From the Associated Press: White House Appears Ready To Drop Public Option

Bowing to Republican pressure, President Barack Obama’s administration signaled on Sunday it is ready to abandon the idea of giving Americans the option of government-run insurance as part of a new U.S. health care system.

Facing mounting opposition to the overhaul, administration officials left open the chance for a compromise with Republicans that would include health insurance cooperatives instead of a government-run plan. Such a concession would likely enrage his liberal supporters but could deliver Obama a much-needed win on a top domestic priority opposed by GOP lawmakers.

Officials from both political parties reached across the aisle in an effort to find compromises on proposals they left behind when they returned to their districts for an August recess. Obama had sought the government to run a health insurance organization to help cover the nation’s almost 50 million uninsured, but he never made it a deal breaker in a broad set of ideas that has Republicans unified in opposition.

Health and Human Services Secretary Kathleen Sebelius said that government alternative to private health insurance is “not the essential element” of the administration’s health care overhaul. The White House would be open to co-ops, she said, a sign that Democrats want a compromise so they can declare a victory.

“I think there will be a competitor to private insurers,” Sebelius said. “That’s really the essential part, is you don’t turn over the whole new marketplace to private insurance companies and trust them to do the right thing.” (emphasis added)


A public, government subsidized and managed health insurance program is the single most important element of ObamaCare. Virtually every policy wonk that President Obama has put in charge of health care reform is a part of the progressive cadre that has pushed for a government-run public health insurance program. The goal of such a “public health insurance option,” which would necessarily have lower premiums, greater bargaining power, and eventually wider appeal than private health insurance, would be to eventually force private health insurers out of the market. Then these progressives would be free to usher in a brave new enlightened world in which medical care would be supervised, financed, and regulated solely by the Federal government. Secretary Sebelius is either a complete idiot, or she has just tried to tell one of the biggest lies in the history of New Deal-inspired Big Government policy-making.

Of course neither the White House nor Congress has yet produced anything resembling a straightforward, coherent plan for health insurance or medical treatment reforms. So we are really guessing when we speculate about these proposed “health insurance co-ops.” but experts believe that they will be private insurance exchanges created by government mandate and launched with government start-up money — kind of like AmTrak for healthcare, in other words.

Presumably these co-ops would offer inexpensive health insurance to qualified individuals (like those who are not in perfect health, or those who are self-employed or who work for an employer who can’t afford health insurance benefits) and then combine these insureds into large groups for the purposes of premium rating. But after a certain amount of time, Federal subsidies are to be halted, and the co-ops would then be required to raise and maintain their own private cash reserves, similar to private insurance companies. Thus the co-ops would be “private” instead of “public” because they would no longer be funded by the government, even though they would probably be more heavily regulated than independent private insurers.

It’s hard to imagine the government ever turning off the spigot when “health care” is involved, and if (or when) co-ops start to overtake private insurers, the temptation will certainly arise to pour even more Federal dollars into these co-ops, or force other private insurers to match the co-op coverages and premiums via regulatory mandates. We would be foolish to assume that liberals will ever give up the dream of creating the single-payer health system that they have wanted for decades. Plus there is the real possibility of a health care reform bill still containing a government mandate requiring proof of health insurance, especially if low-cost co-op plans are available.

But for now, if what the White House says is true, then We The People have scored an incredible victory. Liberals can poke fun at us, they can call us names and accuse us of being crazy, out-of-control ignoramuses, wild-eyed radicals, unpatriotic, unAmerican, and a threat to democracy. But President Obama and the Democrats have just blinked, big-time, because the American people have just made it very clear that we overwhelmingly trust the free market to “do the right thing”, not the Federal Government.

UPDATE: From Mark Ambinder writing at The Atlantic: Administration Official: Sebelius “Misspoke”

An administration official said tonight that Health and Human Services Secretary Kathleen Sebelius “misspoke” when she told CNN this morning that a government run health insurance option “is not an essential part” of reform. This official asked not to be identified in exchange for providing clarity about the intentions of the President. The official said that the White House did not intend to change its messaging and that Sebelius simply meant to echo the president, who has acknowledged that the public option is a tough sell in the Senate and is, at the same time, a must-pass for House Democrats, and is not, in the president’s view, the most important element of the reform package.

A second official, Linda Douglass, director of health reform communications for the administration, said that President Obama believed that a public option was the best way to reduce costs and promote competition among insurance companies, that he had not backed away from that belief, and that he still wanted to see a public option in the final bill.

“Nothing has changed.,” she said. “The President has always said that what is essential that health insurance reform lower costs, ensure that there are affordable options for all Americans and increase choice and competition in the health insurance market. He believes that the public option is the best way to achieve these goals.”

A third White House official, via e-mail, said that Sebelius didn’t misspeak. “The media misplayed it,” the third official said.

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