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Derek Thompson

Derek Thompson - Derek Thompson is a senior editor at The Atlantic, where he oversees business coverage for the website.
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He is a visiting research fellow at the Committee for a Responsible Federal Budget at the New America Foundation. Derek has also written for Slate, BusinessWeek, and the Daily Beast. He has appeared as a guest on radio and television networks, including NPR, the BBC, CNBC, and MSNBC.

The Public Plan Lives! Until the States Kill It

By Derek Thompson
Oct 9 2009, 9:57 AM ET Comment

James Madison once envisioned states as the laboratories of democracy. Now Democrats envision them as laboratories of the public option. Ezra Klein points me to this Sam Stein reporting:

Senate Democrats have begun discussions on a compromise approach to health care reform that would establish a robust, national public option for insurance coverage but give individual states the right to opt out of the program. ...

I think I like this idea.



One thing that concerns me about the health care bills is that it seems to me that requiring every American to purchase health care represents a windfall opportunity for insurance companies if you don't also include some strong mechanism to keep prices down. At the same time, the problem with the public option, from a cost-saving perspective, was that the original versions in the House were too small to exert much downward pressure on prices. A compromise that would create a national public option that allows states to opt out might highlight the cost savings of states with the plan, but the converse could happen too. A neutered public plan that's also rejected by many states could end up having no impact on prices -- or states with the PP might see their prices rise faster -- and that might discredit the idea entirely.

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