Weathervane

In almost a real-time correction to today's column, Paul Krugman explains the view from 5,000 feet on the public option:

Look, it is possible to have universal care without a public option; Switzerland does. But there are some good reasons for the prominence of the public option in our debate.

One is substantive: to have a workable system without the public option, you need to have effective regulation of the insurers. Given the realities of our money-dominated politics, you really have to worry whether that can be done — which is a reason to have a more or less automatic mechanism for disciplining the industry.

The second is what the option debate says about Obama.

If progressives had real trust in Obama’s commitment to doing the right thing, the administration would have broad leeway to do deals. But the president doesn’t command that kind of trust [...]

So progressives have their backs up over one provision in health care reform that’s easy to monitor. The public option has become not so much a symbol as a signal, a test of whether Obama is really the progressive activists thought they were backing.

And I don't think he is a progressive. Nor did I at the time. But on health care, where he has positioned himself in the debate is with the most broadly popular provisions. He didn't support capping the employer deduction because people didn't want to see that happen. He put the focus on the insurance companies because they were hated more than anyone in health care reform. And he talked up the public option because it had 76% support.

Now that's waning because of the political pressure to pass a bill, and also because support of reform is waning generally. The popularity factor is coming up against the reality factor. But as long as a public option remains popular, I think Obama will support it. Therefore, progressives wanting to keep the public option in the bill really have to marshal that popular support.

The problem with this is the uncomfortable reality that the public option, as designed in pretty much every bill and as supported by House progressives, which would only impact the individual market and certain small businesses, and wouldn't have the bargaining power necessary to lower its own costs significantly, is indeed inessential in the larger scope of things. Look at this flowchart created to describe how people would get health insurance coverage in the framework offered, and notice the very minor role for the public option:



You can argue that a more robust public option would do better on the cost side, or that people making 4x of poverty should have access to subsidies. But that's what's basically on the table. It maintains a fairly efficient delivery system in the employer market, and might not provide the kind of subsidies needed to expand access to individuals or those without employer coverage. So I agree that the public option has become a weathervane for Barack Obama, to see which way he will blow. However, he knows - and even the people pushing the plan know - that the public option's existence doesn't really change much to the overall structure of reform that has been put out, therefore making it much easier for him to drop it.

Any public option can be improved down the road, of course, and access to it can be expanded. But it's hard for a lot of people to go to the mat over something that doesn't really need to fundamentally exist in the current reform.