companies would be free to charge individuals and families thousands of dollars to enroll. There are no cost controls,” Shechner points out.

(These plans, even under the current Senate bill, would also be free to overcharge people with pre-existing conditions at least three times as much as other customers – so they could wiggle out of the proposed mandate to provide insurance to those with pre-existing conditions by making insurance unaffordable.)

Raw Story noted the emerging fool-the-progressives stragegy :

A Democratic aide quoted by Politico suggested that the new proposal could be used to sway progressives, who might be tricked” into believing that a government plan run by private companies was a public option.

The proposal under consideration can be said to provide access to the same type of insurance plans that members of Congress and federal employees get. People think of that as government health insurance; progressives could portray this in the same vein,” a Democratic Senate aide was quoted as saying. But moderates can simultaneously point to the fact that the government isn’t the payer and say competition was enhanced without growing the government.”

The godfather of the public option concept, Jacob Hacker, and other progressive experts, aren’t falling for what they see as ruses:

The problem is that the middle-ground” ideas that are currently flying around aren’t in the middle at all.

They represent abandonment of the public plan idea altogether. One proposal that is being floated, for example, is the chartering of a national nonprofit plan, similar to the cooperatives” that Senator Kent Conrad has advocated. But the whole point of the public plan is to create a plan that is up and running quickly and constructed on the existing infrastructure of Medicare so that it can create competitive pressure for insurers and serve as a backup for consumers on day one. In 35 states, after all, the largest private insurer enrolls more than half of privately insured patients. Many of these plans are nonprofits already – the problem is that they don’t face a credible alternative.

Another, even stranger idea is to offer the nonprofit plans available in the Federal Employees Health Benefit Plan (FEHBP) within the exchange. Since the FEHBP is itself a form of exchange, this amounts to offering a new set of private plans within a new set of private plans. How is that going to provide real pressure on private insurers in a consolidated insurance market in which nonprofit plans already have a large presence (and often act little differently from for-profit plans)?

In short, the new compromise proposals are anything but. They represent calls for advocates of the public plan to eat their crumbs and be happy. But a majority of Senators support the public plan. At least two – Senator Bernie Sanders, an independent from Vermont and Senator Burris of Illinois – have said having a real public plan in the legislation is a precondition for their support. Those who believe in the public plan — and, more important, who believe in the principle it embodies: that no American who lacks access to good insurance should be forced to buy coverage from the private plans that got us into our present mess – should stand firm in the face of these non-compromises.

Because the word nonprofit” supposedly resonates with liberals as more public-minded than for-profit firms, then that’s seen by some Democratic strategists as providing the necessary window-dressing for progressives to swallow these latest compromises.

But as one of the country’s leading experts on health policy, Washington and Lee Law Professor Timothy Jost, points out in an op-ed:

The real problem with the proposal Politico reports is that it would be built, apparently, on existing nonprofit insurance plan. Nonprofit health plans are not part of the solution; they are part of the problem. 

The purpose of the public plan was to create an alternative to private insurance to allow Americans more choice and thus to bring down costs by reducing concentration in health insurance markets. But nonprofit plans are already the dominant insurers in much of the United States. Of the nations 138 health plans with more than 100,000 medical enrollees, 84 of them, or 64%, are nonprofit.

On the plus side for progressives, an added lure for winning progressive support is what many liberals see as a sensible proposal to allow aging baby boomers under 65 to be eligible to buy-in” to Medicare.

It’s important to understand that it’s not just the usual suspects among conservaDems opposed to the public option –Senators Ben Nelson, Blanche Lincoln, indepedent Joe Lieberman, and Mary Landrieu – who are involved in the new search for a compromise.” As the Wall Street Journal reported Monday:

Senate Democrats appear to closer to reaching agreement on an alternative to a government-run health-insurance plan in health-care overhaul legislation, even as they dealt with disagreement within their party on abortion.

Sen. Debbie Stabenow, (D., Mich.) told reporters Monday that Democrats are rapidly coming to a conclusion” on language within the bill, including a public-plan alternative. Stabenow, like many other liberal Democrats, has stated that she would prefer that the bill contain a public plan but said the critical issue is not what we call something” but instead the end result.”

The words public option’ does not determine whether the bill is successful,” Stabenow said. If we can do the same thing through another mechanism and get broader support, I’m willing to look at that.”

A group of liberal and centrist Democrats met several times in recent days to discuss a public-plan alternative that would be administered by the Office of Personnel Management but controlled by nonprofit entities. Taking the public plan out of the hands of the Department of Health and Human Services would help address centrists’ concerns that the government would be taking on too much financial risk.

The bill currently contains a proposed public plan, administered by HHS, that states could choose not to carry. Changing the face of the public plan would surely disappoint some liberals, who have argued that they have already conceded too many changes to the version of the public plan they originally sought.

Stabenow pointed to a provision pushed by Sen. Maria Cantwell (D., Wash.) as one option for expanding coverage. The Cantwell proposal would give money to states to create their own insurance plans for low-income residents.

Unions are playing a leading role in fighting back, and aren’t likely to fall for these faux compromises. As The Huffington Post reported:

As the debate over health care reform enters its final weeks, the AFL-CIO is launching its largest lobbying effort to date, dispatching 175 labor leaders to Capitol Hill and pouring $1.5 million into a new ad campaign to fight key aspects of the Senate’s legislation.

In what an aide is calling the largest fly-in we have done since the health care campaign began,” the union conglomerate is blitzing both House and Senate offices this week, demanding a public option for insurance coverage, a requirement that employers cover insurance for their workers and a pay-for system that does not rely on taxing high-end health care benefits. The Senate seems poised to oppose the AFL-CIO on all three of these fronts – setting up, what will likely be, an intense set of negotiations with the House should the legislation come to conference committee.

The targets of the AFL-CIO’s newest effort include lawmakers from at least 16 states, an aide says. Labor leaders will be flying in from Arkansas, Connecticut, Delaware, Indiana, North Carolina, North Dakota, Virginia, Maryland, Florida, Missouri, California, Nevada, Maryland, Nebraska, Texas and Virginia.

The question ahead as the Senate moves toward an end-game is whether a Senate leadership determined to water down the bill so they can get their 60 votes to block a filibuster will be willing to listen to unions and progressives.

Jacki Schechner of Health Care for America Now contends that liberals shouldn’t throw in the towel yet on a public option: Being down and self-defeatist is not productive. You raise your head, realize we have come so far, and you keep pushing.”

UPDATE: Rachel Maddow on MSNBC is one prominent progressive who welcomes the new negotiations involving 10 Democrats as a sign that liberal Senators are exerting more power – and implied that the current public option is so weak it’s worth trading away to get better access and affordability on other fronts. Take a look through the link above.

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Art Levine, a contributing editor of The Washington Monthly, has written for Mother Jones, The American Prospect, The New Republic, The Atlantic, Slate​.com, Salon​.com and numerous other publications.
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