Why the Supposedly Moderate Democratic Health Plan Won't Fly Either

The Brownstein article I mentioned earlier notes that in Democratic primaries, the health-care debate pits advocates of single payer against supporters of a "public option" that would allow but not force people to select government-provided health insurance. You can see why that idea would appeal to Democrats facing primary candidates to their left: It sounds like it guarantees universal coverage with less cost, coercion, and potential unpopularity than single payer.

But there are reasons that President Biden, even after campaigning on a public option and while running an administration that often catered to the left, didn't push for the idea. I wrote about them back in 2020:

If the public option pays [doctors and hospitals] stingily and providers don’t have to participate, costs will be low, but so will enrollment. There’s no point in paying for a plan that doesn’t let you see doctors. Expanding coverage while keeping costs under control will be possible only if doctors and hospitals accept lower incomes. Even then, the long-term effect might be a smaller supply of medical services. But how likely is it that doctors and hospitals will put up with being forced into a low-paying plan to begin with? . . .

Congress . . . has no appetite for cutting funds to doctors and hospitals. Neither do any of the proponents of a public option. It’s not as though Biden or Buttigieg has ever gone out of his way to explain that rosy cost projections depend on cutting payment rates to health-care providers. . . .

But if these plans somehow worked — if they really did produce high-quality, low-cost options by squeezing providers — they would be enormously disruptive. As people left private coverage for the public option, prices could well rise for those remaining. Some lines of coverage could disappear because they would no longer be profitable. When the Center for American Progress, a progressive think tank, got Avalere Health to model a proposal for a strong public option, the consultants found that 18 million people would choose to drop their employer-provided coverage. They also found that another 14 million people would join the new program because their employers had stopped offering coverage.

Those numbers are surely out-of-date, but there's no reason to doubt that large effects of that kind would take place.

I continue to think that a health policy that made renewable catastrophic coverage affordable for all via deregulation and some subsidies (albeit less extensive ones than we have now) would be superior to these progressive ideas and to the status quo -- but must admit that this idea doesn't seem likely to happen any time soon either.