What opt-out states would ‘pay for’

WHAT OPT-OUT STATES WOULD ‘PAY FOR’…. Greta Van Susteren claimed last night that states that chose not to give their residents the choice of a public option would “still have to pay for it.” She didn’t specify what “it” referred to.

This seems to be catching on, though, as a key conservative talking point. Rich Lowry asked this week, “Does a state get to opt-out of the taxes too?” Karl Rove asked rhetorically, “What state is going to say — what governor and legislature of Republican or Democrat majority is gonna say to its citizens of its state, ‘You can pay for this sucker for decades and decades to come, but you’re not gonna — we made a decision — we’re not going to get any of our money back?'” Newt Gingrich added, “What if a big state like Texas opts out? Does that mean they don’t have to pay taxes on it?”

Before this spreads too far, let’s take a moment to note how little sense this makes.

[W]hile Reid has yet to release details of the compromise Senate legislation, every other proposed bill with a public option so far has required the costs of the public plan to be covered by the premiums of those who enroll in it, and the taxes proposed in each of the bills are used to cover the expansion of coverage through Medicaid and subsidies to help certain families purchase insurance, both of which are provided to residents of every state regardless of any public option.

Right. Financing for a public option would come from those paying the premiums — those premiums would pay for benefits and administrative costs. That’s how it’s been structured in both chambers, by every public option supporter on the Hill. The idea is for it to be self-funding — a not-for-profit insurance program financed by those it covers.

It’s likely that this argument will continue to work its way through conservative circles, but that doesn’t mean it makes sense.