Everybody knows the best way to ingratiate yourself when you arrive at party where you don’t know anyone is to walk up to one of the cool kids and shove them from behind. So here goes….
A few days ago Karl had a back and forth with Ezra Klein, which was prompted by an email I sent Karl. I wondered how Ezra could promise moderation wary liberals that the successful passage of a modest healthcare plan would definitely grow into a more expansive healthcare plan in the future, and also be puzzled when critics worry the public plan will increase the deficit. Ezra countered that “The argument, essentially, rests on an analogy to Medicare and Medicaid. The problem here is that Medicare and Medicaid are entitlements. The public option is not.”
Sure, the public option is not an entitlement… yet. But I don’t think I can make the case that almost regardless of initial conditions, the expansive, expensive public option we end up with may not be the modest public option that is initially passed any better than Ezra himself does:
“…. success does breed success. Medicare and Medicaid began as fairly limited programs. Medicaid was pretty much limited to extremely poor children and their caregivers. Medicare didn’t cover prescription drugs, or individuals with disabilities, or home health services.
But once the programs were passed into law, they were slowly and continually improved. They became more expansive, with Medicaid growing to cover not only poor families but also poor adults, and the federal government giving states the option, and matching dollars, to include more people under the program’s umbrella….It is not hard to imagine health-care reform following a similar path…..The public plan could be strengthened, or the government could begin to set payment rates for insurers who participate in the exchange… Subsidies could expand, and new funds could be used to encourage the development of integrated care organizations rather than simple insurance companies. “
Given his eager prediction that the limited healthcare programs we get are likely to expand in untold directions, you’d think he’d be a little more open to the somewhat humble suggestion that the public option might expand in costly ways he is not foreseeing.
You might object to my claim that initial policy conditions don’t really matter and whatever healthcare policy we get is destined for expansion, by arguing that if that were true, than there would be no point in healthcare reform, which leaves you with healthcare policy nihilism, and that is obviously unacceptable. But I’d argue that the public option is uniquely destined for the kind of expansion Ezra promises will happen simply because it could not exist otherwise.
I’m not surprised that Ezra doesn’t get this point, because he also doesn’t seem to get the libertarian critique of the public plan. In fact, he makes it obvious he doesn’t get it in his previous mischaracterization of the disagreement between critics and proponents:
“Liberals don’t think that Congress will pass a bill outlawing private insurance… Rather, they think the market will, well, work: The public option will provide better service at better prices and people will choose it. Or, conversely, that the competition will better the private insurance industry and that people won’t need to choose it.
But that confidence rests on a very simple premise: The public sector does a better job providing health-care coverage than the private sector. If that proves untrue — and I would imagine most every conservative would confidently assume that that’s untrue — the plan will fail….
The liberals are willing to bet that they’re right….The conservatives are not, however, willing to bet that they’re wrong. They’re willing to say the public option will fail, but not give consumers the chance to decide that for themselves.”
That’s a very weak characterization of opposition to the plan, in fact it misses the point almost entirely: critics of the public option don’t think liberal congressman (and conservative congressman who develop ex-post vested interests) will allow the public option to fail. When the government creates a new program (or policy, institution, or other bureaucracy) that subsequently becomes obsolete, it does not undo that program or let it go quietly into the night. Said program will have developed it’s own interest groups with lobbyists and congressional backers, with lot’s of money and jobs dependent on it’s continued existence. It’s employees are likely to be unionized, expanding further the set of lobbyists and congressional defenders. Hey, maybe the public option will even be required to “buy American!”, better yet, maybe Representative Murtha can even get a bill passed forcing the public-option “buy Johnstown!”. (Are there medical equipment manufacturers in Johnstown? If not, I’m sure he can secure some federal funding to help get some started).
Critics of the public plan actually agree with liberals that it may in fact lead to a single payer, we just think that it won’t get there by providing a better product than private companies markets, but through subsidies, purposeful regulatory advantages, and other shenanigans designed to turn a failing public option into single payer system.
So when Ezra says he can’t imagine how the public option would end up costing the government money I think that’s because he hasn’t seriously considered the main criticism of it.