My Perspective: Is the Public Option Important to Healthcare Reform?

The nation has been buzzing today about the idea that public option or the public insurance plan might be killed. This all started on Saturday and Sunday due to comments from the White House including President Obama. The government-run health insurance option favored by President Barack Obama is not essential to a healthcare overhaul as long as the final measure boosts competition, a top U.S. health official said on Sunday. Health and Human Services Secretary Kathleen Sebelius said a public insurance option was "not the essential element" of any overhaul, and non-profit cooperatives being considered by a Senate panel could also fulfill the White House goal of creating more competition on insurance. "I think what's important is choice and competition, and I'm convinced that at the end of the day the plan will have both of those -- but that is not the essential element," she said of the government-run insurance option on CNN's "State of the Union" show.

"The president is just continuing to say let's not have this be the only focus of the conversation," Sebelius said. That is exactly what Obama said in his two day trip to the west where he held town hall in Montana and Colorado while saying that the public option would be nice but the most important thing is to get healthcare reform done. Democratic proposals in Congress for a government-run insurance option have sparked intense opposition from Republicans who argue it would unfairly compete with private plans and would cripple the insurance industry. The government option has become a key focus of opposition charges that the overhaul, Obama's top domestic priority, would amount to a government takeover of healthcare. However six members of the Senate Finance Committee -- three from each party -- have been negotiating a reform package that would feature member-controlled non-profit cooperatives instead of the government-run plan.

"I think there will be a competitor to private insurers," Sebelius said. "That's really the essential part, is you don't turn over the whole new marketplace to private insurance companies and trust them to do the right thing." White House spokesman Robert Gibbs avoided a direct response when asked if the exclusion of a government-run option would be a deal-breaker for Obama. "The president believes the option of a government plan is the best way to provide competition," he said on CBS's "Face the Nation," but he added the White House looked forward to the Finance Committee's ideas. "The bottom line again is do individuals looking for health insurance in the private market have choice and competition?" Gibbs said. "If we have that the president will be satisfied." Obama has pushed a healthcare overhaul that he says would rein in costs, improve care and extend coverage to most of the 46 million uninsured Americans, but the measure has run into stiff opposition from Republican and conservative groups and some elements of the healthcare industry.

Lawmakers at home for the August recess have faced vocal and sometimes disruptive critics at healthcare information sessions. The controversy has driven down Obama's approval ratings and possibly jeopardized passage of the healthcare legislation when Congress returns in September. Obama has intensified his public lobbying for the measure, and held three public "town hall" meetings on healthcare last week to counter the criticism. In a New York Times opinion piece on Sunday, Obama said "for all the scare tactics out there, what's truly scary -- truly risky -- is the prospect of doing nothing." Republican Senator Richard Shelby, a sharp critic of the administration's healthcare reform effort, said a public cooperative option would be "a step in the right direction." "I think the Democratic administration -- President Obama and his Cabinet -- have read the tea leaves of America right now," he said on "Fox News Sunday." Democratic Senator Kent Conrad, a member of the so-called "Gang of Six" negotiators on the Finance Committee, said the cooperative model could attract Republican support. Conrad has argued Democrats do not have enough votes to pass a healthcare overhaul without Republican support, even though Democrats control Congress. "Co-ops are very prevalent in our society. They have been a very successful business model," Conrad said. "It is the only plan that has bipartisan support in the United States Senate."

Even former President Bill Clinton has said don’t let the perfect be the end of progress and some type of reform while giving the keynote address at the Netroots Conference for progressive bloggers this weekend. Still President Clinton should know because he was the last President to deal with healthcare and during his presidency, they got no type of reform done because they wanted to pass their bill with everything in it. Therefore Clinton is trying to make sure that the Obama administration and those on the left as well as others understand that the public option is not the end all be all of healthcare but not getting any type of reform would be disastrous. However not everyone agrees with this view. Former Democratic Party chairman Howard Dean said Monday he doubts there can be meaningful health care reform without a direct government role, putting him at odds with President Barack Obama who says such a public option is only a sliver of the solution.

Dean, a leading figure among the party's liberals, carefully tried to avoid criticizing the president openly, but he urged the administration to stand by statements made early on in the debate in which it steadfastly insisted that such a public option was indispensable to genuine change. Dean said Medicare and the Veterans Administration are "two very good programs that have been around for a long time." Dean appeared on morning news shows Monday amid increasing indications the Obama White House is retreating from the public option in the face of vocal opposition from Republicans and some vocal participants at a town-hall-style meetings around the country. The former Vermont governor was asked on NBC's "Today" show about Obama's statement over the weekend that the public option for insurance coverage was "just a sliver" of the overall proposal. Obama's health and human services secretary, Kathleen Sebelius, advanced that line, telling CNN Sunday that a direct government role in a system intended to provide virtually universal coverage was "not the essential element."

Dean, a physician, argued that a public option is fair and said there must be such a choice in any genuine shake up of the existing system. "You can't really do health reform without it," he said. Dean maintained that the health insurance industry has "put enormous pressure on patients and doctors" in recent years. He called a direct government role "the entirety of health care reform. It isn't the entirety of insurance reform ... We shouldn't spend $60 billion a year subsidizing the insurance industry." Dean also said he doesn't foresee any Republican support for a public option. "I don't think the Republicans are interested and in order to have a bipartisan bill, you've got to have both sides interested," he said.

The shift in the administration's stance on a government-run insurance program leaves open a chance for compromise with Republicans that probably would enrage Obama's liberal supporters but could deliver a much-needed victory on a top domestic priority. Rep. Anthony Weiner, D-N.Y., who is co-chairman of the Middle Class Caucus, said that "leaving private insurance companies the job of controlling the costs of health care is like making a pyromaniac the fire chief." But Sen. Arlen Specter, D-Pa., told reporters in Philadelphia on Monday that the success of health care overhaul doesn't hinge on any one element and co-ops might provide the same results under a different name. "I believe that the president has to make the evaluation as a matter of leadership as to what the administration wants to do. There is an alternative to the so-called public option by having co-ops. I think these matters are subject to exploration," Specter said.

Officials from both political parties are looking for concessions while Congress is on an August recess. Facing tough audiences, lawmakers and the White House are looking for a way to cover the nation's almost 50 million uninsured while maintaining political standing. Sebelius said the White House would be open to co-ops instead of a public option — a sign that Democrats want a compromise so they can declare a victory. Under a proposal by Sen. Kent Conrad, D-N.D., consumer-owned nonprofit cooperatives would sell insurance in competition with private industry, not unlike the way electric and agriculture co-ops operate, especially in rural states such as his own. With $3 billion to $4 billion in initial support from the government, the co-ops would operate under a national structure with state affiliates, but independent of the government. They would be required to maintain the type of financial reserves that private companies are required to keep in case of unexpectedly high claims.

"I think there will be a competitor to private insurers," Sebelius said. "That's really the essential part, is you don't turn over the whole new marketplace to private insurance companies and trust them to do the right thing." Obama's spokesman refused to say a public option was a make-or-break choice. "What I am saying is the bottom line for this for the president is, what we have to have is choice and competition in the insurance market," White House press secretary Robert Gibbs said Sunday. A day before, Obama appeared to hedge his bets. "All I'm saying is, though, that the public option, whether we have it or we don't have it, is not the entirety of health care reform," Obama said at a town hall meeting in Grand Junction, Colo. "This is just one sliver of it, one aspect of it."

Lawmakers have discussed the co-op model for months, although the Democratic leadership and the White House have said they prefer a government-run option. Conrad, chairman of the Senate Budget Committee, called the argument for a government-run public plan little more than a "wasted effort." He added there are enough votes in the Senate for a cooperative plan. However Liberal Democrats warned President Barack Obama on Monday that a retreat on support for a government-run health insurance plan could endanger passage of major healthcare reform in Congress this year.

The White House did signal over the weekend it was not wedded to Democratic plans for a public insurance option, which has spurred intense Republican opposition, as long as the final healthcare measure created more choices for consumers and competition for insurers. "You can't have reform without a public option," Howard Dean, a former Democratic National Committee chairman and a vocal supporter of an overhaul, said on CBS's "Early Show." "I don't think it can pass without the public option," Dean said. "There are too many people who understand, including the president himself, the public option is absolutely linked to reform." The backtracking over the public insurance proposal lifted shares of managed care companies and relieved investors who feared companies could not compete with such a plan. The shift could pick up a few additional Republican votes in Congress and ease criticism that Obama wants a government takeover of healthcare. But it comes at the risk of alienating key Democratic supporters who could torpedo the overhaul drive.

Still Democratic Representative Anthony Weiner of New York, who backs a public option, said in a statement "leaving private insurance companies the job of controlling the costs of healthcare is like making a pyromaniac the fire chief." Obama has repeatedly stated a preference for a government-administered public insurance plan that would create competition for insurers. But in Colorado on Saturday he said the public option "is just one sliver" of healthcare reform. Obama says the healthcare overhaul would rein in costs, improve care and extend coverage to most of the 46 million uninsured Americans. But the measure has run into stiff opposition from Republican and conservative groups and some elements of the healthcare industry.

Republicans argue that a public plan would unfairly compete with private plans and would cripple the insurance industry. That is why six members of the Senate Finance Committee -- three from each party -- have been negotiating a reform package that would feature member-controlled non-profit cooperatives instead of the government-run plan. Members of the cooperatives would join together and purchase insurance for themselves. The debate over healthcare reform will resume in Congress when lawmakers return to work in September after a month-long recess, but it is unclear whether dropping the public option would attract enough Republican votes to ensure passage or alienate enough Democrats to endanger it. Republicans were pleased by the signs there might be a shift, however, although some questioned whether the co-ops would be another form of a public option.

"I am heartened by what the secretary of health and human services said yesterday, that she doesn't think necessarily that a government takeover of health care is a necessary component," Representative Eric Cantor, the second-ranking Republican in the House of Representatives, said in a CNBC interview. The insurance industry also was pleased. Shares of health-insurance companies rose. The S&P Managed Health Care index of large U.S. health insurers increased 4.2 percent. UnitedHealth Group Inc shares rose 4.4 percent, WellPoint Inc jumped 3.8 percent, Aetna Inc increased 4.7 percent, and Coventry Health Care rose 6.8 percent.

Now by dropping his insistence on a public insurance option in an overhaul of the nation's healthcare system, President Obama angered some liberals but took a big step toward winning over moderate Democratic lawmakers -- a trade-off that sharply improves the chances Congress will approve the overhaul. By backing away from the "government plan" -- which would have offered consumers an alternative to private medical insurance -- Obama also moved to neutralize one of his opponents' most effective arguments, namely that the president wants the government to play a bigger role in individual healthcare decisions. Obama's tactical retreat improved the odds of passage for other key provisions: easing small businesses' efforts to cover workers, for example, or prohibiting insurers from denying or canceling coverage because of medical conditions.

The political gain on Capitol Hill was clear in the reaction today of Rep. Rick Boucher of Virginia, one of five Democrats to vote against the bill when it passed the House Energy and Commerce Committee in July. Boucher said backing away from the public option had strengthened Obama's hand among conservative Democrats and other skeptics without compromising the basic goal of lowering healthcare costs and insuring more people. Dropping that option from the bill, Boucher said, "creates the opportunity to pass the healthcare bill. As long as there was insistence on a government-operated plan, that opportunity did not exist. "A government-operated healthcare plan is not essential to an effective healthcare reform," he added. Still, the White House is expressing its position in calibrated language that does not give up on the notion that a new healthcare system would include a government-run plan. But the administration is now signaling in much clearer terms that the absence of a public option is not a deal-killer.

So it should be clear that the public option is important but it is not as important as getting some type of good healthcare reform done this year otherwise we will have to wait another 16 years and that is something this nation can’t afford. We have to remember what we learned from 1993 and that lesson is that we didn’t get any type of healthcare reform done that improved coverage, prevention, and reform that includes health insurance stability, affordability, quality, and patient choice. We can’t allow this pivotal moment to go by and we end up with no type of healthcare reform or health system reform. If we can cover millions of Americans without a public option than let’s do it because at least some type of reform got passed for now and we can come back and get the public option passed later but let’s not allow some type of good affordable and quality healthcare reform to happen because we are aiming for perfection. We can’t allow another 1993 to occur but we can’t allow any type of reform to occur either. We need to get healthcare reform as close to right as possible so it is not like TARP or the stimulus package.

Healthcare reform needs to happen this year and that is why we can’t allow for no type of reform to happen especially if the reform will improve the current conditions of healthcare while not increasing cost. This is what we need and this is what we have been fighting for. If we can get a healthcare reform bill that deals with CPR--coverage, prevention, and reform that includes health insurance stability, affordability, quality, and patient choice without a public option than I am all for it but let’s see what the option is before we dismiss a public option for good and let’s not demonize other plans because the public option isn’t included because it could be a good healthcare reform plan but let’s just see what transpires.