The Blue State Public Option

Sam Stein has a pretty major development:

Senate Democrats have begun discussions on a compromise approach to health care reform that would establish a robust, national public option for insurance coverage but give individual states the right to opt out of the program.

The proposal is envisioned as a means of getting the necessary support from progressive members of the Democratic Caucus -- who have insisted that a government-run insurance option remain in the bill -- and conservative Democrats who are worried about what a public plan would mean for insurers in their states.

"What folks are looking for is what gets 60 votes," said a senior Democratic Hill aide. "The opt-out idea is very appealing to people. It has come up in conversations. I know personally that a handful of members have discussed it amongst themselves."

In conversations with the Huffington Post, sources have said that while the opt-out approach to the public plan is in its nascent stages it has been discussed with leadership in the Senate. It was pulled out of an alternative idea, put forth by Sen. Tom Carper (D-Del.) and, prior to him, former Senate Majority Leader Tom Daschle, to give states the power to determine whether they want to implement a public insurance option.

But instead of starting with no national public option and giving state governments the right to develop their own, the newest compromise approaches the issue from the opposite direction: beginning with a national public option and giving state governments the right not to have one.

Essentially you'll end up with a blue-state public option, with the possibility of a few referenda to remove it in the states that allow ballot initiatives. Although, as we saw on the stimulus, threatening to opt out of a federal program is far easier than actually doing it. I'd guess that most states would go ahead with it.

As compromises go, this is about as good as anything that's been discussed, certainly better than triggers, co-ops or Tom Carper's "opt-in" proposal. It needs to be a good public option, one with Medicare's provider network and hopefully some relationship to Medicare rates, but if that's the case then it probably even beats Schumer's weak natonal proposal.

The entire exercise is to get to the conference committee with some kind of public option in both houses. That way, getting something out of conference is virtually assured. If you have no public option in the Senate bill, you're not going to get one in the final bill. That's just an educated guess. So Democrats are trying to figure out something that can get through a Senate vote. It's a difficult lift.

Outside pressure remains a factor here. But we're now talking about which kind of public option to have, not whether or not to have one at all. That's a better place to be.

What's In A Name?

What's In A Name?

by dday

Harry Reid is now saying there will be a "public option" in any final health care bill. I'm sure nobody knows precisely what he means by that.

U.S. Sen. Harry Reid, D-Nev., said today there will be a "public option" in whatever health insurance reform bill comes out of Congress.

"We are going to have a public option before this bill goes to the president's desk," Reid said in a conference call with constituents, referring to some kind of government plan.

"I believe the public option is so vitally important to create a level playing field and prevent the insurance companies from taking advantage of us," he said.

Tom Harkin said almost exactly the same thing today - and he said that Republicans wouldn't be at the table when the two Senate bills get merged together.

Here's the good news about this. Reid is acknowledging that he absolutely cannot get away with having a final bill without something he can call a "public option." And progressives have done a good job of very specifically separating out triggers and co-ops as something that would not fit that definition. This is almost entirely due to grassroots activism. The public option would have been thrown out months ago if nobody was advocating for it from the bottom up. It was certainly not the intention of anyone in Washington to go into October with this issue still up for grabs. They were perfectly content to jettison it to protect insurance industry profits.

That said - there is no definition here for what public option means. And if you asked Sen. Reid point-blank, I'm sure he wouldn't give you a definition. He wants something that he can call a public option so the grassroots can be satisfied. What will that be? Probably not co-ops or triggers because they've been too well-defined by the grassroots. There are other alternatives coming in their place.

Tom Carper is pushing the idea of giving the states the ability to create a public option, which states could then link together for increased bargaining power. They wouldn't be able to use Medicare bargaining rates and they wouldn't have Medicare's provider network. And being state-based, they wouldn't have much leverage to gather the client base necessary to force a lot of competition with the private market. Of course, a lot of the "public options" out there offer weak, "level playing field" provisions similar to Carper's amendment. Jon Cohn says that actually, this is already in the bill:

One interesting question is whether the proposal is already redundant, thanks to an amendment that another member of the Finance committee, Ron Wyden, introduced that Chairman Max Baucus accepted before the hearings even began.

It's Wyden amendment C8, which appears on page two of the modified bill Baucus introduced formally for markup:

Amend Title I, Subtitle A to allow a State to be granted a waiver if the state applies to the Secretary to provide health care coverage that is at least as comprehensive as required under the Chairman’s Mark. States may seek a waiver through a process similar to Medicaid and CHIP. If the State submits a waiver to the Secretary, the Secretary must respond no later than 180 days and if the Secretary refuses to grant a waiver, the Secretary must notify the State and Congress about why the waiver was not granted. – Insert at the end of b)(1) ―and with citizen input through a referenda or similar means;‖ – In b)(2) strike ―a‖ and insert ―this‖ – Insert b)(4) ―the State submits a ten-year budget for the plan that is budget neutral to the Federal government.‖ – Insert at the beginning of c)(2) GRANTING OF WAIVER.— The Secretary shall approve the plan only if it meets criteria consistent with that of the America’s Healthy Future Act, including that it shall lower health care spending growth, improve the delivery system performance, provide affordable choices for all its citizens, expand protections against excessive out-of-pocket spending, provides coverage to the same number of uninsured and not increase the Federal deficit.

What does the gobbledygook mean? Wyden's staff says it's designed to encourage state experimentation. I haven't yet gotten an official reading from Finance Committee staff on their interpretation.

But my own reading, which I've run by a few analysts, is that it gives states the ability to implement coverage schemes that bolster coverage, control costs, and improve quality at least as well--and hopefully better than--the Senate Finance bill. That would include creating a public option. (You could even read it to allow a state-based single-payer plan.) So it's the Carper amendment, but without the restrictions.

Cohn notes that the HHS Secretary would have to rule, in the Wyden Amendment, on whether any state proposal met the proper criteria. Which means that, under a Republican Administration, you could see nothing helping people allowed to go through, or even scale-backs to benefits (though there is presumably a federal floor).

Still, maybe this is what Reid will determine as a "public option." Or maybe he'll dump Wyden's amendment and pick up the Carper idea and call that a public option. Or maybe Maria Cantwell's proposal, which allows states to negotiate on behalf of the uninsured below 200% of poverty level for a basic plan, will fit the bill, even though it sounds like a good policy but in no way a substitute for the public option.

The point is that all the activism and advocacy has gotten us far further than we would normally be in this debate. But there are still plenty of compromises out there that politicians will call "the public option" as an escape valve. It will be important to see these policies for what they are, instead of applying the name and being done with it.

Tracking The Public Option Through The Senate

Those who have been paying attention understand that today was actually a pretty good day for the public option. We learned that Sens. Wyden, Carper and Nelson (FL) support it in some form, and that there are at least 51 votes for it in the Senate. However, yesterday Chuck Schumer did acknowledge that there aren't 60 votes at this time. Ezra Klein asks the right questions:

There are two questions here. The first is "60 votes for what?" Do they not have 60 votes in favor of a health-care plan that includes a public option? Or do they not have 60 votes against a filibuster of a health-care plan that includes a public option? If it's the former, that's okay: You only need 51. If it's the latter, that's a bigger problem. But I'd be interested to hear which Democrats will publicly commit to filibustering Barack Obama's health-care reform bill. If that's such a popular position back home, why aren't more Democrats voicing it loudly?

Second, why give up the public option now? If these moderates want to kill the measure, let them get full credit for doing so on the floor. They can sponsor an amendment to strip it out of the final legislation and go home to their districts having played a clear and undeniable role in the elimination of the public option.

The former is really the question. There are definitely 51 votes for a public option. It's unclear whether there are 60 for a final bill with a public option. And more specific than that, are there 60 to allow a vote on a final bill with a public option?

Mary Landrieu has come the closest to saying that she would filibuster a bill with a public option. Ben Nelson and Joe Lieberman are probably right with her. But I'd sure like to see them try to defy the President and doom a health care bill 40 years in the making over one provision. Reconciliation is always an option, given that you would only need 51 votes, but it's highly unlikely to get a public option that way. The main reason is that the Budget Committee would control the process, and Kent Conrad just voted against public option amendments yesterday, and would be highly unlikely to allow one to go through a 51-vote process. Heck, he doesn't want reconciliation at all. So Chris Bowers surmises that Harry Reid and the White House are the real pivot points right now, when the Senate merges the bill from their two committees:

The next step in the process does not actually involve Kent Conrad's Budget Committee, as I had previously reported (the Budget Commitee only comes into play with reconciliation). Instead, a source on the Hill confirms to me the Senate HELP and Senate Finance committees will be merged by an informal, behind the scenes process involving the four major players in the Senate: Tom Harkin (Chair of HELP), Max Baucus (Chair of Finance), Harry Reid (Majority Leader), and the White House. Together, these four will meet and decide what sort of bill to send to the Senate floor for debate and amendments.

During this process, we can guarantee that Harkin will push for a HELP or Schumer-like public option to be sent the floor, while Baucus will push for no public option to be in the bill at all. Given his recent statements, the best bet is that Reid will probably push against a public option too, and instead favor either triggers (which he has called a good idea) or co-ops (which seems to be the sort of public option he likes best). With two against and one in favor, this means that the only way a public option ends up in the bill that is sent to the Senate floor will be if the fourth major player, the White House, demands it.
It is all up to the White House now. If it pushes for a public option to be included in the health care bill sent to the Senate floor, then a public option will pass as part of health care reform (at that point, all we would need are 60 votes for cloture, and from what I hear we have 57 already). However, if it allows a health care bill to go to the floor without a public option, it is pretty unlikely that a public option will pass as part of health care reform.

Bowers doesn't think any floor amendment would need less than 60 votes, and while there are conflicting reports on that, he's probably right. He also doesn't think conference committee is an option, but I'm not sure I agree there. The House will almost certainly pass a bill with a public option. So it would depend on the White House umpiring that argument in committee. And that will almost certainly be decided by what they think can pass. If the Progressive Block in the House holds firm, and looks like a higher mountain to climb than getting 3 Democrats just to flip on cloture, the White House could go the other way at any step of this process.

Igor Volsky thinks we may see a new compromise floated:

Instead, the very same Democrats who defeated the national program during mark-up, will likely resurrect a discarded idea floated by the New America Foundation and momentarily embraced by the White House. That compromise will create a network of public options modeled on state employee benefit plans. The proposal could be triggered by Snowe’s amendment if reform did not meet a low affordability measure, but any state-based proposal would lack the market clout to lower overall health care spending, reform health care delivery, or hold private health insurers accountable.

Today may have been the death of the public option and the birth of state-based public options.

State-based plans won't have the economies of scale to really pressure insurers, but neither would Schumer's "level playing field" public option. Therefore, given that we're going to have to improve whatever inevitably comes out of the legislation, I'm inclined to say this is better than nothing. Apparently Tom Carper has started floating this behind the scenes.

I'm not as optimistic as Robert Creamer, but I do think that the public option still has a chance to survive in some form, and can be improved after the fact.

Rotten To The Core

So Senate Democrats on the Finance Committee offered an amendment that would enable the federal government to bargain for lower drug prices for their bulk purchasing, a direct assault on the White House/Big Pharma deal from a few months back. Basically it would shift poor seniors back onto Medicaid for their drug purchasing, where the government can negotiate discounts. This would save the government over $80 billion dollars.

And Tom Carper of Delaware defended the secret deal in the most amazing of ways:

I was not involved in negotiations with PhRMA but I believe that the administration was, obviously PhRMA was, and I presume this committee was involved in some way in those negotiations.

And what PhRMA agreed to do through those negotiations is to pay about
80 billion dollars over 10 years to help fill up half the donut hole. That's my understanding. And they are prepared to go forward and to honor that commitment. As I understand it, the commitment from our colleague Senator Nelson would basically double what was negotiated with PhRMA.

And whether you like PhRMA or not -- remember I talked earlier today in our opening statements, I talked about four core values, and one of those is the golden rule, treat other people the way I want to be treated?

I'll tell you -- if someone negotiated a deal with me and I agreed to put up say, 80 dollars or 80 million dollars or 80 billion dollars and then you came back and said to me a couple of weeks later -- no no, I know you agreed to do 80 billion and I know you were willing to help support through an advertising campaign this particular -- not even this particular bill, just the idea of generic health care reform? No, we're going to double -- we're going to double what you agreed in those negotiations to do. That's not the way -- that's not what I consider treating people the way I'd want to be treated.

That just doesn't seem right to me.

This is incredible. The deal is transparently one to protect drug industry profits. There's just no doubt about this. Carper is saying that it's more important to get a few generic ads in support of health care reform than to save the US taxpayers $80 billion dollars. Backroom deals must be honored even if they hurt people. That's the "golden rule" in Washington.

Did Carper not know that cameras were rolling when he said this?

Worm Turning?

Joe Lieberman is maybe starting to lose some support on Capitol Hill. Byron Dorgan called his actions unacceptable over the weekend. And one of the Senators making calls on his behalf, Tom Carper, thinks something needs to be done.

Sen. Tom Carper (D-Del.), a close ally of Sen. Joe Lieberman, said the Connecticut Independent should pay a price for his campaign attacks against President-elect Barack Obama.

"There need to be consequences, and they cannot be insignificant," Carper said in a Monday interview with The Hill.

I wouldn't put a lot into this. The vote tomorrow will be by secret ballot and it will be difficult after the fact to extract any sort of consequences from those who vote for him to retain the Homeland Security Committee. There are a few willing to make public statements, but most have clammed up, and I expect tomorrow to see a lot of go-along to get-along from Senate Democrats. And after the vote, there will be a lot of calls for calm, that the issue is a settled matter and we now must move forward with the new agenda. And you'll be more hard pressed to find a Senator who voted to keep Lieberman in charge of the committee than an African-American who voted for McCain. I agree with Josh Orton that it makes policy sense to put a Homeland Security Committee chair who actually seems to care about fulfilling his responsibility, but that's not how this will be decided. It's a political play and Senate Dems don't seem willing to expel anyone from their little club. It would be too nasty and partisan.

Straight Talk (Really) on Energy and Gas

So the Senate offered kind of a retread package of bills on energy and gas prices. They're all fine - cut oil company tax breaks and invest in renewables, investigate price gouging and speculation, a windfall profits tax for Big Oil - but nobody's expecting George Bush to sign this or for many Republicans to sign on. Mary Landrieu didn't support cutting the tax breaks the last time around, so the problem is not with the policy but the politics. Still, it's depressing that these ideas aren't a little bit more innovative. For example, something building on Tom Carper's discussion of transit and land use would have been a nice addition to this package of bills.

I ride the train back and forth most days. I live in Delaware, and I go back and forth. As my colleague, the Presiding Officer, knows, I go back and forth almost every night to Delaware. A strange thing is going on with respect to passenger rail ridership in this country.

I used to serve on the Amtrak board when I was Governor of Delaware, and every year we would see ridership go up by a couple of percentage points. We would struggle, try to raise money out of the fare box to pay for the system and the expansion of the system. Well, the first quarter of this fiscal year, ridership at Amtrak is up 15 percent. Revenues are up by 15 percent. People are starting to realize that maybe it makes sense to get out of our cars, trucks, and vans and take the train or take transit. Transit ridership is up again this fiscal year more dramatically than it has been in some time [...]

Americans are beginning to literally buy homes in places that are closer to opportunities for transit -- for rail, for bus, for subways, for the metro systems. As we have seen the drop in home prices across the country -- in some cases, very dramatic -- among the surprises, at least for me, is to see housing prices stable and in some cases actually going up in places where people can buy a home and live and get to work or wherever they need to go to shop without driving to get there [...]

Before I close, there are a lot of good ideas for things we ought to do. I mentioned, tongue in cheek, that we ought to provide more R&D investment for a new generation of lithium batteries for plug-in hybrid vehicles. I say, tongue in cheek, we ought to use the Government purchasing power to commercialize advanced technology vehicles. We are doing that. I said with tongue in cheek we ought to provide tax credits to encourage people to buy highly efficient hybrid vehicles and very low diesel-powered vehicles that are efficient. We are doing that.

There other things we need to do too. We need to invest in rail service. We can send from Washington, DC, to Boston, MA, a ton of freight by rail on 1 gallon of diesel fuel. I will say that again. We could send from Washington, DC, to Boston, MA, a ton of freight by rail on 1 gallon of diesel fuel. But we as a government choose not to invest in freight rail and, frankly, to invest very modestly in passenger rail. It is a highly energy-efficient way to move people and goods.

Carper is the very model of a modern major backbencher and not particularly progressive, but on this issue he's absolutely right. And as Barack Obama has shown, offering short-term gimmick fixes do nothing but insult the public. Obama has actually talked about mass transit a little bit as well recently, so I'm hoping this could be a real initiative of his Administration. Maybe Carper could be the legislative point person.