Can Obama Revive the Dead Public Option?

There are at least three important points to make about a government-run insurance plan -- or public option -- before President Obama's primetime speech on health care reform tonight. (1) President Obama will endorse the public option. (2) Sen. Max Baucus, a key moderate Democrat and Senate linchpin, considers the public option impossible to pass. And (3) Even if a public option does pass, we should be very skeptical about its ability to control health care inflation.

The first point is a matter of hours away. The president's speech will "extol the virtues" of the public option, even if he's nervous about demanding a government-provided insurance plan on his desk by October. That kind of caution makes sense, because the second point is pretty explicit in this quote from Baucus, from Fox News:

"The public option cannot pass the Senate," Baucus said. "I could be wrong, but it's my belief that the public option cannot pass."

But let's put our dreaming hats on and say that the public option in the House bill does pass. It's still not going to put much downward pressure on prices. The plan is limited to employers with fewer than 20 workers, putting it out of reach for almost all Americans. As Ezra Klein reported, the CBO estimates that by 2019, the plan might enroll 10 million Americans if it extended to employers with 50 employees. That's not going to give it much leverage to push prices down, even if it does provide the semblance of "competition" and provide the foundation for a more robust public plan in future years.

Summing up: The public has basically no chance of passing the Senate and maybe little chance of controlling costs in the near term. Let's see how Obama goes about selling it.