Why Obama dropped the “public option”
February 23rd, 2010
Miles Mogulescu in Huffington Post explains The Real Reason Obama’s Plan Doesn’t Include a Public Option:
The real reason is that Obama made a backroom deal last summer with the for-profit hospital industry that there would be no meaningful public option….
s is one of the great under-reported stories of the health reform saga. Much has been written about the Obama administration’s deal with big Pharma to continue to block Medicare from negotiating for lower drug prices or to allow consumers to buy cheaper drugs from Canada, in exchange for Pharma running pro-Democratic ads and giving campaign contributions to Democratic candidates. That’s the reason, under pressure from the White House, that Senate Democrats voted down an amendment that would have allowed consumers to buy cheaper drugs from overseas.But Obama’s deal with the for-profit hospital lobby to insure there would be no public option has, as best I can tell, only been reported in two articles in The New York Times. On August 13, The Times reported that while President Obama had presented himself as “aloof from the legislative fray,” particularly in connection with the public option, “Behind the scenes, however, Mr. Obama and advisors have been…negotiating deals with a degree of cold-eyed political realism potentially at odds with the president’s rhetoric.” One the deals reported in The Times article was the Pharma deal. The other was a deal with the for-profit hospital lobby to limit its cost reductions to $155 billion over 10 years in exchange for a White House promise that there would be no meaningful public option.
“Several hospital lobbyists involved in the White House deals said it was understood as a condition of their support that the final legislation would not include a government-run health plan paying-Medicare rates…or controlled by the secretary of health and human services. ‘We have an agreement with the White House that I’m very confident will be seen all the way through conference’, one of the industry lobbyists, Chip Kahn, director of the Federation of American Hospitals, told a Capitol Hill newsletter…Industry lobbyists say they are not worried [about a public option.] ‘We trust the White House,’ Mr. Kahn said.”
Mr. Kahn’s lobbying group, with whom the White House made the deal, represents America’s investor-owned, hospitals whose profits could be diminished by a public option with the negotiating clout to negotiate lower prices. To say that the deal included ensuring that any public option would not be “controlled by the secretary of health and human services” is code for saying it would not be national in scope and would lack negotiating clout–In other words, the Obama administration made a deal that a national public option on day one comparable to Medicare was off the table.
On September 9, a few weeks after The Times reported Obama’s deal to gut the public option, President Obama gave his big health care speech to a Joint Session of Congress. In the speech, Obama said one of the programs he was considering was a “not-for-profit public option available in the insurance exchange.” Supporters of the public option took this as a sign that Obama was on their side.
But Washington insiders noticed that Obama parsed his words very carefully. The New York Times noted that:
“Mr. Obama’s call for a public plan, however, omitted any discussion of what rates it might pay or who might control it…’He worded it really carefully, because he said ‘not for profit’ and he didn’t say it had to be controlled by the government,’ Mr. Kahn [the hospital lobbyist] added. ‘The way he described it, we could support that!”
In other words, Obama signaled the private health care industry that his deal that there would be no meaningful public option still stood.
Entry Filed under: Obama administration