The Public Option Is Not Symbolic; It Is Foundational

There is a myth that the public option was only a tiny idea blown out of proportion for symbolic reasons. The public option was never going to be truly tiny, it was only going to be small at its inception. It is not because it was "weak," it was just strongly caged in. But even the largest redwood tree starts out as a very small seed.

It is true that the CBO predicted that the negotiated rate public option in the House bill would only cover 6 million people, but that is because it was purposely restricted to a new exchange that would only be used by 30 million people at first. The CBO's guess was that the public option would be selected by 20% of the people in this new marketplace. While I think their 20% estimate is low, it is important to put that in context--any company that can grab 20% of its market is a major player.

The public option was projected to be “small” because it would be forced to be a big fish in a very small pond. It would have major potential for growth. Progressives would have at their disposal multiple ways to increase the number of people who could have access to the public option. Dramatically expanding employer access to the exchange (something the Secretary of HHS could do without Congressional approval) is one idea. Expanding on Sen. Ron Wyden's goal of giving people with employer-provided coverage the option of using vouchers to select their own plan on the new exchange is another route. The best solution might have been to attach a simple 12-word provision to the defense appropriations bill to allow the public option to sell outside the exchange. Any of these are very doable changes that could have completely changed the dynamics in only a few years.

If the public option was able to to sell to the entire private insurance market and just not the exchange gaining 20% of the market would have given it over 50 million customers. This would make the public option larger than Medicare, and one of the three largest insurance companies in America. Assuming the public option's larger market share allowed it to negotiate much better rates (or even better, Congress decided to combine its operations with Medicare), it would probably be able to attract even more than 50 million customers.

The argument over the public option has never been symbolic or about what coverage a small group of Americans would or would not get. This health care fight is not about creating one new, static system that would remain in place forever. To argue otherwise is intellectual dishonesty put forward by many, including the Obama administration. The debate has been about the foundation on which we will build the future of our health care system, and whether the solution to our broken system is public or private insurance. Everyone from progressive activists to health insurance company CEO's understood that this reform could grow, and only minor tweaks made later would make the public option a serious player. That is why the public option has been such a big fight on both sides. It was never about symbolism, but about laying down an infrastructure that could be quickly built upon.

The progressive demand that public health insurance programs must be part of the solution is based not on pure ideology, but overwhelming domestic and international evidence. The track record of private insurance is terrible, and no honest economist could look its performance compared to public insurance and think it a smart solution. The public option is not symbolic, it is foundational. Can the Democratic Party act in the best interest of our country by standing up to the health care lobbyists, or will they reward the private health insurance industry? This is not some metaphysical argument. There are literally hundreds of billions riding on this question, and possibly the future international competitiveness of the American economy. You may not agree with the methods that the supporters of the public option are using, but pretending that they are somehow fools chasing after symbolism completely ignores what the true stakes in the fight really are.