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Plan B on the “Public Option”

August 16, 2009

Nate Silver has a fascinating post up looking at the future of the public option in health reform.  With it  looking increasingly like the public insurance option may not make it into the final bill, Silver’s last theory is pretty fascinating.  Seems like a pretty logical step, and good back up plan, if the blue dog democrats keep the public option out of whatever reform finally passes.

Incrementalism seems to be a popular meme these days — could the public option do better as a standalone provision? While bearing in mind that bargaining is the third stage of grief, this seems to me to be a somewhat realistic hope, especially if Barack Obama is elected to a second term. If a health care reform bill passes, then the government will paying for private insurance coverage for some low-to-middle income individuals. This will tend to give everyone a more direct interest in cost containment: if a low-income family’s insurance coverage is costing more than it should because of the absence of competition from a public option, it will be the taxpayers making up the difference. Of course, there would be some people arguing to blow the whole thing up entirely for this reason. But if someone then proposed a public option — a provision that would spare $150 billion from the public dole and which would give consumers more choices — it would seem to have a fairly compelling case. Part of the problem the public option faces is that it’s a somewhat popular, cost-reducing measure which is mired in a somewhat unpopular, thousand-page, $900 billion bill. When taken as a standalone measure, its cost savings would be more transparent and its opponents would have less ability to confuse the public about its costs and benefits.

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