On August 13, The New York Times reported that while President Obama had presented himself as "aloof from the legislative fray," particularly in connection with the public option, "Behind the scenes, however, Mr. Obama and advisors have been...negotiating deals with a degree of cold-eyed political realism potentially at odds with the president's rhetoric." Among these deals by the Obama administration: A deal with big Pharma to reduce drug prices by a relative paltry $80 billion over 10 years in exchange for Obama reneging on his campaign promise to allow Medicare to negotiate lower drug prices; and a deal with the private hospital lobby to limit its cost reductions to $155 billion over 10 years in exchange for a White House promise that there would be no meaningful public option.

According to the Times: "Several hospital lobbyists involved in the White House deals said it was understood as a condition of their support that the final legislation would not include a government-run health plan paying-Medicare rates...or controlled by the secretary of health and human services. 'We have an agreement with the White House that I'm very confident will be seen all the way through conference', one of the industry lobbyists, Chip Kahn, director of the Federation of American Hospitals, told a Capitol Hill newsletter...Industry lobbyists say they are not worried [about a public option.] 'We trust the White House," Mr. Kahn said.

Mr. Kahn's lobbying group, with whom the White House made the deal, represents America's investor-owned, hospitals whose profits could be diminished by a public option with the negotiating clout to negotiate lower prices. To say that the deal included ensuring that any public option would not be "controlled by the secretary of health and human services" is code for saying it would not be national in scope and would lack negotiating clout--In other words, under the White House deal, weak coops are ok, weak public options at the individual state level are ok, triggers that would likely never be triggered are ok, but a national public option on day one comparable to Medicare has been taken off the table by the White House.

Even more important, under the White House deal, any public option would be prevented from paying Medicare rates (and by implication, from using Medicare rates as a reference point, as would be the case for proposals in the House for the public option to pay Medicare rates plus 5%). Banning the use of Medicare rates as a benchmark for the rates to be paid by the public option ensures that the public option would be unlikely to be able to pay providers lower rates than private insurers, and would thus be unable to save its customers meaningful amounts of money over private insurance premiums...

...Skip ahead a few weeks to President Obama's big health care speech to a Joint Session of Congress on September 9.... The New York Times noted that "Mr. Obama's call for a public plan, however, omitted any discussion of what rates it might pay or who might control it...'He worded it really carefully, because he said 'not for profit' and he didn't say it had to be controlled by the government,' Mr. Kahn [the hospital lobbyist] added. 'The way he described it, we could support that!"

In his speech, Obama downplayed the impact of the type of public option he might support, noting that it would be no threat to private insurance because "less than 5% of Americans would sign up." Moreover, Obama reminded "my progressive" friends that
"The public option is only a means to [an] end--and we should be open to other ideas...For example, some have suggested that the public option go into effect only in those markets where insurance companies are not providing affordable policies. Others propose a co-op or another non-profit entity to administer the plan. Those are all constructive ideas worth exploring".

...In fact, since the beginning of the health care debate the pattern from the Obama White House has been to give enough comfort to his progressive supporters that he's really on their side when it comes to the public option so that they won't jump ship, while winking at the private health care lobbyists to reassure them he'll keep his promises to them that there will be no meaningful public option in the end.

...The problem for the White House, however, is that it doesn't want its fingerprints around the corpse of the public option. It can't be in a position where a bill with a "robust" public option comes to the President's desk. Instead, Obmaa needs Congressional leaders to kill it first so he can tell his followers, "I wanted a public option but it just couldn't make it through Congress."

But here's the rub. Democratic leaders in Congress don't want to be the fall-guys in the murder of the public option. Too many of their constituents have become attached to it. The public option has in effect become a symbolic proxy for the activist base of the Democratic Party on whether Democrats are fulfilling their campaign promises or selling out to special interests. Harry Reid's reelection chances in Nevada in 2010 are shaky and he needs aggressive backing from the Democratic base and unions to keep his seat, which he won't get if he's seen as a weak leader who aided and abetted the death of the public option in the Senate. Nancy Pelosi faces a rebellion from a significant portion of her caucus if she fails to fight for a "robust" (i.e. Medicare plus 5%) version of the public option.

Which brings us up to the present moment. As of the end of last week, Harry Reid was telling the White House that he was within one or two votes of a bill which would include a somewhat weak public option with a state-by-state opt-out. According to which report you believe, Reid was either told by the White House to substitute a "trigger," or at minimum was given a cold shoulder to putting any public option in the Senate. Reid has now decided to go ahead with an opt-out public option, but without White House support, it's unclear if he has the votes to keep even this weak tea in the final Senate bill. Nancy Pelosi convened a meeting of the House Democratic caucus to poll its members whether there were enough votes to pass the most "robust" version of the public option still on the table, one that would set payment rates at Medicare plus 5%. About 50 or 60 House Democrats ducked the meeting to avoid going on record and Pelosi remained a few votes short. Does anyone really believe that if the White House wanted a public option, a few phone calls wouldn't have generated the handful of needed Democratic votes?

...Without [the p.o.] all we're left with is Health Reform in Name Only that will mandate that everyone buy private health insurance too skimpy to pay all their costs if they actually get sick; fine middle class people just over the subsidy level who can't afford premiums exceeding $6,000 for individuals and $14,000 for families; tax the Pick-Up Truck policies of union workers; and continue to ban Medicare from negotiating for lower drug prices. If that's what ObamaCare ends up looking like, it might be better that it be defeated and we start over.

posted by speakingcorpse : 10/27/2009 07:23:00 AM