Will a Public Health Insurance Plan Happen?

Armen Hareyan's picture

President Barack Obama recently spoke with a group of senators working on healthcare reform. His purpose was to inspire Democrats to cooperate on the issue. Both he and Majority Leader Harry Reid want a bill that both liberal and moderate/conservative Democrats are content with. They have a great challenge ahead of them, especially when it comes to the possibility of a government-run health insurance plan, otherwise known as a public option.

The so-called public option has been very controversial. Liberal senators are supportive of it, although some believe the proposals haven't gone far enough. A full-fledged single-payer plan similar to those in Canada and Europe is a nonstarter; one sponsored by Representative Dennis Kucinich in the House quickly fizzled, and the more conservative Senate has not even considered it. Meanwhile, conservative Democrats and Democratic-leaning independents are against a public option entirely. Currently, the bill allows for individual states to opt out of the national health insurance plan. Reid proposed the compromise, but neither side seems to be content with it: opponents of the public option think it still leads to too much government involvement and drives up the budget deficit, while public option supporters believe that an opt-out provision undermines the program (part of its savings would presumably come from the increased buying power a larger insurance pool brings--it would allow the health insurance plan to pressure health care providers into charging less).

For his part, Obama did not make any policy prescriptions during his rare weekend visit. Rather, he emphasized the historical moment before the senators, and compared the healthcare reform vote to the establishment of Social Security. The latter program is generally popular, but there have been worries that the federal government will run out of funding. The large deficit, which reform will increase at least in the short run, exacerbates the problem. On Sunday, he met with five moderate and five liberal members of the Democratic caucus tasked with crafting a healthcare reform bill that stands a chance at receiving 60 votes. That number of votes is necessary to avoid an inevitable filibuster by Republicans, who have vowed that they will block Democratic-led health reform. Reid needs to bring together the warring factions of Democrats in order to defeat the unified opposition.


The main thrust of Obama's speech was that senators should do what would make a difference for America in the future, as opposed to what would make them popular right now. Of course, that is easy to say for someone who is not seeking reelection next year. However, his statements seem to have strengthened the resolve of some liberals, including Sherrod Brown and Claire McCaskill, in the face of the looming 2010 congressional elections. He also emphasized the importance of containing costs while expanding coverage.

There appear to be several alternatives to a public option health insurance plan being considered by the Senate. Recently, Majority Leader Reid has proposed that small businesses, individuals, and families be allowed to buy a health insurance plan through the Office of Personnel Management. That federal agency is responsible for handling the health insurance plans of Congress, in addition to those of other federal employees. Such plans have been reported as being less expensive and more comprehensive than the average health insurance plan available in the open market, though they continue to be provided by private health insurance companies. This type of compromise could be the best of both worlds, though it is unknown if such a plan--recommended by the Congressional Budget Office--would be approved.

Later this week, Reid will file a "manager's amendment". A manager's amendment lists the changes the majority leader of the Senate wishes to make to the bill. He has taken mainly pragmatic positions on healthcare reform. While he supports a public option, he may give it up in exchange for a winning vote by Christmas.

Written by Yamileth Medina
VitalOne Health Plans Direct, LLC.
[email protected]