One-opt, Two-opt, Red-Opt vs Blue-Opt

Analysis…

Democratic senators have warmly received the newest compromise on health care, and, amazingly, it includes a national public option.  The reform, proposed by Sen. Tom Carper (D-Del.) and Sen. Schumer (D-NY), includes a “robust, national public option” that will allow individual states the right to refuse the program if they so wish.  That being stated, the U.S. would most likely see a clear divide between red states and blue states if the reform is mandated.

So how will this system work?  Will we be leaving behind our public option lovers that live in red states?  Here, I have provided analysis of the situation via bloggers and critics who discuss the opt-in, opt-out compromise and what it will mean to the people.

Ezra Klein |  [It] gives you an essentially national administrative structure, but also gives states the right to reject the option entirely. It means, in other words, that the blue states get the public option at full strength and the red states get to ignore it entirely.
That’s a real improvement over Tom Carper’s proposal allowing individual states to create their own public options, which would be quite a bit weaker than a national program. It also creates a neat policy experiment: We can see, over time, what happens to state insurance markets that include the national public option and compare them with those that don’t. We can see whether the worst fears of conservatives are realized and private insurers are driven out and providers are forced out of business due to low payment rates, and we can see whether the hopes of liberals are right and costs come down and private insurers become leaner and more efficient. Or both, or neither. It’s an opportunity to pit liberal and conservative policies against each other, rather than just pitting liberal and conservative congressmen against each other.

Talking Points Memo |  This sounds like a compromise reformers could embrace because I suspect many, probably most states would opt in, providing a plenty large enough pool to get to the bargaining power that is essential to make a public option work.
Part of my assumption here is that you’d have relatively few states opting out and they’d tend toward lower population states, likely clustered in the South and mountain states. So I suspect that a substantial majority of the population would be in opt-in states, providing the bargaining power that would make the public option threshold viable. And if the public option works, one would think the people in opt-out states would quickly become pretty envious of the folks in states who had the option and pressure their state governments to get in. Of course, if the public option was an abysmal failure the reverse would happen. But that’s another matter.

The Daily Kos |  This could make political sense. What they’re talking about is a robust national public option, one that would be set up to be successful. If giving governors the opportunity to turn it down is the compromise we need make a strong, federal public option operating the majority of the nation, it might be worth a look. It’s certainly better than Carper’s alternative, creating fragmented state options. It’s better than co-ops or triggers, or even Schumer’s level playing field.

Huffington Post |  For conservative Democrats — especially those from states with major private health insurance industry interests — this concession could be key, allowing them to punt a vote on a public plan to local governments. For progressives, it would not be the hardest pill to swallow.
Naturally, there are still major question marks about the opt-out approach. For starters, will all progressives be on board? With 60 caucusing members in the Senate, the argument has been made that the liberal wing of the party has already compromised enough to stop the Republicans from filibustering legislation. Moreover, the House of Representatives seems all but certain to pass legislation that includes a robust public plan. Would legislators in that chamber be willing to add a opt-out provision for the sake of picking up Senate votes?
Down the road there are also obvious concerns. As Kirsch notes, private insurance companies are major players in state politics as well as on the national level. A slew of lobbying campaigns could erupt to push state governments to opt out of a government-run plan.
Finally, there are still doubts that the opt-out approach would have the votes needed to pass through the Senate. As one somewhat exacerbated Democratic aide noted, “There are people who are very uncomfortable with the public option generally and this won’t necessarily deviate their concern.”

The Wonk Room |  At first glance, the compromise preserves the original advantage of the public plan: it allows the plan to use its inherent efficiencies and market power to lower health care costs, promote delivery system reforms, and inject competition into concentrated health insurance markets. Red states, for all their political posturing, may weaken the reach of the national plan by opting out. But if the public option proves itself in states where it’s functional, then forgoing the public plan would be tantamount to imposing a tax hike on state residents. After all, why reject a program that offers lower premiums and saves the state billions in health care costs? Hot rhetoric about a ‘government-takeover’ of health care may sound hot on television, but it loses its fever when you’re trying to balance your books.
In fact, after complaining that Medicare/Medicaid would lead to socialism in America during the 1960s, all 50 states have chosen to participate in the Medicaid program — a jointly funded venture between the states and the federal government, which gives states the option to opt out.