Dear Majority Leader Reid and Speaker Pelosi,
I respectfully ask that you bring to Congress a public health insurance option under budget reconciliation rules.
There are four fundamental reasons why I support this approach - its potential for billions of dollars in cost savings; the growing need to increase competition and lower costs for the consumer; the history of using reconciliation for significant pieces of health care legislation; and the continued public support for a public option.
A Public Option Is an Important Tool for Restoring Fiscal Discipline.
I pledged that a health care reform package would address skyrocketing health care costs and relieve overburdened American families and small businesses from annual double-digit health care cost increases. And that it would do so without adding a dime to the national debt.
The nonpartisan Congressional Budget Office (CBO) estimated that various public option proposals in the House save at least $25 billion. Even $1 billion in savings would qualify it for consideration under reconciliation.
Put simply, including a strong public option is one of the best, most fiscally responsible ways to reform our health insurance system.
A Public Option Would Provide Americans with a Low-Cost Alternative and Improve Market Competitiveness.
A strong public option would create better competition in our health insurance markets. Many Americans have no or little real choice of health insurance provider. Far too often, it's "take it or leave it" for families and small businesses. This lack of competition drives up costs and leaves private health insurance companies with little incentive to provide quality customer service.
A recent Health Care for America Now report on private insurance companies found that the largest five for-profit health insurance providers made $12 billion in profits last year, yet they actually dropped 2.7 million people from coverage. Private insurance - by gouging the public even during a severe economic recession - has shown it cannot function in the public's interest without a public alternative. Americans have nowhere to turn. That is not healthy market competition, and it is not good for the public.
If families or individuals like their current coverage through a private insurance company, then they can keep that coverage. And in some markets where consumers have many alternatives, a public option may be less necessary. But many local markets have broken down, with only one or two insurance providers available to consumers. Each and every health insurance market should have real choices for consumers.
There is a history of using reconciliation for significant pieces of health care legislation.
There is substantial Senate precedent for using reconciliation to enact important health care policies. The Children's Health Insurance Program (CHIP), Medicare Advantage, and the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), which actually contains the term 'reconciliation' in its title, were all enacted under reconciliation.
The American Enterprise Institute's Norman Ornstein and Brookings' Thomas Mann and Molly Reynolds jointly wrote, "Are Democrats making an egregious power grab by sidestepping the filibuster? Hardly." They continued that the precedent for using reconciliation to enact major policy changes is "much more extensive . . . than Senate Republicans are willing to admit these days."
There is strong public support for a public option, across party lines.
The overwhelming majority of Americans want a public option. The latest New York Times poll on this issue, in December, shows that despite the attacks of recent months Americans support the public option 59% to 29%. Support includes 80% of Democrats, 59% of Independents, and even 33% of Republicans.
Much of the public identifies a public option as the key component of health care reform -- and as the best thing I can do to stand up for regular people against big insurance companies. In fact, overall support for health care reform declined steadily as the public option was removed from reform legislation.
Although I strongly support the important reforms made by the House and Senate-passed health reform packages, including a strong public option would improve both its substance and the public's perception of any health care legislation. Congress has an obligation to reform our unworkable health insurance market -- both to reduce costs and to give consumers more choices. A strong public option is the best way to deliver on both of these goals, and I urge its consideration under reconciliation rules.
Respectfully,
PAUL W. HODES
Member of Congress
