A Compromise That Could Actually Work

Yesterday, Sam Stein told us about a new compromise plan that is attracting attention because it’s designed to please both progressive Democrats who want a robust public option, and conservative Democrats who want to please the insurance industry.  Under this proposed plan, there would be a strong federal-level public option — the compromise would be that individual states could opt out:

“What folks are looking for is what gets 60 votes,” said a senior Democratic Hill aide. “The opt-out idea is very appealing to people. It has come up in conversations. I know personally that a handful of members have discussed it amongst themselves.”

In conversations with the Huffington Post, sources have said that while the opt-out approach to the public plan is in its nascent stages it has been discussed with leadership in the Senate. It was pulled out of an alternative idea, put forth by Sen. Tom Carper (D-Del.) and, prior to him, former Senate Majority Leader Tom Daschle, to give states the power to determine whether they want to implement a public insurance option.

But instead of starting with no national public option and giving state governments the right to develop their own, the newest compromise approaches the issue from the opposite direction: beginning with a national public option and giving state governments the right not to have one.

Josh Marshall has some early thoughts:

Now, I haven’t heard yet from the people who really understand the policy dimensions of this stuff, the people who know all the moving parts and whose opinions I trust. So consider my comments as very tentative, subject to change if, as is quite possible, there are dimensions of this I’m not considering. But just on the face of it, this sounds like a compromise reformers could embrace because I suspect many, probably most states would opt in, providing a plenty large enough pool to get to the bargaining power that is essential to make a public option work.

Part of my assumption here is that you’d have relatively few states opting out and they’d tend toward lower population states, likely clustered in the South and mountain states. So I suspect that a substantial majority of the population would be in opt-in states, providing the bargaining power that would make the public option threshold viable. And if the public option works, one would think the people in opt-out states would quickly become pretty envious of the folks in states who had the option and pressure their state governments to get in. Of course, if the public option was an abysmal failure the reverse would happen. But that’s another matter.

Nate Silver calls out “public option purists” who are objecting to this proposal (although not by name):

Some of the usual suspects are out this morning with criticism of Tom Carper’s compromise proposal to insert a robust public option into the Democrats’ health care bill, but allow states to opt out of it by legislative or popular action. I’m not going to call these people out by name because I consider some of them friends and they’re doing good, important, productive work. But this compromise is leaps and bounds better than most of the others that have been floated, such as Chuck Schumer’s proposal to have a public insurance option that would be forced to negotiate at private market rates.

He supports this with a long list of specific points. They are all good and sensible points, but there are too many to quote and I don’t want to single out just one or two, so read the entire piece.

I didn’t expect to ever endorse a public option compromise, but then again, I never expected someone would come up with a compromise that actually was a legitimate compromise, and not a cave-in to conservatives and insurance companies. I could live with this plan– and not grudgingly, either.

Barbara O’Brien — who is both strongly liberal and very level-headed and pragmatic (a delightful combination that is not at all common) tells us what she thinks right in the title of her post: “I Like This Idea.”

Given a choice between this and a watered-down public option (or no public option at all), I take this. Yes, a handful of the most regressive red states will opt out. And maybe when the citizens of those states realize what a dumb move that was, they’ll kick the troglodytes out of office. I think all of the states will come in eventually. And until “eventually” happens the rest of us won’t be held back by the stubborn ignorance of a minority.

Over at HuffPost today, Sam Stein picks up the story again, with the news that excitement is building over opt-out:

“[The opt-out] is one of the things being very seriously considered,” said Schumer. “I’m not going to — we have a range of things we’re considering. Senator Tom Carper (D-Del.) and I met for quite a while last night and made progress and talked to a large number of members last night, yesterday. And I am optimistic that there will be some kind of public option in the bill the president signs. I’m very optimistic.”

In private, aides on Capitol Hill say that the opt-out option remains one of several proposals being debating as a compromise to a straightforward national public plan. But, they add, it is quickly winning plaudits within the caucus. A senior aide said that Schumer was taking the lead on negotiating the compromise approach — along with Carper — and noted the significance of having the New York Democrat, who has been one of the most vocal supporters of a robust, national public plan out in front of the proposal. The aide also said that the opt-out proposal had been handed over to Senate Majority Leader Harry Reid on Tuesday though the Nevada Democrat has yet to weigh in on its merits. “He will obviously consider it,” the aide said.

Another Democratic aide said that the proposal is attracting attention within the Caucus in part because progressives view it is a better alternative to other compromise approaches.

“It is clearly much better than triggers and [Carper's] opt-ins,” said Richard Kirsch, executive director of the group Health Care For Americans Now. “A trigger option is a way to kill the public option and these opt ins are not effective because it leaves it up to state legislatures to set it up…”

Ezra Klein is in, too:

That gives you an essentially national administrative structure, but also gives states the right to reject the option entirely. It means, in other words, that the blue states get the public option at full strength and the red states get to ignore it entirely.

That’s a real improvement over Tom Carper’s proposal allowing individual states to create their own public options, which would would be quite a bit weaker than a national program. It also creates a neat policy experiment: We can see, over time, what happens to state insurance markets that include the national public option and compare them with those that don’t. We can see whether the worst fears of conservatives are realized and private insurers are driven out and providers are forced out of business due to low payment rates, and we can see whether the hopes of liberals are right and costs come down and private insurers become leaner and more efficient. Or both, or neither. It’s an opportunity to pit liberal and conservative policies against each other, rather than just pitting liberal and conservative congressmen against each other.

More thumbs-up from Paul Krugman and Howard Dean.