Obama fights for health reform– from Moscow

President Obama is in Moscow, but he’s still in the thick of negotiations over health reform back in Washington.

On Tuesday, The Wall Street Journal quoted presidential Chief of Staff Rahm Emanuel as saying that the White House is open to a deal on the so-called public insurance option, which has emerged as a key sticking point in congressional discussions. The purpose of instituting a “public option” is to provide competition for private insurers, and thus drive down costs. Opponents fear injecting a low-priced public plan into the mix could drive private insurers out of business.

Mr. Obama has argued early and often for a public option, though never issued an ultimatum.

Now Mr. Emanuel is saying that while the goal of creating competition is “nonnegotiable,” the path to getting there is. One alternative he raised is to institute a public plan only if the marketplace does not provide enough competition on its own. Such a “trigger” was put in place in the 2003 deal for prescription drugs in Medicare, but it was never implemented.

Obama still likes a public option

Enter the remote hand of Obama, with his thumb resting more heavily on the scale for a public option. Mid-morning on Tuesday, a “Statement from the President on Health Care Reform” landed in in-boxes, reportedly at the urging of Senate Democrats: "I am pleased by the progress we're making on healthcare reform and still believe, as I've said before, that one of the best ways to bring down costs, provide more choices, and assure quality is a public option that will force the insurance companies to compete and keep them honest,” the statement said. “I look forward to a final product that achieves these very important goals."

Liberals don’t like the idea of a “trigger,” which they say requires the system to get worse before it can get better. Nor do they like the idea of establishing a network of regional health insurance cooperatives – health plans owned and operated by consumers – floated by Sen. Kent Conrad (D) of North Dakota. Opponents of the co-op idea say any public option needs to be truly national, not a patchwork of regional plans, to compete effectively with private insurers.

Two committees, two types of coverage choices

A moment of truth will come when the two competing Senate plans are reconciled. Though the final details are still being ironed out, the Health, Education, Labor, and Pensions Committee favors a form of public option while the Finance Committee is leaning toward the co-op idea.

Another sign that health reform is proceeding will come Wednesday, when Vice President Joe Biden is expected to announce an agreement by three major hospital associations to reduce costs by $155 billion over 10 years. The three groups – the American Hospital Association, the Federation of American Hospitals, and the Catholic Health Association – reportedly reached this agreement in discussions with White House officials and leaders of the Senate Finance Committee, according to the Washington Post. About $100 billion of the savings would come through reduced Medicare and Medicaid reimbursements to hospitals; another $40 billion would come through reducing payments that hospitals receive for treating the uninsured, the paper said.

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