Health Care Reform Effort Will Continue, But Fate is Uncertain

With the bipartisan health care reform summit history, President Barack Obama is turning to the future of his push to revamp America’s health care system. Here’s a simple way for President Barack Obama to demonstrate a commitment to cost containment and bi-partisanship. As he said in his weekly address this morning, “I am eager and willing to move forward with members of both parties on health care if the other side is serious about coming together to resolve our differences and get this done.”

He also made clear, however that he would move forward without Republican support if that was necessary. “I also believe that we cannot lose the opportunity to meet this challenge,” he said, concluding, “It is time for us to come together.  It is time for us to act.  It is time for those of us in Washington to live up to our responsibilities to the American people and to future generations.  So let’s get this done.”

The other day I wrote about the three step process Democrats are likely to use to attempt to pass comprehensive health care reform. To summarize: House Democrats would pass the health care reform previously passed by the Senate. The Senate would pass a clean-up bill (which I’ve also heard referred to as “sidecar legislation”) that makes fixes the House and President Obama want that impacts costs and taxes. The House passes the clean up bill. The President signs both bills and health care reform, Democratic-style, is the law of the land.

Turns out this gambit, while legal and within Congressional rules, doesn’t play out as cleanly as I’d first surmised. John Nelson, a regular reader, brought to my attention that there are various ways Republicans can slow this process down to a crawl. The GOP could not filibuster the sidecar legislation because it is being considered under what’s called the reconciliation process. However, they may not need to. Under the rules governing the reconciliation process Republicans can introduce an almost unlimited number of amendments. While in theory the reconciliation process limits debate to 20 hours, the amendments could stretch out the debate for weeks.

As President Obama accurately noted during the health care reform summit, most Americans care more about the substance of health care reform than the process. However, it’s equally true that the legislative procedures used to push the issue this far have created a cloud over the substance of reform. Republicans have artfully used the messy give-and-take typical when drafting major legislation and cast it as a reason to oppose what was drafted. Some of these criticisms, such as the deals cut to favor specific states, are valid; others, such as condemning the legislation because the bills themselves are large, are spurious. But what’s undeniable is the drumbeat of criticism concerning process has undermined the substance of the bill (of course the serious problems with the substance of the bill hasn’t bolstered it’s popularity either).

If the Democrats could accomplish their legislative maneuvers quickly attention would shift to he substance of the legislation long before the November elections. In other words, like yanking off a bandage, the political pain generated by the process would be over quickly. If Republicans force Democrats to spend weeks mired in process, however, the political pain becomes increasingly greater – and perhaps unbearable.

What all this means is that the odds of comprehensive health care reform passing have improved considerably since the election of Scott Brown to the Senate from Massachusetts and the subsequent loss of the Democratic caucus’ 60 vote, filibuster-busting majority. But those odds haven’t increased as much as a I thought when I wrote about the three-step process Democrats would likely use to enact the reform legislation.

There are smart people on both sides of the issue. There are passionate people on both sides. The effort to pass – and to defeat – health care reform will continue. How it ends is anyone’s guess at this point.

Advertisement

The Congressional Health Care Reform Three-Step

President Barack Obama repeatedly tried to get the bipartisan summit on health care reform to focus on policy rather than process. Now that the summit is over, however, process is rightfully back on the table.

As I noted in my previous post, many of the major health care reforms of the past few decades have been accomplished through use of the reconciliation process. But how exactly would it be used this time for this reform?

Let’s review where reconciliation fits into the wonderful whacky world of the U.S. Senate. As you’ll recall, 41 Senators can invoke a filibuster and consequently prevent a bill from coming to the floor.  Only if 60 of their colleagues vote to close debate (by invoking cloture) can a bill be voted upon by the full Senate. (For an interesting history of the filibuster and cloture, check out the Senate’s web site). There is an exception, however. Since 1974, budget and tax related items can be brought to the floor of the Senate through a process known as “reconciliation” and no filibuster can stop it. So a key issue is, what matters are eligible for the reconciliation process?

Enter Senator Robert Byrd the widely acknowledged master parliamentarian of the U.S. Senate. He created what is known as the Byrd rule to help determine what is outside the reconciliation process. Put simply, the Byrd rule defines as “extraneous matter” items that do not impact government outlays or revenue in a substantive way. (It’s more complicated than that, but that’s the gist of it).

New taxes, and the health care reform process has plenty of them, are clearly within the purview of the reconciliation process. Preventing carriers from excluding pre-existing medical conditions from coverage is not.

What this means is that the Senate can not pass comprehensive health care reform through the reconciliation process. But hang with me here, because the fact is they don’t need to pass comprehensive health care reform through the reconciliation process because they already have. Remember? It was only a few weeks ago, on December 24th, 2009 to be precise. The Senate passed a comprehensive health care reform bill on a party-line 60-to-39 vote. yes, I know. It seems like ages ago, but it has only been a couple of months. And that affirmative act still stands.

So here’s the legislative three-step Democrats are likely to use to pass comprehensive health care reform.

Step One: The House votes on and passes the Senate version of health care reform.
Step Two: The Senate, using the reconciliation process, passes legislation to “fix” certain aspects of the health care reform it passed in the Senate.
Step Three: The House passes the Senate’s ‘clean-up” bill.

Both the Senate health insurance legislation and the clean-up bill arrive on the president’s desk. He signs them both into law.

What you may (and should) ask, would be in the clean-up bill? As previously predicted here, the follow-up bill is expected to remove state-specific funding elements such as the special treatment currently in the Senate bill favoring Nebraska, Louisiana and a few other states. The clean-up is also likely to change the criteria of a “Cadillac health plan” subjecting fewer policies from being subject to the proposed excise tax. Other fees and taxes would also likely be a part of the second bill. In other words, the clean-up bill would only relate to the budget and/or taxes, meeting the test of the Byrd rule.

I haven’t come up with this on my own. This legislative dance to enact health care reform was discussed at length on “Hardball with Chris Matthews” on MSNBC (the relevant discussion starts at about 3 minutes, 10 seconds in this clip, although he refers to it as a two-step process). What’s significant, however, is that it’s a strategy that makes sense (if your goal is to pass health care reform). Republicans will object that it’s ramming health care through Congress, but the GOP can’t claim the three-step violates Senate rules.

Many thought President Obama’s health care reform bill died with the election of Scott Brown to the Senate from Massachusetts on January 19, 2010. The odds are: they were wrong.

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

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.

Health Care Reform Summit May Be Substantive

Will the February 25th health care reform summit merely be political theater? Or will it serve as an inflection point that leads to passage of health care reform legislation? I haven’t seen any polls on the matter, but a quick search on the topic certainly creates the impression that many believe the summit will be six hours of politics with nothing substantive emerging.

I respectfully disagree.

Yes, the bipartisan health care reform summit President Barack Obama is convening will have more than its fair share of politics. That’s inevitable when that many politicians are in the same room. And given that it is in the electoral interest of Democrats to produce health care reform and in the electoral interest of Republicans to deny Democrats this victory, that politics will pervade the proceedings is to be expected. Nor should the political facets of the summit be criticized or denigrated. America’s legislative system is political. Unlike other country’s in which the ruling party is expected to rule (thus Prime Ministers are the leaders of the legislative majority), in America we set up a system that would inevitably be adversarial.

Of course, one could argue (and I do) that this adversarial relationship has gone too far. Today’s political climate is poisoned by an unwillingness or inability by one side to recognize anything of value put forward by the other. Opponents are not simply wrong, they are evil. It’s as if the prevailing logic has become: “Reasonable people cannot disagree because anyone who was reasonable would agree with me. Ergo, people who disagree with me are unreasonable.” That this is a both foolish and unhealthy, both for the individuals involved and the Republic, doesn’t seem to matter. That radio talk shows and cable news channels (especially during prime time) pour fuel on this fire – usually embellished with misunderstood or downright erroneous facts – only makes the matter worse.

Which is a long way of saying that those who claim the bipartisan health care reform summit will fail to rise above political gamesmanship have the odds in their favor. But at the risk of being naive, I think it will lead to something more substantive. Here’s some reasons why:

• It’s hard to be political for six hours straight (even with an hour off for lunch). The participants know they’re engaged in a bit of Kabuki theater. But staying in character that long is tough. These folks do have sincerely held beliefs. Even those who stifle those beliefs in favor of scoring political points are likely to let a ray of substance shine through during the course of the day.
• And each side has an incentive to seize that ray of sunshine (to butcher the metaphor) and ratchet it up a bit.

• For Democrats, the incentive is to get on record the specific provisions Republicans demand to see in a health care reform bill and identify the ones they can live with. By expanding the Obama health care reform proposal to include as many GOP ideas as possible, the Democrats assume a no-lose situation. If including those provisions gain Republican support for a bill, they win by passing health care reform legislation. If Republicans remain united against a bill that includes ideas they profess to support, the Democrats get to paint the Republicans as obstructionist.
• For Republicans, they need to re-position themselves as something other than the Party of No. Not that their base wants them to do anything other than oppose whatever bill the Democrats put forward. But Republicans won’t win elections this November just appealing to their base. It’s independent voters who decide elections. In Virginia in 2008 those independent voters helped send a Democrat to the White House. Those same independents last year put a Republican in the Governor’s mansion. By offering substantive proposals Republicans in Congress can demonstrate they’re serious about solving problems. They can then claim to withhold their support for whatever legislation the President puts forward on the grounds that they cannot support rate regulation, or Medicare cuts, or new taxes or something. But they need to show they care about fixing America’s health care system. And that means putting ideas on the table that reduce costs and expand coverage.

Which leads me to believe President Obama’s health care reform plan will be modified subsequent to the summit. And because it will likely incorporate ideas from a broader spectrum than participated in the drafting of the current plan, the result is likely to be a better proposal.

At the very least, the summit will allow Democrats and Republicans to explain to the American people the “why” behind their positions. Which will liberate Democrats to move forward with legislation regardless of whether Republicans support it or not.

• If the Republicans have used the summit to seize the high ground, the resulting legislation will be much more moderate than what the President is proposing today.
• If Republicans fail to put forward meaningful ideas, the proposal will be poorer for it, but will move forward nonetheless.

At the end of the day, I believe both chambers of Congress will vote on a comprehensive health care reform bill – something that has not happened in recent memory despite decades of effort. If Republican Senators filibuster the President’s health care reform bill, Democrats will turn to the reconciliation process (which allows them to pass legislation with a simple majority, not the super-majority overcoming a filibuster requires.) They’ll claim they gave bipartisanship a try and that they are playing by the rules (which permit circumventing filibusters in certain circumstances) and by American principals (what’s more American than “the majority rules?”)

That’s my educated guess. What’s hazier to me are two additional and critical questions.

1. Will the legislation voted on by Congress be health insurance reform or will it be real health care reform that tackles the need to control costs?
2. Will they be able to put forward a single bill capable of obtaining majorities in both the House and Senate?

But first things first. And first is the summit. Will either size, neither or both engage in a substantive debate? I think so. And even those who are skeptical of this result should hope so.

Why Liberals Will Be Disappointed By The Health Care Reform Summit

Americans’ views of the upcoming bipartisan health care reform summit will differ greatly: their ideologies and existing opinions concerning health care reform will color how they view what unfolds at Blair House on February 25th. Those in the center and right will hear talk of new government agencies and programs, new federal rules and the regulations, and wonder why those on the left are so disappointed. Isn’t what President Barack Obama proposing an unprecedented incursion by the federal government into health care? What more could the left want?

What liberals want is a single payer system. Often couched as Medicare for All, liberals hoped last year the new Administration would move forward with a complete remake of America’s health care system. Not they had much basis for such wishful thinking. Candidate Barack Obama made it clear that he would not be pushing for a single payer system if elected. After the election he made clear the private carriers would be a central part of the country’s health care system (single payer advocates would do away with health insurance companies).

In short, a single payer was off the table pretty early. But that doesn’t mean it was forgotten. I was watching Senator Bernie Sanders call for Medicare for All on one of the news stations earlier this week.

As we approach the Amidst the accusations that President Barack Obama is refusing to compromise on his health care reform package, it’s worthwhile  intention to lead a government takeover of health care in the United States Dr. Quinten Young, national coordinator of Physicians for a National Health Program, attacked both the House and Senate health care reform bills as “disastrous.” In a Huffington Blog posting, Dr. Young called on President Obama to “lay out the facts to the American people and provide energetic leadership for this eminently rational proposal.”

Not going to happen. Consider the current status of Medicare’s finances. Representative Paul Ryan, writing in Newsweek magazine this week, notes Medicare “is short $38 trillion of what it promises to provide your parents, you and your kids. In five years, the hole will grow to $52 trillion. Your family’s share: $458,000.” It’s also worth noting that the single payer bill recently passed by the California State Senate (and likely to be passed by the State Assembly then vetoed by Governor Arnold Schwarzenegger) has a price tag of roughly $200 billion. As noted: it’s not going to happen.

Which explains why liberals are so dismayed when President Obama’s health care reform plan fails to include a government-run health plan to compete with private carriers. Unlike moderates and conservatives who see this (to varying degrees) as a compromise, liberals view the lack of a public option as the elimination of a compromise they already agreed to. They want a single payer system. They were willing to accept a public option. Now that’s off the table, too?

People feel passionate about health care. The issue is personal, political and policy all wrapped into a complex mix of laws, regulations and history. Which is why many observers believe the bipartisan summit will be little more than political theater (I disagree for reasons I’ll put in another post later today). And people will naturally interpret what happens tomorrow based on their own view of health care reform policy and politics. The perspective for liberals seeking a single payer system will be that of an ever shrinking loaf, leaving them with little to celebrate – in their view.

As noted, however, the left’s disappointment is unsurprising, and the fault of their own misinterpretation of election night 2008. Democrats increased their majorities in both chambers of Congress. Democrats won the White House. Progressives interpreted these results as the triumphs of liberalism. They were not. They were triumphs of the Democratic Party – a party that includes moderates and conservatives. Just as all Labradors are dogs, but not all dogs are Labradors, most liberals are Democrats, but not all Democrats are liberal.

No one knows for sure what will emerge from the health care reform summit. But a safe guess is that liberals will be further disappointed.

Obama Health Care Reform Plan: Part I

At last. President Barack Obama has unveiled his own version of health care reform. No longer subjecting themselves to blame or praise for what members of Congress put forward, the Administration now has a plan to call it’s own. Copies of President Obama’s health care reform plan, as well as copious supporting material, are available on the White House web site.

And it looks a lot like what we’ve seen from Congress. In fact, it’s pretty much the bill passed by the Senate last December with some several tweaks – some significant; some less so. For example, the “sweeteners” benefitting specific states (think Nebraska and Louisiana) have been removed. Not a big surprise. Seizing on the recent outrage over large rate increases in the individual health insurance market the President has added a provision that would provide for “rate review” of premiums charged by health insurers by creating a Health Insurance Rate Authority “to provide needed oversight at the Federal level and help States determine how rate review will be enforced and monitor insurance market behavior.” The Associated Press describes this provision as seeking to “regulate the health insurance industry much like a public utility.” 

Once there’s been time to analyze his proposal I’ll address specific elements of President Obama’s health care reform proposal. What’s of immediate interest is the strategy behind the proposal.

In advance of the bi-partisan health care reform summit he is convening this Thursday, President Obama had a choice concerning the nature of the health care reform proposal he put forward today. He could repackage comprehensive health care reform along the lines of those approved by the House and Senate. Or he could introduce a new, less comprehensive package. Whatever approach he chose would change the dynamics of the summit.

Moving forward comprehensive, complicated reforms based on what had already passed a chamber in Congress (which is what he did) would reassure Democratic members of Congress – many of whom risked their political careers supporting controversial reforms. This approach also gives him more negotiating room. The President can go to allies later and say “I fought for this provision, but if we want any health care reform we have to compromise.” This approach also allows him to offer the Republicans concessions that otherwise might never have been on the table. This seems to be the thinking of the White House. The Associated Press quotes Administration spokesman Dan Pfeiffer as saying the health care reform plan the President introduced today “is an ‘opening bid’ going into Thursday’s summit.” Mr. Pfeiffer then reiterated that “The president is coming into the meeting with an open mind. If the Republicans do, too, our hope is that we can find some areas of agreement.”

The problem with this approach is that it is more confrontational than the alternative. And it opens the Administration to charges that it has failed to understand the public’s concern with a dramatic increase in the government’s involvement in America’s health care system. In fact, that’s what’s happened with House Minority Leader John Boehner saying “the president has crippled the credibility of this week’s summit by proposing the same massive government takeover of health are based on a partisan bill the American people have already rejected,” according to the AP.

Yet if President Obama had taken the second option – putting forward a more modest health care reform package that already incorporated elements of Republican proposals – he would have taken flack from his Democratic allies and had left bargaining room. However, he also would have made it more difficult for Republicans to declare the summit political theater.

President Obama is not the only summit participant who will have to find a way to simultaneously appealing to his base while showing the flexibility independents demand.  Republicans face the same challenge. The conservative base wants no compromise with the Democratic president. Independents, however, want lawmakers to solve problems.

My guess is that the president has decided to approach this political quandary in two-steps. First, demonstrate to the base that he wants what they want (although he did abandon the public option as an absolute non-starter and left it out of his proposal). The cost: a barrage of criticism from opponents that he’s arrogantly ignoring the public’s rejection of these plans (as indicated by various polls). The second step, however, will be to embrace proposals put forward by Republicans during the summit, claiming that the result is a bi-partisan bill. He’ll then work with Democratic lawmakers to introduce the refined legislation and challenge the GOP to reject a bill that includes several of their ideas. If this legislation fails President Obama still has the option of bringing forward a greatly scaled down bill blaming Republicans for failing to support more comprehensive reform.

Whether this strategy works or not remains to be seen. But the first moves have been made. It now falls to the Republicans to respond. Will they simply attack President Obama’s health care plan or offer alternatives of their own prior to the summit? And will those alternatives be presented as a single health care reform package or as a assorted, separate proposals? Will the GOP play solely to its base or seek to seize centrist ground? The President has given Republicans an opportunity to capture independents. Now we get to see what the GOP does with this opening.

Stay tuned.

New York Shows Perils of Imbalanced Health Care Reform

One area of agreement likely to be quickly identified at President Barack Obama’s bi-partisan health care reform summit on Thursday is the principal that carriers should be required to accept all applicants for coverage regardless of their health status. This concept, known as “guarantee issue,”  is high on the wish list of Republicans and Democrats alike. What will be far more divisive is whether a requirement that carriers sell health insurance coverage to all consumers should be balanced against a requirement that all consumers buy health insurance coverage.

The issue has both a political and a substantive component. Politically Republicans, and some Democrats, consider forcing individuals to purchase coverage to be overly paternalistic, unfair, a tax-by-another-name, and/or yet another step toward socialism.

From a public policy point of view, it’s hard to see how a system can work without a balance between the requirement to sell and to buy coverage. Otherwise people will wait until they need the insurance before they obtain it. It’s the equivalent of allowing motorists to buy auto insurance from the tow truck driver who shows up at a car wreck. Why buy it before you need it?

Noam Levey, in a thorough article running in the Los Angeles Times describes the costly mistake New York made when it required carriers to sell coverage to all applicants without mandating that individuals purchase coverage. After nearly two decades of this situation health insurance premiums in New York “are now the highest in the nation by some measures, with individual health coverage costing about $9,000 a year on average. And nearly one in seven New Yorkers still lacks health coverage, a greater proportion than before the law was passed.” In some New York counties, Mr. Levey reports “it is impossible to buy an individual plan for less than $12,000 a year.” For some older residents in other states, premiums of $1,000 per month may be close to what they’re paying now. But because New York has pure community rating (meaning all insureds pay the same premium regardless of their age) $12,000 is the premium facing 24 year olds, not just 64 year olds.

I’ve written about this health care reform surcharge frequently and for a long time. The Los Angeles Times article does a great job of showing why New York should serve as a case study on the issue for negotiators at the health care reform summit in Washington. The message is simple.  Mark Hall, a Wake Forest University economist who has studied New York’s experience, summarizes it well in the Los Angeles Times article: “You basically can’t have a functioning insurance market if people can buy insurance on the way to the hospital.”

If those at the summit are serious about solving problems they’ll recognize this reality. However, even folks who should know better, by which I mean anyone with an insurance license, condemn requiring individuals to obtain coverage as un-American in some way. (Never mind the various other duties we impose on citizens in this country.)  The Administration and Republicans are likely to reach an impasse on this issue.

There is at least one other way to balance guarantee issue with the need to prevent gaming with the system. As I’ve suggested before, the solution is to allow carriers to exclude coverage for existing health conditions and to impose a premium surcharge on those applying for coverage who have gone without health insurance for a significant period of time.  The premium surcharge and pre-existing exclusion period could vary depending on how long the individual went without coverage. This approach is a part of the California Association of Health Underwriter’s Healthy Solutions health care reform plan.

Yes, premium subsidies would be required to help lower income Americans purchase the coverage. Republicans have supported refundable tax credits for this purpose in the past while Democrats have put forward direct subsidies. At the end of the day, however, both parties recognize the need to provide premium support. The debate is only over methodology.

The problem with this compromise is that “pre-existing conditions” have become a blasphemous word in Washington, at least among Democrats. Whether they would allow carriers to impose restrictions on existing health problems as an alternative means of encouraging (if not requiring) all consumers to obtain health insurance is unlikely. This is where presidential leadership could make the difference. If President Obama wants bi-partisan health care reform legislation — and, a big if here, the Republicans are willing to negotiate in good faith — the Healthy Solutions method of balancing the need to balance a requirement to sell health insurance with a requirement that consumers obtain it makes sense.

 The health care and health insurance status quo in this country can not long stand. Health care reform is needed. Democrats and Republicans can insist on the purity of their positions. But if they are sincere about solving problems, there are ways to get the job done. The question is, whether there’s the will.

Pointed Questions for WellPoint

On February 24th WellPoint CEO Angela Brady will appear before the House Energy & Commerce Committee. She will attempt to explain why the company’s California operating unit, Anthem Blue Cross of California, recently sought to raise rates on some individual policy holders upward of 39 percent. While the effective date of the rate increase was postponed, the hearing is not. And that it is being held the day before President Barack Obama’s bi-partisan health care reform summit with Congressional leaders is no coincidence. The Administration and others have pointed to the rate increase as one of the reasons comprehensive health care reform – or at least health insurance reform – is needed.

In preparation for the hearing, House & Energy Committee Chair Henry Waxman and Subcommittee on Oversight and Investigations Chair Bart Stupak sent a letter to Ms. Braly asking for background information. The information ranges from the general (“reasons for the premium rate increase”) to the specific (for 2005-2008, “a table listing, as applicable, premium revenue, claims payments, sales expenses, other general or administrative expenses, and profits for all individual health insurance products”) to what some might call a fishing expedition “all internal communications, including e-mail, to or from senior corporate management relating to the company’s decision to increase premium rates in California in the individual health insurance market.”)

The hearing will be closely watched, not only by lawmakers but by WellPoint’s competitors. It could provide an interesting glimpse into the rate making process employed by health insurance carriers. The information will certainly be cited by advocates – and opponents – of requiring carriers to spend a certain percentage of the premiums they take in on medical claims as opposed to administrative expenses and profits.

Ms. Braly’s testimony will also likely highlight the different ways politicians and business people view the same data. What to a member of Congress may look like profiteering could look to an executive like a prudent hedge against unknown risk.

The Associated Press has taken a balanced approach to explaining the issues behind the Anthem Blue Cross of California rate increase. The analysis is worthwhile reading for anyone following this particular controversy. Among its conclusions: rising medical costs are the main driver of rate hikes, not profits; health insurance rate regulations vary considerably from state-to-state; non-profit health plans also have large rate increases; carriers can’t, and probably shouldn’t, subsidize rates for one business line in one state with profits earned by other lines of business, especially in other states; and that there’s a lot of elements taken into consideration by carriers when they set their rates. While there’s little specifics many insurance professionals don’t already know (other than the make-up of WellPoint’s profits), it’s a very useful summary and analysis of the issues.

The timing of Anthem Blue Cross of California’s rate increase is generally perceived as constituting political malpractice. But there may be a silver lining. Ms. Braly has an opportunity to educate lawmakers on how and why carriers charge the health insurance premiums they do. If members of the Energy & Commerce Committee are willing to look beyond the politics of the rate increase, they might gain a better understanding of how health insurance works in this country.

A Critical Week for Health Care Reform

The long strange trip that has been health care reform will take a few new twists and turns this week as President Barack Obama and Congressional Leaders will meet for a televised summit. No matter what actually happens at Blair House the event will be substantial for several reasons. Among them:

• We finally get to see what ObamaCare really looks like. In the past the Administration has voiced support for various elements of legislation “owned” by Congress. While Senate Majority Leader Harry Reid and Speaker Nancy Pelosi struggle to fashion a unified bill Democrats in both of their caucuses can support, President Obama will unveil his own version of health care reform. While it will no doubt be based on the two bills passed, respectively, by the Senate and the House, it will not be the official Democratic bill: it will be the White House bill.
• We finally get to see if either party can rise above the politics of health care reform to actually address the policy of health care reform. Senate Republicans bowed to the inevitable and agreed to participate in the summit agreeing to participate “in good faith” according to the Los Angeles Times. While House Republicans have yet to say whether they’ll attend the summit, they would be foolish not to. The GOP is fighting hard to be known as something other than the Party of No. Not attending would set this positioning effort way back. Besides, the summit provides Republicans with the opportunity to clearly lay out their alternatives and to eviscerate the Democratic approach to health care reform. Yes the meeting gives Democrats the same opportunity. The key for each party, however, will be how they balance the two tactics: pushing forward their own policies; and tearing down the other side’s ideas. If they focus on the benefits of their own approach there’s a real opportunity to find common ground. If they choose to turn the Blair House into a political Thunderdome then politics will trump policy.
• Health care reform will move forward after Thursday’s health care reform summit. But we’ll learn whether what moves forward represents compromise or a Democrats-only version of reform. If Republicans put forward serious ideas (and I assume they will) it will be hard for the Administration to push reforms through the Senate with a simple majority – even though an increasing number of Democrats in the Senate seem willing to use reconciliation to pass a health care reform bill. (Reconciliation allows the Senate to vote on budget related issues without providing the minority the ability to filibuster. A filibuster allows the minority to force the majority to pass legislation with a super-majority of 60 votes in the Senate. Filibusters are not allowed in the House which operates on a simple majority basis). Instead, President Obama would be likely to put forward legislation that incorporates much of what the GOP offers – and then dare Republicans to defeat such a bill. Whether Republicans would – or could – hold out for a bill in which they give up nothing and insist on a pure GOP version of health care reform would be interesting to see.
• If no common ground emerges – whether because Democrats refuse to listen to Republicans or the GOP refuses to truly negotiate – the majority party is likely to move forward on their own. Whether liberals in the Democratic caucus have learned the lesson of the past year would be interesting to watch. That lesson, that it is Democrats who have a majority in Congress, not liberals and that the two are not the same, is a major reason Democrats are in danger of losing the opportunity to pass health care reform in the first place. If the Administration and Democratic leaders had focused on a moderate bill that could gain the support of their more conservative caucus members from the beginning, they would have passed a bill long before they lost their 60th vote. By hewing to the left, they delayed the inevitable: whatever health care reform bill, if any, emerges from Congress will disappoint true believers among progressives.

The ramp-up to Thursday will be interesting. President Obama will unveil his reform plan. The House GOP leaders will agree to attend the summit. The pundits will pontificate. And on Thursday, we learn the future of health care reform. Stay tuned.

Bipartisan Health Care Reform Summit Changes Health Care Reform Dynamic

In politics it’s often easy being in opposition to the party in control. Since your ability to pass laws is limited, at best, the goal shifts from legislating to point making. Minority parties tend to introduce bills to bolster their base and embarrass the majority. They get to rail against the inevitable hypocrisy that is a part of governing in a democracy while ignoring their own double standards back in the days when they were in charge.

In Washington this game is clear and obvious. The Democrats, control of both chambers of Congress and the White House, try to muscle through their priorities. The Republicans unanimously oppose them. In California the game plays out a bit more subtly. Democrats have large majorities in the legislature, but a Republican occupies the Governor’s office. This allows Democrats to shift between the role of the party in control and the opposition. The result: Democrats back a bill that would establish a $200 billion single payer program in the state, safe in the knowledge that it will never become law. If a Democrat becomes Governor next year single payer legislation will still be on the table, but it will be vetted and debated far more thoroughly than this year’s bill.

Now that Democrats have lost their filibuster-busting majority in the Senate, the dynamic in Washington changes substantially. Republicans have been unified in their opposition to the Democrats health care reform proposals. With 60 votes Democrats could ignore them. The debate was all within the Democratic caucus and took place between liberals and moderates. Reduced to 59 votes, Democrats face a new reality: Republicans matter.

President Barack Obama gets this. His appearance at the House GOP conference was a masterful stroke. The give-and-take can be viewed differently depending on the partisan glasses one wears, but the political picture painted at the event unarguably favored the White House. The mere presence of the Democratic president at a Republican meeting was a victory for the Administration. Most of his questioners read from prepared documents (one from a huge book). President Obama answers were note-free. This made it seem like the Republicans had mapped out how to trap or embarrass the President while President Obama was there to simply talk.

Worse, the Republicans could not help but couch their questions in loaded, political terms. (“When will you stop being a socialist” kind of thing). President Obama not only called them on this behavior, but focused his remarks on substance and the need for bipartisanship. Because the questions were politically laden, even when the President responded in kind he won – self-defense is a valid excuse in the eyes of most non-partisans. The best evidence the President benefitted from attending the event: Republican leaders admit, off the record, that televising the question and answer session was a mistake.

Now President Obama is taking the dialogue to a new level and Republicans are in danger of being cornered again. Think of it as the “Be Careful What You Wish For Gambit.” Republicans have been accurately complaining they’ve been excluded from negotiations concerning health care reform. That’s about to change.

On Sunday President Obama announced he would convene a bipartisan health care reform summit with legislative leaders to be televised live. The New York Times quotes President Obama as stating “I want to come back and have a large meeting, Republicans and Democrats, to go through systematically all the best ideas that are out there and move it forward.” The paper goes on to say that “Mr. Obama challenged Republicans to attend the meeting with their plans for lowering the cost of health insurance and expanding coverage to more than 30 million uninsured Americans.”

This move has the potential to actually move health care reform forward. Democrats could be forced to defend some of their more tenuous proposals. Republicans might have to explain how their reforms stack up against the Democrats’ ideas. Republicans could use the opportunity to pin Democrats down on some of their favorite ideas (e.g., medical malpractice reform) while Democrats could question their GOP counterparts on how requiring carriers to accept all applicants regardless of pre-existing conditions can work without requiring all Americans to obtain coverage. In other words, there’s an opportunity for a meaningful, substantive debate that would educate the public while identifying common ground among the Congressional combatants.

And then there’s the political theater of it all. If Democratic or Republican participants use the opportunity to score political points rather than solve problems it will be apparent for the world – and their constituents to see. You can bet that President Obama will avoid this mistake. Instead this is an opportunity for him to present himself to voters – especially independent, moderate voters – as a thoughtful, serious leader focused on finding solutions to serious problems. There’s no more politically potent place for a politician to stand than above politics.

Of course, there’s no guarantee this summit will take place. Republicans are insisting that the legislation passed by the House and Senate be shelved before they participate. While I appreciate their concern about giving credence to the Democratic plan, the reality is that any discussions need a starting point. And the Democratic legislation is what’s before Congress. Taking into account that many of the provisions of the bills are non-controversial, starting with the current bills makes sense from a practical standpoint. Further, politically it’s to the Republicans advantage to force Democrats to defend their proposals. Especially given rifts within the Democratic party within and between each chamber, defending the existing bills would put Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi in an extremely awkward position.

However, instead of turning the President’s summit idea into an advantage, Republicans seem to be deploying the tactics that made them a minority party in the first place. Consider Republican Representative Darrell Issa. According to the Associated Press he said that the first question Republicans should ask President Obama is “Did you lie about moving forward on malpractice reform?” Yes, this feistiness is red meat to the Republican base, but elections are won among moderates – and moderates are tired of politics-as-usual. Representative Issa could have made the same point by suggesting the first question be “How can the GOP help President Obama keep his promise to move forward on malpractice reform?” That’s the approach most independent voters are hoping to see. (Granted, some independents are well to the right or left of the mainstream, but the ones that decide elections tend to be moderates.)

President Obama’s call for a bi-partisan health care summit is subtle and significant.  At best it leads to passage of health care reform albeit at the political price of rewarding Republicans for being partners in reform. At worst the summit proves no health care reform is possible, but in the process shows that it is Republicans who are unwilling to take substantive action.

For President Obama this is a win-win situation. For Republican it is a dangerous one. If they rise above politics it could cement their standing as the alternative to the current Congress.  That’s their win. If they follow Representative Issa’s example, however, they’ll make their base happy, but undermine the electoral momentum they’ve gained in the past year. That would be their loss.