“Opt-out” public option, excerpt from: White House promotes tax on “Cadillac” health care plans By Kate Randall, 27 October 2009

“Opt-out” public option

As deliberations continued on the details of health care legislation to be brought to the full Senate for a vote, Senate Majority Leader Harry Reid (Democrat, Nevada) announced Monday that he would support an “opt-out” version of a government-run “public option.”

Under this proposal, a public option would be included in the insurance exchange where individuals and families would be mandated to purchase insurance coverage, but state governments could choose not to participate in the plan.

While the Senate health committee’s bill included a public option, the Finance Committee instead included health care cooperatives in its version of legislation. Reid’s pledge to include the “opt-out” version of the public option makes a mockery of what is already a toothless measure.

At its best, the public option would serve as a dumping ground for those people without employer-provided coverage who could not afford to purchase private insurance on the exchange, and it would inevitably provide substandard benefits. However, even this fig leaf of reform has been vehemently opposed by the insurance companies, who see any government intervention into the private insurance market as a threat to their profits.

There were indications Monday, however, that the Obama administration is likely to be unwilling to back even the watered-down “opt-out” version of the public option. The Huffington Post on Saturday cited Democratic congressional sources who said that Obama is “actively discouraging Senate Democrats in their effort to include a public insurance option with a state opt-out clause.”

In its place, the White House is reportedly pushing for an alternative policy that would see the public option “triggered” if the insurance industry failed to hold down costs and meet certain as yet undefined benchmarks. The cosmetic “trigger option” has received some support from the insurance industry, as the measure would pose little threat that a government-run plan would ever come into existence.

Senator Olympia Snowe of Maine, the only Republican Finance Committee member to vote for the Baucus plan, has also indicated she might support the trigger option. In cynical fashion, the Obama administration has courted her support for some version of final legislation to lend a veneer of bipartisanship to the health care overhaul. In any event, Obama and numerous administration officials have repeatedly stated that the president is willing to sign legislation that does not include any form of a government-run option.

The major Congressional versions of health care legislation being debated in the House and Senate all have common features that will serve to boost the profits of the health care giants. They each include an individual mandate, requiring individuals and families to purchase insurance or pay a penalty. At the same time, there are no restrictions on what private insurers can charge.

In the interest of remaining “deficit neutral,” the legislation will slash hundreds of billions of dollars from the Medicare and Medicaid programs for the poor, elderly and disabled.

The plans also provide limited government subsidies to assist with the purchase of premiums paid to the private insurers.

While Obama pledged to fight for “universal health care” during his presidential bid, the health care legislation now being promoted by the White House would leave an estimated 17 million US residents, including 8 million undocumented immigrants, without health insurance.