Tuesday, August 18, 2009

Why We Need A Public Option

Paul Krugman made some sense today on health care, but I think he missed the boat in at least one regard. He starts out well enough:

Look, it is possible to have universal care without a public option; Switzerland does. But there are some good reasons for the prominence of the public option in our debate.

One is substantive: to have a workable system without the public option, you need to have effective regulation of the insurers. Given the realities of our money-dominated politics, you really have to worry whether that can be done — which is a reason to have a more or less automatic mechanism for disciplining the industry.

The Public Option As A Signal

He's right - Switzerland built a good system around using something vaguely like the co-ops that Sen. Kent Conrad (D-ND) is flogging. The problem is that we have been given several solid examples recently of why we can't trust our government to regulate an industry that's awash in cash. The banking crisis was brought on by its refusal to regulate the industry. The government has still not done anything remotely like re-enacting the controls that kept that industry out of trouble for eighty years. Yet it barely hesitated before pumping $15 trillion or so into the banking system. We have also seen how little the government is interested in regulating the trading of securities. Given how much the Congress has been at the insurance industry's beck and call during this health care debate, does anyone with two brain cells to call his own think the same thing wouldn't happen to any regulations that are part of a health care reform bill?

Perhaps if I'd seen a few years of responsible government following these fiascos I might be willing to try again. But I haven't. It's hard for me to believe that anyone could trust the government to do the right thing in this area right now. Having an option to obtain publicly-financed (or underwritten) health care like Medicare is a hedge against that mistrust.

So progressives have their backs up over one provision in health care reform that’s easy to monitor. The public option has become not so much a symbol as a signal, a test of whether Obama is really the progressive activists thought they were backing.

And the bizarre thing is that the administration doesn’t seem to get that.

The Public Option As A Signal

This is where I part ways. I certainly can't speak for progressives generally, but I know President Obama isn't one of us. This isn't a litmus test or a test of loyalty. It's really about something that we can trust will cover the health care needs of the 1/3 of Americans who don't have that coverage. Without a public option, there really is no reason to trust that the government will do what's required when it comes to regulating the insurance industry.

It has shown quite clearly that it won't.


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