As a preface to this post, I should point out that to say Ezra Klein has read circles around me on health care is an insult to circles. That said, this is a blog and I have an opinion, so I might as well write it.
Ezra writes about Harry Reid’s take on the public option:
In many ways, this is a fundamentally conservative approach to a liberal policy experiment. It’s only offered to individuals eligible for the insurance exchanges, which is a small minority of the population. The majority of Americans who rely on employer-based insurance would not be allowed to choose the exchanges. From there, it is only one of many options on the exchange, and only in states that choose to have it. In other words, it has been designed to preserve the status quo and be decided on the state level.
It seems beyond argument that Reid proposed a plan so compromised from liberals’ preferred single-payer system that Olympia Snowe’s staff might well have written it before the entire GOP zigged frantically to the right (ref. her or Mitt Romney on the individual mandate). Nonetheless, I have to disagree with Ezra on the option’s potential impact. Yes, most Americans on employer-based insurance would find themselves left out, but we already know that employer-based insurance is trending downward faster than newspaper readership. Entire sectors of American business already admit in private that they will phase out their insurance plans no matter what comes out of DC, and another chunk will certainly dump their plans as soon as a credible public option exists to absorb their workers.
If we take into account the desperate state of employer insurance and the huge number of people who would take anything over plans steadily deteriorating from draconian to outright sadistic, the public option will potentially absorb a much larger number of Americans than appear eligible today. Plus, the government plan will certainly outlaw revoking plans after the fact (“rescission”) to protect itself from dumping. That alone will improve the lives of everyone on the individual market.
Additionally, it is not hard to imagine cost pressure from a non-profit plan driving private insurers out of already low-competition markets. Buyers in those areas, which in some cases encompass an entire state, would effectively be left with a single-payer health plan. Granting my earlier argument that even ‘opt-out’ states will eventually give in to a national public option, the deal seems like a workable, if compromised, way to set in motion an irresistible ratchet towards affordable national health care.
Read Sullivan’s take on this. My feeling is that Andrew has the politics right, but he is trying too hard to squeeze in his thesis of Obama as a nearly omnipotent sleight-of-hand artist.