Round one went to the public option opponents. But there are more rounds in this bout. Next up is the full Senate, and then the House, where a public option could conceivably slip into the statutes. As the New York Times acknowledges, there is
Megan McArdle makes a cogent point about the constituent conundrum that moderate Democrats face:wider support for a government-run insurance plan in the House, where the Democratic caucus is more liberal. And if the House bill includes a public option, as Speaker Nancy Pelosi has indicated, the issue will ultimately be decided in a conference proceedings to reconcile the Senate and House bills.
The big remaining issue is the subsidies. Make them too big, and your constituents will murder you because their taxes will go up. Make them too small, and your constituents will murder you because they have an expensive new mandate to buy insurance. I'm not sure there is any "just right" in this scenario.I think that's probably a good mind-read, but it's worth pointing out that those aren't the same constituents. The tax burden to pay for generous subsidies will likely be a surtax on the top one percent. But a small surtax on the rich could happen with or without a public option. Meager subsidies will squeeze the bottom quintiles for cash to pay for their mandated insurance. But, considered in a vacuum, that sounds like a good reason to consider a public option for poorer people to fall back on. The more immediate reason senators like Conrad sound nervous about the public option is that it could hurt hospital, doctor and insurance profits who already find Medicare rates too stingy.
There is a valid concern that it'll be too stingy on the benefits, too costly on the premiums, too stingy on the subsidies for the "poor", and too costly on taxes for the high income earners and too costly for businesses to comply with.
And we are supposed to trust our elected Snakes?
These guys just don't want to do what is right!
"The big remaining issue is the subsidies."
The White House says: "The President believes the public option must operate like any private insurance company – it must be self-sufficient and rely on the premiums it collects."
Why is Megan talking about subsidies? What subsidies?
The President is pushing BS. If it ran like a private insurance company, it would act like a private insurance company, and offer the same level of service.
You think just because it was created by legislation everyone working there will wear a halo, or the company will be able to pay out more in benefits than it collects in premiums?
The President only makes these assurances on the public plan because he knows that once in place with millions of people on it, it will be politically sacred and can be subsidized. And with that leverage, they can drive private plans to the wall anytime they like.
EnergyChallenge's assertion that there are no subsidies in the healthcare legislation is a jawdropper.
In every version of the Democratic healthcare proposals there would be tens of billions of subsidies per year for people above the Medicaid line up to 65K per year.
That's right, subsidies for people earning 65K per year!
And these subsidies would be in place whether or not there was a public option.
If there were a public option, there might or might not be additional suibsidies for the public option. But Megan wasn't addressing those possible additional subsidies -- rather she was addressing the much bigger subsidies that are at the heart of the bill -- the new entitlement for people earning up to $65K.
EnergyChallenge's failure to realize one of the most basic facts about the healthcare proposals illustrates the success -- so far -- of their proponents to keep the legislative process convoluted and opaque.
"The more immediate reason senators like Conrad sound nervous about the public option is that it could hurt hospital, doctor and insurance profits who already find Medicare rates too stingy."
And those rates are about to get stingier, if you believe the reformers, who insist they'll hold down Medicare reimbursements in order to 'pay' for reform. But who believes this will actually happen?
The real reason Baucus, Conrad, etc., voted no on the public option is that creating such a program would have REQUIRED Congress to make meaningful cuts in Medicare itself (not just Medicare Advantage). By voting 'no' on the the public plan, they can still pass a reform package paid for by Medicare Advantage cuts, a surtax on the top 1% of earners, and some very squishy and vague 'cuts' to Medicare that can be undone later on.
This way, the political pain is spread out and not too severe. Is it real reform that will 'bend the curve' on costs for the government and individuals? No. But it does allow them to kick the can down the road a decade or so, which is all they really care about.