EDITORIAL: Fight for the 'public option,' The Philadelphia Inquirer Says

President Obama has hinted that he might abandon the idea of a government-run health insurance plan. But he shouldn't, unless a strong alternative emerges in Congress.

For months, Obama has been advocating a so-called "public option" as part of health-insurance reform. It describes a government-run plan that would compete with private insurers to help keep the cost of premiums down.

But during their August recess, congressional Democrats have encountered loud opposition at town-hall meetings from conservatives who object to government involvement in health care. (Apparently, Medicare, Medicaid, and the Department of Veterans Affairs don't ring a bell with them.)

The president, trying to rescue one of his central campaign promises, has hinted that he isn't wedded to a government-run plan. Anyway, he said, the public option is just a tiny sliver of his overall proposal for reform.

Obama is right that a public option is not the linchpin of health-care reform. It would not, by itself, magically provide insurance coverage for 47 million uninsured people. In that sense, liberals have overreacted to Obama's apparent retreat.

But the president shouldn't give up on this sensible idea unless a better proposal is developed. A public plan would have real advantages. Because a government-run plan would not be profit-driven, it could offer lower premiums than many private plans. It probably could negotiate lower prices from health-care providers.

And it would likely save the government money by providing a low-cost alternative for low-income people seeking to purchase insurance with the help of government subsidies. It would give consumers more choices.

Member-owned cooperatives, an alternative to a government-run plan, are viewed by some as another way to compete with private insurers. But it's not clear that co-ops would be large enough to have the purchasing power necessary to influence costs. They would probably need to be partnered with hospitals or other health-care providers and use fixed fees to control costs.

Members of health-care co-ops are allowed to vote for boards of directors who run the organizations. They get a direct say in the policies, and there's some evidence that this consumer-driven approach leads to better medical care. Perhaps that's because there is more of an emphasis on preventive care.

A government-run plan or a co-op would be part of a broader, worthy proposal for health-care "exchanges" that would expand the reach of national insurance companies to nearly every market in the country. Included in this reform would be a provision requiring participating insurers to limit administrative costs and profits to no more than 15 cents of each premium dollar.

Thursday, on the radio talk show hosted by Michael Smerconish, an Inquirer columnist, Obama guaranteed to caller "Joe from Philadelphia" that he and his allies in Congress will accomplish health-care reform.

"Passing a big bill like this is always messy," Obama said.

His goals are important: controlling costs, preventing insurers from denying coverage due to preexisting conditions, giving consumers more affordable insurance options, and keeping the overall impact on the federal deficit neutral.

As Sen. Arlen Specter (D., Pa.) said after one contentious town-hall meeting, it's easier to tear down a house than to build one. Opponents of health-care reform seem intent only on stopping it, rather than improving the system. The president needs to keep that in mind as he bargains to reach a goal worth fighting for.