Public Option Conspiracy?

Is the health care reform that is likely to come out of the ongoing Congressional deliberations involve a conspiracy to force a “public option” on an unwilling public? Normally conspiracies are hidden, carried out in secrecy, but the Democrats pathway to a public option is so well-lighted and well marked that it’s hard to call it a conspiracy, even though many participants in the process appear to be blind to it. Consider:

Senators Baucus, Conrad and other poobahs have recognized that a public option would never pass the Senate. Indeed, it wouldn’t even get the vote of Senator Snowe. Thus in the coming weeks they appear poised to insert something like Senator Snowe’s proposed “trigger.”

Snowe supports a so-called “trigger” as a fall back plan where some form of a public option kicks in, perhaps temporarily, if reforms do not bring health care costs down…. [L]eadership aides say that it is increasingly likely that the “trigger” gets into the base bill that Reid is now crafting.

Thus it may be no accident, as we conspiracy theorists say, that the Baucus “bill,” according to many well-informed accounts, will quite clearly result not in lower but in much higher health care costs. As former Congressional Budge Office Director Douglas Holtz-Eakin has just written in the Wall Street Journal (last link):

As it now stands, the plan proposed by Democrats and the Obama administration would not only fail to reduce the cost burden on middle-class families, it would make that burden significantly worse.

In fact, not only would it drive health care costs higher, but it would do so in a manner likely to produce a “death spiral” for private insurance plans.

Insurance death spirals occur when regulators force insurers to offer coverage (“guaranteed issue”) at premiums below the known risk of those they are insuring, without any assurance that the shortfall can be made up elsewhere. When insurers comply with these rules and offer relatively low cost health insurance policies to all comers, quite predictably, many sick people step forward to sign up. When the insurers then try to turn around and charge higher premiums to the relatively healthy to cover their costs, the healthy, also quite predictably, are more reluctant to enroll because they can see the premiums they would have to pay would very likely exceed their health-care costs. So they often say “no thanks” to the insurance and decide to take their chances by going without coverage instead. As more and more healthy people exit the marketplace, insurers are then forced to raise premiums for everyone who remains, which only further encourages the lower risks to opt out. This vicious cycle of rising premiums and an increasingly unhealthy risk pool is called a ‘death spiral’ because it eventually forces the insurer to terminate the plan.

In short, since the Democrats have passed and will insist on a final bill guaranteed to raise, not lower, health care costs and even drive private insurers out of the market, Senator Snowe’s “trigger” is not a fall-back, compromise at all. Her proposal simply paves the way to a public option.

Say What?