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Thursday, August 20, 2009

About those revolting liberals

So what do I think of the liberals who are threatening to vote against health care reform if there is no public option ?

I think it is very very clear (as noted by Ezra Klein with whom I mostly agree) that it is not about the public option and not even entirely about health care reform.

Here the key point is that the big battle has already ended in liberal surrender. The appeal of the public option back in 2008 when it was proposed by the Edwardses was that it would amount to stealth single payer, but, it was assumed, that Republicans would be too embarrassed to explain why. Public health insurance is much much more efficient than private health insurance. We know this, because private companies can't compete with the medicare administration without huge gigantic immense subsidies.

Therefore, if a public option were allowed to compete on a level playing field with private insurers, they would wither away. Clever. Turns out that Republicans (and Ben Nelson) are not easily embarrassed and have made exactly this argument. Of course they claim that they are concerned that the playing field might not be level, but they can't come up with any way to make it level with a slope level enough to make it possible for private health insurance companies to compete.

The compromise which would preserve endangered health insurance companies from unfair competition is to restrict the public option to individuals and small firms buying health insurance on the exchanges. Obama declared his determination to avoid stealth single payer exactly in the announcement which raised false hopes among those who hope for stealth single payer. He said the exchanges must include a public option. That means he agrees that large firms be required to buy health insurance from private companies which means that they'll do fine.

Game over.

Revolting liberals have decided to ignore Klein's explanation that they have lost already and threaten to vote against health care reform over the not so important sliver of a public option which hasn't been ruled out already.

Why ?

Atrios *and* Paul Krugman have made it absolutely clear that this is no longer about health care reform. Reform without a public option is not unacceptable to revolting liberals because it will increase the profits of parasitic insurance companies. Reform with a public option only on the exchanges would do that too. Reform without a public option is unacceptable to many, because it is exactly what AHIP, the insurance industry lobby, proposed. Karen Ignani's very first offer would be accepted by the US government. The shame of liberal defeat would not even be covered by a fig leaf (hmmm current in the running option is more like an olive tree leaf).

The question is do powerful interest groups get exactly what they propose ? My answer is that if they propose universal health insurance with extensive regulatory reform then sure.

The revolting liberals are, to put it as rudely as possible, like blue dogs. They say no and require a last minute compromise to win their votes just to show that they can say no. The blue dogs accepted very minor changes and went back to their districts to brag about how they had held up health care reform. Then the revolting liberals demanded even more tiny changes so that they could prove that attention had to be paid to them too.

That's what it's about now.


Anonymous said...

I think you forgot to close a tag. Makes reading kind of hard. perhaps you can correct it.

James Wimberley said...

Robert: "The compromise which would preserve endangered health insurance companies from unfair competition is to restrict the public option to individuals and small firms buying health insurance on the exchanges."

Aren't you underestimating the greasiness of the slope or the pointiness of the wedge here? A nice little public option plan is set up for the non-Medicaid uninsured and employees of teensy businesses. After a few years everybody notices that it works fine. In particular, the teensy firms grow faster (with fixed, no-hassle health costs snd no pressure to base hiring on insurance status) and cut into the market share of bigger firms hamstrung with inferior private insurance and employees worried sick about it. Then these rather bigger firms say we want some too to level the playing field. The public cption plan expands. Eventually it might reach 40% of the market like Bismarck's AOK.

This slippery slope or wedge looks pretty plausible to me, and it explains why both liberals and conservatives treat the public option as a critical issue.

Robert said...

Good point James. I just thought of that possibility tonight about an hour ago (really honestly).

I do hope there will be a public option and that it will amount to stealth squared single payer as large firms won't put up with paying extra for health insurance.

I thought I was very clever to think of the possibility. The fact that you propose it as a possibility convinces me that I was.

neroden@gmail said...

Um, yeah, essay wrong.

The progressives are holding the line on the public option. Note that they are not holding the line on "public option for everyone". They are holding the line by demanding that it be available at least to the individuals and small businesses currently subject to extortion in the "individual market".

Without this, health care reform is worthless for those individuals and small businesses, and the progressives have therefore got nothing for the group of people most important to them (in terms of votes and campaign contributions): professionals! We've got to stop rolling over and giving away the store.

Nothing to do with "attention" or crap like that. The possibility you thought of an hour ago, as mentioned in previous comment, is correct, of course.

James Wimberley said...

I don't think either of us needed to be clever to think of this. Wingnuts have thought of it: "thought" in the sense that they reflexively see every liberal reform as a slippery slope to horrible Euro-socialism. Rarely, like here, there is a somewhat slippery slope and they are half-right by accident, like the proverbial stopped clock.

The German ur-example doesn't however suggest that a public option will tend to replace everything else, though everything else comes to look very like the public option.