The Public Plan: Know when to hold 'em and know when to fold 'em

The latest version of the Public Plan (or Public Option), which involves the government starting a health insurance plan to compete with other insurance companies, involved getting 5 liberal and 5 moderate senators in a room for a game of Truth or Dare and other drinking games. Not really, it was just the latest version of the Public Plan which involves the government contracting with insurance companies for predetermined plans like bidding for the Federal Employees Health Insurance, Healthy Kids, or Medicare Advantage. As a result, the Public Plan has now come full circle and now resembles other current government health plans. The government has contracted many plans through a competitive bidding process as its free market solution. One interesting note about the bidding process, is that with the Federal Employees Health Insurance, participating plans are required to offer best price or any price discounts that they give to comparable groups to the government. That's one of the key ways that the agency that manages this plan can claim victory for keeping prices so low.\

This is potentially the end to the biggest distraction to achieving health insurance reform besides abortion. The Public Plan has gone from Medicare Part E (for Everyone) to Cooperatives to Robust Plans to a simple government contracting process, like the same way they decide food service in the Pentagon dining hall.

While the Public Plan almost derailed health insurance reform, I see two successful outcomes. First, I think that Congress is finally realizing that the only way that the Public Plan could be a lower cost option was by paying providers 80% of market rates. In that regards, they gained a better understanding of true cost drivers.

Second, the Public Plan was a great bargaining tool for the Obama administration to gain concessions and support from the health care stakeholders. Providers of health care feared the lower reimbursement and insurance companies feared that it would cause providers to require higher reimbursement from them. Obama bluffed everyone with this hand.

The ones who lost the most with the demise of the Public Plan were those who really wanted a single payer system and saw this as the best vehicle. Their position was otherwise not addressed in health insurance reform. More time was spent talking about death panels than a viable single payer system. Given how marginalized their position was, I hope that they can parlay their lack of attention into a vice presidency spot for Dennis Kucinich or another one of their leaders.

With the looming end of the Public Plan, I think that it's time to remember the lyrics of Kenny Roger's karaoke classic, The Gambler which is "You've got to know when to hold 'em, know when to throw 'em, know when to walk away, and know when to run." I think that the Obama administration played the Public Plan hand as long as they needed to get concessions and then folded. The rest of the Democratic party needs to do the same and know when to walk away.