Does the public option matter? | Michael Tomasky

Now here was an intelligent op-ed by Paul Starr in yesterday's NYT. He argues that the public option as currently constructed (and in any form that's likely to pass Congress) is so weakened as to be not even worth fighting for, and that liberals should give it up in return for more meaningful reforms. Selected salient grafs:

An earlier version of the public option, available to the entire public, might have realized progressive hopes and conservative fears. By paying doctors and hospitals at Medicare rates (which are 20 percent to 30 percent below those paid by private insurers), the public option would have had a distinct price advantage. But by severely cutting revenue to health-care providers, it would also have set off such a political crisis that Congress would never have passed it.

Instead, the bills in Congress now call for the government plan to negotiate rates with providers, as private insurers do. That limitation exposes a defect in the idea. The government plan may well have to charge higher premiums because it is likely to attract more than its share of the chronically ill and other high-cost subscribers. It could go into a death spiral of mounting costs.

Accelerating the timetable of reform ought to be a priority. Although the legislation calls for some important interim measures, the Senate bill defers opening the exchanges and extending coverage until 2014. By comparison, when Medicare was enacted in 1965, it went into effect the next year.

For Congress to put off expanding coverage to 2014 would be asking for a lot of patience from voters. It would also give the opponents of reform two elections to undo it. President Obama would have to run for re-election in 2012 defending a program from which people would have seen little benefit.

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