Big Pharma and Big Insurance go on the attack

Lobbyists are working behind the scenes to kill the public option in the healthcare bill. And they're succeeding.


Robert Reich
June 8, 2009 2:21PM (UTC)

I poked around Washington Friday, talking with friends on the Hill who confirmed the worst: Big Pharma and Big Insurance are gaining ground in their campaign to kill the public option in the emerging healthcare bill.

You know why, of course. They don't want a public option that would compete with private insurers and use its bargaining power to negotiate better rates with drug companies. They argue that would be unfair. Unfair? Unfair to give more people better healthcare at lower cost? To Pharma and Insurance, "unfair" is anything that undermines their profits.

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So they're pulling out all the stops -- pushing Democrats and a handful of so-called moderate Republicans who say they're in favor of a public option to support legislation that would include it in name only. One of their proposals is to break up the public option into small pieces under multiple regional third-party administrators that would have little or no bargaining leverage. A second is to give the public option to states where Big Pharma and Big Insurance can easily buy off legislators and officials, as they've been doing for years. A third is to bind the public plan to the same rules that private insurers have already wangled, thereby making it impossible for the public plan to put competitive pressure on the insurers.

Max Baucus, chair of Senate Finance (now exactly why does the Senate Finance Committee have so much say over healthcare?) hasn't shown his cards, but staffers tell me he's more than happy to sign on to any one of those. But Baucus is waiting for more support from his colleagues, and none of the three proposals has emerged as the leading candidate for those who want to kill the public option without showing they're killing it. Meanwhile, Ted Kennedy and his staff are still pushing for a full public option, but with Kennedy ailing, he might not be able to round up the votes. (Kennedy's health committee just released a draft of a bill, which contains the full public option.)

Enter Olympia Snowe. Her move is important, not because she's Republican (the Senate needs only 51 votes to pass this) but because she's well-respected and considered nonpartisan, and therefore offers some cover to Democrats who may need it. Thursday night Snowe hosted a private meeting between members and staffers about a new proposal that Pharma and Insurance are floating, and apparently she's already gained the tentative support of several Democrats (including Ron Wyden and Thomas Carper). Under Snowe's proposal, the public option would kick in years from now, but it would be triggered only if insurance companies fail to bring down healthcare costs and expand coverage in the meantime.

What's the catch? First, these conditions are likely to be achieved by other pieces of the emerging legislation; for example, computerized records will bring down costs a tad, and a mandate requiring everyone to have coverage will automatically expand coverage. If it ever comes to it, Pharma and Insurance can argue that their mere participation fulfills their part of the bargain, so no public option will need to be triggered. Second, as Pharma and Insurance well know, "years from now" in legislative terms means never. There will never be a better time than now to enact a public option. If it's not included, in a few years the public's attention will be elsewhere.

Much the same dynamic is occurring in the House. Two members who had originally supported single-payer healthcare told me that Pharma and Insurance have launched the same strategy there, and many House members are looking to see what happens in the Senate. Snowe's "trigger" is already buzzing among members.

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All this will be decided within days or weeks. And once those who want to kill the public option without their fingerprints on the murder weapon begin to agree on a proposal -- Snowe's "trigger" or any other -- the public option will be very hard to revive. The White House must now insist on a genuine public option. And you, dear reader, must insist as well.

This is it, folks. The concrete is being mixed and about to be poured. And after it's poured and hardens, universal healthcare will be with us for years to come in whatever form it now takes. Let your representative and senators know you want a public option without conditions or triggers -- one that gives the public insurer bargaining leverage over drug companies and that pushes insurers to do what they've promised to do. Don't wait until the concrete hardens and we've lost this battle.


Robert Reich

Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written 15 books, including the best sellers "Aftershock", "The Work of Nations," and"Beyond Outrage," and, his most recent, "The Common Good." He is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, "Inequality For All." He's also co-creator of the Netflix original documentary "Saving Capitalism."

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