The public option in health care reform: Why it matters and why we absolutely need it

From his newish perch at the Washington Post, Ezra Klein explains, in very clear language, the most controversial aspect of the health care debate: the public option. Without it, health care reform won't really be reform and the insurance industry will still control our lives. Ezra is a gem. He really gets this stuff and his explanation is very helpful:

Enter the public insurance option. It doesn't replace the insurance individuals already rely on. But it provides an alternative. It lets them make the decision. It's the health care equivalent of being pro-choice. And it thus serves two purposes. The first is to act as a public insurer. To use market share to bargain down the prices of services, much as Medicare does. To lower administrative costs. To operate outside the need for profit, and quarterly results. The Commonwealth Fund estimated that this would result in savings of 20%-30% over traditional private insurance:

The second is to apply competitive pressure to the rest of the insurance industry. If the public plan is ruthlessly lowering its administrative costs and garnering a reputation for decent, good-faith service, it will take market share from the private insurers. The private insurers will have to respond in kind to retain their customers. If they fail to adapt, the system could become something resembling a single-payer structure.

But that's not the most likely outcome. Rather, the theory here is simple: If you can't replace them, convert them. If the public plan works, then private insurance will work better as well. In this telling, the simple existence of the public plan forces a more honest insurance market: Private insurers need to offer premiums closer to their marginal cost, and they have to cut administrative costs, and they have to work on their reputation for cruelty and capriciousness. The existence of another option changes the market. Individuals will have access to private insurers, but they'll no longer be stuck with them.

That's very, very important.

Ezra also breaks down the various proposals on the public plan. Congress being Congress, there will be lots of proposals for gimmicks on the public option, like the "trigger" idea. So many of those clowns up there on Capitol Hill just can't do the right thing. No, they've got to complicate it. And, then members become ardent advocates for the gimmicky idea.

Ezra explains why he supports the public option and the true purpose of the "trigger":

As someone who thinks cost control and efficiency are important in health reform, I'm most interested in the strong public plan. Folks who are more interested in preserving something that looks like the current private insurance market tend to fall behind the trigger public plan, largely under the theory that it would be pretty much the same as no public plan at all.

That's the essence of the "trigger" plan. It's not plan at all. And, those folks who want to preserve the current system either work for the insurance industry or have amazingly good health insurance (i.e. members of Congress and their staffs and we pay for for their insurance.)

The health care debate is going to get really ugly and intense. The insurance industry and its lobbyists will do anything and everything to prevent real reform. Obama is going to really have to step up if we're going to get the change he promised. Without a public option to keep the insurance industry, there will be no change.

Our mantra through this debate should be the words of Paul Krugman:

1) Don’t trust the insurance industry.

2) Don’t trust the insurance industry.