What’s the difference between a government-run and paid for public option and one that forces selected “private” entities to follow strict rules created, enforced and subsidized by the government? There’s probably not much of a difference, yet apparently some “moderate” Senators are more comfortable with having the government hamstring private entities into creating a pseudo public option, instead of just voting for an explicit public option.

There’s some good analysis on what this leaked compromised plan might mean for us commoners. Over at the Heritage Foundation, Bob Moffit writes (h/t NRO’s Critical Condition):

In the latest desperate search to find some form of government-run health plan to compete against private health plans that is somehow acceptable to Senate liberals and moderates alike, the Senate Democratic leadership is entertaining the idea of stripping the existing “public option” from the big Senate health bill ( H.R. 3590), and replacing it with a combination of public options: an OPM/FEHBP sponsored plan ( that will be “private” in name only) and an expansion of the two giant- and financially troubled or debt ridden- Great Society entitlements: Medicare and Medicaid….

The more interesting element of this proposal is the creation of an “FEHBP Plan” administered by the Office of Personnel Management (OPM). OPM is the agency that runs the popular and successful Federal Employees Health Benefits Program (FEHBP) that covers members of Congress and federal workers and retirees. There are no details about any of this yet, beyond some discussion of broad concepts in the media. However, it appears that under the Senate Democrats’ compromise proposal, OPM would be given authority to contract with private, non-profit insurers( such as Blues and Kaiser ) to compete in the federally -designed health insurance exchanges that would be erected in each of the states under the Senate bill. It appears that the government would sponsor certain favored health plans to compete against the private health plans in the states. It is not clear how a restricted set of plans would add much to competition or to expand personal choice of benefits, particularly if the benefits are politically standardized.

The key question is what authority OPM would have in the negotiation of rates and benefits, and in the financing and the administration of the program. These details are crucial. If OPM were given absolute authority to set premiums and benefits, it could conceivably set premiums below the market prices, thus undercutting private health plans on an un-level playing field, leading to the kind of erosion of private health coverage that was envisioned under the “robust” public plan favored by the Left. If it sets rates and benefits on the basis of the market rates, of course, it would fail to achieve the Left’s goal of a “robust:” administered pricing system, a central rationale for the public plan in the first place. But, of course, that could change over time. The key issue in health care policy is the infrastructure of power and control; the levers of power and domination, additional staff and funding, can be always added later, especially if an artificially low priced, government-sponsored health plan (or plans) starts to run deficits.

And Grace-Marie Turner sums up just a few of the problems with the brilliant idea of expanding Medicare and Medicaid:

The others would expand Medicare and Medicaid, programs that already are bankrupting the federal government and the states, to cover millions more people. The best doctors and health plans in the country already have said if that happens and they are faced with providing care to millions more patients at payment rates that don’t even cover their costs, they will close their doors.

So much for health reform. Virtually every idea being presented is simply an expansion of government-run health care in a different guise.

Is this really the best we can hope for? Even the Left, which has been salivating at the idea of the government taking charge of the health care sector for decades, has to be disappointed with the prospect that the government may run the whole thing through the private insurance companies, which they have spend years demonizing as greedy and callous.

This reminds me of the debate I had on Thom Hartmann‘s radio show. Thom (who sees corporations as an unmitigated plague on the country) has endless faith that the government would fairly and equitably distribute America’s resources (if only we had campaign finance laws that allowed benevolent leaders to become elected). Yet here we are with President Obama, who the Left saw as nothing short of a saint, and Democrats with enormous majorities in both houses and they are conspiring to give windfalls to private entities.

Does this really surprise them? Wouldn’t it be better to put power in the hands of individuals so that we can really hold companies accountable through the market process? No system or process is going to be perfect, but decentralized power and a robust marketplace seems a much better way to ensure fair, equitable outcomes than putting all of this power in the hands of a few.