Democrats, GOP Disagree On Public Health Plan

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The health care reform debate is getting attention on Capitol Hill. The Obama administration and Democrats want a government-run health care plan. Many Republicans say that would put private insurers out of business.

STEVE INSKEEP, host:

We're going to look more closely at that one detail that Mara described as causing so much debate. Let's listen again to the way the president voiced his support for a public health insurance plan.

President BARACK OBAMA: If you've got a private plan that works for you, that's great. But we want some competition. If the private insurance companies have to compete with a public option, it'll keep them honest.

INSKEEP: NPR's Julie Rovner is here to explain what makes that such a subject of debate. Hi, Julie.

JULIE ROVNER: Hi, Steve.

INSKEEP: First, why is that the Democrats especially think it's so important to have this public option, this public plan for people?

ROVNER: Well, one of the big reasons is to keep the private insurance industry obeying the new rules that they think they are going to set down to have prices at least affordable and to make sure that they don't discriminate against people who have preexisting health conditions. I think another important reason to include this public plan is because there are so many Democrats who want a single-payer health system, the idea of getting the private insurers out entirely and having just a government plan. That's not going to happen, but at least having a public competitor would be a step towards saying, yes, we're going to acknowledge that what you want will have a public plan there for people to choose if they wanted.

INSKEEP: So this is something the administration wants, the Democrats in Congress have demanded. What is it that makes Republicans - many of them, anyway - so very nervous and unhappy about this possibility?

ROVNER: Well, they say that having a public plan is the inevitable camel's nose under the tent, that if there's a government plan, sooner or later it will take over, there will be no private insurance. It's the first step towards the very single payer that the Democrats say, no, they're really not going to do.

INSKEEP: Well, let's explore that argument. Senator Charles Grassley of Iowa is one of them who's making it. He's saying, look, this government plan is going to offer a very nice service, which is good, but it's going to be cheaper than private insurers can manage, it's going to take away customers from private insurers, and suddenly you're going to have more than 100 million Americans using this public plan. Is that something that could happen?

ROVNER: Well, it could happen, and he's citing a study by the Lewin Group, which is a fairly well respected consulting firm. But the Lewin Group study actually looked at six different scenarios, and that was indeed one of them. But the other five had much smaller numbers of people. And of course it depends how you design this public plan. There are lots of different ways to do it.

You could limit the number of people who are eligible to go into it. In fact, that's what most Democrats are talking about. So you wouldn't have a hundred million people going into it. If you did, for instance, what Senator Schumer from New York is talking about, you might only have ten or 12 million people going into it 'cause not that people would be eligible to go into it.

INSKEEP: So this is still a subject of negotiation. But let me spin out this scenario for just a moment. Let's say that millions of people do go into the public plan. That means they go away from the private insurer that I have or you have or somebody else may have. Is that actually going to damage - as Republicans say - damage my private insurance company, damage the quality of care that I can get because suddenly my insurer has fewer customers to spread the cost around?

ROVNER: Well, indeed. If what the Republicans are talking about were to happen, that there were a public plan that allowed everybody in, that paid low rates -for instance, the kinds of rates that are paid now to doctors and hospitals under Medicare, then, yes, it could probably hurt private insurance. In fact, it could drive some private insurance companies out of business.

Would that necessarily damage the quality of care? Not necessarily. It might put some of those private insurers out of business but you would still have insurance now through this public plan. Most people who have Medicare are pretty happy with it. So the quality issue and the putting private insurance out of business issue are two different things.

INSKEEP: And as they negotiate the details of this, I want to ask one other thing, Julie Rovner. We have Democrats here who are saying it's absolutely essential. If we don't have this public plan, we've got nothing. There's no health care reform, nothing. On the other side, you have Republicans who say if you put this public plan in, you're right on the way to socialized medicine.

Are lawmakers at all seeing a way between those two extremes?

ROVNER: I think so, and that's what's going on now. We've got a lot of negotiating and deal-making and compromise. Putting out - Senator Conrad from North Dakota this week is floating the idea of having co-ops. So these would be rather than a government plan from Washington, regional buying groups so there wouldn't be quite the specter of government, but it wouldn't be private insurance either.

There's been some interest from the Republican side in that. Or you would have - again, as I said - there would be a government plan but it would be very limited, who could get into it or very limited how much they would pay. So indeed, I think there's some search for a compromise on this public plan. It's the ultimate inkblot. It depends how you design it, what it looks like. It's called a public plan but there's lots of ways to do it.

INSKEEP: NPR's Julie Rovner is helping us follow the Rorschach test that is the health care debate. Julie, thanks very much.

ROVNER: You're welcome.

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