Joe’s Other Switcheroo

October 28, 2009 11:20 a.m.

Reformers are all up in arms over Joe Lieberman’s new effort to scuttle health care reform, for good reason. What got far less attention was that between yesterday and today Joe completely changed his rationale for why he thinks the public option is a bad idea. Indeed, explanation two contradicts explanation one. And number two is so nonsensical as to suggest he’s making up the reasons for his opposition as he goes along.Yesterday, Lieberman argued that the public option is a new entitlement that will balloon the deficit. I don’t think it’s a good argument. But there is a logic to it. He was basically saying that the government will start a public option, have the program run into trouble and then have to come in and bail it out,. So more money added to the federal debt.

Here’s the quote …

I think a lot of people may think that the public option is free. It’s going to cost the taxpayers and people who have healht insurance now. and if it doesn’t its going to add terribly to our national debt….all the history we have of health entitlement programs, including [medicare/medicaid] is that they end up costing more than we’re prepared to pay.

Again, there are some real holes in that argument. But the idea that the government might later have to get into subsidizing the public option isn’t crazy.

But this morning he changed his argument completely. He now says that the public option will work so well at negotiating good deals with hospitals, doctors and pharmaceutical companies that those companies will be out a lot of money and they’ll have to make it up by charging higher rates to private insurers, thus upping everyone’s premiums.

Here’s Lieberman this morning on Fox …

If the public option, the government run health insurance company, negotitates hard to lower the reimbursement, the money it’s paying to hospitals, doctors, they’re gonna have to get that money somewhere, and where they’re gonna get it is from the 200 million americans who today have private health insurance. Premiums will go up. It’s exactly what’s happened with Medicare and Medicaid.

My hospitals in Connecticut told me a while ago that they get 70 percent of the average cost of patient care from Medicaid, about 90 percent from Medicare. If that was it they’d go out of business. So they charge the private health insurance companies 130 percent of the average cost, and that’s what would happen with this new entitlement, new government run health care program. It’s just not worth the risk.

Now, that’s a totally different argument and it leaves out the fact that the public option will be competing against the private insurers — at least with a certain number of potential customers. So private insurers will be under a lot of pressure not to allow their rates to get too far out in front of the public option. The key with Medicare and private insurance is that they deal in pools that are totally walled off from each other. Lieberman seems to completely ignore what most assume would be downward pressure on private insurance costs since the private insurers will have to be competing, at least to some degree, with a lower cost competitor. Insurers obviously have a great deal of negotiating leverage too. So it’s not like they simply have to accept dictates from the providers.

Admittedly this is all a bit deep in the policy weeds. But it does point to what experience with Joe suggest — which is that this is opposition for the sake of opposition, the politics of pique. Why else would change his argument overnight?

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