Health Care For The Blue Dogs

By Jacob S. Hacker

Created 07/28/2009 - 1:03pm

The fate of health-care reform hangs on what President Obama and leading Democrats do in the next few weeks. In particular, it hinges on an effective response to moderate Democrats in the House -- known as "Blue Dogs" -- who are threatening [1] to jump ship.

The main worry expressed by the Blue Dogs is that the Congressional Budget Office has predicted [2] that leading bills on Capitol Hill won't bring down medical inflation. The irony is that the Blue Dogs' argument -- that a new public insurance plan designed to compete with private insurers should be smaller and less powerful, and that Medicare and this new plan should pay more generous rates to rural providers -- would make reform more expensive, not less. The further irony is that the federal premium assistance that the Blue Dogs worry is too costly is the reform that would make health-care affordable for a large share of their constituents.

The Blue Dogs are right to hold Obama [3] and Democratic leaders to their commitment to real cost control. But they are wrong to see this goal as conflicting with a new national public health insurance plan for Americans younger than 65. In fact, such a plan, empowered to work with Medicare, is Congress's single most powerful lever for reforming the way care is paid for and delivered. With appropriate authority, it can encourage private plans to develop innovations in payment and care coordination that could spread through the private sector, as have past public-sector innovations.