Two Leading Labor Unions Drop Out of Health Care Talks, Citing Discord Over "Public Plan" Option and Employer Contributions

The New York Times reports that the American Federation of State, County and Municipal Employees and the Service Employees International Union have both pulled out of the Health Care Reform Dialogue. According to the New York Times, the unions withdrew from the talks because they favor a public insurance plan and mandatory employer contributions to health care, while insurance companies, some employers and Republicans strongly oppose these ideas.

Both unions are strong supporters of Obama, and they recently joined a group of unions and progressive organizations that will wage a campaign to generate political support for his budget proposal. The unions' departure demonstrates the deep conflict over a public plan option and employer sponsorship among participants in the important negotiations on health care reform.

Every Voice at the Table?
Although Obama only recently held his "Health Care Summit," participants in the Health Care Reform Dialogue have been meeting since last Fall through the office of Senator Edward Kennedy who chairs the Senate Committee on Health, Education, Labor and Pensions. Some progressive organizations recently complained that advocates of a single-payer system were not invited to participate in the talks.

As the Health Care Summit began President Obama announced that "every voice" must be heard on the issue. The next day, however, the two unions withdrew from the talks in part due to conflicts over the issue of a public plan, which they believe could develop the infrastructure that would ultimately lead to a single-payer system.

Public Plan: Will the President Compromise on This Issue?
The article suggests that the consensus proposal the group ultimately endorses will reflect the "lowest common denominator" among participants and that this would not include a public plan option which insurance companies and Republicans strongly oppose. The lack of a public plan option and mandatory employer contributions would conflict with Obama's campaign promises.

The health care policy section of BarackObama.Com states that Obama and Vice President Biden would:

* Make employer contributions more fair by requiring large employers that do not offer coverage or make a meaningful contribution to the cost of quality health coverage for their employees to contribute a percentage of payroll toward the costs of their employees health care.

* Establish a National Health Insurance Exchange with a range of private insurance options as well as a new public plan based on benefits available to members of Congress that will allow individuals and small businesses to buy affordable health coverage.

WhiteHouse.Gov also lists these proposals.

Obama's Recent Flexibility on the Public Plan Option
President Obama has exhibited far more flexibility regarding the public plan option than he did during his campaign. Even as he kicked off the summit, he expressed his willingness to abandon the public plan option, and he recognized insurance company opposition to the proposal:

If there is a way of getting this done . . .where we’re driving down costs and people are getting health insurance at an affordable rate and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I’d be happy to do it that way. . . .

I recognize the fear that if a public option is run through Washington and there are incentives to try to tamp down costs . . . private insurance plans might end up feeling overwhelmed.

Critics will likely argue that Obama never really wanted to create a public plan option, but it is also plausible that he discovered that no progress would take place if that option remained on the table. Either way, this situation is looking a lot like the days of "HillaryCare." Leading Republicans have already denounced a public plan option and have argued in a letter to the President that:

[F]orcing free market plans to compete with these government-run programs would create an unlevel playing field and inevitably doom true competition.

Ultimately . . . we would be left with a single government-run program controlling all of the market.

Of course, the letter neglects to mention that government-sponsored health insurance already exists nationally and in every state (or that private-run entities, like schools and universities, compete with publicly funded entities and do not control the market). Consolidation could reduce the costs of coverage and the delivery of health care, which is efficient from an economic standpoint.

I am not advocating a single-payer system (because I am still thinking through the issues). But the answer cannot rest on bankrupt cries of governmental interference and socialized medicine. The debate must center on "how" and "when" the government can inject itself within the private sector -- not "whether" it can do so altogether.

More News on Public Plan Debate:

Health Overhaul Could Stall Over Government Role