Public debate over ‘public option’ for healthcare

President Obama has pledged to find a middle ground in his drive to reshape the nation’s troubled healthcare system.

But even before Congress debates a healthcare bill, the president is getting sucked into a fiercely polarized fight over a centerpiece of his agenda: a new government insurance program that patients could choose instead of private coverage.

The battle over the “public option” has mobilized interest groups on both sides of the political spectrum with millions of dollars in their campaign war chests. Television ads promoting and attacking the insurance provision are already hitting airwaves.

The Obama administration and its allies are now scrambling to contain a full-throated ideological debate that some fear could threaten the most ambitious healthcare campaign in nearly a generation.

“Everybody needs to keep their powder dry,” Senate Finance Committee Chairman Max Baucus (D-Mont.) said in an interview. “We have a huge opportunity to accomplish very significant health reform. . . . Let’s not have any sparks that could light a fire.”

The sparks, however, are already flying.

Conservatives have zeroed in on the insurance proposal as a potential Achilles’ heel in Obama’s healthcare plan, casting it as a move toward Canadian-style government healthcare and contending that federal bureaucrats will dictate personal medical decisions.

Meanwhile on the left, longtime advocates of a single-payer system are also fomenting a showdown with the right to force Obama and Democratic leaders to stand firm behind a new government program.

“This has become a lightning rod,” said Maine Sen. Olympia J. Snowe, a Republican who Democrats hope will work with them on healthcare. “There is a lot of suspicion. . . . I’m afraid this could easily be used as an excuse for not moving any further.”

Policymakers and politicians have battled for decades over the government’s role in a system that relies on both public programs such as Medicare, which serves the elderly, and private insurance, which covers most workers and their families.

Fifteen years ago, the Clinton administration’s healthcare campaign was derailed in part by an insurance industry campaign featuring a fictitious couple named Harry and Louise who worried aloud about government making their medical choices.

Now, with the debate flaring anew, Obama and his congressional allies are struggling to head off the conservative assault and tamp down a liberal revolt, even as they work to keep major healthcare groups, including insurers, at the negotiating table and off the political warpath.

At a recent White House meeting, the president assured a group of House Democrats that he was still committed to a government insurance option.

Last week, Health and Human Services Secretary Kathleen Sebelius tried to defuse the issue on the other side of the aisle, telling GOP lawmakers on the House Ways and Means Committee that the administration had no intention of driving private insurers out of business.

Sebelius noted that many state governments offer their employees a choice between public and private health insurance.

Baucus, who plans to introduce sweeping healthcare legislation next month, said he had recommended starting with less controversial elements of healthcare reform. “We don’t have to deal with the public [insurance] option on the first day,” he said.

Baucus, Obama and others see a new government program as crucial to covering the approximately 46 million people in the United States who have no insurance. They also argue that a public alternative would pressure private insurers to control costs and improve quality.

The federal government already provides health insurance to about 83 million Americans through Medicare, Medicaid and other public programs, including those offered by the military.

Private insurers, meanwhile, face growing criticism for refusing to cover people with preexisting conditions and dropping coverage for sick customers. “This is a benchmark that will set a high standard that private plans have to meet,” said Jacob Hacker, a political scientist at UC Berkeley who advocates a public option.

But insurers say more federal regulation could ensure affordable, high-quality insurance for all. In recent months, the industry has offered to guarantee coverage and stop charging more to people with preexisting medical conditions.

A government-run insurance program, industry leaders and many conservatives maintain, would have an unfair advantage and ultimately drive insurers out of business.

That would inevitably mean a single-payer system, said Stuart Butler, vice president for domestic policy at the conservative Heritage Foundation. “The probability that a monopoly would serve customers well is close to nil,” he said.

GOP lawmakers are intensifying warnings that a public insurance plan will lead to nationalization of healthcare and new limits on patient choice.

That’s a message that will resonate, said veteran GOP pollster Tony Fabrizio. “People don’t want government agencies, boards or regulators standing between them and their doctors. . . . They understand that government control inevitably leads to rationing.”

Pushing that message is the Conservatives for Patients’ Rights Action Fund, a new group founded by former hospital executive Richard L. Scott and assisted by CRC Public Relations, the conservative public affairs firm that worked on the Swift Boat Veterans for Truth campaign against Sen. John F. Kerry (D-Mass.) in the 2004 presidential election.

The fund is in the midst of what the group said would be a monthlong, $1-million television advertising campaign featuring doctors from Canada and Britain -- both of which have single-payer systems -- discussing waiting lists and limited patient choices. A new ad featuring dissatisfied patients from those countries began airing this weekend.

At the same time, MoveOn.org, the liberal grass-roots powerhouse, has been mobilizing its 5 million members to pressure Congress not to compromise on the creation of a new public plan option.

Last week, the group aired its second healthcare ad of the year, featuring a pair of undertakers bemoaning a public plan that could make people live longer. MoveOn’s first ad went after the insurance industry for opposing Obama’s public option.

“We’re not taking anything for granted,” said Nita Chaudhary, MoveOn’s national campaigns director. “This is likely to be our biggest fight for the year.”

MoveOn has been joined by other liberal advocacy groups such as Health Care for America Now, which aired its own ad last month promoting a public plan. Last week, it aired a second ad highlighting Scott’s former work for healthcare giant Columbia/HCA, which a decade ago paid $1.7 billion to settle fraud charges against the company.

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noam.levey@latimes.com

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(BEGIN TEXT OF INFOBOX)

Public option primer

The concept: A new health insurance program provided by the federal government that people could choose if they are unhappy with plans offered by private insurers.

Key backers: President Obama, senior congressional Democrats, consumer groups.

Key opponents: Congressional Republicans, insurance companies.

Main selling point: Advocates say it would force private insurers to provide better service and help control soaring medical costs.

Main criticism: Opponents say it would drive insurers out of business, leaving Americans with one choice for their health insurance -- the government.