No More Public Option

Majority leader senator Harry Reid announced this week that a "grand compromise" has been reached between liberal and centrist democrats where they agreed to drop the "public option". They replaced it with two new proposals. One proposal is to expand Medicare for people between the ages of 55 and 64 (currently Medicare is available to people 65 & above). Second proposal will require Insurance companies to create not-for-profit insurance plans in every state to be sold on the "exchange" along side for-profit plans. These plans will be supervised by the Office of Personnel Management which currently administers the health insurance plans offered to federal employees.

There is a very good analysis of this new proposal at http://www.nytimes.com/2009/12/10/opinion/10thu1.html

I will wait to see how CBO "scores" these proposals with respect to the budget deficit but my initial reaction is of a sigh of relief. I have argued in this blog before that public option will not help reduce cost. The biggest lacuna of this bill is its inability to "bend the cost curve" in any significant way and that will undo everything else that is good in this bill in the long run.

However politics is an art of compromise. I am hoping that thru amendments on the senate floor and thru more back-room deals like this, final product will be a major improvement on what is being debated in the senate currently.