Health Care Reform for Beginners: The Many Flavors of the Public Plan
by Ezra Klein
For most of you, this is the big one. The inclusion of a strong public insurance option has become, for most observers I know, the single most recognizable marker for victory. If the public plan exists, liberals have won. If it's eliminated, or neutered, then conservatives have triumphed.
The public plan has a very particular political lineage: The lesson liberals took from the 1994 health reform fight was that you couldn't threaten the insurance coverage individuals already had. For many policy wonks, the central problem in health care was the existence of private insurance coverage. For most Americans, however, the central problem was that they could lose their private insurance coverage, and be left with something they didn't like, or nothing at all. This effectively ruled out something like single-payer, or even Bill Clinton's managed-care-within-managed-competition model. It ruled out anything that began by changing the health care coverage of those who wanted to keep their current policies.
But that political insight didn't cancel out the policy insight: The private insurance market is a mess. It's supposed to cover the sick and instead competes to insure the well. It employs platoons of adjusters whose sole job is to get out of paying for needed health care services that members thought were covered.
Moreover, public insurance is simply more efficient. Medicare holds costs down better than private health insurance. The substantially public systems employed by every other industrialized nation cost less and cover more than the American model. So the question became how to marry the policy need for public insurance with the political need to preserve the status quo.