One of the sticking points in Barack Obama’s drive to pass healthcare reform is his proposed “public option” – a government-run insurance scheme to compete with existing private plans. Mr Obama has often said that this idea is needed to “keep the private insurers honest”. Almost all Republicans and many conservative Democrats are unhappy with the notion. In the past few days, the White House has signalled that it is willing to give way.
Most Democrats would see this as a serious setback, and are imploring Mr Obama not to yield. They attach great importance to the idea because they hope it might be the thin end of a wedge. The public option, in their view, might have a modest effect to begin with – but over time, correctly managed, it would significantly shrink the detested private insurance business. That prospect is exactly why the other side is against it.
Characteristically, Mr Obama has been trying to have it both ways. His “keep them honest” soundbites express Democratic party orthodoxy: the private health insurers are bandits. Yet he has also said that the public option should operate under strict regulation and without public subsidy, all but neutering its ability to play the role he appears to advocate. Either the public option is the start of an assault on private health insurance – in which case most Americans would not want it – or else it isn’t, in which case why advocate it in the first place?