Sacrificing the Public Option, Expanding Medicare and Universal Coverage

By Marc Seltzer; originally published on December 13, 2009, at
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How does the latest health-care proposal in the U.S. Senate measure up on Progressive principles?

The Progressive movement has rallied behind single payer and public option reform proposals in the belief that not only is universal coverage a fundamental right, but not-for-profit medicine is a better way to get quality health care at a reasonable price.

Unlike most developed nations, the United States has a sizeable part of its population that goes without health insurance.  President Obama took up the cause of greatly expanding coverage in his presidential campaign. He also spoken firmly of reform in terms of bending the cost-curve, making insurance and medical care more affordable to individuals and to the nation, in light of fast-rising health-industry costs.  However, Mr. Obama stopped short of embracing single payer, leaving in question what type of structural changes would be used to achieve reform goals.

The political reality is that both the House of Representatives and Senate are split among those who want to change the system towards government-run health insurance and those intent on maintaining a mostly private system.  In the House of Representatives, the Democratic majority was able to pass legislation substantially expanding coverage and including a limited public option, a small government-run insurance program for those not insured through their employer.  The vote was fairly close and may have reflected inclusion of a controversial abortion-funding restriction, such that the exact count of Representatives who would support a public option if the anti-abortion funding provision were not part of the final bill is uncertain.

In the Senate, Democrats need sixty votes to close debate and move forward.  They have close to, but not quite, that many, who will accept some form of a public option.  Thus, negotiations have continued to explore what types of limited government insurance programs would be acceptable to at least a few conservative Democrats, independents or moderate Republicans.

This week a Senate group reached a compromise that attempts to replace the public option with a public/private non-profit insurance program like that which is currently offered to Congressional legislators and federal employees.  The compromise proposal did not stop there, however.   It also included a provision to significantly expand Medicare, by lowering the age of participation from 65 to 55.

How should Progressives look on this proposal?

All the proposals under consideration push towards universal coverage.  It is really the structure that makes them different.  The use of a public/private program is not equivalent to the public option, or government-run program.  However, the federal authority sets rates, controls profits, and guides provision of health care.  It is a strong control on profit-driven insurance.

Moreover, expanding Medicare is a major step in the direction of single payer.  The Medicare program is single payer for its participants.  Private insurance does not participate except in supplemental programs.  There are approximately 35 million additional Americans who would be eligible to participate, if the age requirement was lowered — more than 10% of the population.  Those under fifty-five would remain in their current employer-provided plans and a small number would participate in the new public/private plan.

Given that there is not political power to create a nationwide single-payer program, the expansion of Medicare to include 35 million additional participants and the coverage of uninsured by a public/private program is much more than could have been achieved by the limited public option as it was contemplated.  The small public option is replaced by a public/private plan, which covers those currently uninsured.  The vast expansion of Medicare offers many more Americans a single payer model of insurance.  Whether this shifts the political equation in the Senate or House is the big question, and this should become known in coming days. blogger Jessica Pieklo and I discussed the new proposal as soon as we got word.  You can hear our conversation by following this link and clicking the December 11, 2009, podcast, and more information should become available as soon as the Congressional Budget Office provides “scoring” or budget estimates.

December 14, 2009, UPDATE: First responses — Senator Lieberman

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