Wednesday, September 09, 2009

What Dr. Krugman said

With all due respect to the estimable Blogfather of our Cogitamus gang, I have to agree with Paul Krugman on this (emphasis mine):

But what is one to make of the practical, political argument from the likes of Ezra Klein, who argue that any public plan actually included in legislation probably wouldn’t make that much difference, and that reform is worth having even without such a plan?

There are three reasons to be suspicious of that argument.

The first is that I suspect that Ezra and others understate the extent to which even a public plan with limited bargaining power will help hold down overall costs. Private insurers do pay providers more than Medicare does — but that’s only part of the reason Medicare has lower costs. There’s also the huge overhead of the private insurers, much of which involves marketing and attempts to cherry-pick clients — and even with community rating, some of that will still go on. A public plan would probably be able to attract clients with much less of that.

Second, a public plan would probably provide the only real competition in many markets.

Third — and this is where I am getting a very bad feeling about the idea of throwing in the towel on the public option — is the politics. Remember, to make reform work we have to have an individual mandate. And everything I see says that there will be a major backlash against the idea of forcing people to buy insurance from the existing companies. That backlash was part of what got Obama the nomination! Having the public option offers a defense against that backlash.

What worries me is not so much that the backlash would stop reform from passing, as that it would store up trouble for the not-too-distant future. Imagine that reform passes, but that premiums shoot up (or even keep rising at the rates of the past decade.) Then you could all too easily have many people blaming Obama et al for forcing them into this increasingly unaffordable system. A trigger might fix this — but the funny thing about such triggers is that they almost never get pulled.


Simon Owens of Bloggasm writes to alert us to a group effort--on the part of numerous progressive blogs and Firedoglake--to raise money for their campaign to demand a strong public option. Go here for more information and to donate, if you possibly can; they're aiming for $50,000 and have already passed the $21,000 mark.

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