The morning after the big health-care speech

Joe Wilson, the Republican congressman who very briefly turned President Obama’s speech into a raucous townhall meeting, has apologized for his ““inappropriate and regrettable” outburst. And according to CNN’s instant poll, the speech was a political success.

“”Going into the speech, a bare majority of his audience — 53 percent — favored his proposals. Immediately after the speech, that figure rose to 67 percent,” says CNN Polling Director Keating Holland.”

However, that result comes with two important caveats. One, a similar speech by President Bill Clinton briefly lifted support as well, but over time his reform effort crashed and burned anyway. Two, CNN’s polling universe included only those who watched the speech, and since Republicans weren’t that interested, the audience was heavily weighted toward Democrats. That means the people polled also tended to lean Democratic, a problem CNN acknowledges may exaggerate the real impact of the speech.

In the speech and in the post-speech analysis, a lot of attention has been paid to the issue of a public option, so I want to resurrect a conversation that occurred deep in the comments yesterday, because I think it might clear up some confusion.

Under the public option, a public corporation would be established to sell health care insurance to consumers in competition with private companies. The public option is considered important because in some parts of the country, one or two insurance companies so dominate the market that no real competition exists.

Conservatives generally make two critiques of the public option:

1.) Government is inherently inefficient and incompetent, so a public plan would also be inefficient and incompetently run.

2.) The public plan is secretly designed to run private insurance out of business over time, leaving only government to provide health insurance, the dreaded “single-payer” outcome that allegedly denies consumer choice.

3.) The public plan will cost taxpayers hundreds of billions of dollars we cannot afford.

Now, points one and two raise an obvious question. How could an inherently inefficient and sloppily run public plan drive presumably well-run, efficient private insurance companies out of business?

That’s apparently where Point Three comes in. The fear is that the public option would be given unfair advantages over its private competitors and would be subsidized with billions of dollars in federal money, allowing it to sell insurance at an artificially lower price that private firms can’t match.

However, House Bill 3200 explicitly rules that out. It states that the public option cannot run a deficit and must pay benefits and operating expenses only from the premiums it collects from its customers.

Here’s the language in the bill (NOTE: “Exchange-participating health benefit plans” means private plans):

(1) IN GENERAL- The Secretary shall establish geographically adjusted premium rates for the public health insurance option in a manner–

(A) that complies with the premium rules established by the Commissioner under section 113 for Exchange-participating health benefit plans; and

(B) at a level sufficient to fully finance the costs of–

(i) health benefits provided by the public health insurance option; and

(ii) administrative costs related to operating the public health insurance option.

Get that? By law, the premiums charged under the public option would have to FULLY cover both health benefits and administrative costs. No tax subsidy allowed.

The bill also states explicitly that the public option plan must abide by the same operating rules as private plans. That language is here:

“(2) ENSURING A LEVEL PLAYING FIELD- Consistent with this subtitle, the public health insurance option shall comply with requirements that are applicable under this title to an Exchange-participating health benefits plan, including requirements related to benefits, benefit levels, provider networks, notices, consumer protections, and cost sharing.”

So again, how could a public option that is inherently inefficient and sloppily run turn around and outcompete more efficient private firms? Logic and House Bill 3200 dictate that it could not.