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Blue Dogs Don't Want a Public Option That Works

July 10, 2009 - by Donny Shaw

I had been looking forward to today’s planned unveiling of the House’s health care reform bill. We’ve already seen drafts, but with the Democratic leadership saying they intend to get a bill passed through the House before the August recess, it’s about time the public sees the bill, which is expected to be around 1,000 pages long and constitute the most significant change to our health care system in decades.

But the unveiling of the final bill has been delayed because of some last-minute concerns from 40 conservative Democrats from the Blue Dog Caucus. The conservative Democrats sent a letter last night to the leadership expressing their “strong reservations” about the bill and said that they “cannot support a final product that fails to” address their concerns. Knowing that they need a certain level of Blue Dog support to get the bill through the House, the Democratic leadership was forced to take things back to the drawing board for some adjustments and now plan to introduce the final bill sometime next week.

A lot of what the Blue Dogs are asking for in the letter seems, to me, workable and reasonable – small-business protections, deficit-neutrality, rural health equity, bipartisanship, etc. But tucked in toward the end of the letter is a startling paragraph explaining their problems with the Democrats’ plan to create a “Medicare-like” public health care option to compete with private insurers. In the letter they write:

In order to establish a level playing field, providers must be fairly reimbursed at negotiated rates and their participation must be voluntary. A “Medicare-like” public option would negatively impact hospitals, doctors and patients. Medicare reimbursement is on average 20 to 30 percent lower than private plans and this inequality is even greater in some parts of the country. Using Medicare’s below-market rates would seriously weaken the financial stability of our local hospitals and doctors.

Two things about this:

1) The Blue Dogs pride themselves on being “fiscal conservatives,” yet here they are arguing that the government should actually spend more money than they have to for the exact same level of care; and

2) The statement suggests that they are missing the whole point of the public option. If the government is able to spend less and still be competitive, it will encourage private insurers to reduce their own costs and increase their efficiency so they can compete.

Here’s how Chris Bowers at Open Left puts it:

Many of the Blue Dogs are simply not intellectually honest. Some others are not even really that intellectual, given how often they contradict themselves and repeat lobbyist talking points verbatim.

If they were smart and intellectually honest, you might be able to point out to them it is impossible to start lowering the cost of health insurance unless some entity begins selling lower priced health insurance. The Blue Dog argument is that we can just keep paying everyone in the health care industry the same amount of money, and that somehow prices will go down anyway. That doesn’t make any sense, but try explaining that to them.

At this point, I can’t imagine what the solution is here. Would rank-and-file and progressive Democrats still support a bill with a public option that pays reimbursments on parity with private insurers? What would be the point? Being able to tell their constituents they helped support a winning compromise on the public option even though it won’t actually have a meaningful impact on bringing down costs?

Or, maybe some Blue Dogs will change their minds and start agreeing with Blue Dog Rep. Loretta Sanchez [D, CA-47] “who believes that we should be required to have a public option because it will bring the costs of health care down.”

UPDATE: Looks like Sanchez has some friends. The Hill is reporting that a “band of House centrists” has sent a letter to the leadership expressing their support for a “robust” (aka “Medicare-like”) public option:

A band of 22 New Democrat and Blue Dog lawmakers say they support a “robust” government-run health plan, boosting chances of moving healthcare reform with a public insurance plan through the House.

Democratic centrists remain the biggest obstacle to House Speaker Nancy Pelosi’s (D-Calif.) ability to pass a healthcare bill with a public plan, and many conservative Democrats oppose a public option as unfair to private insurers.

But the letter from the 22 New Dems and Blue Dogs indicates opposition from this group is far from universal.

“We have a broader coalition to pass this than what was assumed before,” said Rep. Lois Capps (Calif.), a New Democrat who circulated the letter supporting a public option with Rep. Chris Murphy (D-Conn.). “While we may belong to a more moderate branch, we want it known that we support the public option.”

The 20 New Democrats on the letter represent nearly one-third of the 68-member caucus. It is signed by two Blue Dogs and three members who are both New Dems and Blue Dogs.
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