So apparently Obama is going to go on the TeeVee tonight and endorse a public option - but only sort of, and according to this Politico story, he’s already prepared to trade it away.

And so how, actually, the resulting bill would lower health care costs to consumers remains to be seen. If the public option is scrapped - then we’re basically taking the insurance industry’s word for it that, cross their heart and hope to die (is that covered?), they’ll bring costs down.

I’ve been trying to find a well-articulated case against the public option, and there seem to be three basic rationales:

1. It will cost too much. This is a legitimate complaint.

2. IT’S TEH SOCIALISM!!! This is not a legitimate complaint.

3. It will put insurance companies out of business. This is a fascinating complaint.

As detailed here by Robert Laszewski on the Jim Lehrer News Hour, the gist is that private insurers could never compete with the government in terms of price, and so would go out of business.

George Will basically said this straight-up back in June:

Competition from the public option must be unfair because government does not need to make a profit and has enormous pricing and negotiating powers.

And see, the difference between conservatives and liberals is that where conservatives see this is a bug, liberals see a feature.

But it doesn’t even look like we’ll get that far. The Baucus bill, considered the likeliest contender to make it to Obama’s desk, doesn’t include a public option, rather relying on “nonprofit, member-owned co-ops to compete with private insurers.” But the more I read about co-ops the less convinced I am that they will work at all. Even proponents concede that co-ops are going to have to be huge entities if they’re going to be able gain enough leverage to drive down premiums; they are going to need an enormous amount of start-up capital - which will probably have to come from the federal government - and they’re going to have to get providers on board.

And how many co-ops will there be? If size matters, there can’t be too many of them; but if, as Blattner writes, we should probably start with a single, national co-op, what really are the chances that it will be “spun off” into smaller state or regional co-ops? If a single nationwide co-op works, why mess with success; if it doesn’t work on that level, what makes anyone think it will work on a smaller level, with less bargaining power?

In other words, we don’t know if co-ops will work, we don’t know what they’re going to look like - and this gamble is a key provision of the Baucus bill; if it doesn’t work… well… maybe health care costs/insurance costs will come down… some other way…