Weekly Pulse: Public Insurance Option is Not Optional

During a press conference yesterday, President Obama voiced support for government-administered health insurance for all who need it (aka the "public option"), as a key component of healthcare reform. Though Obama stopped short of threatening to veto a bill that didn't contain such an option, he said that a public option is needed to enforce market discipline. If the system is going to reform, the health insurance companies can't just keep selling the same bad coverage with bigger public subsidies for their monopolies. Essentially, Obama isn't about to force taxpayers to buy overpriced insurance from private companies. "The public plan, I think, is an important tool to discipline insurance companies," Obama said during yesterday's White House news conference. "I think there is going to be some healthy debate about the shape that this takes." He outlined three options: Get insurance through your employer, buy insurance on your own, or buy insurance from a marketplace where public and private insurance providers compete for business. In the Washington Monthly, Steve Benen notes the central irony of the standard insurance industry criticism of Obama's plan: A public option, critics tell us, would provide a horrible, bureaucratic service for customers, including rationing and long waiting times. But here's the follow-up: if that's true, no one would choose the public option and insurance companies would be just fine for the indefinite future. Except, of course, insurance companies and their policymaking allies know better. Which is why they're panicking. As Senate Democrats continued to cast about for an elusive bipartisan compromise on healthcare reform, their colleagues in the House are pushing ahead on their own. House Democrats are holding hearings this week on draft legislation and is written without Republican input. The house bill would require all Americans to have health insurance and put new restrictions on employers as well. The Uptake is covering the hearings live. By allowing the proliferation of multiple healthcare bills, the Obama administration is deliberately avoiding the mistakes that the Clintons made in 1994, according to Mark Schmitt in the American Prospect. Instead of submitting its own 1300-page bill to Congress, the Obama administration is letting the legislative branch hash out the details while the executive branch hovers above the fray: The Obama White House has a huge advantage that the Clinton administration didn’t: The plan is basically written, and it has a constituency. Everything Clinton spent a year on is done. All the work to build consensus around fundamental features – a regulated insurance market, an individual mandate, and a public plan to provide a competitive benchmark – made up the outlines of every Democratic presidential candidates’ proposals. They have been further developed at the think tanks and various “strange bedfellow” coalitions that have been at work in Washington for at least four years. There are some questions about details and cost containment, but all the major alternatives have fallen by the wayside. It’s an extraordinary accomplishment, and a real testament to the infrastructure that’s been constructed for progressive policy as well as politics. The big picture approach gives the administration room to shore up key allegiances with powerful interest groups. Last week, many feared the public option was DOA when congressional budget analysts announced that the proposal would cost more than expected. Mike Madden explains in Salon that things were looking grim until Obama struck a deal with Big Pharma to save $80 billion on drugs for seniors: So the deepest significance of the deal between the government and PhRMA, the drug lobby, may well have been what it meant politically. Yes, the announcement means Medicare patients will no longer have to deal with an odd "doughnut hole" in their drug coverage; before Monday, the government pays for seniors' prescriptions if their annual cost is under $2,700 or more than $6,100, but not if the price is in between. But more important, the news gave the administration a public relations victory -- the president just saved the government, and seniors, $80 billion -- to kick off a week where Obama plans to play offense, not defense, on healthcare. Mike Lillis of the Colorado Independent explains why filling the donut hole isn't a big sacrifice for the industry: Drug companies have already profited handsomely from the prescription drug program. Furthermore, Lillis notes, the companies may still come out ahead if seniors begin to buy donut hole drugs that they previously couldn't afford. Even at half price, Big Pharma still does okay. Finally, Eleanor Bader of RH Reality brings us the story of how the Women's Medical Fund helps women who can't afford abortions. The Pennsylvania fund was established in 1985 after state Medicaid cut off abortion funding. The Fund is one of over 100 abortion access funds nationwide providing options for poor women that anti-choicers sought to take away by manipulating healthcare coverage for political ends. Healthcare reform, priority one on Obama's domestic agenda, is finally getting its moment in the spotlight. Competing healthcare bills are taking shape and a vigorous public debate is underway. Keep checking The Pulse for play-by-play coverage of the most important policy battle in a generation. This post features links to the best independent, progressive reporting about health care. Visit Healthcare.newsladder.net for a complete list of articles on healthcare affordability, healthcare laws, and healthcare controversy. And for the best progressive reporting on the Economy, and Immigration, check out Economy.Newsladder.net and Immigration.Newsladder.net. This is a project of The Media Consortium, a network of 50 leading independent media outlets, and created by NewsLadder.