Despite mainstream media reports and a weekend statement by the White House that they are no longer pushing for a public option, the option is alive, well, and may become a swift reality. Moreover, if the current course of events is not altered, Republicans may have no legislative ability to prevent the public option from becoming a reality.
Senate leadership and the Obama administration are currently working out details on how to combine competing versions of health care reform this week. A primary point of contention is the creation of a public option versus non-profit cooperatives. After Obama administration comments this weekend, it has become clear that the final Senate bill will most likely not contain the so-called "public option" in order to garner the 60 votes needed to overcome an impending Republican filibuster. Once the bill has overcome a filibuster, it will allow a small number of Senate Democrats who are facing challenges in the 2010 elections to then vote no on the final bill. However, the public option will not die with the passage of the Senate bill and once the White House has overcome a potential filibuster it will re-open the door to the public option.
The House of Representatives, under Nancy Pelosi, has not abandoned the government option and such a government option will pass the House of Representatives. As a result, Nancy Pelosi, Harry Reid, the White House and a handful of chosen delegates will conference to hammer out the details of final legislation. The problem is that all three of the parties involved in combining House and Senate versions of health care bills support and have lobbied for a government option. As a result, this conference is likely to produce a final bill that not only contains a public option, but is also no longer subject to cloture rules within the Senate. The end result is a final bill that may contain a government option that only needs 50 Senate votes for final passage.
The installation of the government option within a final bill would inevitably cause a massive bloating of costs in order to appease Senate Democrats on the fence. For instance, the current Baucus bill cost estimates are based upon a 25% cut in Medicare reimbursement to providers. Currently, Medicare and Medicaid reimburse health care providers at a rate 17%-19% less than private insurance. Such a cut would mean that reimbursement rates would fall to nearly 40% less than private insurance, thus devastating the medical community and limiting care. In order to garner support for a public option, the conference committee would likely eliminate such language causing costs of the bill to skyrocket. In addition, Senator's such as Kent Conrad (D-ND), who are facing tough reelection bids, have already stated that they would not vote for a public option that was built upon current medicare reimbursement schedules (notice the carefully worded statements of such politicians). As a result, we will likely see a final bill that abandons the medicare payment basis and provide higher reimbursement rates for government run health insurance. Such a move would soften medical community opposition, maintain the support of wavering Senate Democrats, but also cause costs to balloon even further.
If the public would step back and take a second look, they would quickly find that the thrust of the White House has been solely upon passage of a Senate bill. Little attention has been paid to current House legislation and no pressure has been placed upon the House to adopt a bill without the government option. What we are witnessing is the worst of political posturing, publicly admonishing a public option, while privately working out details as to how to pass such an option. The public, for their part, is blind, naively trusting our legislative leaders to do the right thing, abandon government run health care and pass a bill designed to lower medical costs. However, in our blindness, we are overlooking the reality that Washington has no interest in lowering health care costs, if they were then reform would begin at the production level of goods and services rather than the end-user insurance level.
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