The public option is not a hill to die on – for progressives or conservatives

Jonathan Cohn thinks Nancy Pelosi is ready to push forward with a public option in the House:

Armed with favorable cost estimates from the Congressional Budget Office and emboldened, perhaps, by the self-destructive behavior of the health insurance lobby, House Speaker Nancy Pelosi plans to propose that her caucus unite behind a reform bill with a strong public insurance option. She will do so at a Wednesday meeting of House Democrats, according to The Hill’s Mike Soraghan, who was (I think) the first to report the story.

Pelosi’s actions have provoked two very different reactions from within the reform community: Glee and fear.

The glee comes from people who think Pelosi is making a smart strategic move. Yes, a strong public plan remains a tough sell, particularly with centrists in the Senate. But precisely because the Senate will pull the bill to the right, it’s critical that Pelosi pull it to the left while she can. The public option is gaining momentum right now, thanks to strong polling numbers and a realization, among members, that requiring people to get insurance is a bad idea if the available insurance options aren’t very good.

I’m not terribly concerned one way or another about the public option.  I don’t think it’s the back-door to single-payer many conservatives claim it to be.  On the other hand, I don’t think it will do much good at lowering costs or providing a great deal more coverage for the uninsured, despite favorable CBO scores.  More competition, interstate-sale (and regulation) of private insurance, and better regulations against rescission of insurance policies and against refusing policies based on pre-existing conditions could all do more to increase quality and affordable health insurance to more Americans than what is essentially a pretty weak public option.

Arizona already has a public option, and the fact of the matter is, while it may do some good for some Arizonans, the basic fundamental problems remain: insurance is tied to your employer, and unlike employees of the federal government, you probably don’t get much in the way of choice.  Worse, you lose your insurance if you leave your job.  There is virtually no competition between insurers, making service and cost much higher than they would be in a competitive market – and the poor already receive coverage through Medicaid.

In other words, we have a lousy status quo which has been patched up with an ad hoc array of fixes.  If we want real changes, we have to look deeper than a public option, which is just one more ad hoc fix to throw on the pile.  We have to be willing to find a way to divorce insurance from our employers and change the model itself.  This is the only country in the industrialized world that relies so heavily on employers (and unions) for benefits, and it distorts the system in ways that raise costs, and reduce worker mobility.

Even Germany, which requires employers to contribute to health insurance costs, does so through a system of exchanges.  If you leave your job, you keep your insurance, and continue to keep it at the next job you go to.  This is a structural difference between our system and the German system that won’t be made any better by the addition of what is essentially a non-profit insurer.

Eventually the model will have to change, and we’ll adopt either a Canada-style single-payer system or something more in tune with what the Northern Europeans have been doing with a much more market-based approach.

(Photo: Getty via Daylife)