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Obama: Soft on Health Insurance? Part 2More on whether Obama's backing away from real health care reform.

By Timothy NoahPosted Wednesday, March 11, 2009, at 2:20 PM ET

(Continued from page 2)

First, some people are going to want to be in a private plan, period just as some people continue to buy cars that Consumer Reports says are less reliable than the norm because they like how they look or drive or value the decal on the front. Second, and more seriously, the private plans will be able to do things like selectively contract with small numbers of providers that a stable, inclusive public plan simply cannot do, and some people will value these innovations. Third, we don't know how the private plans will react to real competition, since they've worked so hard to avoid it till now. Perhaps they will discover inner wellsprings of cost-consciousness that we didn't know they had.

I don't think Grassley and other opponents of a public plan would find these arguments reassuring. If the first two are correct then I would expect the health insurance business to shrink down into a boutique "niche" industry. I don't think Grassley's willing to settle for that. The third argument sounds to me more like a taunt. I remain convinced that this conflict is irreconcilable, and that the Grassleys will just have to give way.]

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Timothy Noah is a senior writer at Slate.
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