Paying For It All

TNR's Jonathan Cohn has been putting in yeoman's work on covering the health care debate in Congress. Today he reports that the CBO is suggesting that a robust public option will be able to drive down health care costs by as much as $150 billion over ten years.

The sources cautioned that these were only the preliminary estimates, based on previous discussions--that CBO had not yet issued final scoring on language in the actual bill. But the sources felt the final estimate would likely be close.

Exactly how the plan produces those savings is, obviously, a key question. The reason--well, a reason--centrists and conservatives don't like a public plan is that they fear it will use the government's bargaining leverage to force doctors, hospitals, and drugmakers to accept unfairly low reimbursements. Private insurance would go out of business, since they couldn't compete; meanwhile, providers and producers of medical care would struggle to stay afloat.

Advocates of a public plan (myself included) think those fears are overblown--and that there are ways to make sure a public plan doesn't have that effect. But if the CBO is scoring significant savings, then chances are the House version gives the public plan the kinds of power conservatives and centrists fear.

But, for now, the bigger story is the number. At a time when finding the $1 trillion it will take to finance coverage expansions remains the major challenge of reform, the discovery of $150 billion in potential savings is an important--and encouraging--piece of news.

That is good news, and if the CBO's official scoring of the plan is in line with these estimates, maybe, just maybe, this plan has a chance after all.

Over in the Senate, Ohio Democrat Sherrod Brown is saying that he and a number of other Senate Democrats will have problems voting for the health care reform bill unless it does have a public option in it.

Sen. Sherrod Brown (D-OH) says he'd likely oppose health care reform legislation if it didn't include a public option--and that he'd have company. "I think a number of Democrats, and I among them, would have great difficulty voting for a bill without a public option," Brown told me today. "I don't want to say absolutely wouldn't. But I would have great difficulty voting for a bill without a public option."

Sen. Bernie Sanders (D-VT) has similarly suggested that he'd oppose legislation without a public option.

Brown co-wrote the public plan provision in the Senate Health, Education, Labor, and Pensions Committee bill with Sen. Sheldon Whitehouse (D-RI)--a temporary member of that panel, who has nonetheless become a vocal proponent of the idea. In his capacity as a surrogate, Whitehouse has insisted that health care legislation include a government insurance option, though he hasn't come as close as his colleagues have to drawing a line in the sand.

Chuck Schumer, Bernie Sanders, and now Sherrod Brown have come out and said that a public option is pretty much necessary. That's good news as well.

[UPDATE 6:13 PM] Meanwhile, over in the House, Democrats have come up with a plan to pay for a lot more of the public option:

The House will propose raising taxes on people earning more than $350,000 a year to pay $540 billion for healthcare reform, Ways and Means Committee Chairman Charlie Rangel (D-N.Y.) said Friday.

House Democrats had been weighing a plethora of other tax increases, such as levies on sugary soft drinks and alcohol, that raised hackles within their caucus.

Instead, Rangel said Democrats will seek to enact one large tax increase targeting wealthier workers to generate the revenue they need to finance their $1 trillion-plus healthcare reform bill.

“We have decided that instead of putting pieces of different revenue raisers together, that the best that we can do [is] we would have graduated surtaxes starting at [$]350],000],” Rangel said. The tax hikes would begin in 2011 and raise $540 billion over 10 years, he said after a meeting with Democratic committee members.

The problem is, all indicators are that this tax plan is a 100% non-starter in the Senate.