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Senate Health Care Discussions Still Not in the Right Ballpark on Public Option

Two stories on Senate discussions about health care reform suggest that the Senate may not yet be focused on defining the essential components of a public health plan option. They haven’t even publicly defined the relevant goals, so that we can hold them accountable.

First, Ezra Klein reports on Senator Schumer’s comments on Sen. Kent Conrad’s proposal for state/regional cooperatives, which Conrad had proposed as an alternative to a public plan option.

Schumer said Finance Republicans had rejected several proposals designed to beef up the suggested nonprofit insurance co-ops. These included setting up a national structure for the co-ops, $10 billion in government seed money, power to negotiate payment rates to medical providers nationwide and creation of a presidentially appointed board of directors.

Apparently, even these minor adjustments to Conrad’s weak proposal aren’t getting any Republican commitments of support, confirming Krugman’s view (and many others’) that Republicans won’t accept anything that remotely poses a competitive threat to private insurance companies. Is there any point in further discussions with them?

Second, HuffPo’s Ryan Grimm quotes Conrad on whether he’d be amenable to strengthening his co-op concept to accommodate Schumer’s desire for more national presence.

"National structure: I believe to be effective there has to a national entity with state affiliates and those affiliates have to have the ability to regionalize. I think his concern there can be addressed," said Conrad. "Second, he believes there needs to be national purchasing power. I think that’s a good point that the national entity would be able to do purchasing on behalf of the state and regional affiliates and on behalf of the national entity itself."

It seems the two sides are still not even talking about the same concept. Schumer claims to support a national public insurance option that would be subject to the same rules as private plans and thus compete on a "level playing field" with private insurance plans. Conrad hasn’t accepted anything that would pose a significant threat to private plans, but he hints he’s willing to consider giving his co-ops some limited national backing and more funding during start-up.

Recall from my post last week Ezra Klein’s observation that Schumer’s level-field public plan was not just a major compromise from the widely supported single-payer system but a further compromise from a "robust" public plan that would pose a serious challenge to the private insurers.

So when Schumer negotiates with Conrad, we still have a less-than-robust public plan concept being compromised against a non-public plan concept, with the bargaining foundering on the easiest questions of national start-up support. Now that they’ve explored that boundary and determined there’s no there there, it’s time to get back in the right ballpark.

With over 70 percent supporting a public plan, such Senate discussions are now a waste of time. The Republican’s refusal to accept even a strong national co-op concept means they aren’t even in the same ballpark as Democrats pushing genuine reform. Let that be the Republicans’ problem, not ours. (More from Yglesias on related points.)

And Schumer is still trying to define "competition" as something that doesn’t seriously, unduly frighten the private insurance industry. But that was Obama’s point about "keep them honest."

Shielding the highly un-competitive private industry from robust transformative competition should never be the goal of the reform effort. The central point of the competition is to force the private companies to radically alter their egregious behavior towards consumers and health care providers and lower their costs, while giving consumers a better choice if they do not.

Instead, the goal should be to create a public option that is as attractive to consumers, efficient in its operations, and fair to providers, as Congress can make it. Congress should be designing a plan that consumers and providers will actually want to use, and then let the private plans respond if they can to retain their market share.

After decades without meaningful competition or effective oversight, the private sector has become ossified and strongly resistent to reforms, and it’s getting worse. It has become profoundly anti-consumer, at war with both the consumers it works diligently not to cover and the providers it constantly hassles over compensation.

Shaking up that system, forcing it to compete against something better, and keeping it honest, should be the minimum reform conditions Congress imposes on an industry that has simply failed in its primary functions.

If a well designed, efficient and sustainable public plan succeeds in attracting consumers and providers away from the dysfunction private system, the country will be better off. If the private system is capable of responding positively, by substantially improving its services and practices, that too will be progress. But if they can’t improve and thus steadily lose market share to the more attractive public option, then that’s fine too.

Congress’ job is to authorize, fund and create the most attractive, sustainable public plan this country can produce, and then put in place the funding and oversight mechanisms to hold it accountable for doing its job. Then let Americans choose it if they don’t like what they have.

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John has been writing for Firedoglake since 2006 or so, on whatever interests him. He has a law degree, worked as legal counsel and energy policy adviser for a state energy agency for 20 years and then as a consultant on electricity systems and markets. He's now retired, living in Massachusetts.

You can follow John on twitter: @JohnChandley