The Health Care Public Option An Idea Whose Time Had Come

FIGHTING FOR OUR HEALTH

Cover of Fighting For Our Health by Richard Kirsch

Everyone involved in the 2009-2010 crusade for health care reform will want to read this new book by Richard Kirsch, who was on the front lines of the fight as the director of Health Care for America Now (HCAN). Click here to purchase a copy of the book, and check this page regularly this week for additional book excerpts.

Sometimes a policy idea has the power to shape history. While the “public option” did not make it into the final health care reform bill, the idea of providing a choice of regulated private insurance or a public insurance plan was crucial to building the movement to enact the Affordable Care Act.

Without the public option, progressive groups would have remained torn between reform plans that offered either exclusively private or public insurance. The public option provided a point of unity that became a foundation for the coalition and grassroots campaign to enact health reform law.

As with many ideas, timing was everything. As I recount in “Fighting for Our Health: The Epic Battle to Make Health Care a Right in the United States,” the public option had been included in legislation introduced in 1994 by Rep. Pete Stark, then chairman of the Health Subcommittee of the House Ways and Means Committee, a position he also held in the last Congress. But it had been forgotten by both me and Yale Professor Jacob Hacker when we each separately came up with the proposal several years later.

We were both looking for a solution to the same problem: how to design a policy solution that would address the challenge of expanding health care coverage and controlling costs, and lead to significant progressive reform of the health care system. Our similar proposals met with enthusiastic reception by many organizations and advocates who were looking for a path forward on comprehensive health care reform.

The next task was to assure that the public option became part of the proposals of Democrats running for president. Roger Hickey, Co-Director of Campaign for America’s Future and Diane Archer, who began working with Hickey, teamed up with Hacker to make that happen. The following excerpt from “Fighting for Our Health” describes how they went about doing so with John Edwards and Barack Obama. It also reveals the early ambivalence that Obama was to have regarding the public option, which became clear after he was elected President.

Hickey and Archer began to promote the Hacker plan. Their strategy was to increase its academic credentials and make it attractive to pro-reform groups. They focused particularly on key unions that progressives would regard as leaders and that Democratic presidential candidates would court in the 2008 election campaign. Hickey got the Economic Policy Institute (EPI), a leading labor-backed think-tank, to publish an updated version of Hacker’s paper as part of EPI’s Agenda for Shared Prosperity project, which aimed to put out progressive economic approaches in advance of the 2008 election. He also convinced the American Federation of State, County & Municipal Employees (AFSCME) and the Service Employees International Union (SEIU), two unions with strong records of working on progressive political change, to release statements endorsing the plan on the day it was unveiled.

In early February 2007, less than a month later, John Edwards unveiled his health care reform proposal. Part of Edwards’ strategy for attracting the support of progressives was to announce substantive policy proposals early, positioning him as a candidate with ideas and pressuring the other major candidates, Hillary Rodham Clinton and Barack Obama, to respond. As CAF blogger Bill Scher wrote the day after Edwards’ plan became public, “The New Republic reports today that a core feature of the plan is ‘the essential idea behind another health care reform plan that has been quietly generating a great deal of enthusiasm among reformers — a plan composed by Yale University political scientist … Jacob Hacker.” In fact, Hickey and Hacker had been talking with Edwards’ issue and health policy advisors, one of whom was Peter Harbage. Edwards appeared on Meet the Press and noted, “One of the choices, by the way, available in these health markets is the government plan. So people who like the idea of a single-payer insurer health plan, that is actually one of the alternatives that people can choose.”

The public option was a part of Edwards plan, but not the centerpiece. In many ways Edwards’ plan was modeled after the health reform plan passed in Massachusetts in 2006. The Massachusetts legislation combined a requirement that state residents have health coverage with a variety of ways of expanding coverage. The major innovation was the creation of a new regulated marketplace, called a “connector,” where individuals could purchase private health insurance. Low- and moderate-income people who earned too much for Medicaid and did not get health coverage at work received income-based subsidies to pay for the coverage. The regulations included bans on insurance companies denying coverage or charging people more for preexisting conditions.

The next major candidate to announce a health plan was Barack Obama. As he did with the Edwards camp, Hacker had briefed Obama on the public plan idea earlier that winter, just after Obama had announced his run for president. MIT economist Jonathan Gruber, a designer of the Massachusetts plan, also participated on that call with Obama. Hacker told Obama that the Massachusetts plan needed two crucial improvements: clear responsibility for employers to provide for or pay for health coverage, and the inclusion of a public insurance plan in order to control costs.

In the weeks before Obama released his proposal, Hickey and Archer sent Hacker’s plan to Obama’s health care advisors and arranged for Hacker to talk with some of the Obama team. While the advisors asked Hacker about various aspects of reform, he believes that they mainly wanted his ideas on structuring a public plan.

In late May 2007, Obama announced his proposal in a speech at the University of Iowa, but the policy details weren’t clear. He said, “Everyone will be able buy into a new health insurance plan that’s similar to the one that every federal employee … currently has for themselves.” At one point he referred to a “new national health care plan and other participating plans.” Was he speaking about the Federal Employee Health Benefits Plan, which is a choice of private insurance plans, or was he proposing to introduce the choice of a new public insurance plan?

The confusion was noted by several bloggers, and threatened to ruin the reception of Obama’s plan among progressives. An Obama campaign advisor rushed to reassure potential critics: “If you don’t have health insurance through your employer, you will be enrolled into a new, comprehensive public health insurance plan that emphasizes prevention, chronic care management and quality care. The benefits will be similar to those available today to every federal employee.… This plan will enjoy the great efficiencies we see in public plans like Medicare but, if you still cannot afford it, you will receive a subsidy to pay for it. Of course, you can choose private insurance if you prefer but the private plans will have to compete on a level playing field with the public plan — without the extra payments that tip the scales in favor of private Medicare Advantage plans today.”

The Obama campaign erased any further ambiguity by prominently including the following in the official health care issue section on the campaign’s website: “Specifically, the Obama plan will: (1) establish a new public insurance program, available to Americans who neither qualify for Medicaid or SCHIP (State Child Health Insurance Plan) nor have access to insurance through their employers, as well as to small businesses that want to offer insurance to their employees.”


This article is republished from New Deal 2.0.

Comments