What Will Progressives, Unions Do if ‘Public Option’ is Dropped?

Art Levine

A protester holds a sign during an anti-healthcare reform rally August 14, 2009 in San Francisco, Calif.

On the Sunday talk shows, the Obama administration sent its strongest signal yet that it’s willing to abandon a robust public option as a key part of health reform, setting up a likely fight with the Democratic Party’s liberal wing and posing a challenge for progressive organizations and unions that have pushed hard for that approach.

Former Gov. Howard Dean said on MSNBCs Morning Joe” that if he were a member of the Senate, he wouldn’t vote for a final bill without a public option. But he believes the new signal from the White House about dropping the public option is part of a grand strategy to get the bill through the Senate with centrist Democrats on board. Then he sees the option being reinserted from a House version in a House-Senate conference, and attached to the budget bill, allowing for passage with a reconciliation rule — i.e., with just 50 Senate votes needed.

Of course, regardless of any political machinations, some progressives are still holding on to slim hopes in the mixed messages sent by the administration that the president supports a public option. But it’s becoming clearer that the administration has decided that the public option is expendable.

Even so, progressives say they’re still willing to fight for the public option, and take comfort from White House statements in support of the public option. Now the fight for the public option becomes the acid test of progressives’ dedication, organizing savvy and willingness to fight for the provision. As the Campaign for America’s Future Bill Scher asked: How Bad Do You Want the Public Option?”

AFL-CIO President John Sweeney proclaimed today union members will continue to push for this key reform: A quality public health insurance option is a crucial part of health care reform to keep private insurance companies honest, hold down costs and ensure that everybody has a health care choice available.”

And in an alert sent to supporters, the leading grass-roots coalition, Health Care for America Now, declared, We Will Not Back Down.” Online organizer Levana Layendecker redoubled her appeal for action:

The media and some politicians say we don’t have the votes” in the Senate for real health care reform with a strong public health insurance option.1 But poll after poll shows that three out of four of people want a public health insurance option to keep the insurance companies honest.2

Click here to call your Senators and ask them to support real reform – reform with a public health insurance option to keep the insurance companies honest.

The President’s Press Secretary Robert Gibbs said today, The President believes that the public option is the best idea he has seen for achieving the goals of lowering costs and increasing choice and competition.” And Speaker Pelosi has made it clear that the House of Representatives won’t pass a bill without a strong public option…

Unfortunately, some Senators are proposing state-based co-ops as an alternative. The non-partisan Government Accountability Office made clear that co-ops do nothing to lower the cost of insurance.4 And we know that only the government has the clout to force insurance companies to change the way they behave.

We need to get a simple message to Senators: Join with the majority of Americans to support a public option to lower costs and keep insurance companies honest. A co-op isn’t a public insurance option.

Nonetheless, nonprofit, consumer-owned co-ops are getting another look in Congress. That approach is favored by centrist Democrat Kent Conrad, a key player in Senate Finance Committee negotiations over the bill, who declared on Sunday that the public option is dead.

Yet as Health Care for America Now has noted, along with Sen. Jay Rockefeller and other critics, there’s little reason to believe in the successful impact on health reform of these regional, member-owned, nonprofit health insurance cooperatives, even backed by billions in federal funding. Critics say they can’t be counted on as a likely pathway to accessible, affordable care that keeps insurance companies honest.

Senator Jay Rockefeller explained a few weeks ago (as summarized via HCAN Now! Blog):

Senator Rockefeller absolutely destroyed the idea of a co-op as a viable means of reforming our health care system. His main point: Co-ops are unproven ideas, with only a few examples that actually worked available throughout the country. What’s more, no study has ever been done to figure out if these organizations work or affect the health care marketplace in any way. On top of that, there is no regulation on health care co-ops currently.

They are not a public health insurance option, and not a viable solution. Watch:

In fact, there are only two truly successful and competitive co-ops, one in the Pacific Northwest and another in Minnesota, but most have failed.

A smart overview of the challenges facing co-ops in the Nightlight blog underscores the hard truth that any co-op model that would be strong enough to succeed in bringing healthcare reform wouldn’t be acceptable to conservative and business opponents of reform (excerpted below):

If we can take some centrist Democrats off the hot seat and still have meaningful health reform, what’s the problem?

Here’s the problem: Co-ops will fail. They will be unable to deliver the kind of comprehensive and systemic reform that’s needed to save the U.S. economy and ensure the health of its citizens. Here are five simple reasons why:

1. Previous plans, like the Massachusetts reform, haven’t been game changers.’

2. Co-ops will be a localized, haphazard solution to a nationwide problem.

3. Co-ops can’t identify national trends and react accordingly

4. Co-ops can’t fight monopolies.

5. Co-ops have no reason to keep living – as co-ops.

Once we had a nationwide system of nonprofit health organizations. While each was local, they were tied into a loose national confederation. Since they were nonprofit, the idea was that their primary goal was to have the interest of their members at heart. The name of this national nonprofit organization?

Blue Cross.

Indeed, the consensus of progressive-minded health reform experts is that regional co-ops, if adequately funded and overseen by a national organization, could serve as a potentially useful supplement to a true public health option, not as a replacement for it.

A scholarly look at the history of the co-op movement by health law professor Timothy Jost observes all the hurdles co-ops face in getting started:

First, it is hard to imagine how they would get underway. Capitalization and critical size were problems before and would likely be problems again. Senator [Kent] Conrad’s recent draft suggests that members of the coops would elect their boards, and that the coops would then obtain state licensure as mutual insurers, meeting state standards for solvency and reinsurance (with the help of federal seed money). But there is a chicken and egg problem here. Until the coops had members they could not have a board. Until they had a board, how would they meet licensure requirements? …None of this makes sense.

Second, there is every reason to believe that small, state run coops would fail like their predecessors did in the 1930s and 1940s. Unless they reached the critical mass necessary to bargain effectively with providers, to accumulate reserves, and to compete with national private insurance plans, they would be doomed to failure…

The reaction by some progressives to the potential dumping of the public health option was strong and hostile, including tough-minded comments by Rachel Maddow on NBCs Meet the Press,” but it’s not at all clear what will happen to the grass-roots efforts of progressive groups and unions on behalf of a public option plan as part of health reform if the White House is not on board.

Maddow, in battling lobbyist and former Majority Leader Dick Armey over health reform, also sharpened what’s really at stake for progressive groups as they ponder their next move:

But ultimately, if the president decides that he’s going to go with a reform effort that doesn’t include a public option, what he will have done is spent a ton of political capital, riled up an incredibly angry right-wing base who’s been told that this is a plot to kill grandma, and he will have achieved something that doesn’t change healthcare very much and that doesn’t save us very much money and won’t do very much for the American people. It’s not a very good thing to spend a lot of political capital on.

Others in the blogosphere contend that health reform without a public option is still worth fighting for, if it will keep enough Democrats on board.

But it’s the response, strategy and tactics of progressive groups and legislators, faced with the fast-changing reality of a Washington politics that sometimes seems to marginalize them, that could determine the fate of health reform in the weeks ahead.

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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