I think perhaps no one has actually described the endgame of this health care bill.  Despite the justified skepticism that it'll ever make it far enough, I'll take a stab at it.  This is the capitalism alternative to socialized health care.  It's school vouchers, but if all the schools competing for the vouchers were regulated nationally.

The idea is to construct a fair marketplace where different insurance plans can compete for customers while pooling the risk across all the plans in the entire marketplace.  This way if all the sick people go with plan A and the healthy ones go with plan B, the rules of the marketplace would require all plans to contribute to a pool of funds that is used by HHS to offset cost discrepancies that would otherwise bring down the plan with the disproportionate amount of risk.

All the plans must meet basic federal requirements to protect consumers and regulate costs and ensure that every plan covers essential elements that should be a part of every insurance plan.

Then the states have the freedom to add their own rules or tweak the federal ones within certain ranges.

I agree that this may crash and burn terribly.  There are so many ways that it can fail, and our government isn't inspiring much trust right now.  But it's an experiment.  It's innovative.  It doesn't end the private v. public debate, it lets both compete.

That's what I wanted from the public option.  I wanted it to show America that the government plan could offer better care at lower prices - that it was superior to the private market.  That's what the exchanges do, but on a playing field that is much more even.  

I spoke to staffers of some Democratic Senators who argued against the public option because they had yet to hear how it would actually compete fairly with private insurance - the rules would have to be different to adjust for it's much higher risk pool.  The public option would benefit from all the subsidies while private plans would continue to get the tax breaks they currently enjoy.  If private plans were only state-by-state, but the public option could operate nationally, it would have superior negotiating power.  It would have a marketing advantage, being officially endorsed by the government.  And it wasn't entirely unreasonable for people to claim that if the public option started failing, it would get bailouts from Congress because it would be political suicide to let it go belly-up.

The point is, too many people disagreed about how to create a public option that really would compete on an even playing field with private insurers.  Right now you're thinking, "fuck them, let them go out of business."  But a lot of people really believe that the best solution really is to regulate the private insurers but continue to keep health insurance private.

That's why the exchange is a fascinating and hopeful prospect.  It is the best way to allow public and private, for profit and nonprofit plans to compete in a state and eventually national marketplace, while neutralizing the advantages caused by subsidies, unevenly distributed risk, and disparate political protections.

Perhaps this will fail, or never even get properly started.  But I admire the attempt to create an American solution to health insurance instead of simply adopting single payer.  Once we go single payer we'll never have the political will to experiment with something like this.