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After forgetting to mention the public option, Obama assured the Raleigh audience that he still wants it. But how much he wants it and whether he'll fight to get it are open questions.

Psst, where's the public option? 

Click for larger image • In Raleigh, President Barack Obama mentioned the public option, but only when prompted.

Photo by Jenny Warburg

Click for larger image • In Raleigh, President Barack Obama mentioned the public option, but only when prompted.

President Barack Obama, at Broughton High School in Raleigh last week to pitch for his health care reform initiative, was well into his answer to the final question, and just about to say, "Thank you very much everybody, God bless you," when someone in the balcony shouted: "Public option!"

"I'm for the public option," the president shot back, smiling.

It was the first time he'd mentioned it—and the only time.

Obama came to Raleigh dogged by several questions: If a major goal of his health care proposals is to save money, why is there a tax increase attached to it? And unless the reforms save money, and a lot of it, doesn't it follow that adding the uninsured to the system, many with heavy subsidies, will come at the expense—in terms of quality of care—of those who already have insurance? The bad word for this, among reform's many foes, is "rationing."

Proponents of the public option—a public insurance program modeled after Medicare—see it as the best way to reduce health care costs. It's the best way, that is, short of a government-run, or "single-payer," system like those used in most other industrialized nations where the costs of health care are roughly half what Americans pay.

Obama, too, used to make the argument that a public insurance plan, if made available as an option to enough consumers, would be healthy competition for private insurance companies, forcing them to lower their rates, improve services or—hopefully—both. This is because the public plan wouldn't be trying to make a profit. And if modeled on Medicare, the plan's administrative overhead would probably be less.

But as the public option has come under fire in Washington, mainly, and not surprisingly, from the health insurance industry, Obama has stopped talking about it as an essential part of his plan. Consequently, he's been missing his strongest weapon against health care cost inflation.

Will his plan result in lower premiums for those with private insurance now? No, the president said in Raleigh. But without reform, premiums will likely continue increasing at the same rate as they have for the last decade—when they doubled.

"If you've already got health insurance," the president said, "then I can't guarantee that immediately you'll have—your premiums will go—be cut in half. But what I can guarantee is [that] your costs will be lower than if we don't have reform. I believe that strongly."

The big benefit to those already insured, Obama argued, is that they would be assured of continued access to affordable health insurance even if they lost their jobs, and even if they have some pre-existing medical condition, such as cancer or diabetes, that would cause private insurers now to reject them or charge astronomical rates.

With reform, private insurers would be required to accept all applicants and stop charging more for people with past illnesses.

"The reform we're proposing will also help you because it will provide more stability and more security," Obama said, winning cheers. "Because the truth is, we have a system today that works well for the insurance industry, but it doesn't always work well for you."

Yet, if your job's secure and you like your current insurance plan, nothing in his reforms will force you to change a thing. In other words, no rationing, he promises.

As for the costs to taxpayers, Obama argued that Congressional Budget Office estimates of $1 trillion over 10 years are exaggerated. He said the net cost, after savings are exacted from Medicare ($177 billion in subsidies to private insurers offering a "Medicare Advantage" program that's no advantage) and other current spending would be more like $30 billion to $40 billion a year, far less than the cost of invading Iraq.

Going into the congressional August recess, the public option—albeit a fairly weak one that would be offered only to people with no current insurance and the employees of very small companies—survives in a bill passed in the House by a trio of committees. But in the Senate, where all 60 Democratic votes are needed to overcome a filibuster by the 40 Republicans and a handful of Democrats opposed to the public option, its chances are considered slim without strong presidential support.

After forgetting to mention the public option, Obama assured the Raleigh audience that he still wants it. But how much he wants it and whether he'll fight to get it are open questions as the battle for reform intensifies. And without it, the question remains how the U.S. can ever get its health-care spending in line with the rest of the world.

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