Media False Equates Cantwell's Amendment With Public Option

Last week, Think Progress wrote a piece about how the media was falsely equating Cantwell's “basic health plan” amendment with a public option. Since then, the problem continues to persist, so I think it needs to be addressed again.

Politico has repeatedly referred to her amendment as a public option alternative, “quasi state-based public option,” and “quasi public plan option.”

MSNBC has two videos up on the health section with Cantwell talking about her amendment labeled “small victory for public option” and “nearly public option passes Senate committee.'” MSNBC's first read also repeated the claim that it is as a public option.

The Hill claimed that Cantwell's amendment would “enable states to form their own public options.” In another article about Democrats trying to come up with a form of a public option it was called “optional state-based public plans.”

This confusion is not just limited to news organizations. The Democratic Party of Wisconsin has also claimed that Cantwell's amendment is public option.

I do not want this falsehood to continue. I don't dislike Cantwell's amendment. In fact my biggest complaint is that the amendment is far too weak. I think it should be strengthened and expanded, but that is a side issue. The important thing is that it is not a public option. It is a fact that I have repeatedly pointed out, as have others.

I know Cantwell has a responsive communications staff. I hope they contact these news organizations and ask them to stop falsely claiming that Cantwell's “basic health plan” is some type or form of a public option. It would be unfortunate if the progressive grassroots were forced to attack a decent idea because some political operatives tried to use it as an excuse for not including a real public option as part of health care reform. If the same media sources continue to equate Cantwell's amendment with a public option, I will be forced to continue speculating that Cantwell (or some members of the Democratic leadership) wants this falsehood to persist.

I honestly do hope that we can debate Cantwell's "basic health plan" idea on its own merits, completely separate from the issue of a public option. I would like to see how a much improved version could make it into the final bill.

Did Obama Ask Sen. Cantwell To Mislead You?

Since last Thursday when Sen. Cantwell started calling her “basic health plan” proposal a “public plan,” I have been very troubled. Unfortunately, several media outlets have uncritically repeated her claim that it is a public option.

I don't dislike Cantwell's basic health amendment. In fact, I think it has some merit even if it is far too limited. It allows states to use the power of a large purchasing pool to negotiate better prices from private insurance companies. It could help some low income Americans get private health insurance at a better price, but it is in no way a public option. People would still be insured by private insurance companies. Most writers who focus on health care policy agree that it is not a public option (1,2,3).

Given that the issue of a public plan has become a political flash point, it seemed very strange to me that Cantwell would call her proposal a “public plan.” Calling her “basic health plan” proposal a “public plan” should hurt its chances of becoming law. Conservatives will attack it for being a public plan, and progressives will attack it for being woefully insufficient as a public plan.

Now, thanks to a Chicago Tribune article about Obama lobbying conservative Democrats on the issue of a public option, I think I have an explanation:

When Obama spoke by phone recently with Sen. Maria Cantwell, D-Wash., he made a point of the breadth of support for the public option, the senator said in an interview. Cantwell authored a proposal to let states set up public plans that Democrats added to the Senate Finance Committee bill on Wednesday.

This is very strange. Obama does not need to tell Cantwell that Americans want a public option. Cantwell strongly supports a public option. She voted for both public option amendments in the Senate Finance Committee hearing.

I think the purpose of the call was to ask Cantwell to try to mislead American into thinking her “basic health plan” is a public option. The evidence is that Obama does not plan to fight for a real public option, but only wants some fig leaf so he can tell the base that there is a public option. It sounds like Obama wants to try to use Cantwell's proposal as the newest fig leaf.

Expect to see administration officials soon falsely claim that Cantwell's proposal is a public option. It is the kind of fake “compromise” the health insurance industry is unlikely to really fight. It is not a public health insurance alternative to the private insurance companies. It is only a mechanism to get a better price from private insurance companies. Cantwell's amendment, without a public option, still means the private health insurance companies will get millions of new consumers without competition from a public entity. The idea is completely unacceptable as an alternative to offering people the choice of a real public option.

I strongly hope Sen. Cantwell will stop calling her proposal a public plan. The American people deserve a serious debate about the public option. Actively trying to muddle a honest policy debate is unacceptable regardless of political affiliation. Don't let a decent idea be used as a way to trick the American people.

Cantwell “Basic Health Plan” Passes, 12-11

Cantwell offered her “basic health plan” amendment (described in further detail earlier). It would be a voluntary program that states would need to choose to opt in to. If states choose to create a “basic health plan,” their population between 133%-200% of the FPL would be covered through private insurers operating under the basic health program, and not through plans selected on the new exchange. During the debate, Cantwell called the idea a public plan (a point I strongly dispute). Interestingly, the amendment had not been scored by the CBO. It is expected to save money given the history of the program in Washington state, and because of how the amendment is designed.

The amendment passed 12-11. All ten Republicans, along with Democratic Senator Blanche Lincoln, voted against the amendment. All other Democrats voted in support. Chairman Baucus described it as a “great amendment.”

Committee Republicans such as Sen. Cornyn expressed serious concerns that removing such a large population from the exchange would weaken the exchange. He is worried that it could drive up prices for individuals who would still be buying coverage on the exchange. Cantwell argued that lower income Americans tend to be the least healthy individuals. She argued that removing them from the exchange would in fact reduce premiums for those still buying coverage on the exchange. There was no CBO analysis available to support either argument.

Committee Republicans such as Sen Cornyn expressed serious concerns that removing such a large population from the exchange would weaken the exchange. He is worried that it could drive up prices for individuals who would still be buying coverage on the exchange. Cantwell argued that lower income Americans tend to be the least health individuals. She argued that removing them from the exchange would in fact reduce premiums for those still buying coverage on the exchange. There was no CBO analysis available to support either argument.

Cantwell's “Basic Health Plan”, A Better Exchange But Not A Public Option

Cantwell's has an amendment which would have states create a “basic health plan” from individuals making less than 200% of the FPL but more than 133% (the new cut off for Medicaid eligibility). The idea is modeled after the basic health plan in Washington state which has been around for about 20 years. While a good idea, it is in no way a public option.

In essence, what Washington state does is define a basic health plan--it sets the deductible, out of pocket limit, co-pays, drug cost sharing, and defines exactly what must be covered. Private insures bid to be able to offer basically this exact same plan. A few private insurers are qualified; there are small differences in the basic health plan depending on the insurer the individual selects. Premiums are subsidized by the state to make the plans affordable.

This is not a public option. It is not a health insurance company run by, managed by, or directly overseen by Congress. What Cantwell's “basic health plan” is is simply a better way to run an exchange. This is closer to how more market-heavy universal health insurance systems are run in other countries (Switzerland, Netherlands, Beligium). The government defines the basic health care plan which must be covered, and companies mainly compete on price of premiums and provider network. In those systems, you can buy supplemental insurance which covers what is not covered by the government-defined minimum benefits package. The idea is also similar to Medicare Advantage without the choice of Medicare.

This is a much better way of running an exchange, in contrast to vague categories of what must be covered and policies sold at different actuarial levels. (The current framework of the exchanges in the Baucus bill is just asking for confusion, bureaucratic red tape, and abuse.) However, it is still just a better exchange, and would still greatly benefit from having a public option as one of the qualified insurance providers.

I see two problems with Cantwell's amendment. The first is that the basic plan is restricted to only those people making between 133%-200% of the FPL. It should be open to everyone or the whole exchange should be run this way. This would depopulate the original state-based exchanges, reducing the market power and increasing the price for individuals making above 200% of FPL. It makes some people better off, but others considerably worse off.

The other problem is that Cantwell is trying to sell her idea as a public option--and it is not a public option . It is still not a bad idea--it would be an improvement over Baucus's plan for people making below 200% of FPL (not hard to do)--but it is not a public plan.

My message to Cantwell is simple: Don't hand progressives a daffodil and try to call it a rose. It discredits you and it discredits a reasonable idea.