“My guess is that there isn’t going to be a public option,” said Dean Baker, co-director of the Center for Economic and Policy Research, at a forum hosted by the Congressional Progressive Caucus last week. But in return for giving it up, progressives should get something significant in exchange. Baker believes that one option would be a federal, rather than state-administered, exchange, where consumers could shop for private insurance, because of regulatory gaps that would allow some states to create weak marketplaces.
“There’s greater hope for higher standards in a federal exchange,” said Baker.
Another key difference is an excise tax on Cadillac, or high-cost, healthcare plans, that the Senate has proposed to help pay for the bill. The lower chamber’s measure calls instead for a surtax on high-income earners.
“The majority of the House takes the position that to tax healthcare benefits is tantamount to raising taxes on people who make less than $250,000 per year and we don’t want to do that,” said Clyburn.
Labor unions bitterly oppose taxing Cadillac plans, but Baker, who prefers the millionaire’s tax, said it wouldn’t be a disaster because it would not affect low-income earners.
But Senate Democrats are feeling just as adamant about not raising income taxes, says Cato Institute senior fellow Michael Tanner. For some, particularly those from red states, such a move could hurt them politically. Then there are others, said Tanner, who’d rather reserve the option to increase taxes to help pay for entitlements or to lower the budget deficit.
And then there is the abortion issue. House Democrats were able to pass their bill only after agreeing to support a measure sponsored by Michigan Rep. Bart Stupak, which would restrict abortions that could be offered through a public option and private insurance plans that receive government subsidies.
“It’s the toughest of all because it’s a moral issue, which makes it much harder to compromise,” said Tanner.
Clyburn disagrees and expressed confidence that the Senate bill’s language on abortion will satisfy who voted for the Stupak amendment.
Getting a bill to Obama is the one thing most people can agree on and Baker says even that will be just the beginning.
“This is a two-part agenda. One was to cover the people who aren’t covered; this goes far, though not as far as we want. The second goal is to fix the health care system,” Baker explains. “We’ve done very little on that so the question is how do we set the stage to be in a better position to confront it in the future because we know we have to; there is no choice.”