Maddow: Opt-out is Achilles’ heel of public option

By David Edwards and Daniel Tencer
Tuesday, October 27th, 2009 -- 12:06 pm

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healthcareprotest Maddow: Opt out is Achilles heel of public option Opt-out clause creates 'incentive' for conservative states to harm public health care, Maddow argues

The opt-out clause now included in the Senate's version of health care reform could cause the entire public option to fail, because it would reduce its ability to keep costs down, MSNBC's Rachel Maddow told viewers Monday night.

Because the version of public health care currently being proposed would cover only the uninsured, and only in places where state legislatures don't opt out of it, the public health insurance plan may not have enough participants to successfully reduce health care costs, Maddow explained.

As Maddow's guest, Sen. Ron Wyden of Oregon, explained, the public option as it is currently proposed would not cover more than 90 percent of Americans. And that fact, Maddow argued, could cause the public system to fail.

"One of the main arguments for the public option is that it would be big, and it would not only have the potential to give people another option at the consumer level, another choice of whom you get your insurance from, it would also -- because it would be big -- have the potential to save the country a lot of money on health care," Maddow said.

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"Part of the reason it would save money is that, if it's big enough, it can spread the insurance risk among that many more people. It also needs to be a big enough player in the marketplace to be able to bargain effectively to keep costs down. If they only take up a really small part of the market, they're not going to have much bargaining power with the people who control how high health costs are.

"The smaller the number of people that are allowed to participate in the public option, the more you restrict who can get it based on things like where people live or whether or not they already have insurance, the less effective it's going to be. The bigger it is, the more effective it's going to be at keeping costs down."

"So, politically, what has been created is an incentive in which conservative politicians can say, at the state level, 'The public option won't work.' And if enough of those conservative politicians can persuade their states to opt out of it, then that prediction it won't work could become a self-fulfilling prophecy," Maddow concluded.

But some observers say that getting states to opt out of a public option would be difficult, because of the negative optics that would come with denying people health care options. Writing in the New York Times earlier this month, columnist Paul Krugman suggested that the opt-out would force conservative state governors into an uncomfortable position.

"The idea of putting red-state governors on the spot, having to decide whether to deny their voters cheaper policies, definitely has some appeal," Krugman wrote.

Speaking on The Rachel Maddow Show, Sen. Wyden said it's not too late to change the Senate bill so that the public option can work more effectively. The Oregon Democrat praised Senate Majority Leader Harry Reid for his announcement yesterday that a public option would be included in the Senate's health reform bill, but criticized that public option in its current form.

"I continue to be concerned that the way this proposal is written, more than 90 percent of Americans -- seven years after the bill becomes law -- won't be able to hold insurance companies accountable, they won't be able to get the public option at the exchange, the marketplace, nor will they get additional private choices," Wyden said.

But "we have a lot of opportunities to turn this around," the senator added.

This video is from MSNBC's The Rachel Maddow Show, broadcast Oct. 26, 2009.

Download video via RawReplay.com

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Story comments are below...

Connors

The whole thing is a sham. One of the Democrats' main arguments for the public option was that it would compete against private insurers, giving consumers a choice and driving costs down. But if it's only available to the uninsured, how the hell is that functioning as competition against anyone?

conwaym

I prefer the public option to be just that. Public. I want access to medicare and am willing to pay the premiums to get it. I want to have the option to tell Blue Cross, Blue Shield, Aetna, Cigna a big "no thank you" if I so choose. I don't want big Red State Goverment telling me what I can and can't do with regards to my healthcare choices.

WJM51

This could be the best thing that happens in this entire discussion.

Look, an opt out means that you have it, and after a year you can opt out as a state. Do you REALLY think that the republicans want to go to their local constituents and tell them that they have had insurance for a year, and now they, the republicans in their party, are gogn to take it away? That could be the final nail in the republican coffin. What politician wants to tell 70% of his or her citizens that they hate taking care of them so much that he or she would actually take away their health care?

This could be the nail that finally goes through the coffin and pierces the heart of the treasonous scum we call the republican party. In fact, I think that EITHER party that undoes such a thing would be just HUGELY popular among those in need. GOOD LUCK getting back to your car after taking health care away from those who have had it, even for a short period of time.

jimco

That would be correct , that is if everyone has the option . The way this thing is currently written only the very poor and unemployed can use it . What good is a public option that everyone can't opt for ? The rest of us will be herded into the tender mercies of the insurance industry with no option what so ever , no thanks . What will happen the way it's being presented however is it will be guaranteed to fail as only the poorest will be admitted . This will make it no more than another form of medicade , underfunded and totally dependent on taxpayer dollars while most taxpayers won't have access . How popular do you think that will be when people realize what it is ? I would guess , not very . This appears to be a ruse to make those who want a public option think they're getting one . But again, it ain't an option if everyone can't use it and that appears to be the snake oil they're offering .

damixaustex

The uninsured does include quite a few people who just can't afford what they're finding in the market or what they can afford is useless, so they chose to go it alone. I know several people like this, self employed professionals, not necessarily "the very poor and unemployed."
That said, you make a great point, It appears they're setting it up to be EXACTLY what people have said they don't want, another government program destined to fail.
I think the key will be public pressure for the public option, now and whenever the fool thing comes available. The question is, Let's say I'm one if the many many millions of under insured and am getting a crappy deal on my current plan. If I drop my insurance because it sucks, can I buy the public option? If that's the case, this bill would be ok. People will move over to it. If not, the PO in this bill is near useless.

WJM51

This isn't the end of the game, regardless of how insufficient it is. It's a toe in the door. Once that door is held open, even just a little, it can be pushed further and further. And it will be.

But without a start, you won't EVER get anything at all.

And I agree, everyone should be in, regardless of whether they want to go and get supplemental insurance after that or not, or the whole thing won't ever work.

Funny how a single payer system is good enough for the rest of the industrialized world, it's good enough for our military, it's good enough for our congress, and it's even good enough for the Iraqis who just put it into their constitution, but it's just not good enough for the very people paying for all the rest of it. Or maybe it's just that those who are screwing us for as much as they can aren't done screwing us yet.

damixaustex

"But without a start, you won't EVER get anything at all. "
Agreed, but I'm still going to keep up the pressure now. I'm a bit worried about the details. I've started reading the things, and I think they've made a few too many concessions.

Single payer or even the bismark model would have been better for sure, but it's really hard, in this country, to make laws that affect current profits of large companies. Rhetorical, I know, especially on this site, but it never hurts repeating it.
I hope Maddows show tonight will go into some of the mechanisms in the bill. There's a lot of hacking to be done.

damixaustex

I'm looking forward to the scenario you envision in my state of Texas. Texas has one of the highest percentages of uninsured because, well, Republicans have been running the show for some time. By some estimates, 50% of Texans are uninsured or under insured. That's nearly 12 million people, with quite a few Hispanic voters. Texas republicans enjoy quite a bit of support with Hispanic voters here. We have a governor race next year, Republicans will duke it out between the incumbent Perry and KB Hutchison, the current Repub Senator who's decided she'll make a good Governor. Will either of them dare to opt out of the public option? Will they risk losing a governor seat to Dems and support of the Hispanic community(about half of Texans).
Hmm, not sure, but it sure will be fun to watch.
The current governor, remember, refused stimulus money for extending unemployment benefits, then had to borrow it from the federal government anyway. SO, we could see a major shift in power here if the Senate version goes through.

damixaustex

The Public Option(it really needs a name...how about UCare) has the potential to be an engine for economic growth, but, to be effective in the goal of reducing overall expenses, it must draw the attention of small businesses so they can consider moving their employees onto the plan.
There will be pressure from businesses to expand the public option in the future, so even this lousy opener could lead to something. But, as it stands, it's not the most important part of this bill.
It's time to start talking about other details, the tit for tat items.

jimco

How about Medicare part E , everybody knows what Medicare is . As response to the above comments , I'm afraid this thing is being designed to fail , a foot in the door doesn't help if insurance company toadies are on the other side with an ax . I have no faith in Obama and co , I think they've been looking for a way to scuttle this all along . The base keeps rising up and they back down and so it goes . This latest ( gag ) plan seems to be yet another ruse designed to fail . I mean , come on , whats this obsession with Snow and who gives a rats ass if the republicans don't vote for it ? As far as this seeming dire fear of the filibuster has anyone else wondered why they just don't let them do it ? Yeah , let the bastards filibuster , how long do you think that would last ? I would like nothing better than daily coverage of the republicans and stinking pigs , I mean blue dogs standing in the chamber day after day reading phone books etc blocking popular legislation , let em do it . Reid and co know damn good and well that wouldn't last long , but they won't call their bluff . Know why , because it's a handy excuse to stall the legislation , thats why . Don't you remember when it became obvious the dems would get huge majorities in both houses Reid and company immediately started yapping about 60 votes 60 votes . What really happened is when they got the majority their paymasters told them you better not . I remember filibusters , they go for a while until public pressure builds then they cave . The filibuster was never meant to allow the minority to kill legislation , but to slow it down and try to build public support against it . In this case it's being used as an excuse not to act because the big money boys don't want what would be popular legislation .

damixaustex

great post. Medicare part E sounds too bureaucratic. It turns out there’s already a Ucare.

"I have no faith in Obama and co , I think they've been looking for a way to scuttle this all along ."

I wholeheartedly disagree. I think Obama and team played it pretty darned well. They knew to expect “big government taking over” attacks so they played it cool. Sure, it was claimed anyway, he publicly repeated that his ideas weren't the only way and the goals should be hammered out by Congress, then he stood back a bit and let the Republicans make complete asses out of themselves. Meantime, his army of healthcare researches fed both houses with information and assisted the process(in the background to us). When Congress returned from their break, Obama went on national TV and explained the plan directly to the public...in front of Congress. Go back to the joint session video and look at the faces of the Republicans. They knew at that point he had ‘em, not just for this bill, but for the next several things they hoped to impact. They looked like childish brats, dumfounded and pissed.
From that point forward, public support grew for Obamas original ideas(thanks to a lot of excellent Dems!), Repub position looked worse by the day. Enough real data had got "released" to Congress that, by the time republicans got their Price Waterhouse Coopers data, it smelled foul and the public knew it immediately. PWC had to go on record to save their name and reputation by stating it was incomplete- at the request of the contractee - Republicans
.
"whats this obsession with Snow and who gives a rats ass if the republicans don't vote for it ?"
True, but under accusations of "closed door" bullshit, the whole Snowe charade helps to isolate specific issues. She's down to one at this point, but, like other Republicans, has not offered an alternative Republican approach, just a revision to the Dem proposal.
Do you think it’s a coincidence that the Opt out idea originated with a Delaware Democrat? Bidens state? I don’t.

joze46

Of course the idea is more like “Robin Hood” politics; make the rich pony up what monies have been swindled of the decades through secret Federal Reserve deals in the tune of trillions.

Why not they the rich can not only afford it but in a stubborn way they refuse to improve the system they are in trying to keep everyone healthy. It seems insane not to do it.

Indeed the governors of Red states never had the public health care welfare of the citizenry in their decisions. If they did America would not be in this argument now. Even MSNBC has reported that over the years the red states take away more in taxes then what they put in. An extraordinary argument for the tea baggers to defend where in decades of taking monies out of the system all the while parading around for fairness in taxes…wildly insane hypocrisy.

Most red states are given very poor to no health care as Insurance companies cancel policies for what ever reason they want. Even Rachel Maddow telecasted that.

"The idea of putting red-state governors on the spot, having to decide whether to deny their voters cheaper policies, definitely has some appeal," Krugman wrote

Some appeal, no, it is needed….Actually the well healed are acting as heels while some Heil hate to create the sandals of handels to move electorate...

milanhornik

The 10:10 min. of video stoped(checked twice) 2:17 min. of un viewed video & audio of Raw Story
video clip The Rachel Maddow Show interviewing
Sen. Ron Wyden on my wireless linksys signal.



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Maddow: Opt-out is Achilles’ heel of public option

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