In their relentless drive to overhaul one sixth of the American economy, Senators are obviously making it up as they go along. In the latest desperate search to find some form of government-run health plan to compete against private health plans that is somehow acceptable to Senate liberals and moderates alike, the Senate Democratic leadership is entertaining the idea of stripping the existing “public option” from the big Senate health bill ( H.R. 3590), and replacing it with a combination of public options: an OPM/FEHBP sponsored plan ( that will be “private” in name only) and an expansion of the two giant- and financially troubled or debt ridden- Great Society entitlements: Medicare and Medicaid. If the original idea of the public option was to keep costs down, As its champions have tiresomely insisted, a proposal to expand Medicaid and Medicare is curious to say the least: Both are major drivers of the health care spending curve upwards- well into the stratosphere.
The key question is what authority OPM (Office of Personnel Management) would have in the negotiation of rates and benefits, and in the financing and the administration of the program. These details are crucial. If OPM were given absolute authority to set premiums and benefits, it could conceivably set premiums below the market prices, thus undercutting private health plans on an un-level playing field, leading to the kind of erosion of private health coverage that was envisioned under the “robust” public plan favored by the Left. If it sets rates and benefits on the basis of the market rates, of course, it would fail to achieve the Left’s goal of a “robust:” administered pricing system, a central rationale for the public plan in the first place. But, of course, that could change over time. The key issue in health care policy is the infrastructure of power and control; the levers of power and domination, additional staff and funding, can be always added later, especially if an artificially low priced, government-sponsored health plan (or plans) starts to run deficits.