The Alan Katz Health Care Reform Blog

Health Care Reform From One Person's Perspective

Posts Tagged ‘Nancy Pelosi’

No on Proposition 45

Posted by Alan on October 30, 2014

As you know, this blog has been—and remains—on hiatus. I’m playing around with reviving it down the road, but before I could even think that idea through, a California issue has arisen that compels me to write something now. That issue is Proposition 45. There’s a long and storied history in California of great sounding initiatives that harbor devastating impacts. Proposition 45 is one of those and that’s why it needs to be defeated on November 4th.

Proposition 45 is Unnecessary

Proposition 45 supporters claim it will lower costs by simply requiring the California Department of Insurance Commissioner to approve rate and benefit changes to individual and small group medical plans before they take effect. (Large group coverage is exempt and untouched by Proposition 45). Whether this would actually lower rates or not is an open issue. After all, insurance rates are driven by a host of issues—the cost of medical care, new technologies and drugs, an aging population and changing demographics, increasing rates of chronic conditions—none of which are addressed by Proposition 45.

Regardless of its intent, Proposition 45 is late to the lower-premiums party. The Patient Protection and Affordable Care Act (the “ACA”), often referred to as ObamaCare, already requires carriers to spend a specified percentage of the premium they take in on medical services and related expenses. This mechanism acts to prevent the price gouging Proposition 45 proponents claim is rampant in the industry.

That Proposition 45 is unnecessary is reason enough to vote no on the initiative. But it’s far worse.

Proposition 45 Gives too Much Power to One Politician

Proposition 45 doesn’t create a single payer system; it creates a single overseer system. By explicitly giving the Insurance Commissioner authority over rates and benefits, Proposition 45 gives this elected official implicit power over everything relating to health plans in California. This includes what treatments carriers cover—or don’t cover, what doctors and hospitals are in—or out—of a carrier’s network, what insurers spend on marketing and distribution, and virtually everything else but what colors are in the carrier’s logo. And a creative Commissioner could probably find a way to control that as well.

The ability to leverage explicit powers to expand control over other items isn’t idle conjecture. I’ve seen it done in other contexts. In fact, I did this kind of thing in another context. When I served on the Santa Monica City Council we used our authority over zoning to extract all sorts of concessions from developers. For example, while we didn’t have explicit authority to require a developer to set up a job training program in the city, leveraging our power over zoning exceptions we got it anyway.

The power given the Insurance Commissioner by Proposition 45 is unprecedented—and dangerous. For example, while the Commissioner oversees insurance companies, HMOs are regulated by the Department of Managed Health Care. Proposition 45, however, allows the Commissioner to overrule a DMHC decision concerning an HMO’s rates. Or benefits. Or network. Or anything else.

Covered California is the state agency running the medical exchange in the state setup pursuant to the ACA. In that role Covered California negotiates with participating carriers over rates and benefits. Under Proposition 45, however, the Commissioner (or, as we’ll see, virtually anyone else) can object to the deals reached by Covered California. The result, discussed below, could be catastrophic for California’s health insurance exchange.

So long as we continue to elect human beings to public office no politician should be given such unbridled power. The temptation to misuse it (even in the name of all that’s good and just) would overpower a saint. And to my knowledge, there are few politicians who have been up for sainthood.

Here’s an interesting fact: every elected California Insurance Commissioner but two have run for higher office. One of the exceptions, Chuck Quackenbush was indicted and resigned the office. The second, the incumbent Dave Jones, simply hasn’t had the time yet. Commissioner Jones will be reelected this Tuesday and is widely assumed to be eyeing a run for Governor, Senator or Attorney General at the next opportunity. The post of Insurance Commissioner is a stepping stone, not a destination.

There’s nothing wrong with political ambition. But it does mean almost every decision made by an office holder is at least partially a political one. The calculus facing an Insurance Commissioner when reviewing a carrier’s rate submission is pretty straightforward. At the next election does the Commissioner want to run ads bragging about the hundreds of millions of dollars they saved voters or does she want to give her opponent ammunition to call her a tool of the evil insurance companies? In the political world, regardless of party affiliation, this choice is as close to a no brainer as politicians are legally allowed to stand. The market isn’t always a perfect pricing mechanism, but it’s far preferable to a political one.

Proposition 45 Will Create Chaos and Confusion

Some 35 other states require state regulators to approve rate changes. None of them, however, have an “intervener” system like that contained in Proposition 45 (or gives such extensive power to a single politician). Proposition 45 enables “consumer advocates,” lawyers and others to object to carriers’ rate actions. Once their intervention is accepted by the Commissioner, these interveners can earn $675 per hour for their efforts. A similar provision in Proposition 103, which dealt with auto and home insurance, has earned the authors of that initiative millions of dollars since its passage. No wonder they included a role for interveners when they drafted Proposition 45.

The extremely lucrative intervener provisions in Proposition 45 are virtually guaranteed to result in costly and frequent objections. Which means rate and benefit changes could be delayed months. Under Proposition 103, the average rate filing subject to intervention takes 343 days … over 11 months. Given that health insurance is not the same as property & casualty coverage this is extremely troubling. Timely decision-making is even more important with medical coverage than homeowner and auto policies.

If anything remotely close to these delays were to result from Proposition 45 the result would be chaos and confusion. Here’s a nightmare to consider: the premium subsidies available individuals in Covered California’s individual exchange is based on the cost of a specific plan (the second lowest cost Silver plan for those interested). What happens if, after this linchpin-product is identified, priced and in place, an intervener objects to its rates? What would the premium subsidy be based on then? What plans would be available in the exchange?  It could, and I believe probably would, take months to decide.  And by then open enrollment in the exchange could be over.

Think of the opportunities for mischief. Want to undermine the ACA? Wait until the last-minute and then object to the plans and rates negotiated by Covered California. No wonder the Board of Covered California have expressed their dismay about the damage Proposition 45 could do to their program.

Broad Opposition to Proposition 45

And the Board of Covered California (who took no formal position in opposition to Proposition 45) are not the only ones concerned about Proposition 45. The roster of Proposition 45 opponents is broad and impressive.

Earlier this week House Minority Leader Nancy Pelosi voiced her opposition to Proposition 45.telling the editorial board of the San Francisco Chronicle, “If I wanted to kill the Affordable Care Act, I would do this.”

Minority Leader Pelosi joins the California Medical Association, the California Hospital Association, the Service Employee International Union of California, the California State Conference of the NAACP, the Small Business Majority, the California Association of Health Plans and a host of others in opposing Proposition 45. Significantly, the vast majority of newspapers in the state are opposing the initiative as well, including the Los Angeles Times, Sacramento Bee, U-T San Diego and the San Francisco Chronicle.

As are the major agent and broker organizations: CAHU, NAIFA-California, IIAB-Cal and WIAA have come together to form Agents of Action. This is a grassroots effort to generate 100,000 No votes on Proposition 45. The strategy is by harnessing the efforts of brokers throughout the state to educate and motivate their clients, colleagues, friends and family on why it’s important to defeat Proposition 45. (Full disclosure, I’ve played a leadership role in Agents of Action).

If you’re a broker in California, please check out the web site at www.AgentsOfAction.org, download the tools available to you there and get your network out to the polls on November 4th to vote No on Proposition 45. As Agents of Action emphasizes, Proposition 45 is bad for you and worse for your clients.

Of course, the important thing to do is vote. Too many have given too much for us not to live up to our responsibilities.

And, hey, when you do vote, please vote No on Proposition 45.

Posted in California Health Care Reform, Health Insurance, Politics | Tagged: , , , , | Leave a Comment »

Fixing Health Care Reform Harder with Pelosi as Democratic Leader

Posted by Alan on November 5, 2010

The message delivered by the 2010 mid-term election is clearly in the eye of the beholder. Some see it as a repudiation of President Barack Obama and/or Democrats in Congress. Others see it as a rejection of incumbents of all political parties. Most everyone agrees, however, that this was an election demanding change. There are other blogs that do a great job of noodling through these kinds of issues. This blog focuses on health care reform. And while I believe the Patient Protection and Affordable Care Act will be changing over the next several months, the process won’t be easy.

The difficulty is only in part because a divided Congress is a guarantee of frequent gridlock. Consider the Kabuki Theater we’ll see play out on repeal of the PPACA. My guess is Republicans in the House will push through a bill to repeal the new health care reform law. This legislation may contain language to preserve certain provisions of the PPACA, but it will be dubbed the “repeal bill.” Not that the GOP majority needs their votes, but a handful of Democrats will likely vote for this bill despite pressure by the Democratic leadership to present a unified front (Democrats aren’t nearly as disciplined as Republicans in this regard, so someone is likely to jump ship).

Democrats in the Senate will kill the bill – and will likely prevent it from coming to the floor. Either party can filibuster. Even with with a few Democratic defections (that would be Senators Joe Lieberman, Ben Nelson and Joe Manchin) the GOP will fail to garner the 60 votes necessary. So President Obama won’t even need to veto the bill as it will never get to his desk.

This script, or something much like it, has nothing to do with public policy and everything to do with politics. Each side will be playing to their base. You might even see liberal Senate Democrats put forward legislation to implement a public option or the like, safe in the knowledge that such a bill would die in the House. Again, it’s all about making partisans (and pundits) happy.

Eventually, however, members of both parties will need to focus on the substantive work of amending the PPACA. In my previous post I wrote about the need for Republicans to decide if they will seek to improve President Obama’s health care reform plan or use the PPACA as a campaign issue in 2012. In that post I also brought up the possibility that Speaker Nancy Pelosi might retire from Congress given the drubbing House Democrats received on election night. She won’t. At least not yet.

Speaker Pelosi has announced she’ll seek to become the Minority Leader in the new Congress. This no doubt delights many Republicans in the House and saddens some Democrats. As the Associated Press reports, in making the move to stay on as House Democratic leader, Speaker Pelosi “rejected pressure from moderate House Democrats – and even some liberal allies .…” Again, other blogs will dissect the broader political impact of this move. But what does it mean for health care reform?

Unfortunately, Speaker Pelosi’s decision to stay on as the Democratic leader in the House means improving the Patient Protection and Affordable Care Act will be much harder than would be the case with someone else leading the Democratic caucus. First, because Speaker Pelosi is a lightning rod for conservative anger. Speaker-to-be John Boehner will have a tough enough time getting his caucus to vote for anything short of repeal of health care reform. The GOP Caucus in the House will contain a significant number of true believers: ideologues who consider compromise a mortal sin as opposed to a natural part of the political process. And even those Republican lawmakers prone to compromise will spend the next two years looking over their right shoulder evaluating whether a vote for half-a-loaf on an issue will have career-ending consequences. Getting these compromise-shy politicians to accept a deal brokered with Minority Leader Nancy Pelosi may be asking too much.

The second reason her decision makes improving health care reform more challenging is that it means no change among the negotiators. The Big Five in Washington for the past two years have been President Obama, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, Speaker Pelosi, and Minority Leader Boehner. Assuming no challenge to the two Senators (and none seems to be emerging) and with the likelihood of the House leadership simply switching offices, the same Big Five will be negotiating health care reform for the next two years. Meaning no new perspectives, no change in tone, no difference at all (other than the relative power each holds). As anyone whose survived basic chemistry in high school can tell you, if you have combine the same ingredients in the same way expect the same results. For those of us looking for improvements to the PPACA, this is not a good thing.

Democrats in the House could choose someone else as their Leader, but Speaker Pelosi is an excellent vote counter. I doubt she’d have announced her intentions without be certain they’ll be achieved.

A lot of the Democrats defeated on November 2nd were moderates – the Blue Dog Coalition in the House will be roughly half the size in the new Congress as it was in the old one. This means the Democratic caucus is more liberal going forward than it has been in the past. And given the success of the Tea Party the Republican Caucus has grown even more conservative. The gulf between the two, consequently, is greater than ever and there a fewer bridge builders to help span it.

Changing the PPACA is important. Having the same faces among the Big 5 and more extreme caucuses in the House doesn’t mean revising health care reform will be impossible. But it does mean achieving that change will be harder.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Patient Protection and Affordable Care Act, Politics, PPACA | Tagged: , , , , , | 14 Comments »

Second Take on 2010 Election Results and Health Care Reform

Posted by Alan on November 3, 2010

The 2010 mid-term elections were one of those elections. One that changes everything … forever. We haven’t had one of these game changing elections since, well, 2008. Which apparently defines “forever” as meaning “two years.” So before the next tsunami/landslide/other metaphor for lots of changes election in 2012, what will be the 112th Congress’ impact on health care reform? What follows is my take on what can and/or should happen in the next two years along with some broader political observations. Like the predictions available 24×7 on Talk Radio and cable “news” shows, they may be wildly off-the-mark. I also may change them at any time (consistency not being a high priority among broadcast pundits). Hopefully, this perspective will provide some grist for your own thinking about the future. Please feel free to share your predictions and observations – just remember to keep your comments civil.

1. Who Will Lead? While we assume we know who the major players will be for the next two years, we don’t know for sure. Yes, President Barack Obama will remain president. And it is all but certain that today’s Minority Leader, John Boehner, will become Speaker John Boehner. While some talk of a challenge from conservatives against Senate Minority Leader Mitch McConnell, that’s possible, but unlikely. With his come from behind victory Tuesday night, Senate Majority Leader Harry Reid would be expected to remain in that post. Then again, he bears substantial responsibility for the heavy hit his caucus just took. A challenge to Senator Reid is not beyond the realm of the possible, it’s simply not likely. Then there’s current Speaker Nancy Pelosi. Dethroned Speakers have retired from Congress before (think Newt Gingrich and Dennis Hastert). Speaker Pelosi could seek to serve the Democratic Caucus as Minority Leader, but there’s no guarantee she’d be elected. We’ll know more in a few weeks, but there could be some new players in leadership roles. This could change the tenor and tone of negotiations. Then again, nothing might change at all.

2. Why Republicans May Let PPACA Stand. The Patient Protection and Affordable Care Act will be amended. Whether those changes are substantial or not is in the hands of newly empowered Congressional Republicans – and, as noted below, a few Democrats). The GOP, both from ideological disagreements with President Obama and political calculation gave no support to the Administration’s major legislative goals. Unified Republican caucuses in both Chambers of Congress worked to deny the President any support – at times even when the President was promoting or at least open to GOP positions. And they were rewarded with a political landslide of historical proportions. With 21 of the 33 Senate seats up for election held by Democrats and the Presidency on the line in 2012, why mess with success? (OK, besides a desire to solve problems). If the strategy is to deny the President accomplishments upon which he can campaign for reelection, then “fixing” his flawed health care reform plan is counterproductive. Better to let things remain as they are then hope to ride displeasure with the PPACA to majorities in Congress and a Republican President in the White House. Is this a cynical perspective? Perhaps. But given the promise of “no compromise” from Representative Boehner and Senator McConnell’s statement that Republican’s “single most important thing we want to achieve is for president Obama to be a one-term president” perhaps not.

3. Why Republicans May Improve the PPACA. Then again, the Republicans may decide to fix a lot of what’s broken in the Patient Protection and Affordable Care Act. And even add some needed additional reforms to the package. The “just say no” political strategy carries some heavy risk. Republicans already have a worse “favorability gap than Democrats. (Exit polls indicate that 43 percent of voters have a favorable view of Democrats while 53 percent view them unfavorably while 41 percent viewed Republicans favorably and 53 percent viewed them unfavorably). Other polls show the public wants Republicans and Democrats to work together to get things done. Now that they have power, the public may punish the GOP if they fail to deliver results. “Fixing” health care reform would demonstrate Republicans understand their responsibility to move beyond gridlock. Some changes will be easy; others much harder. But a vibrant debate – and some political compromises – could also enable Republicans to achieve long held goals like medical malpractice reform and improve the cost containment provisions of the new health care reform law. At least one can hope.

4. Vice President Biden May Determine the Fate of Health Care Reform. When the dust settles, the Senate Democratic Caucus will have 53 members (assuming Senator Pat Murray’s lead in Washington continues to grow) while there will be 47 Senate Republicans (which  recognizes that whoever Alaska elected to the Senate will caucus with Republicans). However, one member of the Democratic Caucus is Senator Joe Lieberman, a conservative Independent who frequently sides with Republicans. And with a tough reelection campaign facing him in 2012 he might switch over to Republicans with the right inducement. Then there’s the Senate’s most conservative Democrat, Senator Ben Nelson of Nebraska. He too often sides with Republicans. Concerned about his reelection in 2012 he too might support Republican efforts to amend the PPACA. Enter stage right Governor and future Senator from West Virginia Joe Manchin, who may prove to be even more conservative than Senator Nelson. Governor Manchin has said that he “favors repealing things that are bad in [the PPACA]” and describes President Obama’s health care reform as “overreaching.” If these three members of the Democratic caucus – and only these three – join a united Republican effort to change major aspects of the Patient Protection and Affordable Care Act the Senate would deadlock, leaving Vice President Biden to cast the decisive vote. Who says being Vice President is a boring job?

5. Be Careful What You Wish For. If gridlock is avoided, what might change in the PPACA? The low-hanging fruit involves lowering administrative burdens imposed by the Patient Protection and Affordable Care Act that have little value. Examples include provisions impacting W-2s and 1099s (In a press conference today President Obama talked about the need to reduce the burden of the PPACA’s 1099 requirements). Republicans might want to make it easier to achieve grandfather status and thus enable some employers and consumers to avoid certain requirements of the PPACA. They will push for medical malpractice reform and may offer some additional measures to control costs. And Republicans could (and should) make the premium subsidies created by the PPACA available for use outside of the government exchanges. This would create more competition and choice for consumers and employers, a cause the GOP could easily champion. Republicans are unlikely to do away with the medical loss ratio requirements included in the health care reform law, but they might redefine elements of it. For example, they could recognize the wisdom of excluding broker commissions from the MLR calculation altogether (OK, this may be wishful thinking). Republicans are unlikely to seek to eliminate exchanges – they have been a part of the GOP’s health care reform proposals for years. They will seek to do away with the individual mandate, even though doing so would result in skyrocketing premiums. In other words, some improvements pushed by Republicans could make health care reform worse.

6. Obama Has Already Won. Here’s an observations folks may not like, but if you think about it, when it comes to health care reform, President Obama has already won. No one that I’m aware of is calling for a return to the status quo. Even the Republican campaign mantra was to “repeal and replace” the Patient Protection and Affordable Care Act. Yes, his particular reforms may cost the President a second term and certainly cost some lawmakers their job, but these are short-term impacts. Long term President Obama accomplished what predecessors of both parties tried and failed to do – pass substantial health care reform. Even if Republicans could repeal the new law (and they can’t given their inability to muster veto-proof majorities) they would need to replace it with something. And that something will not be a return to America’s health care system circa 2008. You may not like the Administration’s reforms. Those reforms may need reforming. But it cannot be denied that President Obama delivered on his campaign promise to forever change America’s health care system.

6. Change Will Change. There has been a lot of discussion on this blog – some of it quite heated – concerning the impact of the PPACA in general and on brokers in particular. As I’ve noted frequently, the health care reform law itself is not the end reforming health care. The PPACA is only the start. Much of the law remains to be interpreted by federal and state regulators and then those regulations will in turn be interpreted by employers, carriers and others. Even if Congress gridlocks on major revisions, some change to the PPACA will emerge from Congress in the next two years. And Republicans in the House will certainly seek to impact implementation of the law through through Congress’ budget and oversight powers. The PPACA is health care reform that needs reforming. My hope is that we get those changes. But whether they’re the right changes or not, there will be change.

There’s one thing certain about the 2010 election results: they assure an interesting 2011.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Patient Protection and Affordable Care Act, Politics, PPACA | Tagged: , , , , , , | 3 Comments »

First Take on 2010 Election Results and Health Care Reform

Posted by Alan on November 2, 2010

Election night 2010 is far from over but some general trends are clear. And there’s no question that the electorate has given the new Republican majority in the House a mandate and sent a clear message to the White House and the Democratic majority that will remain in the Senate.  Interpreting that mandate will be challenging and much is riding on how the leadership of both parties view tonight’s results.

Mandate’s are mischievous things. Mandates are like a fine whiskey, actually they’re more like too much of a fine whiskey. They feel great. After the celebrating, however, those on the receiving end too often find their judgment warped, their thinking clouded. The euphoria following a strong mandate can lead to disastrous results.

Consider what happened to President Barack Obama and his fellow Democrats. By most any objective measure, then Senator Barack Obama’s win in November 2008 was a landslide. His fellow Democrats increased their majorities in both the Senate and the House. Although it would take a number of months, once Al Franken was certified as the winner of his Senate race in Minnesota, Democrats even had a filibuster-proof majority in the upper chamber. From such results are mandates made.

That President Obama and his allies saw the 2008 election as a mandate for change is understandable and appropriate. They could also have viewed the vote as a call for a new way of doing business in Washington. One in which moderation, civility and problem solving trumped games of the ideological and political variety. When Republicans chose to oppose virtually anything the Administration put forward, Democrats could have responded by seizing the middle ground that the GOP was abandoning. Instead Speaker Nancy Pelosi and Senate Majority Leader Harry Reid, presumably with the support and certainly with the acquiescence of the Obama Administration, determined they had a mandate for their ideological interests. The result was passage of major and historical legislation, but at a substantial political cost.

That cost is being paid tonight with Republicans decisively taking control of the House and trimming the Democrat’s majority in the Senate to no more than 53. The misreading by Democrats of their 2008 mandate most likely helped Tea Party become a far more dominant force in the 2010 elections than would otherwise have been the case. And the rise of the Tea Party and the enthusiasm they generated among more conservative voters are a major reason for the GOP success in this election year. (Ironically, this passion may also be the reason Republicans failed to take a majority of the Senate – in states like Nevada, Delaware, California and perhaps others, GOP nominees were too conservative to knock off vulnerable Democrats).

The size of the GOP majority in the House of Representatives is still unknown as I write this post, but it will be substantial, a striking turnaround in just one election cycle. And truly a mandate. But a mandate for what? Were voters urging politicians to move to the center or to the extremes? Republican Congressional Leaders, and many of their newly elected troops, seem to be interpreting tonight’s results as evidence the public is taking a hard turn to the right. Speaker to be Representative John Boehner has vowed there will be no compromising with the Obama Administration. And Tea Party activists are warning Republicans that they will be ousted if they fail to adhere to the group’s principles. And given the number of upsets the Tea Party engineered against more moderate Republicans, this is more a promise than a threat. Never mind that a recent poll found that 75% of likely voters (including two-thirds of Republican) said the GOP should compromise some of its positions to get things done were they to control Congress. (Full disclosure: I don’t think politicians should follow polls blindly, but ironically, many conservatives have blasted Democrats for failing to adhere to public opinion on health care reform and the like).

What does all this mean for health care reform? There are lot of elements of the Patient Protection and Affordable Care Act that needs to be changed. Republicans could interpret their mandate as a call to modify the legislation. To preserve those provisions for which there is broad support, to add elements (think malpractice reform and meaningful cost containment) that the PPACA lacks, and to dramatically change or eliminate provisions that will drive up the cost of care without benefiting consumers). Or they could see tonight’s election results as a mandate to repeal the health care reform legislation and refuse to compromise on meaningful changes.

Refusing to compromise might earn Republicans short-term political points, but it’s bad public policy. (Interestingly, when it comes to evidence of the damage an ideological approach can have on complicated and controversial legislation, the PPACA could be put forward as Exhibit A). If the American public is lucky, the GOP House members will vote to repeal the new health care reform law (thus satisfying the more conservative members of their base), but then work for useful changes once the Senate fails to go along with repeal.

How Republicans address health care reform – whether they make changes or, by refusing to compromise fail to fix flawed legislation – will depend on how they view their mandate. GOP leaders would do well to remember: mandate’s are mischievous things. They are also fickle. Just ask President Obama.

(Note: This is obviously a post about politics. Civil comments, even those strongly disagreeing with my take on things, are welcome and encouraged. Comments featuring name calling, denigrating opponents and other forms of uncivil comments, will be deleted).

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Patient Protection and Affordable Care Act, Politics, PPACA | Tagged: , , , , | 3 Comments »

Health Care Reform Passage is Historic, But Only the Beginning

Posted by Alan on March 21, 2010

Health care reform was passed by Congress today. It’s as simple as that. And as complicated. The legislation will do far less than either its proponents or opponents claim. But the legislation will change the insurance industry. It will begin to address some of the drivers of skyrocketing medical costs. It will aggregate more power and influence in government while it is far from a government takeover.

The political impact of health care reform legislation will have far reaching political ramifications for years to come. The Senate health care reform package and the associated clean-up legislation were passed exclusively with Democratic votes. Which means if, over time, the program is deemed by voters as successful the electoral benefits of the program will accrue almost exclusively to Democrats. And if the program is rejected by voters it will be Democrats who are punished.

The vote in the House of Representatives – 219-to-212 to pass the Senate health care reform bill and 220-to-211 in favor of the clean-up legislation – is historic by any definition of the term. Many Presidents of both parties had tried to pass health care reform. Many Congresses had considered such legislation. To President Barack Obama and the 111th United States Congress goes the credit (or blame) for actually taking action.

Their bill is more moderate than some that had been proposed (the proposals of both Presidents Bill Clinton and Richard Nixon were in many ways more far reaching) and far more liberal than others. Yet the politics, policy and process has polarized the nation in ways few issues have before. (I find it ironic that many of those marching against today’s health care reform today were doing much the same against the Viet Nam War in the 60s and early 70s – or condemning those who did).

The House vote today means that, once signed, the Senate health care reform bill, HR 3590, becomes the law of the land. However, virtually no one in Congress or the Administration likes that bill as written. Consequently, the House passed a companion bill, HR 4872, that makes several significant changes to the HR 3590. Most significantly, the companion bill can be considered by the Senate under established parliamentary rules that bypass the filibuster process. This means the clean-up bill can be passed by a simple majority of the Senate – 51 votes. Senate Majority Leader Harry Reid has assured House Speaker Nancy Pelosi he has rounded up the necessary votes. However, success is neither automatic nor guaranteed. Republicans have the ability to delay passage of the clean-up legislation and might be able to have key elements of it removed.

This means there will be two signing ceremonies concerning health care reform: in the first President Obama will sign into law the Senate health care reform bill that no one likes. In the second, President Obama will sign into law a measure that virtually everyone agrees makes the first bill better. American politics being what it is today, however, we will first witness the spectacle of Republicans trying to defeat legislation that contains provisions they would likely admit improve the law that they failed to defeat today. No wonder Alice in Wonderland is the most popular movie in the land today. The body politic has fallen through the looking glass.

As a result of tonight’s action, Congress has addressed the easiest part of health care reform: changing how insurance companies act and are regulated. These “market reforms” are meaningful. Some, although not all, were necessary. But in a real sense the measures enacted represent low hanging fruit. Because the reality is that insurance companies don’t determine insurance premiums in a vacuum. Congress has taken on the easy villains in this drama: the greedy insurance companies. But everyone knows (and a few will admit) that health costs will continue to increase at an unacceptable rate. This means lawmakers will soon be forced to address the real driver of increasing health insurance premiums: medical costs that increase at twice the rate of general inflation. Doing so will be more difficult than beating up on insurance carriers, but eventually there’s no escaping the need to address root causes.

Then there’s the inevitable law suits. State legislators are already passing laws to exempt their citizens from elements of the health care reform package (specifically the requirement imposed on virtually all Americans to obtain health care coverage). And any legislation of this magnitude is a boon for lawyers in both the private and public sectors.

Should agents and brokers (the primary audience for this blog) consider passage of health care reform the death knell of their profession? No. Change will be required (something that has been required with some regularity every few years for the past three decades). But thanks to the efforts of the National Association of Health Underwriters and the hundreds of brokers who have engaged in the health care reform debate, change does not mean elimination for today’s professional brokers. And the reality is, even if Congress failed to pass health care reform brokers faced substantial changes to their profession in the next few years. The status quo was going to change by legislative fiat or as the result of internal stresses. At least now we have a better sense of what the new world will look like.

The health care reform bills passed by the House of Representatives today draw the outlines of this new world. It will be up to judges and regulators and future Congresses and state legislatures to fill in the details. As mentioned previously, neither the health care reform process or debate is over yet.

So yes, the House of Representatives made history tonight. And it’s only the beginning.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , , , , | 26 Comments »

Support for Health Care Reform Gains Support from Left and Middle

Posted by Alan on March 17, 2010

Health care reform is likely to pass the House of Representatives as early as this weekend or beginning of next week. The vote will be close. The methodology may open questions concerning legitimacy. But health care reform is likely to pass.

Consider: Liberals are falling into line. Some may have assumed this was a given, but some on the left oppose President Barack Obama’s health care reform package for failing to go far enough. They want their single payer system or their public option and don’t want to settle for anything less. Unless, it seems, anything less is nothing at all.

That, at least, is the explanation Representative Dennis Kucinich gave today when he switched his position and announced he’d vote “yes” on the President’s health care reform bill. As Sabrina Eaton of the Cleveland Plain Dealer writes about her home town Congressman, Representative Kucinich “acknowledged this morning that his choice now is to either vote ‘no’ on principle, and thereby possibly block the biggest (though imperfect) advance in health coverage in decades, or compromise for the good of the estimated 30 million more Americans who could gain insurance.”

More evidence: the opinion shows on MSNBC. Virtually all of the talking heads in their liberal line-up speak of the need for Democrats to pass the current version of health care reform even though it lacks their beloved government-run health plan. Even former Governor Howard Dean, speaking to a pro-health care reform march in Washington DC last week, was arguing for the legislation he often criticized , proclaiming, “We deserve a vote! Are you for the insurance companies or are you for the American people?”

The left, in short, has fallen into place. Liberals will not kill health care reform.

But liberals alone will not pass health care reform, either. That feat requires the support of moderate Democrats. And while centrists may not be rushing to support the current health care reform, at least a few are stepping forward. Representative James Oberstar was among the moderate Democrats who were following Representative Bart Stupak in opposing the Obama Administration’s health care reform bill over abortion language. This group of 12 (now, presumably fewer) Democrats, were holding out for the more restrictive abortion language in the House’s version of health care reform. Representative Oberstar today announced he would support the President’s health care reform bill saying “On balance, it does what we need to do,” according to the Minnesota Independent. Another pro-life Democrat, Representative Dale Kildee, a close ally and friend of Representative Stupak also announced his support of the Administration’s health care legislation today. According to the New York Times, Representative Kildee said “he was satisfied that the provisions in the health care bill passed by the Senate would prevent the use of federal money for insurance coverage of abortions.”

The U.S. Conference of Catholic Bishops and anti-abortion groups like the National Right to Life Committee have been the driving force behind the more restrictive abortion language included in the House bill.  As reported by McClatchy Newspapers, the Bishops believe the Senate abortion language would “open the door to federal financing” of the procedure. But today a group of 60 nuns, leaders of orders comprised of 59,000 Catholic nuns sent a letter to House members urging them to pass the Senate health care reform bill. According to the Associated Press. in their letter, the nuns claim that “despite false claims to the contrary, the Senate bill will not provide taxpayer funding for elective abortions.”

Whether the split between bishops and nuns will be enough turn all of Representative Stupak’s faction into supporters of health care reform is unlikely. But as Katie Connolly notes in her post on the Newsweek magazine, “Having high-profile support from a key Catholic group nudges fence-sitters in (the Stupak) group toward a yes vote. At the very least the (nuns) letter damages the validity of Stupak’s argument.

(What’s ironic about the fight over how health care reform addresses abortion is that, as a practical matter, both the House and Senate versions of health care reform are victories for anti-abortion advocates.)

Passage of health care reform is not a done deal. Momentum is not victory. Patrick O’connor of Politico.com provides an excellent summary of the challenge Speaker Nancy Pelosi faces in assembling 216 votes to in support of health care reform. And even if the bill passes in the House of Representatives, who really knows what will happen in the Senate? Given the twists and turns of our story so far, anything could happen.

But with liberals falling in line and moderates slowly coming to support President Obama’s health care reform package, passage is certainly more likely today than it was yesterday. For those who consider this the ruin of American ideals, the end of quality health care in this country and the demise of the health insurance industry, my advice is to take a deep breath.

There’s thousands of regulations yet to come. There’s plenty of opportunity for Congress to tweak the reforms for the better. And there’s always the adaptability of American business. Somehow these things have a way of working out. Careers continue. The country endures. Health care reform, 2010 style, is unlikely to be any different.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , , , , , | 7 Comments »

Health Care Reform a Question of Trust

Posted by Alan on March 10, 2010

In the end, health care reform may come down to a question of trust: does the House of Representatives trust the United States Senate enough? Yes, majorities in both chambers are  comprised of Democrats, but that is far from sufficient. We’re talking about political careers here. We’re talking about overcoming the animosity said to exist between House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid. We’re talking about politics, fear, egos and legislation that will impact every American along with one-sixth of the nation’s economy. During a recession. In an election year.

This is epic stuff going on here.

Let’s review. In order to enact President Barack Obama’s health care reform package Congress must execute a three step legislative dance:

Step One: the House passes the Senate’s version of reform – a bill most oppose, but could accept with some changes. Once passed by the House, the legislation would go to the President’s desk for his signature and become law.

Step Two: The Senate passes legislation to make the changes House members (along with Senators and the President) want. These changes would all relate to government spending or taxation, enabling this so-called “side-car” legislation would be passed by through the reconciliation process. In other words, the clean-up bill could be passed by the Senate with 51 votes instead of the super-majority of 60 votes requires for most legislation now days.

Step Three: The House passes the Senate’s side-car bill, sending it on to President Obama for his signature. Taken together, the Senate bill and the clean-up legislation becomes the Democrat’s health care reform package.

The problem is that before they can amend an existing law, that existing law has to exist. Meaning the House has to pass the Senate’s health care reform bill before they know whether the Senate can and will pass the clean-up bill. No one in Washington actually likes the Senate bill as it is chock full of provisions House Democrats neither support nor wish to defend in this election year.

Without complete confidence that Senate Majority Leader Harry Reid can and will push through the side-car legislation, asking House Democrats to pass the unloved Senate bill (without any support from Republicans) is a huge risk. What if Senate Democrats refuse to enact the remedies House Democrats expect and demand? What if Senate Republicans succeed in blocking passage of the clean-up legislation? A lot can go wrong. Given the only three laws that seem to  apply within the beltway (those being the laws of Gravity, Unintended Consequences and the one named after Murphy) something is all but guaranteed to go wrong.

Not surprisingly then, as I’ve talked to legislative staff and others here in Washington a lot of creative thought is being devoted to bridging the trust gap. One rumor was that Speaker Pelosi was demanding that Senator Reid deliver two letters. The first would put in writing his commitment to pass clean-up legislation satisfactory to House Democrats. This letter would also guarantee that the Senate Parliamentarian (who ultimately will decide what provisions can be passed through reconciliation and which can’t) will permit these remedies to be approved with a 51-vote majority under reconciliation rules.

The second letter requested by Speaker Pelosi was rumored to be one signed by 51 Senators pledging their support of the side-car legislation. 

If true, the Speaker’s demand for written assurances is highly unusual, to say the least. And not all of the guarantees are within Senator Reid’s power to offer. For example, he has no ability to commit the Senate Parliamentarian to any specific decisions. The Senate Parliamentarian is an independent, non-partisan referee. The current Parliamentarian was appointed by Republicans when they controlled the Senate. No one has questioned his fairness during his service since (although some Republicans are now setting the stage to attack him if any of his decisions work to the advantage of Democrats). Senator Reid cannot control what the Parliamentarian will decide.

Another rumored solution to the Democrat’s dilemma would be one in which the Senate’s health care reform bill would be deemed passed by the House only if the side-car legislation was also passed. In the House, votes are subject to “rules” which specify everything from how much time a measure can be debated to how many amendments may be considered. The theory is that a rule could be passed that would, in essence, make enactment of health care reform clean-up legislation a pre-condition for the vote approving the Senate health care reform bill being considered binding. Or official. Or something. OK, I’m not sure how the rule would be worded, but the goal would be to prevent health care reform from passing without the provisions of the side-car bill also passing.

What to make of all this? First, that Democratic Leaders feel a great sense of urgency to enact health care reform. The longer voters sees Congress  struggling through procedural mazes, the less they support the legislation. Some have reported that President Obama has asked to have a bill ready for his signature by Congress’ Easter recess (if he’s going to use holidays as markers I would suggest April Fools Day just to demonstrate the White House still has a sense of humor, but that may just be me. The Associated Press story cited above says the Administration is hoping to see health care reform legislation passed by the end of next week when President Obama is scheduled to start foreign travel.

The second takeaway from all this pretzel-making is that Democrats are anxious to make the legislation more acceptable to the American people. The side-car legislation will contain several provisions put forward by Republicans. It is likely to eliminate the sweetheart deals favoring specific states. Democrats know they’ll be attacked this November if they pass health care reform legislation or if they fail to do so. Given this reality their best strategy is to pass a defensible bill.

What all these rumors also imply is that whether health care reform passes all comes down to whether Speaker Pelosi and Senator Reid can trust one another. If they can, health care reform is likely to move forward. If they cannot, health care reform in its current form is most likely doomed.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , | 13 Comments »

The Never Ending Story That is Health Care Reform Continues

Posted by Alan on March 2, 2010

President Barack Obama is scheduled to announce his final health care reform package tomorrow (Wednesday). This is the version of reform the President hopes Democrats in Congress will embrace and enact through a process that would side-step the inevitable Republican filibuster of health care legislation. Passage is far from assured. There are still several parliamentary maneuvers available to the GOP to slow the legislative process down. And it’s unclear whether Democrats can muster a majority behind any single bill to pass health care reform even if no super majorities are required.

Yet there are indications Democrats could be successful. For example, the House passed its health care reform bill by the slimmest of margins – 220-215 – last November. Only one Republican voted for the bill and he has indicated he won’t bolt his party again. Given that 218 votes are need to pass legislation in the House, this doesn’t give Speaker Nancy Pelosi much room for error. However, according to the Associated Press, “at least nine of the 39 Democrats” who voted against the health care reform bill in November are now “undecided or withholding judgment until they see Mr. Obama’s final product.”

That same Associated Press story also reports that the President is thinking of incorporating four Republican proposals raised during the bipartisan health care reform summit last week. These are: 1) using investigators disguised as patients to uncover fraud and waste; 2) increasing payments to Medicaid providers; 3) strengthening and expanding Health Savings Accounts; and 4) expanding the medical malpractice reform pilot programs already in his bill.

It’s not that the President thinks including these provisions increases the likelihood of any Republicans supporting his health care reform legislation. But it would provide Democrats with a useful talking point during the firestorm that would follow passage of reform legislation by a simple majority vote in the Senate. Democrats will be able to say something along the line of “We met with Republicans and had an open mind, even incorporating some of their cost saving ideas into the final package. And our package already included several provisions Republicans had supported now or in the past. Their unanimous opposition, consequently, obviously reflects politics more than policy so we had to find away around the filibuster. What we did was fair, legal and within the rules.” Or something along those lines.

What all this means is that there’s still several chapters to go in the never-ending story that is health care reform.

  • Will Democrats find a way to bring health care reform votes to the floor of the Senate?
  • Will the House vote first or wait until after the Senate takes action (if it ever does)?
  • If a vote is taken, will there be sufficient votes to actually pass a bill?
  • If Congress does enact health care reform legislation, how soon after the President signs it into law will it take before the first law suit is filed?
  • Which party will suffer at the polls this November for the the procedural games both have played?

And on and on. Stay tuned.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , | 6 Comments »

Bashing Insurance Companies May Be Fun, But Avoids the Real Issue

Posted by Alan on March 1, 2010

That health insurance carriers were ascending to the throne of political piñata in the health care reform debate has been apparent for some time now. Last July President Barack Obama began referring to health care reform as health insurance reform. A couple of weeks later Speaker Nancy Pelosi described insurance companies as “almost immoral” for opposing the creation of a government-run health plan. That insurance companies were to be cast as the villains was pretty much inevitable. People like and trust hospitals and doctors much more than health insurance carriers. And pharmaceutical companies, while profiting far more from health care than medical carriers are a bit removed from people’s daily experience. The reality is the only group Americans trust less when it comes to health care reform than insurance companies are Republicans in Congress.

Compounding the situation the health insurance industry has had atrocious timing. America’s Health Insurance Plans (AHIP), the industry’s trade organization, released a report warning that health care reform plans being considered by Congress would dramatically increase medical insurance premiums for many Americans. The message was hardly welcomed by Congressional Democrats, but what infuriated them was the timing. The Senate Finance Committee was about to vote upon the closest lawmakers had come to a bipartisan agreement (meaning at least one Republican voted for it. The vitriol the report inspired went far beyond its substance.

Then there’s the timing of recent rate increases in the individual health insurance market. While Anthem Blue Cross’ individual market increase first captured the public – and lawmakers’ attention – it’s now clear several carriers have levied double-digit premium increases in multiple states in both the individual and small business market segments. Many political observers believe that these rating actions breathed new life into flagging reform efforts.

But the 24-hour news channels and other media along with their innumerable pundits need fresh meat. Their job is to keep people watching (or reading) so the commercials don’t run together. There’s only so many ways you can use “insurance company” and “venal” in the same story before it gets old. Insurance company bashing will continue, but there are signs that serious attention may be given to aspects of America’s health care system reform beyond insurance markets.

Consider: Daniel Weintraub is one of California’s most respected journalists. In addition to reporting for and providing opinion pieces to the Sacramento Bee he maintains an excellent blog on health care issues, HealthyCal.org. In the past, Mr. Weintraub has been hard on insurance carriers. Nor is he a fan of the health care status quo in this country. So it must have been a surprise to even him when he wrote a post that makes clear that bashing health insurance companies is not the same as enacting meaningful health care reform.

Mr. Weintraub begins his post citing the political travails California insurance companies face in the state today, ranging from separate investigations by Attorney General Jerry Brown and Insurance Commissioner Steve Poizner to a host of legislative hearings led by lawmakers who, like the Attorney General and Insurance Commissioner, are seeking higher office in this election year.

While noting the entertainment value of this spectacle and recognizing that “it might actually produce information relevant to the health care debate,” Mr. Weintraub makes clear that “health insurance company profits and administrative costs remain a relatively small factor in driving the cost of coverage skyward. The biggest reason that health insurance is getting more expensive,” he continues, ”is that health care is getting more expensive.”

The post includes a useful pie chart describing national health expenditures as broken down by the US Centers for Medicare and Medicaid Services. Of the $2.3 trillion on health care Americans spent in 2008, $159 billion (approximately seven percent) “went to private insurers after deducting all the costs they pass through to the doctors, hospitals and other health care providers.” Put another way: “health care costs nearly doubled between 1998 and 2008, increasing by 96 percent. If we had eliminated private insurance companies in 1998, and assuming they provide no benefit in managing costs, health spending still would have increased by 83 percent during that decade.”

None of this means that health insurance companies and their behavior should be ignored nor their misdeeds forgiven. But as Mr. Weintraub notes, “when this election year is over and the current political bash-fest comes to an end, the core costs of health care will still be there, and chances are they will still be rising.”

That a respected journalist is noting that attacks on health insurance companies are diverting attention from other serious issues with America’s health care system is significant. But he’s not alone. According to Politico.com, Warren Buffett is advising President Obama “to scrap the health care bill and start over” because the legislation “does not focus on controlling costs.” (He went on to say that he’d vote for the Senate bill as opposed to maintaining the status quo).

President Obama and his allies will argue that their legislation does attack rising costs – and they have some evidence to back their claim. But few could honestly say it goes far enough. And while good starts are important, the question is whether the Administration and Congress have the political will to follow-up with meaningful cost containment measures.

Attacks on the health insurance industry will continue. Every drama needs a villain and in this particular theater, carriers are the bad guys. But that folks like Mr. Weintraub and Mr. Buffet are calling out politicians for failing to more fully address the most critical issue undermining America’s health care system – runaway medical costs – is an encouraging sign.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , , , , , | 2 Comments »

Democrats Now More Likely to Move Health Care Reform Forward On Their Own

Posted by Alan on February 25, 2010

Well, so much for a breakthrough. The health care reform summit was fascinating political science. But it certainly does not seem to have generated a clear direction for anything close to bipartisan health care reform. Which means President Barack Obama and Democratic leaders will put forward a bill for an up-or-down vote, most Democrats will vote for it and no Republicans will. The only questions remaining are: 1) will Democrats invoke a rule that will allow them to move forward with a simple majority or will they permit the GOP to prevent the legislation from coming to a vote; and 2) will Democrats make any changes to the legislative proposal put forward by the President to reflect issues raised by Republicans during today’s health care reform summit. This post addresses the first question; the next one the second.

Reconciliation: My guess is that Democrats will use reconciliation as a means of bringing health care reform legislation to the floor of the Senate for a vote. As NPR has reported, it would not be the first time reconciliation led to substantial changes to America’s health care system. As Sara Rosenbaum, chair of the Department of Health Policy at George Washington University, notes in the NPR story, “In fact, the way in which virtually all of health reform, with very, very limited exceptions, has happened over the past 30 years has been the reconciliation process.”

She’s not just talking about arcane legislation, either. COBRA, the provision that allows workers to continue their coverage after leaving an employer, was passed through reconciliation. In fact, COBRA stands for the bill in which this health insurance extension was included, the Consolidated Omnibus Budget Reconciliation Act of 1985. Reconciliation is the “R” in “COBRA.” In 1997 the Children’s Health Insurance Program, which along with Medicaid now covers one in every three children in the United States, was passed as part of a budget reconciliation bill. As the NPR story reveals, the list literally goes on-and-on. It seems health care reform simply can’t wend its way through the Senate with a super majority. is this because, as the Center for Public Integrity reports, there are eight health care lobbyists for each member of Congress? Whatever the reason, reconciliation is commonly used to pass health care reform.

It’s likely Democrats will keep this streak going. Yes, Republicans will cry foul, but at the end of the day, it’s a perfectly legal process. And while not every provision of the President’s reform package is likely to be eligible for reconciliation, enough will be to enable Democrats to declare victory.

Assuming, of course, they can muster majorities for comprehensive health care reform legislation. The earlier House bill passed with two votes to spare – including one from a Republican who is now saying he’d vote against the bill. And while the Democratic caucus numbers 59 members, there are 18 members of a the Moderate Dems Working Group. Whatever bill comes before the Senate will need to hold onto nine of those moderates – and that’s assuming all other Democrats are willing to go this route. Some liberals, including Senator Jay Rockefeller, have expressed reluctance to to invoke reconciliation. In the end, the President is likely to muster enough support for a bill – he only needs 50 votes in the Senate as Vice President Joe Biden could cast the decisive vote there. The vote will be close in the House, but Speaker Nancy Pelosi has repeatedly demonstrated her ability to muster a majority when needed.

President Obama needs a vote on health care reform. Politically he needs to demonstrate to his base and moderate independents that his commitment to hang tough on the issue – even if it means he’s the captain going down with his ship. If Republicans (and some Democrats) defeat the legislation, he’ll have shown he’ tried. America doesn’t like quitters (former-Governor Sarah Palin being the most prominent exception). They do like fighters. Politically, moving forward on health care reform is a necessity.

It also makes public policy sense. The health care status quo is untenable. Change is needed. Even if his ambitious reforms fail, the effort will set the stage for more modest reforms – modest reforms that could be introduced and voted upon before the November elections.

In an upcoming post I’ll discuss whether the bipartisan health care reform summit makes it more likely the President will moderate his health care reform proposal.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , , , , | 8 Comments »

 
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