As I was reading Paul Krugman’s column this morning, it struck me that I hadn’t commented on the public option. One brief aside on the column itself. Dr. Krugman laments:
On the issue of health care itself, the inspiring figure progressives thought they had elected comes across, far too often, as a dry technocrat who talks of “bending the curve” but has only recently begun to make the moral case for reform. Mr. Obama’s explanations of his plan have gotten clearer, but he still seems unable to settle on a simple, pithy formula; his speeches and op-eds still read as if they were written by a committee.
If Democrats don’t want a dry technocrat as president, they might think about not nominating them so frequently. By my reckoning in four of the last six cycles the Democratic candidate has been a dry technocrat and the remaining, Bill Clinton, was only saved from the characterization because he was colorful not because he wasn’t a technocrat.
But back to the public option.
I think that both sides of the question have made reasonable points. Those who support a public option (assuming they do so as something other than a stalking horse for a nationwide single-payer plan) point to a lack of competition among insurance companies in individual markets. They’re right. A public option would be valuable to the degree that it promotes competition.
But the opponents are right, too. It’s hard to see how a federal insurance program will compete on a level playing field with private insurance companies and, if it doesn’t, why the private healthcare insurance companies shouldn’t fold up their tents and silently steal away.
For example, what would the public plan do if it had exhausted its budget? If it can appeal to the Congress for more money, it doesn’t operate on a level playing field with private companies. If it can’t appeal to the Congress, there’s the possibility that it might not be able to pay its claims.
Note, too, that there’s a serious constitutional issue with the public plan. As things stand private insurance companies are regulated by the insurance boards of each state in which they operate. Would the same be true of the public option? If not, it doesn’t compete under the same rules as private insurance companies. If so, how would that work, exactly? State officials would issue orders to federal officials? Really?
This suggests that there’s something at work in the public option that I’ve complained about here before: the search for a master stroke, a grand over-arching solution. Right now, this very minute, the only thing preventing California (not to pick on poor California—it’s just as true for Illinois or Missouri) from having its very own single-payer system is California. Its legislature could enact such a plan any time it cared to. That it has not, presumably unwilling to take the political heat and recognizing that it’s beyond the state’s ability to pay, should give us pause.
That’s something that both American and European critics of our healthcare system frequently fail to appreciate. The proper comparison to the United States isn’t France or Germany. It’s the European Union and the European Union doesn’t have a single, consolidated healthcare system, either. Our states resemble sovereign countries more than they do departments of the federal government.
Under our political system the proper place to fight out reforms to the healthcare system is state by state, legislature by legislature. That would require spade work that I suspect advocates of sweeping reform aren’t willing to do.
That’s why as a rule my recommendations for reform have been rooted in things that could actually be done within the strictures of our system, e.g. changing the rules under which Medicare subsidizes medical education or modifying the way the Food and Drug Administration regulates pharmaceuticals.