Father of ‘Public Option’ Says It's Not a ‘Trojan Horse’ for a Single-Payer Health-Care System

By Christopher Neefus | August 18, 2009 | 10:12 PM EDT

Editor's note: The videos referenced in this article as aired by Fox News Channel, were first posted online by Verum Serum, www.verumserum.com.

(CNSNews.com) –
A liberal Yale scholar, widely regarded as the originator of the “public option” idea of creating a government run insurance provider to compete with private-sector insurance companies, told CNSNews.com that he does not see the public option as a "Trojan Horse" that could lead the United States to single-payer, government-run health insurance.

“I do not see my ‘Health Care for America’ proposal as a route to single payer,” Jacob S. Hacker told CNSNews.com in an email.
Hacker said that he hopes the public option, if adopted, would eventually lead to a government-managed system--but it wouldn't happen overnight. 
In a 2008 video obtained and aired by Fox News Channel (first posted by www.Verumserum.com), Hacker not only suggested that his plan would lead to a single-payer system, but said it would do so openly, in a gradual way, he admitted.

“Someone once said to me, ‘Well, this is a Trojan horse for single payer.’ I said, ‘Well, it’s not a Trojan horse, right? It’s just right there! I’m telling you!’” Hacker said in the video, which was filmed at a July 2008 forum sponsored by the liberal Tides Foundation,.
“We’re going to get there (to a government-run system)--over time, slowly, but we’ll move away from reliance on employment-based health insurance, as we should.
“But we’ll do it in a way that we’re not going to frighten people into thinking they’re going to lose their private insurance. We’re going to give them a choice of public and private insurance when they’re in the pool, and we’re going to let them keep their private employment-based insurance if their employer continues to provide it.”
Hacker told CNSNews.com in an e-mail that his 2008 statement was being misconstrued because he meant only to say that the public plan itself would not be disguised--or a hidden “Trojan horse.”
“It is not: The public plan is right out in the open, as it should be, since most Americans say they want the choice of a new public plan.” Hacker added.
Health Care for America
Hacker, now a Yale professor with an endowed chair in political science, developed the notion of the public option as part of his 1990 doctoral thesis, which later formed the basis for a 2007 proposal published by the liberal Economic Policy Institute, titled “Health Care for America (HCA).”
Offered to all of the Democratic presidential candidates in the 2008 election cycle, his scheme is “very similar to the ideas on the table today,” Hacker said.
HCA has three “central elements," including 1) a public plan open to “any legal U.S. resident without good workplace coverage”; 2) a requirement for employers to provide their workers comparable coverage or else submit to a 6 percent payroll tax to fund the public plan; and 3) a mandate that all remaining individuals buy coverage, either private or public, in order to “take responsibility” for the families’ health.
In January 2007, when Hacker publicly released HCA as part of EPI’s “Agenda for Shared Prosperity,” he admitted that at least small insurers would disappear.
“This would eliminate the small group market insurance industry. Right? It’s premised on doing so,” he told the audience of reporters at the time, according to a transcript of the session..
Hacker also acknowledged that his proposal is based on the notion that a single-payer health care plan--with the government calling the shots--cannot be reached directly.
“(T)he entire premise of the proposal is that it would be very difficult to move immediately to a universal Medicare-like plan,” he said.
To an audience member who asked if his plan, unlike the failed 1993 Clinton health plan, had a chance of becoming law, Hacker mentioned the single payer ideal.
“Employers felt that (the Clinton plan) was, as they put it, ‘single payer in managed competition garb,’” he said. “I’m just much more open about what I want to do.
“There’s no single payer in managed competition garb. This would be single payer for half the population. And in that sense, I think that it has some actually key virtues.”
Hacker also told the audience it was possible even the largest employers would not be able to contain costs as effectively as the new government plan, describing that new insurance offering as a backstop.
Hacker pointed to an analysis of his plan conducted by an independent group--the Lewin Group--which showed that more and more people would end up in the new public insurance exchange over time.
“(T)he failsafe option in the end is if they’re not able to (control costs), they have this public option available to be able to provide coverage for relatively modest costs.”
The American Prospect, a liberal publication, asked Hacker at the 2007 event whether the intent of his plan was to have “almost everybody” in the Medicare-like program in “a couple of generations” by undercutting private plans employers were offering.
“Well, I would not be upset were that to occur,” Hacker responded, but added that the shift would occur very slowly, perhaps taking as long as 250 years.
“So I’m not sure that that’s worth worrying about,” he said. “That’s of course what those fear-mongers are going to seize on.”
He added: “You know, the government plan will have inherent advantages I think, the most significant one being that it would never be allowed to go out of business.”
Phil Kerpen, director of policy at Americans for Prosperity, said that is precisely the problem with the government plan--people will be pressured out of private insurance under the public option--but it would not happen overnight.
“I mean, that’s the big question, right? Let’s say (more) people are buying these plans through exchanges and they’ve got a choice of a few private plans with a government run plan--will they over time end up in the government plan?” he told CNSNews.com
According to Kerpen, once a public option is created, the government would be obligated to support it.
“We wouldn’t let it fail because a lot of people are going to be on the plan, politicians are going to be responsible for it and so on,” he told CNSNews.com. “So it’s going to have, in my view, at least implicit backing from the taxpayers, much like Fannie Mae and Freddie Mac had before they were explicitly bailed out.”
But Judy Feder, a senior fellow at the liberal Center for American Progress--and an explicit proponent of Hacker’s plan--told CNSNews.com that the public plan Congress is currently considering would not create a massive shift away from employer-based coverage.
“Before the public plan was somewhat--the force of it was somewhat weakened in the Blue Dog (compromise)--they found that employer-sponsored insurance actually increased and that the number of people going into the public plan was about 10 million.”
The Lewin Group, which analyzed Hacker’s plan and the more current forms of the public option proposal in 2008, said at the time that about 6.3 million people would become newly covered through their employers. However, according to its April 2009 report analyzing the plans in Congress as they currently stand, a staggering 107.6 million people would lose their private coverage as employers opted for the lower costs associated with the government-controlled pool.