Democrats Strip Medicare Buy-In From Health Bill, Can They Still Achieve The Goals Of The Public Option?

Moments ago, Democratic Senators told reporters that the caucus yielded to Sen. Joe Lieberman's (I-CT) demands and dropped the Medicare buy-in provision from the Senate health care bill, leaving only a network of nonprofits to stand in for the public health insurance option. While Senators stressed that a final decision would be made tomorrow, after the Democratic caucus meets with President Obama, most agreed that the fate of the Medicare buy-in was all but certain.

"The general consensus was that we shouldn't make the perfect the enemy of the good and if we're going to get all the insurance reforms accomplished and a number of other things [and] dropping the Medicare expansion was necessary, well then that's what should be done and it appeared that would be necessary to get the 60 votes," Sen. Evan Bayh (D-IN) told the Hill. "At some point you have to switch from the sentiment, the emotion of the words, to the facts," said Sen. Jay Rockefeller (D-WV). "And then you've got to decide if I didn't get what I want, in the form that I wanted it, am I willing to cashier 31 million Americans? I want a bill."

CNN confirmed these reports:

When Democratic leaders initially announced the compromise last week, progressives claimed that the Office of Personnel Management's (OPM) network of nonprofits would do little to increase competition or lower health care costs. Public option 'godfather' Jacob Hacker argued that "because Blue Cross and Blue Shield (BCBS) is the most likely national non-profit to take advantage of this new opening, and because the Blues dominate most states, the plan perversely amounts to trying to increase competition and choice by encouraging Blue Cross and Blue Shield to compete against, you guessed it, Blue Cross and Blue Shield," Hacker wrote, asking "That's competition?"

Now, with the public option dead (and the OPM proposal ineffective), Democrats should demand a list of policies in its stead. These proposals should seek to accomplish the goals of a public plan (competition, cost savings, transparency and accountability) through regulatory means and ensure that health reform does not reward private insurers with millions of new customers.

Among the options are proposals to strengthen the Medicare Commission (now known as IMAC) to focus on a more systematic approach and target more providers, allow all state-based exchanges to act as prudent purchasers and select only the most efficient insurers, work to strengthen the consumer protections in the bill or bolster the mechanisms that oversee insurer compliance with the new regulations. Lawmakers should also consider including more dynamic regulatory authority that would allow the Secretary of Health and Human Services to prevent insurers from designing new ways of excluding sicker beneficiaries and give the agency the authority new insurer abuses.