The "progressives" at Third Way, that moderate public policy think thank tank that apparently exists to make the DLC look like regular liberal firebrands, turned their hyper-incrementalist bullshit domestic policy sites on something that matters: the public option in the health care reform package.

This leaked draft [pdf] of their upcoming policy paper shows that they're not even going for a hyper-incrementalist watering down of the public option--they're trying to kill it. Here's their premise:

Whether health care reform should include a "public plan" is an issue that now threatens to fracture the emerging consensus on health reform. If left unresolved, the debate over a public plan could derail the broader reform agenda while other pressing issues central to reform are put on hold. The proponents of a public plan seek the right goals—to broaden access and lower costs. But there is a very real danger that an overly intrusive public plan can ultimately undermine these very goals and destabilize the private-sector coverage that middle-class Americans—i.e., Harry and Louise—depend on and are largely satisfied with.

They actually invoke Harry and Louise again, which is fitting, since Harry and Louise were a creation of the insurance industry, much like this plan seems to be. In the event that Third Way forgot, "proponents" of the public option include President Obama, one of the key Senate leaders on the issue, and the largest voting bloc in the House of Representatives. It's not a fringe group of DFHers who want a solid public option. It's the consensus of the majority of Democrats. And the President.

Nonetheless, Third Way seems committed to doing the dirty work of the insurance lobby from the "left." Here's the plan's four basic elements:

An explicit rejection of price controls and rate-setting on medical services and products;

A level playing field that preserves and enhances a vibrant and robust private insurance industry with market-based competition;

An assurance of stable coverage for the middle class, meaning that reform will not force people to change plans; and

Mechanisms to ensure private-sector cost-containment, in conjunction with the health care industry’s pledge to achieve the $2 trillion in savings over ten years

Those four elements are spelled out in the "key policy proposals" they will presumably put forward:

Explicit rejection of price controls and rate-setting

A level playing field on taxes, regulations and administration

Limited participation to certain market segments (e.g. small group and individual)

Required supermajority approval for federal bailout of the public plan (in addition to self-financing)

Automatic sunset after four years unless the plan can demonstrate solid financial performance and positive impacts on market stability

Mandatory accreditation or evaluation of providers, plans and other stakeholders to ensure private sector cost containment if targets are not met

To clarify, this means the public option wouldn't be "public" as much as limited to those small businesses and the uninsured, or "market segments" that are geographical. It would "firmly and explicitly reject Medicare-style price controls and rate-setting," and not be allowed to to negotiate with drug companies or hospitals or doctors at all for prices (in the name of "innovation"). Should the plan require a emergency federal funding, it would have the barrier of obtaining a supermajority of Congressional approval.

It gets better. They propose that actually administration of what they are calling their "hybrid" should be contracted out to private industry. Finally, they want their plan to have a "reverse trigger," to sunset after just four years should it not prove effective, because "Harry and Louise must feel confident in knowing not just that their employers won’t be dropping their existing coverage in favor of the public plan." As if restrictions can't be placed on employers to prevent them from dropping Harry and Louise? Given all the the restrictions they want placed on it, what do you think the chances of that success might be? What's more, four years is a ridiculously short amount of time for an evaluation period. Every analyst worth her salt is estimating a decade for reform plans to prove their worth.

Then they have the gall to conclude with this:

Progressives who believe in both the power of markets and of government to work together in bettering the lives of the middle-class should embrace the notion of a hybrid plan that can energize and enhance the current market.

Where they got the idea that they speak for "progressives" on this issue is beyond me. This morning, DemFromCT laid out all of the reasons we should be putting our weight behind a solid, trigger-free public opton. Job one is killing this Third Way "hybrid" before it gets beyond the draft stage.