Earlier this month, the president-elect’s selection for Secretary of Health and Human Services, former Senator Tom Daschle, announced that the transition team was planning a series of “health care reform parties” during which the general public would have the opportunity to offer input on the shape and content of the reform plan.

Of course, holding these sessions now will also allow the Obama team to later say they solicited public input before moving to push a reform plan through Congress.

It should be obvious from this and other signals that the president-elect plans to move fast and hard to pass health care legislation as early as possible in 2009. In a certain sense, he and his team are doing their “listening” now so they won’t have to later.

It is also clear that a major battle will be fought over the so-called “public insurance option” in the Obama campaign plan. Many Democrats, including Senate Finance Committee Chairman Max Baucus, want to give workers the option to enroll in a public insurance plan modeled on Medicare. Proponents of this idea say they only want a fair competition with private insurance offerings, but the reality is that a public insurance plan would open a backdoor to a single-payer system. Public insurance plans always set fees for services well below market rates and thus shift costs to other payers who must negotiate, not dictate, rates with doctors and hospitals.

Recent news stories indicate that major insurers are now beginning to voice serious concerns about the idea, as they should.

Some more moderate advocates of Democratic-leaning reform try to downplay the significance of the public insurance option, suggesting it might be discarded to get a deal. Perhaps.

But the Obama framework really doesn’t work without it either because the Democratic approach to reform is entirely dependent on governmental price controls to hold spending in down. Jettisoning the public insurance option, absent a real marketplace, would drive the costs of Obamacare even higher.


December 17, 2008