Public Option Still Divides

Even before a South Carolina man jumped up at a town-hall meeting in August and warned "Keep your government hands off my Medicare," it was evident that a new government health insurance plan is going to stir a lot of emotion.

The so-called public option is included in the reform bill that's moving ahead in the Senate after Saturday's vote. The public option is in addition to other government plans, including Medicare, Medicaid, and the Children's Health Insurance Program, and it seemed far too controversial to include in any piece of legislation that stood a chance of passing.

But here we are. Even though it was stripped from a Senate committee bill to get it passed, and even though some Democrats say they will vote to kill a bill with a public option, the new plan is present in both the Senate and House versions of President Obama's health reform.

The question is: What's the compromise? Since expanded coverage is a key goal of health reform, the issue has to be addressed. In addition to the new public plan, Medicaid is being expanded in both the House and Senate versions of the reform bill. Oddly, the expansion of Medicaid hasn't created as much debate over a government takeover of health care. States share the cost of funding Medicaid, and some governors have warned expansion will stress their budgets.

Business groups oppose the public option largely because they see it as a potential cost shift to private industry. Another government plan that won't reimburse doctors and hospitals fully will mean private employers pay more to insure their workers.

"This will lead to a cost shift, which will mean manufacturers who continue to offer private insurance will face higher premiums," National Association of Manufacturers president John Engler says in a statement.

So the challenge is to create a public option that doesn't look like a public program. Therein lies the challenge.