Why Liberals Won’t Kill Health Care Reform

For those opposed to the current versions of health care reform moving through Congress it might be enjoyable to see the Democrat versus Democrat circus currently underway in Washington. Both parties are susceptible to the joys of circular firing squads, but the Democrats are embracing the concept with exceptional glee of late as liberals and moderates in the Democratic caucus brawl over the shape of health care reform legislation. But at the end of the day there’s several reasons why it’s highly likely all 60 members of the Democratic caucus will vote to move the bill forward.

1. The Senate is not voting on a final health care bill. Yes, passage of health care reform by the U.S. Senate would be a historic milestone, but just a milestone. What emerges from the Senate will go to a conference committee where the final health care reform bill will be drafted. This makes it easier for Senate Majority Leader Harry Reid to muster the necessary votes. For example, Senator Ben Nelson who is threatening to vote against allowing a vote on the legislation unless it’s abortion language is modified, can make it clear he’ll vote “aye” now to keep the health care bill alive, but he’ll vote against it if the conference committee doesn’t address his concerns. The liberals who are claiming the legislation is a bail-out of the insurance industry can make the same claim: “I’ll vote for it now, but it needs to get better in conference.”
2. Liberals opposing the bill don’t vote. With the exception of Senator Bernie Sanders, an Independent who caucuses with the Democrats, most of the complaints have come from liberals outside of the Senate. Former Governor Howard Dean was the first well-known liberal to call for defeating the Senate health care reform bill. he was soon joined by Keith Olbermann of MSNBC and folks at the Daily Kos blog. The AFL-CIO and SEIU are also making noises about killing the bill and starting over. But killing the bill would require liberals to tell millions of Americans that preventing health insurance companies from denying them coverage isn’t adequately progressive. Or that preventing carriers from dropping insureds when they get sick isn’t sufficiently liberal. Or that eliminating annual and lifetime caps on insurance coverage is unimportant to liberals. Or that making health insurance accessible and affordable (through subsidies) for millions of the currently uninsured fails to meet the definition of “good enough.” Liberals will complain. They’ll whine and threaten. At the end of the day, however, it’s unlikely any liberal wants to go down in history as the vote that postponed health care reform for a generation (see reason #4, below). Mr. Olbermann gets paid to talk so the commercials on his Countdown show don’t run together. He doesn’t have vote in Congress. Neither does Governor Dean. What they say matters only within the bubble known as cable news. Having a vote in Congress is a responsibility the pundits lack, but lawmakers take very seriously – seriously enough to keep health care reform legislation moving forward.
3. Liberals are upset over more than just the public option. While dropping a “robust” public option from the Senate health care bill is generating the most recent complaints from the left, threats to defeat the bill result from several disappointments. Many liberals support a single payer system and see a government-run health plan as a compromise. They look at the requirement for everyone to purchase health insurance and ask a reasonable question: what is to stop carriers from gouging the public? (Hence proposals for requiring high medical loss ratios). Then there’s efforts by anti-abortion groups to use health care reform to insert language that goes beyond the current status quo embodied by the Hyde amendment. Some progressives also are upset pure community rating is absent from the bill and the fact Health Savings Accounts will survive the reform effort. As the end game approaches, it’s not surprising that passions rise and frustration bubbles over. Especially for liberals about to vote for what they consider disappointing legislation, venting their displeasure is to be expected. Venting displeasure, however, is not the same as blocking health care reform.
4. Liberals won’t get a better bill any time soon. Progressives were understandably delighted by the 2008 election results. President Barack Obama had a demonstrably liberal voting record and still won in what can legitimately be called a landslide. Democrats had substantial majorities in both houses of Congress. What was overlooked is that the Democratic Party (and the president) is more centrist than true liberals like to believe. In fact, nearly one-third of the Democratic Caucus are also members of the Senate Moderate Dems Working Group. Anyone not trying to sell Viagra and auto insurance (which leaves out Mr. Olbermann) has known for months that health care reform would be shaped by these moderate Democrats Senators. And if liberals think they’ll be replacing these moderates with more liberal Democrats they’re spending too much time in a different space-time continuum than the rest of us. The chances of liberals taking the seats of Senators Blanche Lincoln and Mark Pryor (Arkansas), Evan Bayh (Indiana), Ben Nelson (Nebraska), Mary Landrieu (Louisiana), Kay Hagan (North Carolina), or Clare McCaskill (Missouri) any time soon are extremely slight. The reality is that Republicans are likely to pick up several seats in the Senate and House in 2010. Historically, the mid-term elections go poorly for the party in the White House. What this means is that for liberals, the current Congress is as good as it gets. Starting over would likely result in reforms even more moderate than what’s being considered today. That’s why Republicans are doing everything they can to slow down the health care reform process. They know the longer the process takes the more likely health care reform is likely to fail and that future attempts will be more to their liking. Liberals in the Senate know this. The Governor Deans of the world can ignore this fact, but lawmakers have to deal with reality, not the fantasies of ideologues.
5. There’s always tomorrow. To think that whatever health care reform legislation President Barack signs into law health care reform legislation early next year will end debate on the issue for the rest of his Administration is naive. As Republicans gain strength they’ll seek to modify whatever is enacted. Democrats will attempt to expand reforms through more targeted legislation. Whatever health care reform bill emerges from Congress this session should be viewed as a foundation for future political fights, not the end of them.

Could health care reform fail because of attacks from both the left and the right? Yes. Is it likely to fail because liberals join Republicans in torpedoing health care reform? Not really. I don’t envy Senate Majority Leader Reid his task, but my guess is he’ll soon have the 60 votes needed to bring health care reform legislation to the floor of the Senate. Then if some of the liberals want to make a symbolic vote against the reform package they can go right ahead. Once the bill is brought before the Senate It only take 51 votes to move the legislation forward to the conference committee.

Of course, whether whatever health care reform legislation the conference committee can draft will secure enough votes is still very uncertain. But we will have the chance to find out.

Medicare Buy-in Compromise Unraveling?

Nothing lasts forever … not even health care reform compromises. The Congressional Budget Office is expected to come out with its analysis of the latest proposal – replacing a the creation of a new government-run health plan (the controversial “public option”) with a program in which Americans 55-64 could buy Medicare coverage. However, it’s looking like even if the CBO determines the idea makes financial sense, the votes to go forward with the proposal there doesn’t seem to be enough votes around for it to move forward. Which means the public option remains the big make-or-break element of health care reform in the Senate.

Only a few days ago, along with the idea of empowering the Office of Personnel Management to organize a coverage program, the Medicare buy-in compromise  seemed to be the solution to breaking the public option impasse. Now the idea seems to be losing steam.

First, doctors and hospital groups came out in opposition to the Medicare buy-in compromise, with the Washington Post reporting them as claiming the approach “would be financially untenable and would jeopardize access to health-care services for millions of Americans.”  The medical and hospital groups are concerned, according to the Washington Post, “because the program pays providers at much lower rates than private insurers, and because older Americans are the greatest consumers of health-care services.”

And then two conservative members of the Democratic caucus indicated their disapproval of the Medicare buy-in. According to the Associated Press, Senator Joe Lieberman, who had originally sounded open to the idea, now considers it “a bad deal for taxpayers and the deficit.” And the AP quotes Senator Ben Nelson as saying “I’m concerned that it’s the forerunner of single-payer, maybe even more directly than the public option.”

So while, as the Washington Post and others are reporting, the President Barack Obama and many Democrats are praising the compromise, the fact is, the Democrat’s need 100 percent buy-in by their caucus to pass any bill. (Yes, it’s possible Senators Olympia Snowe and Susan Collins might cross party lines and vote for a bill, but it’s hard to see how these Republican Senators could support any legislation conservative Democrats like Senators Lieberman and Nelson could not).

Democrats are trying to dodge a nasty choice: dropping the public option from health care reform. Liberals have made inclusion of a public option their litmus test for meaningful reform. As the liberal blog Daily Kos put it this past summer, the public option is the compromise progressives are willing to make between a single payer system and the status quo.

In the end, however, liberals will need to decide whether the absence of a public option is enough to get them to walk away from reform. Because there does not seem to be any way they will obtain 60 votes in the Senate for a bill that includes a new government-run health plan. My guess? Liberals will complain bitterly, but ultimately vote for a bill without a public option. Health care reform has been on their agenda for decades and they have moved the issue further through Congress  than ever before. To abandon it now would set back health care reform for at least a decade if not longer. Failure would hand Republicans a huge stick to use against them in the 2010 elections.

Passing reform, even reform liberals perceive as too weak, provides a foundation for future efforts. This might seem like a hollow victory for many progressives, but it would be a victory for them nonetheless. And I just don’t see them trading even a hollow victory for a hard defeat.

Devil Dwells in the Details of Health Care Reform Compromise

A critical health care reform compromise seems to have emerged from negotiations between five liberal and five moderate Democratic Senators (the so-called “Gang of 10”). They are putting forward a compromise that eliminates (or at least postpones) the creation of a government-run health plan while allowing Americans 55 through 64 years of age to purchase Medicare and tasking the Office of Personnel management to administer a program offering coverage through non-profit, private health plans. Of course, as with anything as complicated as health care reform, a solution or compromise on one issue creates new ones elsewhere – think of trying to flatten a partially inflated balloon. Push down on one part and the air pops up in another.

As I noted the other day, expanding Medicare is an idea that appeals to both liberals and conservative Democrats. For example, former Governor Howard Dean, a leading and vocal advocate for a government-run health plan called the compromise “a positive step forward” on the CBS’ “The Early Show.” Meanwhile, Senator Joe Lieberman, who had threatened to support a filibuster of any health care reform plan containing a public option signaled the compromise might be acceptable. According to MSNBC Senator Lieberman said he was “’open- minded’ about the deal” and indicated he was encouraged by what he’s heard so far about the compromise. In other words, he’s pretty much on board.

Senator Reid will be submitting the Gang of 10’s compromise to the Congressional Budget Office where its financial impact will be determined. In the interim, it’s worthwhile asking some questions about the impact of elements of the health care reform compromise as it is in the details that the devil likes to linger.

For example, how will allowing 55 through 64 years old enroll in Medicare impact private health insurance premiums?  It is widely accepted that Medicare often pays doctors, hospitals and other providers less than the actual cost of the care they provide. For example, “payment levels for hospital services under Medicare are equal to only about 71 percent of what is paid by private health plans for the same service,” according to a study by the Lewin Group. Medical care providers make up for the Medicare reimbursement shortfall by charging more to their insured patients. This cost shifting is reflected in higher health insurance premiums.

To the extent the 55-through-64 year olds signing up for Medicare previously were insured by private carriers the amount of dollars being shifted to private insurance will increase and the number of privately insured consumers absorbing this cost will decrease. The result, upward pressure on health insurance premiums.

However, to the extent that these new enrollees were previously uninsured it will reduce the cost of private coverage. Right now virtually all the costs incurred by the uninsured are shifted to private carriers. If Medicare pays for 71 percent of these expenses that’s 71 percent less in losses providers need to shift to their insured patients. How these two consequences balance out is as yet unknown – and may not be knowable until after the fact. But lawmakers should be aware of these consequences.

There’s another detail of the compromise potentially offering affordable housing to the devil.  Alison, a regular reader of this blog, pointed out a provision that would require private carriers to spend at least 90 percent of premiums on medical care. Forcing carriers to spend a high percentage of premiums on medical costs is one of those proposals that: 1) sounds great; and 2) emerges with the regularity of ground hogs in Pennsylvania in February. And it’s a seriously flawed proposal.

Consider: requiring carriers to maintain a specified medical loss ratio (as the percentage of premium spent on claims is called) could reduce the availability of low cost plans. It costs just as much to process claims for a plan costing $300 per month as it does for one with a monthly cost of $100. If these fixed costs amount to $15, they represent 15 percent of the lower cost plan’s premium, but only 5 percent of the premiums for the more expensive plan. Need to get your medical loss ratio (as the percentage of premium spent on claims is called) to 10 percent? Raise your premiums. It’s counter-intuitive, but do the math and you’ll see the danger.

There are several other potential dangers from requiring a high and specific medical loss ratio. Economic swings or flu outbreaks (or the lack of expected flue outbreaks) can greatly alter the percentage spent on claims. So can government-imposed mandates to cover certain conditions. Private carriers pay taxes and need lawyers to deal with government regulation. These costs are beyond their control, but they tend not to increase over time (taxes and regulations have a nasty habit of piling up), meaning these uncontrollable costs are likely to absorb funds needed for truly administrative costs – like answering the phone. Answering the phone, of course, speaks to customer service, a likely victim of mandated loss ratios.

And setting the medical loss ratio at 90 percent would certainly eliminate broker commissions. Brokers would either need to charge fees directly to clients (if that’s permitted) or go away, leaving consumers bereft of independent advocates and counselors.

The good news is that just because a provision is in the compromise doesn’t mean it will be part of the final legislation. Or that it can’t be improved upon before reaching President Obama’s desk. When California Governor Arnold Schwarzenegger proposed an 85 percent medical loss ratio in his 1997 health care reform plan, lawmakers recognized the potential pitfalls. The provision was amended to make clear, for example, that taxes and disease management programs would be part of the claims side of the ledger. Eventually a workable compromise was was reached. (The bill did not pass the Legislature, however).

Of course, fixing California’s version of a mandated medical loss ratio didn’t happen of its own accord. Many interested parties, including the California Association of Health Underwriters, expended considerable effort to educate lawmakers about the implications of this provision. An effort of similar magnitude will be required to make sure that the devil is unable to take up residence in the details of the health care reform compromise shaping up in Washington.

New Elements Added to Health Care Reform Debate

I haven’t been writing much of late. The Senate debate has simply been too predictable to merit much comment. The partisan attacks could have been scripted months ago. The votes unsurprising, and the difficulty Democratic Leaders face in fashioning a 60-vote majority is to be expected.

Consider: Republicans charge the Democrats will destroy Medicare. The fact that not long ago it was the GOP wanting to eliminate waste and abuse from the program seems to be forgotten. Democrats, meanwhile, seem incapable of understanding the relationship between medical costs and insurance costs. Listening to their claims that cracking down on evil insurance companies will lower health care spending is disappointing. It would be nice if now and then a Senator would acknowledge that medical costs drives up premiums and not vice versa – a wish not likely to be realized any time soon.  I heard on the radio last week (sorry, not sure what station) a lawmaker complaining that health insurance companies use actuaries, an unfair advantage they wield to the detriment of consumers.

But in the past few days some ideas seem to be gaining traction that could mix things up considerably. One proposal is to allow 55 through 64 year olds to buy into Medicare. The Washington Post’s Ezra Klein seems to be the first blogger to report the Medicare buy-in proposal is “attracting the most interest” as an alternative to creating a new government-run health plan to compete with private carriers. The under 65 cohort would not get basic Medicare coverage for free nor does it look like this approach includes subsidies not already on the table. It simply is a way to create access for some Americans to a public health plan without creating a new public health plan. And as with the public option, participation by 55 year olds would be voluntary.

That the idea of a Medicare buy-in option is gaining traction would seem to indicate that chances for a “true public option” are diminishing. Even liberal bloggers like AntonRobb at Benzinga.com are reaching this conclusion. “… proponents of the public option may be compelled to get behind this plan as an alternative. The severeley (sic) comprised … versions of the public option that have any chance of passing … would probably be worthless and probably do more damage politically to the Dems than good,” he writes.

The other interesting idea to emerge is to, as CBS News describes it, “establish national health insurance options, which would be administered by the Office of Personnel Management (OPM) but operated by private, nonprofit insurers ….” Since the OPM already administers the Federal Employees Health Benefit Program (FEHBP), which insures members of Congress and their staffs among others, this alternative to a public option is being viewed as the equivalent of opening up the FEHBP to non-government workers. (Incidentally, although the CBS reports implies the plans would be administered only by nonprofit carriers, this is far from certain. None of the other news reports mentioned this restriction – and there are for-profit carriers participating in the FEHBP.)

The “what’s good for Congress is good for the public” approach seems to appeal to moderate and conservative Democrats who have been objecting to the creation of a new government-run health plan run by the Department of Health and Human Services. As CBS notes, Senators like Ben Nelson describes this proposal as an alternative to, not a version of, a public option.

The import of these proposals go beyond the fact that new ideas are on the table. It also shows the influence likely to be wielded by the “gang of 10” Senators formed over the weekend. These 10 Senators, five liberals and five moderates, are charged with hammering out a compromise on the public option, according to MSNBC. While focused on the public option, it is likely this group of lawmakers will be called on to bridge the chasm that separates liberal Democratic Senators from their moderate and conservative colleagues. Remember, liberals have long claimed that health care reform without a public option is no reform at all. So if the gang of 10 manages to find a way to remove a government-run health plan from the legislation while still keeping liberals on board, they will position themselves to fashion compromises on other divisive issues as well.

(For those interested, the gang of 10 is comprised of Senators Sherrod Brown, Russ Feingold, Tom Harkin, Jay Rockefeller, and Charles Schumer from the liberal wing of the party and moderate Democratic Senators Tom Carper, Mary Landrieu, Blanche Lincoln, Ben Nelson and Mark Pryor).

As noted above, the momentum building behind the Medicare buy-in and an FEHBP-type proposal is that the public option is not going to make it into the Senate bill. Not with a trigger. Not with an opt-out. Instead it appears the public option won’t be in the legislation at all. This should mollify Senator Joe Lieberman who has promised to vote with Republicans against bringing a health care reform bill to the floor if it contains a public option.

All of this also makes clear the strong desire of Democrats, regardless of their ideology, to pass health care reform. The New York Times reports on various lawmakers’ description of President Barack Obama’s message to Senate Democrats on Sunday. “He reminded us why we are here. He reminded us why we run for office. And he reminded us how many people are counting on us to come through.” “Decades from now this will be the kind of vote you remember. It will be written in the faces of children and families who are relieved of the burden of anxiety and sorrow.”

Democrats consider this a historic moment. While grasping it carries political risk in the upcoming 2010 elections, failing to seize the opportunity poses even greater dangers. And the crushing of a dream many of these lawmakers have held for decades.

There are still controversies that could scuttle health care reform. And there will enough political charges and counter-charges bandied about to satiate even the most verbose pundits. But Senators are serious about finding a path to passage and it is increasingly likely they will pass some version of health care reform before years-end. Of course, this will only set the stage for the real work to begin: the House-Senate Conference Committee likely to convene shortly after New Year’s Day.

Obama Administration Presents State-by-State View of Status Quo and Impact of Health Care Reform

Most readers of this blog understand the benefits and problems of the health care system status quo. And they can make an educated guess at how the various health care reform proposals will impact their world. Most voters (and much of the media, I might add), don’t have as informed a view on these issues.

Into this vacuum comes the Obama Administration with a state-by-state description of the current health care system in the jurisdiction and its view as to the benefits health care reform will deliver to the states’ residents.

Yes, the site is aimed at building support for health care reform. Still, it provides some interesting data and observations. For example, it warns that the “amount of uncompensated care provided will more than double in 45 states” by 2019 as the number of uninsured grows by at least 10 percent in every state and by more than 30 percent in 29 states.

It’s worth spending some time. You may disagree with some of what’s presented. And some of it is inaccurate — it claims, for instance, that health care reform would establish a high risk pool in California, but the state already has one. And it seems to imply that 100% of the individual market would buy through the exchange, something no one is claiming (that I’m aware of). So read it with a handful of salt. However, the reports do provide an interesting, more granular glimpse into health care in America than is usually available. And the more detailed look we all give to reform, the better.

Senate Health Care Reform Still Alive, But Likely to Change

The Senate has just spent most of today (Saturday) engaging in a debate on whether to allow a debate on comprehensive health care reform. Later this evening 58 Democrats and 2 Independents will vote to allow Majority Leader Harry Reid’s health care reform bill come to floor for debate and consideration of amendments. 40 Republican Senators will vote unanimously against allowing this to happen. Senator Reid’s Patient Protection and Affordable Care Act is still alive. It is unlikely to survive in its current form for long, however.

Don’t get me wrong. Tonight’s vote is significant, very significant.  The vote is a test of President Barack Obama’s and Senator Reid’s ability to line up enough votes to keep the bill alive.  The debate leading up to the vote has been an opportunity for Republican Senators to present their opposition to HR 3590. (Yes, the Senate has taken a bill passed by the House and moved to the Senate, gutted that language and substituted their health care reform package. Consequently, the Senate legislation has a House bill number.) And the vote to allow debate has served as an action forcing event, sort of, for Democratic moderates.

Those moderates could have sided with the Republicans killing the bill before it could be brought to the floor. Instead, they joined with their liberal colleagues and kept health care reform alive. While there are 18 moderate Democratic Senators (including Senator Joe Lieberman, who is an Independent), it eventually came down to three:  Senators Mary Landrieu, Blanche Lincoln and Ben Nelson. All three made clear they would seek amendments to the bill before voting for it. And all three are among those moderates making it clear further changes to the Patient Protection and Affordable Care Act is necessary before they’ll commit to voting for it.

We’ll learn more about the changes moderates will demand over the several weeks before a final vote on health care reform is held in the Senate.  Democratic leaders are hoping to hold that vote before the end of the year. The legislation would then move on to a conference committee that will attempt to reconcile it with legislation the House passed earlier this month.  More importantly, that conference committee, made up of an equal number of Senators and House members, will seek to fashion legislation they hope will earn the support of a majority of House members and 60% of Senators. As I’ve noted before, passage of legislation by the Senate is merely the final playoff game. The World Series — the conference committee — is yet to come.

Uniting the Democrats to allow debate on health care reform is a victory for the Obama Administration and for Senator Reid personally. That it took this much effort, however, demonstrates the challenges they yet face. Republicans appear to be uniting in opposition to the legislation. Even Senator Olympia Snowe, who voted for a health care reform bill in the Senate Finance Committee, is expected to vote against bringing HR 3590 to the floor.

I’ve written before about the power moderates have to determine if health care reform legislation will pass Congress and what the final bill will contain.  Now we’ll see that power put forward. Some of what they’ll ask for will be parochial. (That there’s a provision in Senator Reid’s bill that would send additional Medicaid money to Senator Landrieu’s state of Louisiana is neither a coincidence or accidental). But most of their demands wil concern public policy issues. Moderate Democrats tend to be more fiscally cautious than their more liberal colleagues, giving them pause to legislation that greatly expands governmental powers,  spends nearly a trillion dollars over the next decade and taxes corporations and individuals to pay for it. These are the issues on which they will focus.

Republicans will have their own pet issues, but those are unlikely to influence the outcome. Having already declared their unmoving opposition to any health care reform Democrats could claim keeps their campaign promises, the GOP has removed themselves from negotiations. (A couple of the Republicans, most notably Senator Snowe and her colleague from Maine, Susan Collins, might vote what moderate Democrats fashion. But whether they’ll be able to insert provisions without committing to voting for the bill if their amendments are accepted is unlikely. 

We don’t know yet what changes to HR 3950 moderate Democrats will demand, but the possibilities are extensive. They could eliminate a public option — or at least postpone its implementation until after other reforms have had a chance to take effect. They could  demand additional cost containment provisions. They could strengthen — or weaken — the requirement that all consumers obtain coverage. Certainly they will modify what taxes and fees are imposed to pay for health care reform.

What’s important to remember is that moderate Senators will have two shots at the bill. They’ll extract as much as they can during the current Senate debate. Then at least two or three of them are likely to agree to vote for the bill “in order to keep the process moving forward.” However, they’ll also make clear they want significant changes made to the legislation by the conference committee before they’ll commit to a vote that would place the legislation on the president’s desk. Liberals will insist they have compromised all they can, but in reality, the moderates (and the liberals) know that the progressives are likely to accept any legislation that can be called “health care reform” with a straight face. And as politicians, they have great skill in passing the straight face test.

Yes, Democrats have won the debate on whether to debate health care reform. What legislation eventually emerges from the Senate, if any, is still uncertain.

House and Senate Health Care Reform Bills Mark the Beginning of the Endgame

Senate Majority Leader Harry Reid is unveiling his health care reform plan after it received passing grades from the Congressional Budget Office. Whether he has the 60 votes he needs to bring the bill to the floor is still an open question, but odds are he’ll have the votes when he needs it, perhaps by this weekend.

Then the fun begins. Senators will debate the bill, offer amendments, vote on those changes, and finally craft a bill. If Senator Reid and his allies play their cards well, they’ll have the 60 votes needed to allow a vote on the legislation. (Yes, before there’s a vote there’s a vote on whether to have a vote – you’ve gotta love democracy). Only then will the Senate make history and pass health care reform.

Of course, what the Senate passes and what becomes law are two different things. Just as passage by the House of Representatives of HR 3962 was only a prelude to what will be the act of drafting the “real” health care reform bill.

Many have tried, but only President Barack Obama, Speaker Nancy Pelosi and Senate Majority Leader Harry Reid have gotten this far with health care reform. What they’ve accomplished is historic and Herculean. Whether you support or oppose their bills, respect for their accomplishment is appropriate. But getting this far is not the end. Well, it’s the end of the beginning. And it brings us closer to the beginning of the endgame.

The legislative process involves several stages. In the beginning there’s a lot of sincere questions being asked as lawmakers seek information, float trial balloons, and generally get a lay of the political landscape and the issues. During this phase there are a lot of options on the tables, including the most extreme positions (e.g., do nothing or enact a single payer system).

This phase was also when it became clear that, for the most part, Republicans were as interested in defeating “Obamacare” as they were in reforming the health care system. By publicly declaring so early in the process they would oppose any legislation containing provisions dear to the Democrats, the GOP effectively removed themselves from the deliberations. Why, after all, would Democrats negotiate with a party that had made clear they would oppose anything other than their own proposals?

Of course, Republicans could ask the same question of the Democrats (and do). The difference is that Democrats are in the majority in Congress. So if the two parties go their separate ways, the Democrats could still, under the right circumstances, pass a bill. In other words, it’s their bat and ball, so if the Republicans stalk off the field, the game continues.

In the second legislative phase the House and Senate committees with jurisdiction on health care weighed in. General concepts became legislative language. Lawmaker’s inclinations became public votes. Options feel by the wayside. (This is the phase in which the possibility of enacting a single payer system was formally laid to rest).

What the committees produced generated a lot of concern, anger and raucous  objections. Apparently some folks thought someone in Washington really thought these bills would become law. Nope. What the committees were producing were negotiating positions, not laws. Everyone had their eye on the main battle to come in the fourth phase. They were setting up their arguments, gathering their support for the real showdown.

Before the showdown, however, we have to get through the current phase, phase three. In this portion of our program, ideology and public policy take a back seat to a very practical concern: what needs to be in the bill – and what needs to stay out of the legislation – in order to get enough votes to pass it.

Senate Majority Leader Tom Daschle describes this process as shoveling frogs into a wheelbarrow. Speaker Nancy Pelosi’s job: craft a bill that could get 218 members of the House into her wheelbarrow. She succeeded by cobbling together legislation that is an abomination to many of the House Members who voted for it.

Senator Reid’s task: to get 60 Senators into his wheelbarrow. To do that he’s pared back provisions (such as on a government-run plan) in ways that only three weeks ago liberals would have labeled a betrayal (and some still do. Of course, those progressives complaining about the compromises Senator Reid has made tend not be in the Senate. Because liberal Senators understand the process. If they need to accept a weakened public insurance program to help Senator Reid keep 60 frogs in the wheelbarrow, so be it.

Why do liberal House members vote for a bill they consider an abomination and progressive Senators accept compromises that were absolutely unacceptable a few weeks ago? Because this is the phase where it’s about getting something passed, not public policy.

If the Senate passes Senator Reid’s health care reform legislation, the fourth phase begins. A conference committee will be created made up of members of the House and Senate. Their task: to meld together the House and Senate proposals into a single bill for which Speaker Pelosi and Senator Reid can shovel enough frogs into their respective wheelbarrows to pass.

Think about that challenge. A single bill that can get majorities in both chambers. That won’t be easy. The process won’t be pretty. Decisions will be made based on factors outside of health care reform.

Take Senator Joe Lieberman. He’s on record declaring his opposition to a government-run health plan is a matter of conscience. His history makes clear he loves being Chair of the Senate Homeland Security and Governmental Affairs Committee. Keeping the chairmanship he loves may require him to bend his conscience a bit. Yes, who chairs a particular committee has nothing to do with the substance of health care reform. But it has everything to do with the politics of health care reform.

(By the way, I’m not saying Senator Lieberman has been threatened with losing his chairmanship unless he agrees to let health care reform come to a vote in the Senate. But if it turns out he was, no one should be surprised. Hardball is a sport played by both parties. And  the higher the stakes, the harder the ball.)

Given the nature of the issue and the politics, the conference committee will forgo public policy debates and focus on fashioning a compromise that majorities of the frogs – I mean, lawmakers – in each chamber can support. This means what the House passed and what the Senate may pass are now the extremes in the health care reform debate. Compromises, after all, tend to wind up in the middle of two poles. The Congressional leaders making up the conference committee will try to establish a middle ground on which their needed majorities can stand. Their building blocks will be what it takes to get the bill passed. That the result may be messy, perhaps even unworkable is of less concern. There will be time enough to fix those problems.

Getting reform right was for an earlier phase in the process. And by eliminating some of the more extreme ideas, by establishing the boundaries of reform, those phases assured that public policy considerations would have an impact on the final legislation. But that was then. In this final phase of the legislative process it’s is about getting reform. Period.

In short, the health care reform process to date has been fascinating and important, but it’s main purpose has been to define negotiating positions. We’ll see the end of the beginning of health care reform if and when the Senate enacts its version of reform.

Only when the conference committee convenes, however, do we move into the beginning of the endgame, the point where the drafting process of health care reform begins in earnest.

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.