Monday, December 14, 2009

Senate Dems to White House Tomorrow

Sounds like Reid et al. will drop Medicare buy in and get what they can get....and they are all going to the White House tomorrow. I think they must have manager amendment and cloture vote by sometime Friday to pass it by Christmas.

Dropping the weak public option is not that big a loss. Medicare buy in is a better health policy, but it was always an odd thing for people saying they were worried about government intervention in the health system to be for as a compromise. Lieberman has totally flipped around on this, but the thing to do is move ahead. Politically, this actually gives cover down the road to the Dems....anything goes wrong, blame it on lack of a public option, and it takes away the Republicans blaming anything bad on the presence of public option. Health insurance companies get more customers they now can't sign up, but they will also be on the spot.

If an individual mandate with expanded private insurance markets passes without a public insurance option, in many ways the pressure may be wratcheted up on private insurance. This will be an experiment in whether people can actually be good consumers of health insurance and see whether that can do anything to cost inflation. The insurance companies will say the penalty for individual mandate is too low and they will be worried about adverse selection. The liberals will be angry that essentially the Dems are passing what passed for a moderate Republican alternative 15 years later. I actually think there is going to be more pressure on private insurance companies than many think. If this doesn't work out so well (of course there will be bumps and tweaks down the road), then we will return in 10-15 years, and it probably won't be to try and work it out in a different manner via private health insurance.

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