A Smart Deal on Health-Care Reform

According to Politico, Senate Democrats may have figured out how to do the seemingly impossible: craft a deal on the public option that eliminates Joe Lieberman and Ben Nelson's main reason to vote against health-care reform while keeping their liberal wing happy. How? By not creating a public option, but instead allowing everyone over 55 to buy in to Medicare and increasing Medicaid eligibility to 150 percent of the poverty line.

Carrie Budoff Brown reports:

Under the compromise, the public option would be removed from the bill and replaced with a new government-administered national insurance plan similar to the Federal Employee Health Benefits Plan, which serves members of Congress and federal workers.

To sweeten the deal for liberals, people 55 and older would be able to “buy in” to Medicare and purchase coverage in the popular government program for the elderly.

For liberals who wanted the public option to open the door to single-payer, expanding Medicare should create the same possibility. All single-payer really is, after all, is Medicare for everyone. If Medicare becomes a more popular and cost-effective program for people ages 55 to 65 than private insurance, there will surely be calls to expand it further. Meanwhile, liberal policy wonks were wringing their hands recently over the possibility that a public option that made it through needle's eye of 60 Senate votes would be so watered down it would not achieve its cost-saving purposes.

Democratic conservatives, on the other hand, get to tell their constituents—or in Lieberman's case, the Sunday-morning shows—that they maintained their small-government credentials by not creating the new federal program. Instead, they expand Medicare, which everyone loves, even the congressional Republicans whose hero Ronald Reagan got his start in politics opposing its creation.

This sounds like smart politics. But obstacles remain. How will the Congressional Budget Office score this proposal? Will doctors and hospitals come out in force against a plan to expand Medicare and Medicaid because they will receive those plans' reimbursement rates, which are lower than those of private insurers? But the possibility that there is a way around the public-option conundrum is a potential paradigm shift in the health-care reform debate.