Commonwealth Magazine: Return of the public option

February 10, 2010
By Paul McMorrow

Congressional Republicans saw their sweeping midterm gains as a mandate to roll back the nation’s sweeping new health care reform package. After staging a loud but symbolic repeal vote in the House, national health care opponents are now focused on weakening the new regime’s funding at every possible turn.

The other side isn’t garnering nearly as much ink, but their strategy is much more direct – defending the new health care law by expanding its reach. Public option health insurance plans figure prominently in this effort.

Congressman Steve Lynch said this week he’ll be a vocal proponent for the new public option push. Lynch’s back-and-forth stances on health care votes earned him a challenger from the left wing of the Democratic Party last year. Speaking at a New England Council breakfast this week, the South Boston politician called House Republicans’ health care repeal efforts “a colossal waste of time,” and said that, instead of fighting over a law that’s already in place, Congress should focus on lowering its costs. Public option health plans and the revocation of health insurers’ antitrust exemption should be at the forefront of those cost-lowering efforts, Lynch said.

“I voted against health care reform because it really had no structure to lower costs,” Lynch argued. “The basic idea was to use savings to pay for insurance for 32 million more people; we never lowered the price, and then we added 32 million people at top dollar.”

Now, Lynch said, there is tremendous pressure on Congress to wring cost reductions from the new health care regime. He indicated insurance premiums were a prime target. Taken together, Lynch said that a new focus on public option plans and the elimination of the antitrust exemption would “force insurers to compete and lower [their] cost structures.”

In the vast majority of states, he said, health insurance markets were run by monopolies or cartels, arguing, “You’ll never have robust competition if you give them the ability to fix costs and reduce competition.”

Lynch said a nationwide public option plan would present a dumping problem because of vast geographical cost differences. Instead, he said, the focus should be on setting up state-by-state public option plans, with an eye toward the creation of regional public option blocs.

Connecticut is already exploring the creation of a statewide public option plan, and this week Vermont’s governor went a step further, filing legislation that would create a single-payer regime by 2014.

There’s a parallel movement on Beacon Hill, where state Sen. Jamie Eldridge has filed a bill creating a robust state-run public health plan. Eldridge’s line of reasoning tacks closely with Lynch’s – the state’s 2006 health care reform effort “did absolutely nothing to reduce costs.” He argues that the planned merger of two of the state’s three biggest insurers “will create a duopoly and do nothing or very little about reducing health care costs,” so it’s now incumbent upon the state to “make health insurers compete, apply more pressure to reduce costs, and make plans more affordable.”

Attention is currently fixed on the power struggle over probation and parole, but health care cost containment is shaping up to be the signature battle of the new legislative session. Every one of Beacon Hill’s big three – Gov. Deval Patrick, Senate President Therese Murray, and House Speaker Robert DeLeo – has identified health care costs as a top priority. However, Eldridge said, legislators have heard few details on what cost containment might look like. That’s why so much attention remains fixed on the public option, he said.

“The debate at the national level about the public option really educated the public and a lot of legislators,” he said. “And it’s fair to say the Massachusetts Legislature is more progressive than the US Congress.”

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