Think Progress: state-based proposal would lack clout to lower spending or hold insurers accountable

[ProSense]

Has Baucus Killed The Public Option?

Today, several Democrats on the Senate Finance Committee (SFC) joined with Republicans to defeat a public plan that reimbursed five percent above Medicare rates and another option that competed on an equal playing field with private insurers. The failure of both provisions suggests that the Senate Finance Committee’s health care bill will leave committee without a public option. (The Committee may still consider Sen. Olympia Snowe’s (R-ME) trigger proposal, although the final text of that amendment has yet to be released.)

This development is disappointing, but not surprising. SFC is led by a chairman who feels obliged to vote like a Republican to attract Republicans and the Committee is stacked with conservative Democrats from high-cost or rural conservative states (Sens. Nelson, Conrad, Lincoln come to mind).

The public option’s best chance was always in conference. Sen. Harry Reid (D-NV) has suggested that a final Senate bill (one that merges the Senate Finance bill with the Kennedy bill) won’t include a public option and any floor amendments will likely fail.

Once in conference, negotiators will have to reconcile the Senate bill with its far more progressive House conterpart (which will include some kind of public plan). Should Reid and Pelosi stack the committee with public option advocates like Rockefeller, Schumer, or Schakowsky, the option will live another day — no Democrat would vote against a health care package simply because it includes a public option that attracts some 10 million enrollees. Conversely, if likely conferees Baucus and Conrad feel ‘constrained’ to vote with Republicans, the option will likely die.

The final legislation won’t include a Medicare-like public option that saves the government $50 to $100 billion over 10 years. Nor will the plan negotiates rates with providers and compete on a level playing field with private insurers. In fact, it won’t be a national plan at all.

Instead, the very same Democrats who defeated the national program during mark-up, will likely resurrect a discarded idea floated by the New America Foundation and momentarily embraced by the White House. That compromise will create a network of public options modeled on state employee benefit plans. The proposal could be triggered by Snowe’s amendment if reform did not meet a low affordability measure, but any state-based proposal would lack the market clout to lower overall health care spending, reform health care delivery, or hold private health insurers accountable.

Today may have been the death of the public option and the birth of state-based public options.

That runs counter to Obama's goals and real health care reform.