Friday, September 25, 2009

Why the Public Option is Doomed To Fail, and What Can Be Done About It

Published on Thursday, September 24, 2009 by Black Agenda Report

Why the Public Option is Doomed To Fail, and What Can Be Done About It

by Bruce Dixon

Some highly profitable and job creating industries simply can't be reformed.  Slavery and child labor cannot not be made humane and reasonable, not with kind and solicitous masters or school and limited hours for the kids.  Both these practices were eventually cast aside. Allowing souless, greedy private insurance corporations to collect a toll for standing between patients and doctors may be next. 

The president's health care plan is designed to preserve the parasitic private insurance industry a little while longer. In this context, the public option is a cruel and cynical hoax, an excuse not to abolish the role of private insurance death panels and toll collectors in the nation's health care system.

Nobody can read the president's mind, but he did promise to construct health care legislation in an open and transparent manner, even "on C-SPAN."  Instead, Obama handed off the drafting of health care legislation to five House and three Senate committees.  The most generous view is that he did this to give legislators a stake in the bills, and because there is this thing called the separation of powers between the executive and legislative branches. 

Another view is that the embedded influence of Big Insurance, Big Pharma, and Big Medicine were easier to conceal when spread out over several committees, where the lobbyists are themselves former congressmen, senators and their top staffers, and many current members and staff look forward to the same career paths.  These are the men and women who wrote what is and will be the president's health insurance reform legislation.  The result has been a half dozen versions of a thousand-plus page bill, chock full, as Rolling Stone's Matt Taibi points out, of deliberately obscure references to other legislation.  Nobody can authoritatively claim to have read, much less understand all of it.  And that's just the way insurance companies and the president like it.  HR 676, the Enhanced Medicare For All Act, which does provide universal coverage at reasonable cost, comes in at under thirty pages.

To begin with, there are no less than three versions of the public option.  The first is an imaginary public option first conceived by Political Science grad student Jacob Hatcher in 2001.  It was to postpone the death of private insurance companies by forcing them to compete with a publicly funded insurer open to all comers which would drive their prices downward.  This imaginary public option has never been written into law, and is not under consideration in Congress this year.  It lives pretty much in the minds of the public and the lips of the Congressional Progressive Caucus, MoveOn.Org and many others.  It's in the mouth of Howard Dean, who says it will be just like Medicare, only available to everybody.  To distinguish it from the President Obama's version, it is usually called "the robust public option."

The second version of the public option is not imaginary, it is all too real.  President Obama explicitly outlined its contours in his health care address earlier this month.  Unlike the expansive and inclusive imaginary public option championed by MoveOn.Org, the president's public option will be stingy, means-tested, socially divisive, actuarially unsound and doomed to failure, unless its objective is simply to discredit the word "public" in the term "public option."  The president has said it will be limited to 5% of the nation's population, those Americans too poor to afford the cheapest insurance available on his regulated "insurance exchanges" which won't be fully implemented anyway till 2013.  

Hence those making more than a very small wage will be ineligible for the president's version of the public option, and those who currently get insurance from their employers, no matter how skimpy the coverage, how high the co-pays and deductibles, will also not qualify.  Those who receive relatively good (or maybe not so good) coverage from their employers will pay a special tax to support both the public option and the subsidies the government will pay to enable others not quite poor enough for the public option to fulfill their legal obligation to buy shoddy insurance from private vendors.  

In a social culture where Americans have been taught to despise poverty and the poor, even when they themselves are poor and near poverty, this will be bitterly and inherently divisive.  It will provide economic incentive for the working poor to look down on and resent whatever benefits those even poorer than themselves receive.  It turns medical coverage for the poor into stigmatized welfare subsidized by the near-poor, and all to the continuing profit of insurance companies.  

And since the pool accessed by the public option will be relatively older, poorer and thus more chronically ill, it will not be economically viable in and of itself, much less of the size needed to compete with private insurers and drive their prices downward.  

The only good thing one can say about the president's version of the public option is that even he is not firmly attached to it, and does not regard it as essential to his package. That's actually good news.

Beyond the imaginary "robust public option" of MoveOn.Org, and the divisive, destructive public option of the president, there is a third public option, a very real one.  It's HR 676, the Enhanced Medicare For All bill, sponsored by John Conyers and Dennis Kucinich.  Unlike the mostly imaginary "robust public option" of MoveOn.Org, it actually exists and ordinary people can read and understand it.  Unlike the president's public option, which does not take effect till 2013, a fact still ignored by most of the mainstream media, HR 676 can be put into effect almost immediately.  The first Medicare back in 1965-66 took only eleven months to send out the first cards and pay the first medical bills.

The White House of course, is not listening to the public outcry for Medicare For All.  For example, a group of Oregon physicians calling themselves the Mad As Hell Doctors put up a web site that included an email-the-president page.  After the White House received only about 5,000 emails in the first few days, it elected to block emails [1] coming from the Mad As Hell Doctors as spam.  Never mind that tracking polls as late as this June indicate majority support among the public for the simple extension of Medicare benefits to everybody.

And although the progressive caucus in Congress continues to wistfully describe its imaginary version of the public option as a line in the sand, it is neither lining up votes for a promised HR 676 floor vote, nor are they demanding that caucus members support amendments to let states to pursue their own versions of single payer in the near future.  Congress is being set up to accept anything with the name "public option" and be done with it, even the president's cynical and divisive proposal.  The die is cast.  The Obama proposals, written by the health insurance lobbyists may pass, but they're not worthwhile.  The president's version of the public option, if it stays in the bill is doomed to fail, and the MoveOn version never existed.  The only possibility for the real public option, Medicare For All, this year is on the state level.  That door will be opened or closed by the Congress this year.  

The Congressional Black Caucus and the Congressional Progressive Caucus can partially redeem their sorry capitulation to the president and Big Insurance by insisting that states be allowed to go their own way on single payer, the only real public option.

© 2009 Black Agenda Report

Bruce Dixon is based in Atlanta GA and is managing editor at Black Agenda Report [2].  He can be reached at

Donations can be sent to the Baltimore Nonviolence Center, 325 E. 25th St., Baltimore, MD 21218.  Ph: 410-366-1637; Email: mobuszewski [at]


"The master class has always declared the wars; the subject class has always fought the battles. The master class has had all to gain and nothing to lose, while the subject class has had nothing to gain and everything to lose--especially their lives." Eugene Victor Debs


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