How Pharma and Insurance Intend to Kill the Public Option

             Friday, June 05, 2009  by Robert Reich

And What Obama and the Rest of Us Must Do

 

 

I'ved poked around Washington today, talking with friends on the Hill
who confirm the worst: Big Pharma and Big Insurance are gaining ground
in their campaign to kill the public option in the emerging health care
bill.

You know why, of course. They don't want a public option that would
compete with private insurers and use its bargaining power to negotiate
better rates with drug companies. They argue that would be unfair.
Unfair? Unfair to give more people better health care at lower cost?
To Pharma and Insurance, "unfair" is anything that undermines their profits.

 

 

So they're pulling out all the stops -- pushing Democrats and a handful
of so-called "moderate" Republicans who say they're in favor of a
public option to support legislation that would include it in name only.
One of their proposals is to break up the public option into small
pieces under multiple regional third-party administrators that would
have little or no bargaining leverage. A second is to give the public
option to the states where Big Pharma and Big Insurance can easily buy
off legislators and officials, as they've been doing for years. A third
is bind the public plan to the same rules private insurers have already
wangled, thereby making it impossible for the public plan to put
competitive pressure on the insurers.

Max Baucus, Chair of Senate Finance (now exactly why does the Senate Finance Committee have so much say over health care?) hasn't shown his
cards but staffers tell me he's more than happy to sign on to any one of
these. But Baucus is waiting for more support from his colleagues, and
none of the three proposals has emerged as the leading candidate for
those who want to kill the public option without showing they're killing
it. Meanwhile, Ted Kennedy and his staff are still pushing for a full
public option, but with Kennedy ailing, he might not be able to round up
the votes. (Kennedy's health committee released a draft of a bill today,
which contains the full public option.)

Enter Olympia Snowe. Her move is important, not because she's Republican (the Senate needs only 51 votes to pass this) but because she's
well-respected and considered non-partisan, and therefore offers some
cover to Democrats who may need it. Last night Snowe hosted a private
meeting between members and staffers about a new proposal Pharma and
Insurance are floating, and apparently she's already gained the
tentative support of several Democrats (including Ron Wyden and Thomas
Carper). Under Snowe's proposal, the public option would kick in years
from now, /but /it would be triggered only if insurance companies fail
to bring down healthcare costs and expand coverage in he meantime.

What's the catch? First, these conditions are likely to be achieved by other pieces of the emerging legislation; for example, computerized
records will bring down costs a tad, and a mandate requiring everyone to
have coverage will automatically expand coverage. If it ever comes to
it, Pharma and Insurance can argue that their mere participation
fulfills their part of the bargain, so no public option will need to be
triggered. Second, as Pharma and Insurance well know, "years from now"
in legislative terms means never. There will never be a better time than
now to enact a public option. If it's not included, in a few years the
public's attention will be elsewhere.

Much the same dynamic is occurring in the House. Two members who had originally supported single payer told me that Pharma and Insurance have
launched the same strategy there, and many House members are looking to
see what happens in the Senate. Snowe's "trigger" is already buzzing
among members.

All this will be decided within days or weeks. And once those who want to kill the public option without their fingerprints on the murder
weapon begin to agree on a proposal -- Snowe's "trigger" or any other --
the public option will be very hard to revive. The White House must now
insist on a genuine public option. And you, dear reader, must insist as
well.

This is it, folks. The concrete is being mixed and about to be poured. And after it's poured and hardens, universal health care will be with us
for years to come in whatever form it now takes. Let your representative
and senators know you want a public option without conditions or
triggers -- one that gives the public insurer bargaining leverage over
drug companies, and pushes insurers to do what they've promised to do.
Don't wait until the concrete hardens and we've lost this battle.

Robert Reich was the nation's 22nd Secretary of Labor and is a professor at the University of California at Berkeley. His latest book is "Supercapitalism." This is his personal journal.