Daschle, Dole Say Public Option Must Be Scrapped ABC World News reported, "Former Senate leaders launched a bipartisan push for healthcare reform, but they took issue with a central feature of the President's plan, a public, government-run health insurance program." Bob Dole was shown saying, "If you want to stop this thing dead in its tracks, or dead on arrival, in my view, you put the public plan in it." ABC noted that even Tom Daschle, "once Obama's top healthcare adviser, said the public option probably needs to be scrapped." Daschle: "We've come too far and gained too much momentum for our efforts to fail over disagreement on one single issue."

Daschle, Dole and Republican Howard Baker released a bipartisan plan today that would tax some employer-provided health-insurance premiums, require individuals and large employers to buy health insurance, and create public insurance pools run by states instead of the federal government [...]

In a bid to blunt Republican opposition to setting up a government-run insurance plan for those without coverage, Dole, Baker and Daschle suggest giving states, instead of the federal government, the option of establishing insurance-purchasing pools. These pools would extend coverage to everyone regardless of their health status or ability to pay, Daschle said.

And yet Sen. Baucus is bending over backwards to jettison a public health insurance option to appeal to Congressional Republicans. Despite a bipartisan collection of former Senate Majority Leaders endorsing a $1.2 trillion plan, Baucus is looking to trim $600 billion out of his plan – even if it means that its ability to cover more Americans will be substantially reduced. You can’t cut out a third of your bill without taking the axe to primary care, prevention, subsidies for the middle class to afford premiums, and everything that we know our health care system actually needs, and needs desperately. And what, aside from a couple fewer insults from John McCain, will you have gained?

Simply put: Congress is focusing on the wrong thing. Leaders who are able to get us over the finish line by creating a bill that can substantially improve health care access, cost-control and quality in this country aren’t focused on the best bill – they’re focused on a dog and pony show of interpersonal drama, and looking to placate a constituency with no credibility rather than solve the problem. It's time to turn off Project Runway and start making the change we elected them to create.

You can cut a $1.6 trillion reform bill down to $1.3 or even $1.2 and still come up with a pretty good program. In fact, some reforms designed to reduce the program's cost would actually make it better. You could, for example, introduce more aggressive payment reforms to reward efficiency and outcomes. You could create a real public plan that controls costs better than private insurers could. You could even do both.

But my suspicion--based on what I've heard and seen over the last few months--is that knocking the price tag all the way down to $1 trillion will mean a lot less money to subsidize insurance for people who can't afford it and far fewer guarantees that insurance would be adequate. In other words, you could end up with many more people still uninsured or underinsured.

The New York Times reports that House Democrats are considering a value added tax as a way of financing healthcare reform. A VAT is one of those things that economists and think tankers all love, but it's also one of those things that's never had any real chance of being adopted in the United States. So it surprised me that Dems were even seriously talking about it.

But Tyler Cowen has a take on this that I hadn't thought of:

"From my distant perch out here in Fairfax (and Arlington), I believe this means health care reform is falling apart. It means the unions won't let them tax health insurance benefits and the CBO won't let them punt on the issue of finance."