How The Goalposts Moved On The Public Plan

Lots of big news on the health care front over the past 24 hours. There are a million issues, like small business group reform so that small businesses can bargain in tandem for lower costs, something at which the health care industry has balked. But the main battles are being fought on two central fronts: One over the public plan, and the other over short and medium-term funding. Let's look at each, starting with the public plan.

In his letter to key members of Congress, President Obama announced his full support for the public option as a way to "keep insurance companies honest."

"The plans you are discussing embody my core belief that Americans should have better choices for health insurance, building on the principle that if they like the coverage they have now, they can keep it, while seeing their costs lowered as our reforms take hold.

"But for those who don't have such options, I agree that we should create a health insurance exchange -- a more market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that's best for them, in the same way that Members of Congress and their families can. None of these plans should deny coverage on the basis of a preexisting condition, and all of these plans should include an affordable basic benefit package that includes prevention, and protection against catastrophic costs. I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest."

That is a remarkably new thing. Obama has not previously included the public option in his list of fundamental principles. He's talked about the public option in this way in the past, but the public option always existed on the fringes of the debate, as something to be bargained away. Ezra Klein notes that there has been a change:

The White House, which seemed relatively unsinterested in the issue a few months ago, has begun pushing hard for it.

And that, in my reporting, is what seems to be underneath the change. A few months ago, most observers thought the public plan was a bargaining chip. It had a lot of public supporters but few real friends. In recent weeks, that's begun to change. The White House seems genuinely intent on including a public plan -- or at least some form of public competition -- in the final bill. And that's changed the incentives for senators down the line. The public plan was safe to oppose so long as the powerful players weren't really interested in its survival. Indeed, when the policy was going to be bargained away anyway, the incentives were to try to convince the health industry that you'd been their key ally in that victory. But now that the White House has put some muscle behind the policy, opposition has potential consequences. And that's making the policy's opponents rethink their stridency.

A few months ago, I would have bet against the presence of a public plan in the final bill. Now I'd put my money in favor of it.

We're obviously not done here. The idea of a trigger option for the public plan remains under consideration, which would seemingly give people an additional choice but not until the insurers got a chance to solidify their monopoly. Conditioning a public option to certain market conditions would kill it - mainly because the trigger would be tied to some unrealizable standard. Progressives are fighting back against this sham reform, and that's where the new battleground has been set.

But Ezra misses one key fulcrum point in this debate - when the House Progressive Caucus laid down their marker and said there had to be a public option in the legislation. Until then, I think Congress and the White House felt they could get away without having one. But suddenly, the dynamic changed. And then progressive activists were unleashed to whip up votes on it. Ben Nelson has had to put out umpteen different statements to mollify his constituents that he was open to a public plan. Max Baucus has had to backtrack and hold meetings with single-payer advocates. Basically, that action changed the dynamic, and put us on a more progressive course.

It's not FULLY progressive, of course. Single-payer remains off the table. And the corporate interests are seeking to kill the public option in different ways. But we did see a change for the better. So the Progressive Caucus should learn from this, and step up on other Obama agenda items to make them as successful as possible.