Why Opt-Out Is No Silver Bullet for Health Reform

The much-touted savior of the public option could be a dud

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The "opt-out" provision, which would allow states that do not want public health insurance to exclude themselves from the program, has been called the "silver bullet" that would save the public option. But health care experts are increasingly wondering if the provision is anything more than political cover to help Democrats ward off criticism from Republicans and moderates who are wary of the public option. Why? The concern is that no state could really choose to opt out of the public health insurance plan, rendering the proposal moot.

  • Why No One Will Opt Out  Ezra Klein makes the case. "My opinion on this is, I admit, a minority opinion, but I don't think there will be any real fight over the public option, and I think that virtually no states will opt-out," he writes. "States wouldn't be able to opt out till 2014. By 2014, we'll be arguing over all manner of things, but a public insurance option for the small sliver of the population with access to the health insurance exchanges will be one of those things. In that scenario, where there's very little controversy over the public option, I don't believe that state legislatures and governors are going to go to the trouble of rejecting it, and I don't believe that anyone will manage to reinvigorate the controversy around it."
  • Opt-Out Would Be 'Nightmare' for GOP  The Atlantic's Andrew Sullivan explains why Republicans are so opposed to the opt-out provision. "Imagine Republicans in state legislatures having to argue and posture against an affordable health insurance plan for the folks, as O'Reilly calls them, while evil liberals provide it elsewhere," he writes. "It's political nightmare for the right as it is currently constituted. In fact, I can see a public option becoming the equivalent of Medicare in the public psyche if it works as it should. Try running against Medicare."
  • Medicaid and Highways Also 'Opt-Out'  Liberal blogger Matt Compton notes that no states have taken advantage of other opt-out provisions. "It's important to remember that opting-out, as a policy mechanism, is not a new idea. Medicaid, for instance, is an opt-out program, but no state has ever chosen to take that step. Federal highways are also an opt-out program, but we all follow the same speed limits. At worst, we should expect about as much resistance as we saw with the federal recovery package earlier this year. Despite a lot of hand-wringing from conservatives, ultimately, most states took most of the money."
  • But That's Not The Same Thing  Matthew Yglesias disagrees with Compton. "In the case of Medicaid I believe that Arizona actually held out for a long time before implementing the program. And to the day, the extent of the Medicaid benefits offered from state to state vary a great deal. The 'opt-out' structure of a public option would work differently since there wouldn't be a net transfer of tax money involved. But for the federal government to enact a policy that works differently in some states than in others wouldn't be a breach of any time-honored principle of government."
This article is from the archive of our partner The Wire.