Liberal’s Approach to Health Care Reform Made Abortion Controversy Inevitable

Democrats paid a heavy toll to keep health care reform moving forward. They were forced to accept substantial and virtually unprecedented limits on abortion coverage in order to get the Affordable Health Care for America Act through the House of Representatives. This result should awaken them to the need to rethink their approach, but it assumes they learned the key lesson: where government goes, ideology follows.

Speaker Nancy Pelosi needed 218 votes to make history: passage by the House of the Affordable Health Care for America Act. Liberals got her most of the way there, but to get across the finish line Speaker Pelosi needed support from moderates and conservatives. This meant cutting a deal with the pro-life caucus. The result: HR 3962 prohibits the government-run medical plan and coverage offered through the health insurance exchanges the bill would create from covering elective abortion procedures. Liberals are furious, but to pass health care reform they had to accept this restriction as part of the package.

This post is not about the politics or morality of abortions. Readers of this blog are on both sides of this issue. This blog is about health care reform and what happened to HR 3962 concerning abortion highlights one of the greatest pitfalls in Democrats approach to reform. If they continue down the road they are on, increasing the amount of America’s health care system government directly controls and manages, the party is guaranteeing that similar defeats on similar public policy issues is all but a certainty. The issue today is abortion. In the future it could be access to birth control. Or making coverage available to domestic partners. The fact is, government-run health care does not and cannot exist in a vacuum. Politics and ideology inevitably come along for the ride.

The final health care reform bill may loosen the prohibition on abortion coverage contained in the House bill. But if the restrictions are diminished, it will be because Democrats led by Speaker Pelosi and Senate Majority Leader Harry Reid are in control of Congress and President Barack Obama occupies the Oval Office.

For now.

Eventually conservatives will be in power again. No party or ideology dominates America’s politics forever. And a conservative government will not hesitate to use the tools given to it by Democrats to push forward their agenda merely because those tools were created by liberals. 

No one should be surprised about this political reality. In a post back in August 2007 I warned single payer advocates that a government takeover of health insurance would open the door to ideology meddling by conservatives. And in August of this year I reminded liberals that while Democrats are ascendant today, politics, like a pendulum, eventually changes direction. “In 2001 the President was George W. Bush, the Senate Majority Leader was Trent Lott and the House Speaker was Dennis Hastert (just two years earlier it had been Newt Gingrich). Their view of how a public health plan should work – what it covers and who it benefits – varies considerably from the Obama/Reid/Pelosi view. Yet the greater the role liberals give the government over health care, the more control over issues like abortion conservatives like Bush/Lott/Hastert will have when they take power again – and eventually, they will.”  And I’m hardly the only observer to state this reality.

So Democrats face a critical choice. They can pursue their health care reform goals care by increasing government’s direct participation in the market or by looking to the regulations the government imposes on the market.  One opens the door wide to groups of lawmakers holding health care reform hostage to unrelated public policy issues; the other narrows this opening.

For example, lawmakers want to prohibit carriers from denying consumers coverage because of their current or previous health conditions. Creating a health insurance exchange is one method of achieving this goal, but it is not the only way. And alternatives limit the opportunity for ideological meddling in Americans’ lives.

Yes, a public plan would increase competition in the market (a primary justification for a government-run plan), but so would health insurance co-operatives. And as non-government entities, co-operatives would be less susceptible to partisan interference.

By focusing on their goals and being careful of their methodology for achieving them, Democrats can have their health care reform and limit the price they’ll pay on other issues. Or they can continue down a road in which accepting limits on abortion coverage is merely the first of many heavy and painful tolls they will pay.

House Health Care Reform Passes, But It’s Far From the Last Word

History was made on November 7th when the House of Representatives passed HR 3962, the Affordable Health Care for America Act. Yes, it was a close vote (220 in favor versus 215 opposed). Yes, only one Republican voted for the bill. Yes, the legislation leaves a lot to be desired. At the end of the day, all that matters is that the legislation passed. President Barack Obama’s health care reform initiative remains alive and is closer to reality than the efforts of his predecessors. Given the complexity and controversy surrounding the issue, not to mention the competing demands of numerous, powerful stakeholders, this is a remarkable achievement.

While historic and remarkable, however, it’s important not to read too much, or too little, into what happened. Consider:

House Passage of Health Care Reform Puts Pressure on the Senate: It’s probably hard for Republicans to understand the importance of health care reform to Democrats. I suppose it’s the equivalent of a tax decrease to the GOP. It’s a defining issue, in the sense that the issue differentiates themselves from the other side. When Republicans controlled the White House and Congress they lowered taxes. They could have made a major push behind health care reform during their years in power, but that’s not where Republicans were willing to invest the political capital in health care reform, not when it could be put behind cutting taxes. Democrats now control the Executive and Legislative branches. And they are investing their political capital where their heart is: health care reform.

Which means if you’re a Democratic Senator you do not want to be the reason health care reform fails. No doubt some members of the Senate were quietly hoping the vote in the House would fall short, letting them off the hook. No such luck. Now it’s up to Senate Democrats to keep the dream of health care reform alive.

HR 3962 is Not on the President’s Desk: Nor is it likely to ever get there.  What the Senate will pass is not likely to look a lot like the Affordable Health Care for America Act, either. The politics in the Senate are far different from that in the House. Consider the idea of the government creating – and maintaining – a health plan to compete with private carriers. Senator Joe Lieberman reiterated his threat to vote against allowing a reform bill containing a government-run plan to come to a vote on the Senate floor, according to the Associated Press. Unless his 60th vote is replaced by a Republican (think Senator Olympia Snowe) Democrats will be unable to overcome a GOP filibuster with Senator Lieberman’s vote.

Of course, as noted in an earlier post, Senator Roland Burris is threatening to prevent a bill without a public insurance plan to come to a vote. So Senate Majority Leader Harry Reid has to craft a package that satisfies a diverse and divided caucus (Senator Lieberman is an Independent, but he caucuses with Democrats in order to hold on to his committee chairmanship). Senator Reid has already submitted a proposal to the Congressional Budget Office for review. (That the CBO has yet to issue an analysis is widely taken as evidence the cost of the legislation is higher than Senator Reid is counting on, meaning adjustments will be required). Meaning …

The Senate Will Pass a More Moderate Bill. Whatever Senator Reid puts before the Senate, it will be more moderate than HR 3962. Moderates hold more power in the Senate than they do in the House. Leaving aside Senator Lieberman, passage of health care reform in the Senate will need to satisfy 17 moderate and conservative Democrats. While several of these Senators have already pledged their support to the legislation outlined (but not published yet) by Senator Reid, there’s enough hold-outs to force concessions that will disappoint liberals. Yet those liberals are unlikely to vote against health care reform and accept blame for defeating this core Democratic issue. (Senator Burris is an exception for reasons discussed in the previous post).

When the Senate Acts Will Be When Democrats Have 60 Votes:  Warner Pacific, a general agency based in California, held a series of town hall meetings last week featuring former Senate Majority Leader Tom Daschle. John Nelson, co-CEO of Warner Pacific, interviewed Senator Daschle for roughly 90 minutes and the result were numerous, meaningful insights which I’ll try to write about in future posts. But one observation Senator Daschle offered is relevant here. When it comes to passing legislation, the Senator described the role of the Majority Leader and House Speaker as shoveling frogs onto a wheelbarrow. Why did the House vote on health care reform now instead of waiting to learn more details concerning the Senate legislation? Because Speaker Nancy Pelosi had finally managed to fill the wheelbarrow with at least 218 votes and the longer she waited the more likely it was one of them would jump out.

Speaker Pelosi had a somewhat easier task than the one facing Senator Reid’s. She needed to muster a simple majority and the rules of the House gives her more power than Senator Reid enjoys in the upper house. Plus he needs to shovel a super-majority of 60 frogs into his wheelbarrow.  Once he marshals the votes, however, expect the Senate to act relatively quickly. And don’t expect a vote to be scheduled until Senator Reid is reasonably confident he will prevail. Once that happens, however, the Senate will likely pass their health care reform legislation. Then …

It’s the Conference Committee That Matters: Getting health care reform this far has required a Herculean effort by lawmakers and the White House. And it’s all aimed at getting two bills to a Senate-House conference committee. That’s where the final deals will be struck, losers and winners defined, and the political calculation made as to what single bill can be passed by both chambers of Congress.

For brokers, one of the issues to watch will be related to the health insurance exchange reform will create. In the Senate bill, at least for now, there’s a provision to require those selling products in the exchange to be licensed by their state; the House bill permits unlicensed entities to sell the products. (Ironically, the House approach, which would let DMV clerks sell health insurance in the exchange is supported by some Republicans in the Senate).

The conference committee will determine the taxes implemented to finance reform, what mandates are in place and how they’re enforced, whether there’s a government-run health plan, what cost containment provisions are included, and whether reform addresses malpractice – among other items. In other words, while everything leading to the conference committee is important, it has all been prelude.

To use a baseball analogy, think of the general discussions and hearings earlier this year as Spring Training. The committee votes were the regular season. The vote in the House was a league playoff and now we await the outcome of one more playoff series. All of this leads to the World Series, known as the conference committee. So there’s still more to come. It’s what comes out of the conference committee that, if approved by both the Senate and House, will be signed into law by President Obama. And, assuming something is passed …

Health Care Reform Will Be Worse Than Hoped For, But Better Than Feared:  A  friend from college went to the same law school I did, but a year earlier. As I approached my first day of classes I asked him what to expect. “Worse than you hope it is; better than you fear it will be,” was his reply. (And he was right). Well, the same applies to health care reform.

For example, there’s far less medical cost containment in either the House or Senate bills than most observers believe is necessary to make coverage affordable. But as Senator Daschle noted at the Warner Pacific town hall meeting – and as reader JimK has pointed out – there are some potentially significant cost containment provisions tucked away in the bills. Yes, they call for studies and regulations as opposed to describing details, but perhaps that’s the only way cost containment can make it through the political labyrinth that is Congress. They hold the potential, however, to lead to a significant bending of the cost curve. Of course, for now, it’s only a potential, but still, it’s there.

Consider: When California passed its small group reforms in the early 1990s many brokers and industry insiders feared it would harm the market. Instead that legislation, AB 1672, has been a stabilizing influence that eliminated harmful industry practices without destroying the industry in the process. Yes, there were winners and losers (the dominance of Multiple Employer Trusts in the small group market soon ended), but most brokers and their clients will agree it was a net win.

I watched some of the debate on the Affordable Health Care for America Act on C-Span Saturday. To over-generalize, Democrats made the Superman argument: the status quo was leading the country to ruin and only HR 3926 could save the day. Republicans countered with the Hell and damnation offensive: passage of the Democrat’s health care reform legislation would lead to the destruction of all America stands for.

The reality is, the Democrats are overselling what the bill does. And Republicans are exaggerating the negatives. Many of the charges leveled against HR 3962 by GOP members were similar to those their counterparts made against Medicare 45 years ago. Now the GOP positions itself as the protector of Medicare. Apparently not all slippery slopes lead to damnation after all.

What the House accomplished on November 7th is historic. It is neither all good nor all bad. Nor, significantly, is it the final word.

Harry Reid’s Health Care Reform Dilemma: The Myth of the 60th Democratic Senator

If asked even two weeks ago I’d have said there was an 80 percent change or greater that meaningful health care reform would be signed into law this year. Now, however, I think the chances of such an outcome are far lower – still substantial – but much less likely.

One reason meaningful health care reform may not reach President Barack Obama’s desk this year is that Senate Majority Leader Harry Reid is having difficulties in lining up the 60 votes necessary to overcome the inevitable filibuster from Republicans. Senator Reid’s problem is that while there are 60 Senators in his caucus, there are really only 59 Democrats plus Senator Joe Lieberman.

Senator Lieberman caucuses with the Democrats because he used to be one (he won re-election as an Independent in 2006) and he wants to be a Committee Chair (he chairs the Homeland Security and Governmental Affairs Committee). However, he campaigned strongly for Senator John McCain in the 2008 presidential campaign, even addressing the Republican National Convention. Senator Lieberman also has said he expects to campaign for Republican candidates in 2010. It doesn’t take much insight to predict that, were Republicans to gain a majority in the Senate, Senator Lieberman would be knocking on their door for admittance.

Senator Lieberman has pledged to support a filibuster of a health care reform bill that includes a public option.  While he recently seems to have backed off this threat, as Timothy Noah on Slate.com points out, the Senator’s position on health care reform has been … well, let’s call it a bit erratic. So let’s say Senator Reid puts forward a bill that Senator Lieberman can support, does that solve his problem?

Hardly. Remember Senator Roland Burris, he of the controversial appointment to the Senate by then-Governor Rod Blagojevich. Senator Burris is threatening to oppose any health care reform bill that does not include the public option. As Senator Rollins is a bit of pariah in the Senate (many of its members, including his fellow Senator from Illinois, having called for him to resign) the Democratic leadership has little influence over his actions. So Harry Reid is in a bit of a no-win situation. Go after Senator Lieberman’s vote and he risks losing Senator Burris’ support. Accommodate Senator Burris and there goes Senator Lieberman.

Meanwhile, Senator Reid is forced to wait for an analysis of his proposal by the Congressional Budget Office. What they have to say about his efforts to blend the Senate Finance Committee and Senate Health, Education, Labor and Pensions Committee’s differing versions of health care reform will greatly impact the votes of moderate Democrats. Since only one Republican vote, that of Senator Olympia Snowe, seems to be in play, those moderate Democrats hold the key to whether the Senate can muster the votes for health care reform.

Given that the debate in the Senate will be long, slogging through the legislation will take quite some time. While Senator Reid would like to get a bill on the president’s desk before Christmas, this is a present that may need to wait for the new year. That, of course, complicates matters considerably as 2010 is an election year. Lawmakers hate doing controversial things in an even numbered year. (Why the difference between December 2009 and January 2010 makes a difference is one of those unanswerable questions that seem to be especially common within the Beltway).

On paper, Democrats have a 60-vote majority in the Senate. That’s a myth. In reality they have a group of 60 Senators who caucus together, but don’t act together. That’s actually good for democracy (the unanimity within the Republican caucuses in Congress demonstrates stronger party unity, but a lack of individuality that is somewhat startling). But the diversity within the caucus makes being Majority Leader a lot harder.

It’s Time for President Obama to Define Health Care Reform

Now comes the fun part. With the Senate Finance Committee poised to pass its version of comprehensive health care reform we get to one of the more difficult segments of the Kabuki dance: Speaker Nancy Pelosi and Senate Majority Leader Harry Reid must now reconcile the bills passed by multiple committees into a blended proposal. Which means the time is right for President Barack Obama to publicly define what, exactly, is “Obamacare”.

First some background. In the House, different versions of health care reform legislation have been passed by the House Ways & Means, Energy & Commerce, and Education & Labor committees. To be more precise, while the legislation moved forward by Ways & Means and Education & Labor were very similar, moderate Democratic members on the Energy & Commerce committee gained significant changes in that committee’s version. Speaker Pelosi will now combine the three versions into a “Manger’s Bill.” This is the version that will be debated and voted upon by the full House.

What’s makes Speaker Pelosi’s mash-up of the House Committee’s health care reform bills important is that any changes must be imposed upon it. Her version of the bill is the “default” position. From a legislative process perspective, this puts those seeking changes to the legislative language at a disadvantage.

The same blending process is underway in the Senate. There the task is even harder. The Senate Health, Education, Labor and Pensions Committee passed a liberal version of health care reform; the Senate Finance Committee’s plan is much more moderate. The gap between them is far greater than that between the three House committee’s bills. The Associated Press describes Senator Reid’s efforts to blend two disparate health care reform bills as “mission seemingly impossible.” Given the differences in the how the two Committees addressed costs, taxes, whether there should be a government-run plan, the obligation of employers to provide coverage and other controversial items, “seemingly impossible” may be an understatement.

Unless President Obama dives deeper into the details than has publicly been the case. The White House has been engaged in Congressional health care reform negotiations for some time. According to news reports, White House Chief of Staff Rahm Emanuel, formerly part of the House Leadership, has been the Administration’s point person in these discussions. Until recently, President Obama has been willing to let Congress thrash out the thorny issues related to health care reform, setting forth broad principles. Beginning last month the president has offered more specifics, but hardly enough to clearly define what his version of health care reform looks like. At least not publicly.

With all the Congressional committees having taken a position, the time has come to get specific. Yes, the White House could leave it to Speaker Pelosi and Senator Reid to fashion compromises that can pass their respective chambers, but that only postpones the Administration’s day of reckoning. For after the House and Senate passes their differing versions of reform, a conference committee (made up of both Senators and Representatives) will convene to fashion the final bill. If President Obama waits until the conference committee convenes to publicly engage in the nitty-gritty of reform, it could be too late. Legislators will have been forced to make numerous politically challenging votes. The political payback if the White House then makes those votes unnecessary would be … ugly.

President Obama needs to make his health care reform vision known now, before those votes. He needs to say “this is acceptable;” “this is not.”  He needs to spend his political capital to define Obamacare, to give lawmakers the cover they need to make tough votes, and to rally his considerable grassroots organization behind specific legislation.

Publicly defining what he wants in the bill is a huge political risk for President Obama. His positions will anger some supporters and give opponents mounds of ammunition to use against him. Whatever changes Congress makes to the president’s reform plan will be described by the jabbering cable network pundits as a defeat for the Administration. If he accepts those changes he’ll be accused of weakness and flip-flopping. (One of the most insightful columnists around, Richard Reeves recently explained the value and wisdom of political leaders capable of changing their minds).

But the greater risk to the Administration is failing to achieve meaningful health care reform. And if health care reform does pass, the messiness of the process will be soon forgotten. The odds of President Obama getting a health care reform bill sent to his desk increases exponentially if Congress – and the public – have a clear understanding of the Administration’s legislative ambitions.

The policy and political pieces are all on the table. Selecting from among the various provisions contained in the five variations of health care reform passed by Congressional committees won’t be an easy, but it is necessary. President Obama wanted Congress to participate in the reform process. They have. Now it’s his turn.

Public Option Compromises Gain Traction

President Barack Obama wants a public insurance plan to compete with private carriers. Democrats in the House of Representatives want a government-run plan. Apparently so do a majority of Democrats in the Senate. However, as of now there’s enough Democrats in the Senate opposed to the idea to keep the support below the 60 votes needed to pass health care reform legislation. A compromise being considered in the Senate, however, could change the math, creating the potential government health plans will be part of the health care reform package ultimately enacted by lawmakers.

Advocates for public plans were set back when the Senate Finance Committee defeated amendments to add a government medical plan to the health care reform bill its writing. But liberals immediately pledged to keep pushing for the public option and many claim a public option is critical to meaningful reform. Whether progressives would defeat health care reform which doesn’t include a public health insurance plan is uncertain, but it is possible.

Enter Senator Tom Carper from Delaware. Senator Carper is a thoughtful moderate who voted against one of the public option amendments in the Senate Finance Committee, but voted for another. He is floating a compromise that not only may appeal to liberals, but to moderate Democrats and, conceivably, to Republican Senator Olympia Snowe, the only member of her party considered likely to support a Democratic version of health care reform.

Politico.com reports that Senator Carper proposal would give “states the option of creating a competitor to private insurers, (these competitors could be) a government plan, a network of co-ops, or a large purchasing pool modeled after the revered Federal Employees health Benefits Plan.” Unlike a compromise suggested by Senator Snowe which would create a national government-run plan only if private carriers failed to offer affordable coverage to at least 95 percent of the population, Senator Carper’s plan envisions only state (and, perhaps, regional) public plans and permits states to move forward, according to another Politico.com posting, “if affordable insurance is not widely available or the insurance market is dominated by only one or two players.” (It should be noted Senator Snowe has not sought a vote on her idea by the Senate Finance Committee)

Brian Beutler, writing on the Talking Points Memo blog, predicts Senator Carper’s idea may fail to gain support from either liberals or conservatives. He writes, “Liberal critics will charge that, while the plan doesn’t involve triggers, it does lack the heft that a plan organized at the national level would have to bargain down prices with providers” while conservatives will reject it as the first step toward a single payer system. “

Mr. Beutler may be right, but I think a compromise along the lines of Senator Carper’s proposal will gain traction. According to a second Politico.com posting, lawmakers, both public option supporters and opponents, are speaking positively about Senator Carper’s compromise.

The political reality is that there probably will not be enough votes to pass the “pure” public option desired by liberals. So they will face a choice: no government-run plan at all, a host of state-run insurance plans, or no health care reform. To reject health care reform because the public plans competing with private carriers are not controlled by the federal government is a political argument few liberals will want to make.

At the same time moderate Democrats may see the compromise as a way to push the entire public plan controversy to the states. This would allow them to escape the intense pressure they are under from party activists (and, perhaps soon, the White House) without personally voting for a government-run plan. State’s rights are usually championed by moderates and conservatives. It is certainly reasonable for a lawmaker to conclude that the public option is an appropriate decision for states and not the federal government. It is interesting to note that one of the three Democrats on the Senate Finance Committee to vote against both attempts to add a public option, Senator Kent Conrad described Senator Carper’s plan as a “very constructive option,” according to Politico.

What the effort to construct a workable public health insurance option overlooks is that it is virtually impossible to create a government-run plan that will both lower medical costs and compete fairly with the private marketplace. A public plan can lower health care spending only by imposing (not negotiating) low reimbursement rates on doctors and hospitals, most likely by tying them to other government programs such as Medicare. (It is important to note that Medicare often pays providers less than their actual costs). But imposing rates, something only monopolies and governments can do, is unfair competition (which is why we have laws against monopolies). But a public plan that merely negotiates rates with doctors and hospitals like any other health plan does is unlikely to be effective in reducing costs.

I’ve long predicted the health care reform legislation eventually enacted this year will not include a government-run health plan. Now, however, I have to recognize the possibility that a compromise along the lines of those proposed by Senator Carper or Senator Snowe might make it into the final package. It’s far from certain, but it is a possibility.

Senate Finance Committee Rejects Government-run Health Insurance Plan

The Senate Finance Committee continues to refine its health care reform legislation. Today it broke ranks with other Congressional committees with jurisdiction over health care reform by defeating amendments to create a government-run health plan. The debate was passionate, but ultimately enough Democrats joined with Republican Senators to defeat two attempts by the panel’s more liberal members to insert public option language into the bill.

Keeping the public option out of the bill was a major victory for Senator Max Baucus, chair of the Finance Committee. While acknowledging that a public option would “hold insurance companies’ feet to the fire,” his opposition was based on the goal of enacting health care reform this year. According to ABC News Senator Baucus believes health care reform including a government-run program cannot pass the Senate.

Senator Jay Rockefeller insisted, however, that a public health insurance plan was absolutely essential to meaningful reform. Failure to to create a public, non-profit plan to compete with private carriers, the Associated Press reports the West Virginia Democrat as saying, “was a virtual invitation to insurance companies to continue placing profits over people, and he predicted they would raise their premiums substantially once the legislation went into effect.”

Senator Baucus countered that the legislation being developed by the Senate Finance Committee includes numerous consumer protections, including a provision to prevent insurance companies denying coverage based on pre-existing conditions. None of the lawmakers on either side of the aisle spent much effort in defending the behavior of private insurance companies. Senator Baucus said he agreed with the intent of the Rockefeller Amendment to “hold the insurance industry’s feet to the fire,” according to the Washington Post. The Associated Press quotes Senator Jim Bunning as observing that “the private sector is not doing exactly what it should do with medical services.”

Republican members of the committee were unanimous in their opposition to public options. The Washington Post quotes the ranking GOP member of the panel, Senator Charles Grassley, as warning that a government plan “will ultimately force private insurers out of business” and that “The government is not a fair competitor. It’s a predator.”

The first public option amendment, offered by Senator Rockefeller, would have permitted the government-run plan to set reimbursements to medical providers at levels paid by Medicare for the first two years. (After that period, I believe the Senators proposal would have permitted the public medical plan to, like Medicare, impose rates on providers). It should be noted, Medicare often pays doctors and hospitals less than the cost they incur providing services. The five Democrats joining with Republican committee members to defeat this amendment were Senators Baucus, Thomas Carper, Kent Conrad, Blanche Lincoln, and Bill Nelson.

Senator Charles Schumer then proposed an amendment that would have required the public plan to negotiate reimbursement rates with providers, much as private carriers do today. Three Democrats – Senators Baucus, Conrad and Lincoln – voted against accepting this amendment.

I’ve maintained for some time that a government-run health plan was unlikely to be part the health care reform plan passed by Congress. The Senate Finance Committee’s rejection of this provision increases the likelihood of this outcome, but the debate will continue. Senator Schumer, for one, pledged to continue the fight. 

"’The present system is broken’" the Washington Post reports him as saying. “He said he was pushing for a public option not for ideological or symbolic reasons but because ‘costs are going through the roof.’ And he expressed confidence that, ‘with some work and some compromise,’  proponents of the provision eventually could get 60 votes on the Senate floor. ‘We are going to get at this, and at this, and at this, until we succeed, because we believe in it so strongly.’"

With polls showing 65 percent of the public support a government-run health plan operating like Medicare to compete with private health insurance plans, President Barack Obama continuing to argue for a public option, and Speaker Nancy Pelosi claiming the House was unlikely the House would pass health care reform that did not include a public option, this debate is far from over. Assuming the Senate Finance Committee moves forward a reform package this week, the next step will be for it to be integrated into the bill passed by the Senate Health, Education and Pensions Committee – legislation that does include a public option.

Getting health care reform is a long hike. Today’s vote in the Senate Finance Committee is a step along the way – albeit a very significant step indeed.

Health Care Reform Odds & Ends

When it comes to health care reform, to maul Dickens: It is the busiest of times. It is the calmest of times. Or as general agent Michael Traynor put it, “These are interesting times when talk of exchanges and pre-existing exclusions have bumped Paris Hilton and Lindsay Lohan from the news.”

This coming week it will be even harder on E! News and the like. Sure, Hollywood has the Emmys, but Washington has the debate in the Senate Finance Committee over America’s Healthy Future Act of 2009. Not a contest. Add to the mix President Barack Obama’s five appearances on Sunday morning television shows (plus his stint Monday night as David Letterman’s guest) and these are strange days, indeed. 

There’s several items in the mix I wanted to comment upon, but none of them really warranted their own post. So here they are, mashed together into a single article. Think of it as clearing the deck in anticipation of all the fun news coming out of Washington in the next few days. 

1. Excluding Pre-Existing Conditions

Yes, it’s true, health insurance companies exclude individuals with pre-existing conditions. When they can carriers refuse to offer coverage to those likely to use that coverage. According to some politicians and pundits of all political stripes, instead of being a legitimate business practice, this process (called “underwriting”) is evidence of the evil nature of health insurance carriers and their executives. 

Under today’s rules, however, underwriting is necessary to keep the cost of coverage from going even higher than it is today. Imagine permitting people to buy auto insurance from the tow truck driver at the scene of an accident. Or picture homeowners buying fire insurance after the flood waters recede. The cost of these policies would be astronomical. Why would anyone buy auto or homeowners coverage before they need it if they can buy the same policy after an accident or disaster? The cost of insurance in this environment would be the cost of the claim (plus administrative expenses). Have $1,000 in damage after that wreck? The cost of the policy sold by the tow truck driver would need to be more than $1,000 because no one else’s premium would be available to cover any of the cost.

The same applies to health insurance.  Allow individuals to purchase coverage on their way to the hospital and costs will skyrocket. (Don’t laugh, one of the GOP proposals would allow consumers to buy coverage in the emergency room). In New York and New Jersey, where there’s a mandate to sell individual health insurance but no mandate to buy it, premiums are three-times higher than in California.

Which illustrates the only way to resolve this situation: require everyone to obtain medical coverage. Without this balance (both a mandate for carriers to sell and for consumers to buy coverage) premiums quickly become unaffordable. Lawmakers who propose guarantee issue without a mandate to buy – and they exist on both sides of the aisle – are either grandstanding, mathematically challenged or ill-informed.

2. Losing Coverage When You Need It

The other popular market reform concerns carriers cancelling coverage after claims are incurred by policy holders, a practice called “rescission.” Much of the furor over rescissions in Washington and elsewhere are legitimate, the result of carrier’s tone deaf, heavy-handed, and inept approach to a reasonable concern: preventing fraud. So long as health insurance is voluntary, carriers need to protect their members from being gamed by those who would intentionally abuse the system. To hear some talk about the problem, however, you’d think every claim submission is answered by a termination notice. Estimating the total number of rescissions is difficult due to disparate reporting requirements around the country. Yet in testimony before Congress three of the largest carriers claimed to have canceled about 20,000 health insurance policies over five years. Four thousand annual rescissions sounds like a lot, but it’s a small fraction of the millions of policies sold and maintained by those carriers each year.

Because the number of terminations is small does not excuse the health plans from abusing their rescission power. Change in this area is needed to restrict rescissions to only intentional misrepresentation of medical conditions. In the meantime, overstating the severity of the problem may be good politics, but it is misleading. (Of course, if underwriting is eliminated, this problem goes away: if carriers cannot charge premiums based on pre-existing conditions there’s no reason to even ask about prior medical conditions.)

3. Non-Profit Doesn’t Mean Cheaper

Liberals demanding that reform legislation include a government-run health plan usually claim it will reduce the cost of coverage by introducing a non-profit health plan into the market. Here’s how Senator Jay Rockefeller put it on MSNBC, “There’s got to be some discipline to other insurance companies, that make them take seriously, not just competing with each other, but competing with somebody who because they are non-profit … and don’t have to please their shareholders because they don’t have any, that they can offer premiums at lower prices” (this sound bite begins at about the 2:35 mark). Yet there are already non-profits operating in most states. In California, for example, Kaiser Permanente and Blue Shield of California are two. In some parts of the state, these plans do offer the most affordable plans; in other regions the lowest cost plans are available from their for-profit competitors. Experience indicates little correlation between a carrier having shareholders and their premiums. Claiming it does may sound good, but anyone taking the time to see what’s happening in the real world will realize this is a false argument.

4. Ugly Language is Dangerous.

House Speaker Nancy Pelosi raised the possibility that the angry rhetoric prominent in the health care reform debate could turn violent, comparing it to the situation in San Francisco over gay rights in the 1970s. The link between the anti-gay rhetoric and the murder of Mayor George Moscone and Supervisor Harvey Milk is legitimate. So is the Speaker’s concern. Words can motivate. Passions can lead to horrendous acts – from terrorist bombings to the murder of doctors who perform abortions.

What’s hypocritical about Speaker Pelosi’s comment, however, is that she has contributed to tenor of the debate. When Speaker Pelosi, the individual third-in-line to the presidency calls opponents “immoral” and describes them as”the villains” in America’s health care reform system she loses the ability to complain when others claim her policies are socialist. The fact that Speaker Pelosi is guilty of what she rails against should not mean her warning is ignored. America’s health care system will be reformed by thoughtful deliberation. Depicting President Obama as Hitler, painting swastikas on the offices of lawmakers, pastors praying for the death of President Obama, or calling opponents “traitors” inspires ugly emotions and provides cover for crazies who take the law (both governmental and ecclesiastic) into their own hands.

Speaker Pelosi hopes for a more responsible tone in the health care reform debate. Her greatest contribution to achieving this goal would be to moderate her own rhetoric.

CBO Bolsters Baucus Health Care Reform Plan

The Congressional Budget Office has given a boost to the Chairman’s Mark of America’s Healthy Future Act 0f 2009. In a preliminary analysis of  the health care reform proposal put forward by Senator Max Baucus, the chair of the Senate Finance Committee. the CBO estimates the plan would reduce federal budget deficits by $49 billion between 2010-and-2019.

The Congressional Budget Office is highly regarded by both parties for its independent analysis. Their findings can cripple a bill or enhance its stature. In this case, even though the report is preliminary, the CBO adds substantial credence to Senator Baucus’ reform effort. A good thing considering the attacks on the proposal from both wings of the political spectrum.

The CBO presented its findings in a letter to Senator Baucus on September 16, 2009. (The analysis is summarized on the blog of CBO director Douglas Elmendorf). In addition to the positive effect on the federal deficit the analysis projects the health care reform legislation would increase federal revenues by $139 billion over the 10 year period. To be sure, the CBO, working with the staff of the Joint Committee on Taxation notes these estimates “are all subject to substantial uncertainty.” Further, the analysis was based on a description of the Chairman’s Mark of the America’s Healthy Future Act provided by Senate Finance Committee staff, not the document itself let alone actual legislative language.

What the CBO reports is that Senator Baucus’ health care reform bill would reduce the number of uninsured Americans by 29 million by 2019 according to the analysis. This would increase the percentage of Americans legally in the country and under the age of 65 to approximately 94 percent in 10 years from its current level of roughly 83 percent. This would leave “25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants).”

Where these newly insured consumers obtain coverage is kind of interesting. As you read these numbers, keep in mind that the size of the individual health insurance market nationally is estimated to be approximately 18 million people. The CBO estimates roughly “25 million people would purchase coverage through the new insurance exchanges, and there would be roughly 11 million more enrollees in Medicaid than is projected under current law.”  These numbers are significant. They will change the dynamics of the market, but they hardly represent a government takeover, especially considering that the Senate Finance Committee proposal does not create a government-run health plan.

The health care reform plan put forward by Senator Baucus has been subjected a great deal of criticism by Democrats and Republicans, but the attacks by liberals have been especially vicious. Which means the real debate has begun. During August it was conservatives dominating the attack on Congressional health care reform proposals. Now liberals are joining the rant party. Here’s another example from Countdown with Keith Olbermann who, like the Glenn Becks on the right, seems unable to disagree with someone on public policy without calling them names or attributing venal motives to anyone on the other side. It’s politics by outrage that demeans the debate, but pleases the partisans.

Are there flaws in Senator Baucus’ health care reform plan? Yes. Hopefully the debate starting next week in Senate Finance will fix many of them. Is his plan better than the status quo?It certainly would be for the 29 million Americans gaining coverage under the proposal. Reducing the deficit seems like a step in the right direction. And, as I’ve noted before, to the dismay of Mr. Olbermann, health care reform will be decided by moderates. And moderates aren’t attacking the America’s Healthy Future Act.

Baucus Introduces America’s Healthy Future Act of 2009

Senate Finance Committee Chair Max Baucus has unveiled his health care reform proposal, the “America’s Healthy Future Act of 2009” in the form of a “Chairman’s Mark.”  This means instead of publishing legislative language, the plan is presented in a “here’s the current law and here’s how we should it” format. While specific legislative language would be nice, there’s enough detail in the 223 page document to get a good understanding of what Senator Baucus proposes. And we won’t have long to wait for the legislative language: the Committee will begin debating the bill on September 22, 2009.

No Republican members of the Senate Finance Committee have signed onto the plan, but I don’t think the lack of GOP support at this point dooms the Baucus proposal. As noted in my previous post, at least one of the three Republicans who has been negotiating with Senator Baucus towards a bi-partisan bill, Senator Olympia Snowe, has indicated she’s waiting to see how the bill is amended in committee before committing her vote. Further, the audience Senator Baucus is directing his health care reform plan to are moderate Democrats.

By directing his plan at moderates, Senator Baucus, not surprisingly, infuriates liberal Democrats. Senator Jay Rockefeller has already announced his opposition to the Chairman’s Mark and claims four-to-six other Democrats on the Finance Committee share his views. There are 23 members of the Senate Finance Committee: 13 Democrats and 10 Republicans. So Senator Baucus can afford to lose only one Democrat and still move his proposal out of the committee in the face of unanimous GOP opposition.

My expectation, however, is that neither President Barack Obama nor Senate Majority Leader Harry Reid will let liberals bottle-up the bill in the Finance Committee. If needed, they’ll arrange for some progressive Democrats to speak against the bill, while voting to move it out of committee in order to “let the process proceed.” Of course, if Senator Snowe or any of the other Republicans on the committee vote for the amended bill, fewer Democrats will be needed.

A quick review of the Chairman’s Mark indicates there have been no substantive changes from what was expected. There’s no government-run health plan, it requires individuals to purchase coverage, it establishes state health insurance exchanges. What has been firmed up is it’s price tag: $856 billion over 10 years.

I hope to post more detailed analysis of the America’s Healthy Future Act of 2009 over the next few days, but in the meantime, below are a few articles that summarize the proposal. Senator Baucus describes his proposal in an opinion piece published in the Wall Street Journal today. In reading these keep in mind that what Senator Baucus introduced today is only the beginning. On September 22nd the Senate Finance Committee will convene to debate and amend the bill. The mark-up, as it’s called, will be civil but robust. What emerges from the committee will be different than the Chairman’s Mark.

And that’s just the beginning. The Senate will need to reconcile the Senate Finance Committee’s bill with the legislation put forward by the Senate Health, Education, Labor and Pensions Committee. The result of that mash-up will then need to be reconciled with whatever health care reform legislation the House approves by a conference committee made up Senators and House members. Then both chambers must approve the resulting compromise legislation.

In other words, there’s a long journey ahead for health care reform. There will be plenty of noise and controversy along the way. The path to reform will be subjected to a multitude of twists and turns. We won’t know how it turns out for another two-to-three months. But with the introduction of the America’s Healthy Future Act of 2009, the health care reform debate takes a big step forward.

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Here’s some articles describing Senator Baucus’ health care reform proposal:

“Baucus Unveils $856 Billion Health-Care Legislation” from the Wall Street Journal.

“Baucus unveils health care bill” from the Boston Globe.

“Baucus Offers Health Plan With No Republican Backing” from Bloomberg.com

“Baucus Introduces $856 Billion Health Care Bill” from the Washington Post.

“Baucus Puts Bill In Play” from National Underwriter (my thanks to Dwight Mazonne for identifying this article)

Lack of GOP Support for Baucus Health Care Reform Matters, But Not So Much

After months of trying to craft health care reform legislation that would garner at least some Republican support, Senate Finance Committee Chair Max Baucus appears ready to move forward without GOP support – at least for now. According to the Associated Press, Senator Baucus will release his proposal on Wednesday without any Republican co-sponsor. The media will claim this is a huge setback for Senator Baucus and for President Barack Obama.

Maybe, but I don’t think so. First, there is a possibility at least one Republican will support the legislation when it comes to a vote in committee. Politico.com reports that “Sen. Olympia Snowe (R-Maine), who is considered the likeliest Republican to sign onto the bill, said she wants to wait to see how the committee process plays out. “’I am committed to this process,’” Snowe said. “’I want this effort to continue and I am going to work through all these issues and the committee process will advance that as well and we will continue to work together.’” While the other two Republicans working on bi-partisan legislation sounded less upbeat, they have not completely closed the door to supporting bill either.

The second reason the lack of any Republican support may not matter much in the long run is that Senator Baucus’ bill will appeal to Democratic moderates. And while Republican votes would be useful, it is moderate Democrats that hold the key to health care reform. Without the support of most of the members of the Moderate Dems Working Group in the Senate or the Blue Dog Coalition in the House, Congress cannot pass health care reform legislation. There are 18 Democratic Senators who are a part of the moderate group. At least eight of them must support legislation for it to pass. In the House, where Democrats outnumber Republicans 257-to-178, there are at least 52 members of the Blue Dog Coalition. They need at least 13 of them to support reform legislation.

Yes, there are more liberals in Congress than moderates. And some of these liberals are threatening to oppose health care reform that does not meet their litmus test of including a government-run health plan. But it’s much easier for a moderate to oppose health care reform than it is for liberals.

A moderate can stand on the floor and claim the bill is too expensive or involves too much government. Given their districts, this is unlikely to hurt them politically. In fact, it will likely help them in the upcoming election.

For a liberal to oppose one of the most important priorities of the Democratic Party because it doesn’t go far enough is a much tougher message. They must claim that millions of Americans should go without health care coverage because the bill isn’t ideologically pure enough. They must explain why insurance carriers should be permitted to continue to deny coverage to individuals with pre-existing conditions because the legislation doesn’t include a public option. In other words, liberals need to argue that the status quo is better than any reform. That’s not only a tough argument to make, it’s a foolish one.

Senator Baucus would love for Republicans to support his health care reform bill. President Obama would too. But they don’t need Republicans to support the bill. They need moderate Democrats.

Senator Baucus is pitching his proposal to those moderates. If he succeeds and if President Obama can get liberals to vote for what they will perceive is a partial loaf, then health care reform passes. If either fails in their assignment, so does health care reform.

It’s that simple. And that complicated.