An amazing sight occurred last week.
Democrats in Washington grew a spine and actually put up a fight on something. And in the process, the public option for health care is suddenly back on the table.
First, some recent history. The House of Representatives had passed a basic public option in the bill they passed in early November. The Senate stalled for months on end while the Democratic leadership conceded portion after portion of the bill in order to attract Republican support for the bill. After all those months, they gave up most of the meat of the bill and got exactly zero Republican votes.
Then, one month ago, Republican Scott Brown won the special election to fill the late Ted Kennedy's Senate seat, and all of a sudden, Democrats were unable to pass anything, as they had a majority of "only" 59–41.
Arcane and outdated Senate traditions like the filibuster were being abused like never before in history, and the Democratic agenda was stalled indefinitely. Then the public option was revived, jump started by, of all things, a private insurance company.
Anthem Blue Cross of California recently announced a hike in premiums for those buying insurance on an individual basis. The size of the rate hike was enormous (39 percent), and in Maine, premiums have already increased 400 percent over the last decade.
Wellpoint, the Indianapolis-based company that owns California's Blue Cross company, is also the employer of Board of Directors member Susan Bayh, the wife of retiring Sen. Evan Bayh (D–Ind.). The company had a representative appear on FOX Business Channel to discuss the rate hike. The FOX host scolded him, saying this just gives health care reform another push.
Yet, the rationale isn't one of seeking even more profits, but one of justifying costs. The health reform bills, while quite far from perfect, would at least modestly lower costs and make insurance coverage more affordable. The death of reform, Wellpoint realizes, would be catastrophic.
Here's why: If costs continue to rise extremely fast, healthy people will be provided with more incentive to not purchase insurance until they need it for illness or surgery. In effect, this leaves insurance companies with clients who are the sickest and the most expensive to care for; a recipe for disaster for both insurers and patients.
This is why it's not possible to craft a bill that simply bans the denial of insurance based on pre-existing conditions. Surely everyone believes that if someone wants it, they should be able to purchase insurance, but if a ban on pre-existing conditions is in effect, there's no incentive for people to purchase insurance until they need it. After all, they could just buy it when they get sick.
Thus, the way to combat that problem is to mandate that people purchase insurance so that there are healthy people in the risk pool, also. The problem with this, however, is that some people just wouldn't be able to afford it. That's why both the Senate and House bills included subsidies, to help people afford insurance.
Now with Wellpoint's increase in premiums, life has been breathed into the idea of having a public insurer compete with private companies. Once tossed off the table entirely by Senate leadership trying to curry favor with Republicans, there's been a surge in support amongst Senators in the past week at getting it through reconciliation, a process where legislation requires "only" a majority.
At this point, even Evan Bayh, someone who's painfully willing to throw away any policy initiative in order to draw supporters of both sides, has voiced support for the idea of ramming the public option through by any legal means necessary, regardless of whether the opposition likes it or not.
It's not a done deal. Never underestimate the Democrats' willingness to back down from something they're completely right about. Still, recent developments on health care are promising, and maybe we'll be surprised and get a good bill out of this after all.
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