The Public Option Lives On

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Robert Reich's Blog

The Public Option Lives On

Today is a critical day in the saga of the public option. Democrats Charles Schumer (New York) and Jay Rockefeller (West Virginia) are introducing an amendment to include the public option in the bill to be reported out by the Senate Finance Committee -- the committee anointed by the White House as its favored vehicle for getting health care reform.

Before you read another word, call and email the Senate offices of Democrats Max Baucus (Montana), Tom Carper (Delaware), Robert Menendez (New Jersey), Kent Conrad (North Dakota), Jeff Bingaman (New Mexico), John Kerry (MA), Blanche Lincoln (Arkansas), Ron Wyden (Oregon), Debbie Stabenow (Michigan), Maria Cantwell (Washington), and Bill Nelson (Florida) -- telling them you want them to vote in favor of the public option amendment. And get everyone you know in these states to do the same. Hell, you might as well phone and email Republican Olympia Snowe (Maine) and make the same pitch.

Background: Every dollar squeezed out of Big Pharma and Big Insurance is a dollar less that you'll have to pay either in healthcare costs or in taxes to cover healthcare costs. The two most direct ways to squeeze future profits are allowing Medicare to use its huge bargaining leverage to negotiate lower drug prices, and creating a public insurance option to compete with private insurers and also use its bargaining clout to get lower prices and thereby push private insurers to offer lower rates.

But last January, the White House made a Faustian bargain with Big Pharma and Big Insurance, essentially scuttling both of these profit-squeezing mechanisms in return for these industries' agreement not to oppose healthcare legislation with platoons of lobbyists and millions of dollars of TV ads, and Pharma's willingness to cut drug prices by some $80 billion over the next ten years. The White House promised these industries they'd come out way ahead -- getting tens of millions of new customers who'd be buying private health insurance policies and thereby paying for an almost endless supply of new drugs. Healthcare reform would be, in short, a bonanza.

Big Pharma and Big Insurance have so far delivered on their side of the deal. In fact, Big Pharma has shelled out $120 million in advertisements in favor of reform. Now the White House is delivering on its side.

Last Thursday, for example, the Senate Finance Committee rejected Ben Nelson's amendment to require Big Pharma to give some $160 billion in discounts to Medicare -- thereby reducing the bonanza Pharma would reap from the healthcare bill. Not surprisingly, all Republicans voted against the amendment. But it was defeated only because Dems Baucus, Carper, and Menendez voted with the Republicans.

Carper later explained to the New York Times why he voted with the Republicans. The amendment, he said, would "undermine our ability to pass" health care reform, because the White House had made a deal with Big Pharma by which the industry wouldn't oppose healthcare reform -- and White House officials had told him "a deal is a deal." The Times described the vote as a "big victory" for the White House.

Schumer voted for the amendment. He said he was "not at the table" when the White House and Big Pharma made their deal so didn't feel bound by it. But even if he had been at the table, he wouldn't be bound. No member of the Senate is bound to a deal made between industry and the White House. Congress is a separate branch of government.

Big Pharma and big insurance hate the public insurance option even more than they hate big Medicare discounts. And although the President has sounded as if he would welcome it, political operatives in the White House have quietly reassured the industries that it won't be included in the final bill. At most, the bill would allow the formation of non-profit "cooperatives" that wouldn't have the scale or authority to squeeze the profits of private industry, or a "trigger" that would allow states to form public insurance options eventually if certain goals for cost savings and coverage weren't met.

But the public option lives on, nonetheless. It's still in the Senate Health, Education, Labor, and Pension bill. It still headlines the House bills, and Speaker Nancy Pelosi says she's still committed to it. The latest Times/CBS poll shows 65 percent of the public in favor of it.

Now, Schumer and Rockefeller are introducing a public option amendment in the Senate Finance Committee. Carper, Menendez, Baucus, and other Dems on the Committee should vote for it, or be forced to pay a price if they don't.

Robert Reich

Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including his latest best-seller, Aftershock: The Next Economy and America’s Future; The Work of Nations; Locked in the Cabinet; Supercapitalism; and his newest, Beyond Outrage. His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org.

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