Newshoggers.com

The CBO Cudgel

By Fester:

The CBO has scored the HELP committee's full healtcare bill. The bill is the complete vision of what Senators Kennedy and Dodd want to do and it includes a reasonably strong public option, Medicaid expansion, comparative effectiveness research and an employer mandate. The goal is to expand coverage by a significant margin and introduce significant and well backed competition in regional health insurance markets that are overwhelmingly quasi-monopolosistic or duopolistic.

The CBO previously scored a partial version of the HELP framework that did not have the public option or the employer mandate in it. That partial scoring produced estimated costs of about 1 trillion dollars but with a significant portion of the population still uncovered. The marginal increase in coverage per dollar over the next decade was not good.

The new scoring of the bill that takes into account the actual coverage expansion and cost control measures is pretty damn impressive. From the AP:

The plan carries a 10-year price tag of slightly over $600 billion, and would lead toward an estimated 97 percent of all Americans having coverage, according to the Congressional Budget Office

Not a bad deal at all if we can get 97% coverage in even if there is a reasonable argument that the CBO score is a bit low as made by Jonathan Cohn. The real value of this CBO score with the complete HELP framework including the public option and the employer mandate is that it is a cudgel against the 'centrist' Democrats who don't want the public option overtly because it is 'too expensive' and potentially because it is a threat to major local employers and campaign contributors of regionally dominant health insurance providers. The public option is the best means of cost control and doing without it means a weaker bill for significantly more cost.

Congress has few philospher kings

By Fester:

I like to live in the real world. It is messy, it is confusing, it often produces non-optimal outcomes (depending on the relevant constraints) but it is tangible. I can also live in a normative world where everything is neat, clean, organized and optimized towards the relevant constraints. However that world seldom exists. I often look for satisficing improvements instead of optimal solutions because the improvements are achievable.

I don't understand the critique of Waxman-Markley that Andrew Samwick and others are advancing in that it is a satisficaing improvement but non-optimal on several grounds:

Much as you may like the idea, this is another 1300 pages of complexity and loopholes. Buried in there, I'll wager, are more than enough ways for large organizations (the ones who hire lobbyists) to get all the exemption and evasion they'll need. Consider the alternative of a carbon tax calibrated to achieve the same emission reductions, and applied to all sectors including vehicle fuel consumption. I'm no expert on translating ideas into pages of a bill, but that can't be much. And given that it allows us to do away with the CAFE standards, I figure we've done a great service of dramatically simplifying the whole regulatory process for carbon emissions.

Economically, a clean carbon tax and a clean cap and trade bill will do the same thing. They will both internalize the currently externalize cost of carbon dioxide emissions. There are two big differences. The first is that a a carbon tax is a price certain option while the cap and trade system is a quantity certain feature.  Secondly, cap and trade is economically more efficient as it allows for market discovery of prices of a scarce good instead of hoping that Congress can hit the right number at any given time for optimal economic efficiency for a given amount of emissions.  

 

His argument is that a carbon tax would be neater and less messy.  Lobbyists would not be able to claw out special interest exemptions and transfers and the legislation would be only several pages long.  He is arguing a straw man here in my opinion.  A properly designed cap and trade system could also be written in a fairly short and concise manner as well.

 

He is bitching and moaning about basic political incentives here.  A complex bill with exemptions, curlicues and who knows what else in it for concentrated interests is far more profitable to the relevant players than a simple, clean sheet proposal with no exemptions.  Dr. Samwick is implicitly arguing that a carbon tax would be less susceptible to this type of manipulation than a cap and trade regime.  I have severe doubts about that.  We have plenty of evidence that tax bills, even comparatively simple tax bills that are mere modifications of existing tax laws can and will be massively abused with exemptions, exceptions, partially refundable credits, donut hole deductions and anything else that concentrated interests can muster to improve their interests against the counterfactual of a clean bill.  The classic example is the agricultural bill where there are significant subsidies for sugar, mohair, honey and other products because there is a strong lobby for those interests while the public purpose of food security, public health and reasonably low prices for a wide selection of goods is often ignored. 

 

I have yet to see a good political reason why the concessions that the Democrats on the Agricultural Committee wanted and received to weaken the bill and make the bill more complex for cap and trade would not also be granted in a carbon tax system.  I think it is very reasonable to assume that Agricultural Committee Democrats would want land use carbon emissions to be exempted from the carbon tax or at least counted under a friendly system.  Those are the concessions that they basically got in cap and trade, and those would be the concessions they would have wanted from a carbon tax regime.  Otherwise they most likely and there would be nothing. 

 

Now if Dr. Samwick wants to argue that doing nothing now is a superior option as the costs of action and inaction escalate the pressure to pass a much cleaner bill that is more to his liking at some uncertain point in the future, that is a defensible argument.  However that is not the argument he is making.  He is whining that Congress is acting like politicians engaged in politics with attendant incentives instead of philosopher king technocrats who will agree with his preferred solutions.  Me, I’m happy for an improvement with the hope that institutional inertia will lead to a good process and outcome over time. 

 

 

Progressive Realism And Iran

By Steve Hynd

In my last post, I gave my opinion that Iran 2009 will be more like the repressed damp squib of Tiananmen 1989 than the revolutionary tsunami of Tehran 1979.

So what next? Is Obama's talk of negotiating even with America's enemies dead in the water? Matthew Yglesias thinks so.

The hope behind an engagement strategy was that the Supreme Leader might be inclined to side with the more pragmatic actors inside the system—guys like former president Rafsanjani and former prime minister Mousavi. With those people, and most of the Iranian elites of their ilk, now in open opposition to the regime, any crackdown would almost by definition entail the sidelining of the people who might be interested in a deal. Iran would essentially be in the hands of the most hardline figures, people who just don’t seem interested in improving relations with other countries.

Under the circumstances, the whole subject of American engagement may well wind up being moot.

Yglesias explicitly endorses Robert Farley's view that

the repression has opened greater opportunity for what might be termed a non-interventionist coercive strategy; this is to say that more and tougher sanctions against the regime are on the table now than was the case two weeks ago.

And Kevin Drum agrees.

I agree with my friend Robert Farley that more and tougher sanctions are probably going to be the kneejerk result of American foreign policy thinking after these Iran elections - but I disagree that sanctions can be described as "non-interventionist" when they invariably impact the poorest and disenfranchised, not the rich elite. Especially when US foreign policy interventionists from both left and right always see more and tougher sanctions as merely a necessary step along the path to military action.

And I definitely disagree with Yglesias's implication that more and harsher sanctions would be a good idea. Ygelsias, who originally supported the invasion of Iraq and now broadly supports Obama's benchmarkless, Bush retread of a plan for the Af/Pak theatre, is almost certainly echoing the listserve-discussed views of others he shares a generally interventionist view with at think-tanks like the Center for American Progress, Center for a New American Security and the National Security Network - all of whom have provided key national security or foreign policy staff and policy planning to the Obama administration.

In arguing against the incrementalist interventionism implicit in saying before the fact that "American engagement may well wind up being moot", I'd cite - as many already have, including Obama - the simple truth that whether a regime is repressive or not it's still better to talk than not. Indeed, over the years America has negotiated with many other nations, including both the Soviet Union and China, when they were at their most repressive, totalitarian and recalcitrant.

Moreover, I'd argue that engagement is exactly the strategy needed. In 2006, Robert Wright set out the beginnings of what has become to be known as "progressive realism" in a seminal piece for the NY Times entitled "An American Foreign Policy That Both Realists and Idealists Should Fall in Love With" in which he wrote that "It’s now possible to build a foreign policy paradigm that comes close to squaring the circle — reconciling the humanitarian aims of idealists with the powerful logic of realists." Shortly thereafter, he sent an email to Kevin Drum in which he outlined a progressive realist stance that's very applicable to Iran now. In that email Wright acknowledges that there's going to be a lot of anti-American sentiment fuelling geopolitics for decades to come, no matter how much America changes now. That's something that short-term thinkers like Thomas Jocelyn use to argue for more interventionist policies - if we’re going to get blamed for it anyway, we might as well do some stuff in support of the opposition - but Wright correctly characterises a longer term solution.

America's security will best be served if all nations are by then free-market democracies, because ... the entanglement of such nations in the global economy strengthens their incentive to preserve world order and their inclination toward international cooperation — including, crucially, highly intrusive arms control.

...Making free-market democracy pervasive is only crucial to America's interest in the long run, over decades. Hence: no need to rush into, say, the Iraq war.

...Progressive realists (unlike neocons) believe that economic liberty strongly encourages political liberty. So (a) America should economically engage, rather than isolate, countries like Iran and North Korea, and (b) more generally, economic engagement offers a path to peacefully fostering the free-market democracy that neocons are inclined to implant via invasion.

In other words, the correct answer is less sanctions and more engagement, not the obverse. Wright ended his email to Drum:

I reject the "premise common in Democratic policy circles lately: that the key to a winning foreign policy is to recalibrate the party’s manhood — just take boilerplate liberal foreign policy and add a testosterone patch." The problem is more subtle than that, and Democrats aren’t doing America a service when they fuel a Democratic-Republican arms race on the macho front.

Now that Democrats hold power, that macho race has become even more of a problem instead of less - perhaps a measure of the perennial fear Democratic leaders have of losing the next election because they've been painted as "weak", perhaps simply a reflection of their belief that they don't have to pander to their "peacenik" base any more. Whatever the reason, kneejerk incrementalist interventionism has always been the order of the day among the VSPs and the wannabe-VSPs are now following suit.

Obama's statement today is a careful bit of fence-sitting that could be used to justify either engagement as planned or a turn towards a more hostile policy towards Iran. I'm not optimistic that, given the pressures for hostility, we'll see a progressive realist strategy as the outcome. But we should.

Fungibilility and non-inteference

m

By Fester:

The United States and the West have very little leverage in Iran. Global trade is falling fast, global credit is far less available now than it was three years ago, and oil prices are going up again in dollar terms past Iran's break even point. The US military is tied down in two wars, the rest of NATO either can not or will not deploy additional forces to Afghanistan to act as fungible units to free up US forces. There are not too many obvious and effective leverage points avaialble to nation states that want to lend support to the protesters or to harm the current regime.

The only plausible leverage point is economic. A complete embargo on the oil as a means of pressuring the ruling elite is being proposed. We know that sanctions have worked wonders on quickly overthrowing the Castro regime in Cuba.... instead of allowing the elites to blame outside actors for their own failings.
Raymond Lears at the Huffington Post proposes this idea without thinking through the consequences.

Though the United States does not currently import Iranian crude, the fungiblity of oil is such that our government espousing such a boycott would carry a meaningful impact. The cutoff of Iranian oil shipments through a buyer's boycott is entirely feasible in the structure of today's oil market. Inventories throughout the world are filled to overflowing, supertankers are loaded with 100's of millions barrels oil, lying at anchor at sea waiting for customers or storage on shore....Without the income from oil, Iran's dictatorship will be increasingly vulnerable.

There are several significant practical road blocks to this.

First is the political-economic one of domestic political support in Europe or Japan --- all of those economies are under as much or more pressure than the US economy with consumers retrenching, concerns about jobs and concerns about debt levels --- where is the political support for individuals to pay another ten to fifteen percent per gallon/liter if the boycott was 100% effective? That to me seems like the quickest way for a government to lose its mandate as they would be effectively be placing a regressive tax that would mainly be a transfer from oil consumers to non-Iranian oil producers.

The countervailing effect is that the boycott would not be effective as Iran would still be able to export several million barrels of oil per day to a different customer set.

We know that China has two primary current foreign policy concerns. The first is to maintain its supply lines for crucial raw materials. This is fueling the expansion of Chinese trade with Brazil and Australia as well as backing the Chinese influence push into Africa. Iran already has decent to good ties with China and as a customer of last resort, those ties would strengthen. The second major foreign policy concern for China is a concerted effort to push for a precedent of international non-interference in the internal affairs of nation states. China and its oil buyers will not be a part of a buyers' embargo.

The end result is public diplomacy masturbation as the embargo would be toothless while giving the current hardliners a validation of their story that they and the rest of the Iranian people are being pressured by foreign, colonialist influences. That is not a good solution

Lucy's Football

By Fester:

Ian Welsh has the outline of the Senate Finance Committee’s health insurance plan. The shorter version of the short version is that it sucks. Here is the short version of the plan:

1) Lower the medicaid coverage rate from 150% to 100% of the Federal poverty line, 133% for kids and pregnant women (once you have the baby, too bad for you)

2) Subsidies stop at 300% of the poverty line (was 400%)

3) No Public Option mentioned

4) Insurance exchanges at the State level

5) Must buy insurance unless it costs more than 15% of your income

6) A fine if you don’t buy insurance unless you’re below the Federal poverty line

For the most part, as Walker discusses, this is actually identical to or slightly worse than the plan put forward by America’s Health Insurance Plans (AHIP). Yes, worse than the insurance industry’s plan. Remarkable. Baucus is really earning his campaign donations these days…. Without a public option, the insurance companies will have no check on their prices, let alone pressure to actually reduce them. Because people will be forced to buy bad insurance, they’ll hate the plan, and because “reform” has been passed, we’ll have to wait another 10 or 12 years for another shot....

Tim at Balloon Juice is very curious why Obama is not actively selling a strong public option proposal.

Watching Democrats try to fix health care I see a photo negative of the Bush years. Here is an issue with obvious urgency. Setting aside our shameful infant mortality rate, uninsured rate and other statistics, medical bills are by far the leading cause of personal bankruptcies. Insurer misconducy wrecks lives every day in every city in America. The right options are obvious and relatively few in number. Huge majorities support doing the right thing.

Even self-interest is similarly one sided. Remember how much Republicans invested in realigning the destroying Social Security? Imagine if they had an issue that would realign the country in their favor and instead of huge majorities violently hating it, most Americans strongly supported what they wanted to do. Republican strategists would give two of their first three kids for a shot at an issue with this much going for it....

I hear that Obama supports the public option. That would mean more if it felt even a little more urgent than his idea that we should have a college football playoff series.

Belaboring the obvious, people who care about what they’re doing normally enter negotiations with some firm goal in mind. Most would agree that it is moronic to make negotiating itself the point.

Many others, including Steve have noted that if a major and effective health financing reform bill passed with either a pathway to de facto single payer for baseline care or at least a strong public option, major fundraising avenues will be closed off to some of the current veto points in the Senate and the House. I think that is part of the problem with the Democrats.

However, I would like to get a little more cynical for a moment. What if healthcare reform is to Democrats what abortion and anti-feminism is to Republicans in that both are seem by significant portions of their respective bases as high salience issues that are best served by never fully addressing? Gotta keep the activists in line and ready to donate and phone bank for two more incremental steps in the 'right' direction instead of attempting to systemically change the constraints of power and the political process.

Tim is right that an effective public plan option would be a system changer that would effectively tilt the political playing field to Democrats for at least a generation or two in much the same way that Social Security and Medicare are high salience, high effectiveness boundary conditions for Democrats to lean on. However the Democrats who would benefit from these changes are not neccessarily the Democrats who are currently in power or more importantly, currently occupying critical blocking positions. So reform that can shave off several points of GDP on health expenditures, improve coverage and re-align US politics is not a winning solution for the key set of stakeholders; instead their winning solution is to do just enough to avoid overwhelming political costs and pressure.

Republican Budget Encore

Commentary By Ron Beasley

Remember the Republican Budget with no budget estimates or numbers. At the time I wrote:

The biggest problem the Republicans have right now is that their House and Senate members were chosen for blind obedience and are incapable of independent thought.  For the most part they are morons who mostly just embarrass themselves.

Well not much has changed.  The Republicans have unveiled their health plan.

House Republicans presented a four-page outline of their health care reform plan Wednesday but said they didn t know yet how much it would cost, how they would pay for it and how many of the nearly 50 million Americans without insurance would be covered by it.

 

The High Stakes Health Care Race

Commentary By Ron Beasley

The health care industry has a horse in the health care race but so do the Republicans, the Democrats and Obama. 

For the Republicans this race is about more than money - it's about survival.  If Obama and the Democrats get a public option it will be successful and popular.  The Republicans know this and that's why they are fighting it.  Of course there's the money to.  Robert Parry tells us to look at one of the most vocal critics of the public plan, Senator Grassley:

For instance, since 2005, Grassley’s various political action committees have collected nearly $1.3 million in donations from the industries related to the health insurance debate, according to OpenSecrets.org. Grassley’s top four donor groups were Health ($411,956); Insurance ($307,348); Pharmaceuticals ($233,850); and Hospitals ($197,137). Eighth on Grassley’s donor list were HMOs at $130,684.

If the Democrats and the Obama administration don't get at least a public plan the Obama administration will be seen as a failure.  Robert Reich rightly demands a "real" public health care option:

Here's the latest contortion from Senate Dems trying to win over a few Republicans to a "public option": Let nonprofits create healthcare cooperatives, then call them the public option. Kent Conrad, of North Dakota, chair of the Senate Budget Committee, came up with this bamboozle. Finance Committee chair Max Baucus, D-Mont., is impressed, and some Republicans — even Chuck Grassley of Iowa — seem interested. Watch your wallets.

Nonprofit healthcare cooperatives won't have any real bargaining leverage to get lower prices because they'll be too small and too numerous. Pharma and Insurance know they can roll them. That's why the Conrad compromise is getting a good reception from across the aisle, just as Olympia Snowe's "trigger" (whereby there's no public option until sometime down the pike, and only if Pharma and Insurance don't bring down costs and extend coverage a tad) is also gaining traction.

The truth is that there's only one "public option" that will truly bring down costs and premiums — one that's national in scale and combines its bargaining power with Medicare, and that's allowed to negotiate lower drug prices and lower doctor and hospital fees. And that's precisely what Pharma and Insurance detest, for exactly the same reason.

And then we have the insurance companies.  They know change is going to happen but maybe, just maybe they can turn it to their advantage.  Robert Parry again:

To understand the financial stakes involved in the battle over U.S. health-care reform, it’s useful to keep two numbers in mind: 50 million and 119 million.

The first number is the approximate total of Americans without health insurance, a new market that the private health insurance industry is salivating to get its hands on. The industry’s hope is that the government will mandate that those Americans sign up for private insurance and offer subsidies for those who can’t afford to pay the premiums.

Fifty million new customers and government largesse to help pay the bills would be a huge windfall for the insurance industry, which otherwise faces a decline in its market because Baby Boomers are reaching the age to qualify for Medicare and because rising unemployment is draining the pool of Americans who have insurance through their employers.

And the 119 million?  That's the number the insurance companies might lose to a real public option according to Senator Grassley.  And that's probably optimistic - a successful public option would probably eventually morph into single payer because the private insurance companies would not be able to compete.  So in this horse race there is no place or show -  it's win or nothing for the insurance companies.

So the question is how hard will Obama fight for the public option?  I wish I could be more optimistic.  The current economic crisis has left bankers about as popular as the H1N virus and the banking industry ripe for restructuring and regulation but we haven't seen it.  The insurance companies are even less popular and the socialized medicine ads are having little effect on public opinion I fear they are having an effect on the politicians.  You can forget about the economy and the wars health care will be the thing that makes or breaks the Obama presidency.

Update

While it appeared the conservative AMA came out in opposition to a public plan now they are saying maybe not:

The remarks came just several hours after the American Medical Association said it would oppose a public option for coverage. But in a reflection of just how delicate this debate has become, the 250,000 member physician group largely backtracked from its opposition later in the day.

"Make no mistake: health reform that covers the uninsured is AMA's top priority this year," a clarifying statement from the group read. "Every American deserves affordable, high-quality health care coverage.

"Today's New York Times story creates a false impression about the AMA's position on a public plan option in health care reform legislation. The AMA opposes any public plan that forces physicians to participate, expands the fiscally-challenged Medicare program or pays Medicare rates, but the AMA is willing to consider other variations of the public plan that are currently under discussion in Congress. This includes a federally chartered co-op health plan or a level playing field option for all plans. The AMA is working to achieve meaningful health reform this year and is ready to stand behind legislation that includes coverage options that work for patients and physicians."

Could this be a writing on the wall moment?

Petraeus: "No Concerns At All" About Miranda Rights For Detainees Of FBI

By Steve Hynd

Spencer Ackerman was there to hear Gen. David Petraeus speak to the CNAS annual conference today, and liveblogged the speech. In amongst some very interesting COIN-related stuff, Petraeus took a moment to puncture the Republican outrage de jour.

Spencer quotes the man who the Right have made into a modern early-career Caesar:

A Fox News reporter asks about a Weekly Standard report that detainees were getting read Miranda rights. Petraeus says he has “No concerns at all. This is the FBI doing what the FBI does. … The real rumor yesterday is whether our forces were reading Miranda rights to detainees and the answer to that is no.” Sorry, Steve Hayes.

Meanwhile, the Anonymous Liberal notes that the Bush administration had FBI teams "read rights similar to a standard U.S. Miranda warning" to detainees too, and, via A.L., Greg Sargent has a statement from the Obama D.O.J. to the effect that there's been no overall change in policy and Miranda warnings are simply used to "preserve the quality of evidence obtained". As A.L. writes:

This makes complete sense. If you know you may want to prosecute someone eventually, it's malpractice not to mirandize them. It's a very simple measure that helps preserve evidence. I'm sure its standard FBI practice and has been for decades, including during the Bush years.

So to summarize: just another p.o.s. scary story created out of whole cloth for political gamesmanship.

Humility Helps

By Fester:

Andrew Exum is commenting on the Lebanese elections and has a simple insight that should be taken to heart by any American policy maker:

In general, it might be healthy to admit that what we did and did not do in Washington had a far smaller impact on these elections than what the Lebanese did and did not do in Lebanon proper.

This simple lesson in humility and non-American exceptionalistic ego-centrism would be an extraordinarily valuable lesson that could inform most schools of foreign policy thought and most operational doctrines of foreign policy and military policy implementation. It is not always about us. Local facts and local issues matter, on the whole, a lot more than distant preferences that are often moderately uninformed by the local mileau.

Humility helps. It is not always about the United States as there are many situations that have their own internal logic that is minimally related, at most, to the day to day political drama in the United States.  This removal of ego-centrism is a useful analytical tool as I noted in 2004 regarding a right wing blogger trying to impose a US political explanation on unrelated activities in Iraq:

In response to the coordinated bombing attack against a ceremony celebrating the opening of a sewage treatment plant that killed 35+ children and wounded ten or more American soldiers who were present, Roger Simons makes the following comment:

Is today's carnage in Iraq...... timed for the debate tonight? It's hard to know, but it's far from impossible. We do know, the terror mongers have tried to influence elections before,

I need to respond to this idiocy. The attack was brutal and I wish it did not happen, but Mr. Simons needs to get over himself and his extremely narrow viewpoint. Not everything that is happening around the world is occurring because of its potential effect on the upcoming US elections.

The Iraqi insurgents have been operating on their own rhythm and motives since the very beginning and although there is a political and propaganda component to it, it has not been specifically targeted at immediate inflection points. Instead it has been targeted at isolating the battlefield and dictating a situation where the US becomes more isolated and less able to create winning situations

It is very seldom just about US. 

The scorpion and the turtle

Commentary By Ron Beasley

Will serious health reform meet the fate of the scorpion and the turtle? In that fable, the scorpion pleads with the turtle to carry him across a river. The turtle resists, fearing the scorpion's sting, but the scorpion reassures him that he'd do nothing so foolish, since both would drown if he did. Finally the turtle agrees. Halfway across, the scorpion betrays his promise with a lethal sting. As the turtle begins to drown, he asks why he took both their lives. "It's just who I am," the scorpion replies.

~Paul Rogat Loeb

The D's and the R's may change places but in DC it's still the 30,000 plus lobbyists that make the policy.  No where is this more evident than in health care "reform."  Single payer was taken off the table at once.  Ezra Klein explains what is left.

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 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.

Enter the public insurance option. It doesn't replace the insurance individuals already rely on. But it provides an alternative. It lets them make the decision. It's the health care equivalent of being pro-choice. And it thus serves two purposes. The first is to act as a public insurer. To use market share to bargain down the prices of services, much as Medicare does. To lower administrative costs. To operate outside the need for profit, and quarterly results. The Commonwealth Fund estimated that this would result in savings of 20%-30% over traditional private insurance:

The second is to apply competitive pressure to the rest of the insurance industry. If the public plan is ruthlessly lowering its administrative costs and garnering a reputation for decent, good-faith service, it will take market share from the private insurers. The private insurers will have to respond in kind to retain their customers. If they fail to adapt, the system could become something resembling a single-payer structure.

But of course the private insurance companies don't want competition because they know they can't compete with a plan that sucks 20 plus percent out of every health care dollar for profit and million dollar salaries for CEO's.  But a public plan appears to be a done deal so attempts are being made to neuter it.

• The "Trigger" Plan: Olympia Snowe is pushing this compromise, as are some conservative Democrats. The basic idea is that the public plan would act as an invisible threat: It would be "triggered" into existence if the private insurance market was unable to offer, say, enough options in a particular region, or enough cost control. In addition, the public plan would only come into existence in this or that region, or this or that state. It would be effectively useless as an insurer. It could potentially have some competitive effect in that private insurers would still work to avoid its existence. Some have argued, however, that the conditions being mentioned in the "trigger" proposals have already been met.

• The Weak Public Plan: This is what people are talking about when they refer to a "level-playing field." This incarnation of the public plan -- first proposed by Len Nichols at the New America Foundation and later echoed by Peter Harbage and Karen Davenport at the Center for American Progress -- would have no special advantages over private insurers. It couldn't use the low rates that Medicare sets or access taxpayer subsidies. It couldn't force its way into networks. It would simply be another insurer, albeit with different incentives than traditional insurers.

Paul Rogat Loeb:

I fear we're about to get stung again. When people look back at the failure of the Clinton-era health care initiative, they point, accurately, to an opaque process that produced a baroque Rube Goldberg mess that satisfied no one. That happened even before the insurance industry went on the attack with their Harry and Louise ads. But another missing element parallels our current challenge-appeasement of the insurance companies as the plan's centerpiece, and the inevitability that these same interests will betray us again. 

[......]

But why assume that the insurance companies are our friends? Why appease them at all?  It's not as if they've played a helpful role in our current system.  Rather, they've gamed it in every possible way, leaving our country with the highest health care costs in the world and worst health outcomes of any advanced industrial country.  While they've made promises to cut costs, their promises are only that (like the scorpion's), and they're already lobbying with everything they have to gut any seriously competitive public option. Add in examples like former HCA/Columbia CEO Rick Scott.  after his company paid a $1.7 billion fine (the largest in US history) for defrauding Medicare, Medicaid, and the program that serves our armed forces, he is now organizing attacks on any public program (hiring the PR firm that coordinated the "Swift Boat" attacks on John Kerry). We need to challenge the insurance companies, not appease them. There's no evidence that suggests they're constructive players, or are likely to do anything except defend their own parochial interest.

The insurance companies and other major financial interests are talking a good line of late. They have no choice if they don't want to be cut out of the game. But ultimately, they are who they are, and their behavior reflects this.  It makes no sense to embrace a partner who you know will ultimately betray you.

So will we give the scorpion a ride across the river again?  Probably - the scorpion has deep pockets and the lawmakers of both parties are for sale.  But one blue dog, Ben Nelson, says he won't filibuster a public plan so maybe, just maybe.

Note:

See related post here:

Health Care Myths