Democrats bargain with Washington on health care

The health care debate has become an argument, not between Democrats and Republicans, but between Democrats and institutional Washington, where cynicism and conflict rule.

The final offer from the right seems to be a Cato Institute plan that would require everyone buy health insurance but offer "health status insurance" on that insurance for those who fear their policies might be cancelled. (And insurance on that health status insurance? And insurance on that insurance?)

The Cato plan is seen as proof Republicans are not seriously engaged in the debate.

Democrats have rolled out two of the three bills they must propose before serious negotiations can start.

• The House bill includes a "public option," allowing people to buy government insurance comparable to Medicare, and was seen as revenue neutral by the Congressional Budget Office.
• The Senate Health, Education, Labor, and Pensions (HELP) Committee plan was slammed by the Congressional Budget Office.
  

The CBO criticism drew massive headlines.

This despite the fact that, under Senate rules, only the Budget Committee can deal with changes in the tax laws and that committee, under Sen. Max Baucus, has not yet reported a bill.

The criticism, and the headlines, are a grand kabuki hiding the real action in the Budget Committee.

While liberals fear a bipartisan "gang of six," including Maine's moderate Republicans, is trying to scuttle the bill, at least one of them, Sen. Ron Wyden of Oregon (above, from his Web site), is actually working to save the bill with a proposal he calls the Free Choice Act.

The idea is that the uninsured, small businesses and the self-employed be offered a "health exchange," a  choice of plans to buy, but those who don't like any get a voucher, covering two-thirds the cost of the lowest-cost plan available.

People will use the voucher, and their own cash, in the market. The market pressure from this process would be on the side of controlling costs, and gradually everyone would be allowed to buy care under the exchange.

There are similarities between this and a plan put forward by lobbyist Bob Laszewski, which reformers have praised. A key difference is it relies on market pressures, not tax mandates, to force costs down.

Everyone knows how to push down costs -- preventive care and best practices. The question has always been how to get those ideas into the market, and whether that's possible without a single-payer system, for which there is only limited support.

Once Wyden gets the Gang of Six on board with a version of his idea the Budget Committee will release its bill The Gang wants assurances that, if government is to offer a public option, there is real pressure on the system to adopt these cost-saving techniques.

Once Washington is assured that the health care cost curve can be driven down toward what other countries pay, the kabuki will end and a final bill will move.

This post was originally published on Smartplanet.com