The Public Option is dead as a Doornail

Earl Ofari Hutchinson

President Obama, House Speaker Nancy Pelosi, and a parade of House and Senate Democrats should get academy awards for their play act on the public heath care option. It’s as dead as a doornail. Yet, the principal players still tease the public with their talk about it. The public option epitaph was written months ago during the more than two dozen secret meetings that Obama and his aides had with the insurance industry and pharmaceutical bigwigs.
The deal went like this. The major insurers and the pharmaceuticals would drop their seven decade opposition to health care reform if the Obama administration did four things. It must guarantee that the estimated 45 to 50 million uninsured would buy insurance from the private health insurers with penalties for non-compliance. The mandate would guarantee the insurers a monopoly on a product that would make the old 19th Century Robber Barons green with envy. The government (taxpayers) after delivering them would then pay the cost to cover many of them with billions in subsidies. This is a treasure trove of untold riches for the insurers. Minimal (or no) checks on what private insurers charge and no real way to compel them not to dump those they deem to sick, too poor and too undesirable to insure.
The elimination of the public option, though, sealed the deal. Obama could pay lip service to the public option but not fight for it. The lip service was important solely to keep labor unions, progressives, and liberal Democrats in tow. They were the ones who turned the presidential campaign into a holy crusade to put him in the White House. With 2010 midterm elections near any hint that the White House had cut a deal to scrap the public option will stir wholesale revolt by the left side of the Democratic Party. All factions have made it clear that a health care bill without a public option is a sham. They speak for the majority of Americans. Every poll and survey including a mid October Washington Post poll has found that the public solidly backs a public option.

The double cross by America’s Health Insurance Plans, the private health insurer’s industry group, which commissioned a study that claimed that private insurers would have to jack up prices and families would pay through the nose for health care if the reform bill passed didn’t change the deal. It actually strengthened it. A few days after the industry’s blatant blackmail, White House Chief of Staff Rahm Emanuel again reiterated that a public option was not ”the defining piece of health care.” This was a wink and nod to the industry that the White House would keep its part of the bargain no matter the trickery, skullduggery, or lies from the industry.

The fall guy for the play acting has been Senate Finance Committee Chairman Max Baucus. He’s been hectored, cat called, finger pointed, and raked over the coals for supposedly single-handedly torpedoing the public option. Baucus just took his cue from the White House. When the deal was cut, he had the green light to craft a reform bill that is firmly within the parameters of the industry guidelines the White House rubber stamped months earlier. There can be no deviation from that. As agreed, the public option was nowhere to be found in his plan. It was never a part of the round-the-clock negotiations the key players on the finance committee engaged in to nail down the fine points of the bill.



Only the most hopelessly naïve can be surprised by the White House and Capitol Hill play acting. Obama desperately needs to knock down a win on health care reform, no matter how much of an industry giveaway it is. He’s heard the loud grumbles from progressives and liberal Democrats that he is way too quick to make nice with the GOP on comprehensive heath care reform. His soft shoe of the public option is their single biggest point of displeasure with him.
Some progressives will scream sell-out and flip-flopper at him when he signs the final bill sans a public option.

It won’t much matter. Their criticism will be buried in the avalanche of media publicity, a blitz of laudatory industry accolades, and congressional back patting when Obama signs the gutted final bill and declares it the greatest victory for health care reform since LBJ inked Medicare into law four decades ago.
The major provisions of the reform bill won’t kick in for years down the line. In that time, memories will have long since faded as millions remain uninsured, private insurers continue to rake in their grotesque profits, and the promised cost savings from reform never materialize. A true public option was the obvious answer to this. But when the insurers, pharmaceuticals and the White House agreed to play act on it it was dead as a doornail.

Earl Ofari Hutchinson is an author and political analyst. His forthcoming book, How Obama Governed: The Year of Crisis and Challenge (Middle Passage Press) will be released in January, 2010.

Insurers Royally Played Obama

Earl Ofari Hutchinson

In the months after President Obama’s inauguration, he and other administration officials held more than two dozen secret meetings with top insurers and the major pharmaceutical groups. He met with registered lobbyist Karen Ignagni, president and CEO of America's Health Insurance Plans, the major private insurer’s industry group, on March 5, 6 and 11, May 11 and June 30.
The meeting with AHIP and the other industry bigwigs was followed by a much public and much ballyhooed pledge by the private insurers and the pharmaceuticals to plough tens of millions of dollars into an ad and PR blitz to back Obama’s health care reform plan. They solemnly and very publicly assured that they’d work closely with Senate Finance Committee Chair Max Baucus and his five other gang of five cohorts on the Committee to not be the hard headed obstructionists they’d been for the past six decades to getting health care reform passed. Obama bought their pledge, back patted them for their spirit of cooperation, and publicly hailed them for promising to break down the final barrier, namely themselves, to providing affordable health care to all Americans.
The insurers hustled, conned and lied to Obama. They cynically played upon his political naiveté about them. Worse, they didn’t even try to mask their play of him. AHIP brazenly fired off to the press a study it commissioned that claimed that Obama’s health care reform plan would hike the cost of insurance for families by thousands. The insurers insisted that private employers would get hit even harder with the increased fees, taxes, and add-on costs in the reform plan. They swore that would cause many employers to reduce or even eliminate coverage for their employees. The insurers doubled down on their play of Obama by threatening to spend a fortune on an ad campaign to kill his plan.


The worst part of the insurers con game is that they had already squeezed a guaranteed profit bonanza out of the White House and the Senate Finance Committee—no public option, government enforced mandates complete with penalties, taxpayer subsidies of the poor and middle class uninsured, forced employer mandated plans, and best of all absolutely no meaningful government hammer over them to make sure that they don’t raise prices or figure out ways to dump those who private insurers label “high risk” or less charitably, “undesirables” at the first chance they get. Those are the millions who suffer chronic and major diseases—cancer, diabetes, asthma and heart disease. The overwhelming majority of them are blacks and Latinos and the poor.
Covering them was supposed to be the reason that Obama and congress battled for reform in the first place. The issue for private insurers even as they made nice with the White House and deceived Obama into thinking that he had a deal with them has never changed. It’s still their endemic fear of any smattering of government control of medical care.
The hint that insurers would double cross the White House the first chance they got was Obama’s mere mention that he’d impose higher taxes on the wealthy to pay for coverage of the uninsured. This stirred terror among insurers and medical industry groups of deficit soaring taxes and socialized medicine. The even bigger hint was the even more terrifying to them thought that congress might actually impose cost containment measures into whatever reform package that finally emerged from congress. This would directly threaten what insurers regard as their absolute right to make and keep the kings ransom in profits they’ve raked in seemingly forever. This drove them to the barricades the past six decades even faster than their phony, self-serving scare shout that health care reform is socialized medicine.
Obama learned an age old and bitter lesson from the insurer’s double cross. When you try to buy your enemies affection you can never be rich enough. The insurers royally played Obama.

Earl Ofari Hutchinson is an author and political analyst. His forthcoming book, How Obama Governed: The Year of Crisis and Challenge (Middle Passage Press) will be released in January, 2010.