The resurrection of the public plan?

Have I seen twenty MSM articles on this theme in the last five days?  Yet the betting odds are only slightly above their minimum point.  Right now the contract is running at about twenty rather than eighteen or so a few days ago. 

I don't follow the ins and outs of the trenches (try Ezra Klein), but as an outsider I don't understand why in strategic terms the Democrats are resurrecting this idea.  It's their most likely path to failure, namely that they can't pass a public plan and can't easily go back to a bill without a public plan either.  Any bill that is passed will be revised repeatedly in any case, so there's plenty of time to try to get a public plan in the future anyway.


The InTrade market is conflated with the deadline of Dec 31, 2009. Perhaps most of the market is trading on this cutoff, based on Senator Snowe's comments about pushing the vote into 2010.

I was thinking the same thing about the contract deadline, but then I didn't understand why there wasn't more interest in the March and June 2010 contracts.

This is now-or-not-anytime-soon shot for Democrats. Bundling it with health care reform that everyone supports, and while they have huge majorities in both houses, is much easier than passing it separately after 2010 with smaller majorities.

The 60 Senators limit is pure fiction. You need 50+VP to pass laws, what public option easily has.

Christian is right. The intrade betting is mainly about whether it can be done before Dec. 31, 2009, which is not looking that likely.


As for your other question, the reason so many Democrats are in favor of of the public option is probably because they believe it will be better for the country and believe it's achievable now. There are actually a lot of people who think that way, in my experience.

The Intrade contract terms state that a state opt-in or opt-out provision will count as no public option.

Likewise with a trigger: Trigger=no public option.

I also do not follow the ins and outs all that closely, but I will suggest that the public plan is being resurrected to anchor the Dems' bargaining position. With a public plan on the table, Dems can claim that giving up public plan (again) represents a concession. It also makes the version of the Baucus Bill that passed the committee look like a "middle" position. So even if a public option would be unlikely to pass, seriously discussing it can still provide Dems with benefits.

The intrade definition of public plan has been clarified to indicate the plan must be truly national in scope. So, even the most expansive comprimise that is on the table in the Senate (the national opt-out public option, which is a Schumer modification to Tom Carper's state-based opt-in version) would not cause the contract to expire at 100. Accordingly, a fair price for the contract is probably in the single digits. I think the observed price can be accounted for by noting that many traders on the long side probably have not read the rules (at least since they have been most recently updated) and that there is some risk on intrade issuing a further (contradictory?) clarification. I know that many traders were frustrated by the clarification (which was explicit) that the opt-out proposal would not qualify, and I'm sure some potential short traders fear the same kind of definition uncertainty risk.

In any case, the intrade contract should not be relied on as indicator of the probability of some form of the public option being passed into law, though it is probably true that the direction of any shifts in the contract price have a relationship to that probability.

For that matter, can we ask why the Democrats are so hell bent on passing into law something observers from most every vantage point think is terrible?

Hell, even the supporters of health care seem to spin its terribleness into some sort of Trojan Horse positive, "If we pass this terrible bill, we'll create such a disastrous CF that we'll have to do completely re-work everything in a few years.

So, basically, you're asking why people who set on doing something that makes no sense... are set on doing it in a way that makes no sense?

I continue to be amazed that we have these discussions in the most abstract way. I would have thought the logical place to start would have been to define what is [and is not] covered by any plan - public or otherwise. I could support a basic - major medical type of public plan - that had coverage for the most needed services - and eliminated coverage for thing like marriage counseling and dental and eye care.

A limited scope public plan would provide the kind of insurance most needed and could override the hundreds of mandated coverages that have been added to various state plans [and medicare]. Insurance companies could continue to exist - and employers could continue to offer more extensive plans - but the consumer would be assured of a basic safety net. The alternative of not limiting the coverage - or even defining it of the "public option" leads us to the place Tyler's NYT op-ed piece suggest - spiraling out of control.

I see that there is a "plan" to allow states to opt their citizens out of the public option. Where is the "plan" that describes how these states opt-out of paying for the subsidized cost of the plan they opt out of?

"I don't understand why in strategic terms the Democrats are resurrecting this idea. It's their most likely path to failure, namely that they can't pass a public plan and can't easily go back to a bill without a public plan either."

Answer: politics is not about policy.

Vehical: please, give us more of your insightful analysis. I never realized it could be so simple!

By including the public option it is possible that the health care bill is scored as eligible for reconciliation rules, which eliminates the cloture problem.

I think most people fail to recognize the effect of two years of constant debate on health care reform, a process that Obama has encouraged by not fighting Congress in its various debates.

For some, the issue is still as pressing as it was two years ago (or 15 years ago).

For others, the perfect has been shown to be the enemy of the good, which in this case is making universal coverage the norm, even in a flawed form.

For others, they are just tired of the debate and no longer care.

For many, they already have universal government run health care and conservatives have failed to convince them that universal coverage for all will hurt their Medicare entitlement - Democrats are increasing the benefit by closing the "donut hole".

And no one has even tried to argue that the best way to reform the system is to kill Medicare and Medicaid and close ERs and cut costs by denying care to the chronically ill or poor.

What frustrates me is the failure of advocates to hammer home every day the lower cost of care everywhere else delivering better outcomes. But at least the conservatives have offended enough dual nationals and long term residents that the ads claiming Canadians are dying young because heath care is rationed, or that the NHS killed off Stephen Hawking have been publically rebuked and turned into jokes.

And no one can point to a single thing the private sector in the US has done to control health care costs other than deny care, except for those plans that integrate insurance with health care delivery, which insurers have sought to kill for three decades. How can government do worse with the public option than the for profit insurance industry has?

All of the above analysis seems to be based on the assumption that they want to pass a bill. If senior democrats are starting to doubt that they can pass anything, or at least anything significant, the public options failure is a feature not a bug. It at least pleases the base to go for the public option if you expect to lose anyway.

Why are they pushing the public option again? Because Congress' approval rating is so abysmally low that the only people left supporting them are the borderline insane -- the Single Payer crowd among them.

By continuing to promote this extremely bad idea, Congress appeases the Single Payer people and racks up donations. They also appease Obama, who genuinely wants this disaster to happen, and Obama's approval rating (while low) is higher than theirs. So it all makes sense for the Dem leaders.

As long as they don't actually pass anything. Americans hate Single Payer overall, and have managed to find out that the public option is a first step towards it. Far too many rank-and-file Dems would get canned over this. So the correct political play is exactly what's happening: keep talking about it while shuffling your feet.

I agree that it's probably because the opt-out provision doesn't count as a public plan according to the rules of InTrade. So considering this bill means we aren't considering a public option, so the chances of such a thing passing should indeed drop.

@ Bono: who asked about opting out of subsidizing a public plan,

A common misconception of the public plan. None of the bills under consideration would subsidize the public plan more or less than any other type of insurance. Further, the public plan is required to pay for itself solely through premiums, or shrink (recall that Obama very publicly said he would oppose a public option that was subsidized more than private plans). So tax dollars wouldn't go toward specifically subsidizing the public plan. Thus, there is nothing to opt out of and hence no provision needed.

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