For instance, rather than linking the public option to the rates enjoyed by Medicare, the new language would require a separate agreement without Medicare's bargaining power, Rep. Jerrold Nadler (D-N.Y.) said. Secretary of Health and Human Services Kathleen Sebelius would be responsible for negotiating deals with service providers from day one of the public plan's existence, rather than year three. States can also set up co-op insurance plans in addition to the public option, but not in its stead.
"The public option must go out and negotiate with providers, just like private health insurance companies do," Ross said. "It's strictly optional. It won't be mandated on anyone. It will not be based on Medicare rates."
In response to this compromise, Liberal members of the House, including members of the Progressive Caucus, have voiced their displeasure:
The Blue Dogs’ deal, which cut $100 billion from the healthcare reform price tag, was instantly denounced by Rep. Lynn Woolsey (D-Calif.), co-chairwoman of the Congressional Progressive Caucus, who said, “It’s unacceptable. We’re not going to vote for anything that doesn’t have a robust public plan.”
Liberals aimed to win 50 signatures on a letter to their leaders opposing the deal to make it clear they could defeat the healthcare bill on the floor.
and House Speaker Nancy Pelosi (D-CA) has targeted her anger not at the Blue Dogs, but at the Health Insurance companies:
"They are the villains in this. They have been part of the problem in a major way," Pelosi said of the insurance industry after her weekly press conference. "It's almost immoral, what they are doing," she said, referring to industry lobbying against a public insurance plan option. "Of course, they've been immoral all along. They are doing everything in their power to stop a public option from happening, and the public has to know about it."
Ezra Klein offers his analysis:
House liberals are afraid of the dynamic in which good bills face Blue Dog opposition in the final mile and are aggressively watered down. Senate liberals are afraid of the same. And throwing this final compromise with the Blue Dogs into doubt is a show of strength. After all, House liberals feel they've already compromised plenty: Coming down from single-payer is a compromise. Cordoning the public plan off on the Health Insurance Exchange is a compromise. The whole bill is one big compromise, and every subsequent iteration is a compromise stacked atop a compromise placed upon a compromise. At some point, the compromises have to stop. Or, better yet, they have to go in the other direction.
In the midst of all of this it is amazing to remember that all of this compromise is being done with a small number of members of a small conservative coalition inside each Chamber of Congress where the Democrats hold majorities. In the Senate, where the Democrats hold 60 seats, the Chairman of the Senate Finance Committee Max Baucus (D-MT), has been holding closed door meetings with a few Blue Dogs to work on a bipartisan compromise but has yet to emerge with a bill.
It appears to me that the compromise is being done not only to push back voting on legislation, but also to tweak the public option so that the insurance companies will not feel too threatened. It is going to be crucial for citizens to contact their representatives and for organizations that still wish to see a strong and robust public option to stay very vocal while Congress is in recess. These lobbyists for the insurance industry are very powerful and what we may end up with is a mediocre bill with no guarantee of a public option. What kind of true reform would that be?