Fixing Health Care Reform Harder with Pelosi as Democratic Leader

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.

Second Take on 2010 Election Results and Health Care Reform

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.

First Take on 2010 Election Results and Health Care Reform

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).

Health Care Reform Passage is Historic, But Only the Beginning

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.

Health Care Reform a Question of Trust

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.

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.

Repealing Health Insurance Anti-Trust Exemption: the First of Many Incremental Bills?

The health care reform debate in Washington DC may be quieter than it had been before the Democrats lost their filibuster-proof majority, but it’s far from over. In the old days, pre-Massachusetts, the goal was to pass one big comprehensive reform bill festooned with provisions, compromises, deals and more. Negotiations continue to between Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi to try to fashion a substantial bill that could be passed over a Republican filibuster. But more likely we’re about to enter a period where small, targeted bills become the norm.

Which means it’s not surprising that Speaker Pelosi has announced a vote next week on repealing the antitrust exemption currently enjoyed by health insurance carriers. No one will argue that the world will change if insurers lose this exemption. It will make their life more difficult as new rules, procedures and regulations will apply to their activities. But carriers are already subject to state anti-trust laws and other regulations.

Supporters of the exemption repeal, however, claim the anti-trust exemption is outdated and that “states lack the resources to regulate the insurance industry effectively,” according to Reuters and that “Eliminating this industry giveaway will create more choice for consumers and create more competition for insurance companies.”

Well, not so much. It’s more likely to create more opportunities for demagoguery about pernicious health insurance companies than have any meaningful impact on consumer choice and competition in the marketplace. That’s the conclusion reached by the National Association of Insurance Commissioners. In a letter to Senate Majority Leader Reid and Speaker Pelosi the NAIC stated “it is unlikely that a repeal of the McCarran-Ferguson antitrust exemption for health and medical malpractice insurers will lead to more competition and lower premiums.” The letter goes on to note that “The most likely result of this repeal would therefore not be increased competition, but a series of lawsuits testing the limits of the state action doctrine, with associated litigation costs being passed along to consumers in the form of higher premiums.”

So if applying the McCarran-Ferguson Act to health insurance carriers is at best going to change little and at worse be counter-productive, why move forward on the issue? Part of the motivation is no doubt political pay back. Health plans aggressively opposed Democrats’ health care reform bills. Another impetus is also political: insurers have been demonized in the health care reform debate. Repealing their anti-trust exemption (an exemption they share only with major league baseball) allows supporters to claim they’re taking on those evil carriers. And some lawmakers legitimately believe it’s a good, helpful idea. (Reasonable people can disagree, after all).

And there are two, more subtle benefits that could result from passage of the exemption repeal. First, it might prove the viability of a piecemeal approach to health care reform. Speaker Pelosi’s office has made it clear that considering the anti-trust repeal bill separately signals a move to break the comprehensive bill into bite-size pieces, according to the Reuters article. Yet if the anti-trust exemption issue is dealt with separately it will be evidence that other matters can be as well.

The second benefit of passage of this legislation: one less thing for critics of the industry to complain about. Hey, you get your good news where you can.

Democrats Could Win With a Truly Bi-Partisan Health Care Reform Strategy

Hopefully the cottage industry in health care reform paranoia can calm down now. No one in Washington is talking about strategies to short circuit the election results in Massachusetts this week in which state Senator Scott Brown, soon to be the Republican’s “41st vote,” upset the Democratic candidate in a special election. While some dismayed Democrats did consider ways of passing legislation before Senator Brown is sworn into office, there was never really a chance that would happen.

One reason Senator Brown won was a reaction to the hubris Democrats in Congress displayed over the past 12 months concerning health care reform. Favors were dealt out to key lawmakers party favors at a kid’s birthday if that’s what it took to secure their votes. A temporary exemption from an excise tax on expensive health insurance policies was crafted for unions to get their support. Deals were brokered with large pharmaceutical companies and others to get them on-board. This is politics as usual, practiced by Democrats and Republicans alike.

Engaging in politics as usual, however, was the problem: voters in 2008 expressed their desire for change. Politics as usual is exactly what the public did not want.

Given this reality, Democrats passing a health care reform bill by jamming something through would be political malpractice of the highest order. Besides, there were never enough rank-and-file lawmakers in the caucus willing to go along with such silliness. So, not surprisingly, instead of passing health care reform by manipulating the rules, Democrats are now taking a breather, gathering their thoughts and developing a strategy for moving forward.

After some reflection, Democratic leaders will realize the scope of health care reform they can pass is extremely limited. Expensive, intrusive reforms are no longer an option. This doesn’t mean they can’t pass some version of reform. It just means that the reform they can pass will need to be less expensive, less comprehensive, and less intrusive than they had hoped.

What health care reform can be passed, and how long it will take, will depend in large part on which of two strategies the White House and Congressional Leaders choose to take.

President Barack Obama, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi can either pursue health care reform that gains the vote of the fewest number of Republican lawmakers necessary or legislation that can earns support from a meaningful percentage of Congressional Republicans. Following the former strategy would see them negotiate almost exclusively with Senators Olympia Snowe and Susan Collins. Seeking truly bi-partisan reform would require negotiating with a far larger group.

The bare minimum strategy will be tempting. It requires the least amount of compromise. As I wrote the other day, they could bare the current legislation down to its cost containment provisions, health insurance reforms, and some of the less expensive ideas to expand coverage to more Americans. Such a scaled-back bill might get the support of either Senator Snowe or Senator Collins – or both. (Who knows, even Senator Brown might be supportive. He does have to run for re-election in Massachusetts in 2012. He won the special election by positioning himself as an independent and downplaying his Republican affiliation. Showing his independence from hard-line Republicans is a reasonable political strategy for him.)

The problem with the bare minimum strategy is its what got Democrats into their current mess. By pursuing health care reform that never had a chance of gaining broad support, President Obama, Senator Reid and Speaker Pelosi assured a long, politically ugly legislative process – one that required the kind of deal making that voters, especially independent voters, had voted to change in 2008.

Instead, Democrats could take the advice of House Majority Whip Jim Clyburn, who observed, “Medicare wasn’t done in one fell swoop. You lay a foundation and you get this thing done over time.” If Democrats had taken this approach from the beginning health care reform might have been enacted already. Instead months were spent battling over issues like a government-run health plan that neither Republicans nor enough moderate Democrats could support. While hanging tough for a liberal wish list pleased their base (for awhile), it was inevitable moderate Democrats would determine the final health care reform package.

To gain sufficient Republican votes, Democrats will have to be willing to accept fairly limited reforms for now. They will need to include some meaningful malpractice reform. Democrats needs not include every and any provision Republican demand. Their goal is not to pass a bill by unanimous consent. Democrats just need to offer enough to peel off a significant number of Republicans – say 12 in the Senate and 35 or so in the House. Legislation with meaningful malpractice reform and a low sticker price could do that. Is this realistic? Well, there are a number of Republicans running in moderate seats, too. Running for re-election as a candidate who “opposed President Obama at every turn” is not a recipe for job security in such seats.

If Democrats succeed in passing bi-partisan reform they’ll have laid the foundation for future health care reform efforts. But what if Republicans unify behind a strategy of blocking reform of any kind, regardless of how moderate that reform might be? Such a strategy would just confirm that the GOP is the party of politics as usual. And in 2010 that’s not an image voters are likely to reward.

Massachusetts Offers Both Parties a Window of Opportunity for Health Care Reform

Not that anyone asked, but here’s some free advice to both Democrats and Republicans in Washington: don’t over think what’s happened in Massachusetts. There are as many interpretations of the “meaning,” “message” and “impact” of state Senator Scott Brown’s victory Tuesday night as there are television pundits. And just like paranoids noodling with a conspiracy theory, the facts can be manipulated to prove anything (I’ve heard all of these in the past 24 hours or so): President Barack Obama was too liberal; he tried too hard to be bi-partisan; he didn’t move fast enough on health care reform; he moved too fast on health care reform.

Or that the special election results prove that the Republican strategy of non-cooperation with Democrats is working; that the Republican establishment is out of step with Republican grass roots; that the country is irretrievably locked into blue/red gridlock; that the Republicans are branding themselves up as barriers to progress.

Or that Attorney General Martha Coakley defeat reflects voters feelings about the two candidates; what they think about President Obama, Speaker Nancy Pelosi and/or Senate Majority Leader Harry Reid; that Republicans are assured of victory in November; that Democrats have had a wakeup call and will rebound; or that the results reflect the skill (or lack thereof) of the candidates and their campaigns.

Yeah, yeah, yeah. One could argue that it means all those things and more. Usually, however, the simplest interpretation is usually closest to the truth: voters rejected Republicans last year because they were fed up with political games, hypocrisy and ineptitude. They are rejecting Democrats this year because they are fed up with political games, hypocrisy and ineptitude. The reality is that both parties have shown a remarkable inability to govern this complicated country let alone unify its diverse political viewpoints.

So instead of wasting time trying to squeeze every nuance out of the Boston-brewed tea leaves, my advice to both parties is to take advantage of the window of opportunity that election created between now and President Obama’s State of the Union Address to reinvent yourselves. Because let’s face it, voters don’t like either Democrats or Republicans. And why should they? Democrats lost sight of the reality that this is a centrist country. And Republicans have lost sight of the need to stand for something besides “we’re not those guys.”

Not surprisingly, given the topic of this blog, I think health care reform provides both parties with the chance to prove they deserve votes for something other than being the best of two evils.

Democrats have to stop acting like every member of their party thinks alike. Liberals seemed to think that with 60 votes in the Senate they’d quickly adopt the Progressive Caucus’ wish list. If they’d looked past their own hubris they’d have noticed that some of the folks in their caucus room were pretty darn moderate – heck, some are downright conservative. And they were elected as Democrats, too. Which means their views and votes are just as “Democratic” as those of liberals.

Given that the liberal agenda was never within reach and now is even more remote, think carefully about what you do next. Pass health care reform through some political legerdemain and you’ll only confirm to independent voters that you’re more interested in political games than acceptable public policy. (And remember, it’s independents that will determine the make-up of Congress. Consider: there are perhaps only 50-75 House seats winnable by either party – most Congressional seats are so solidly in one camp the seats are safe for the party who holds them now, assuming the incumbent avoids scandal or indictment).

Instead of passing health care reform in the next 24 hours, promise to take a step back and reconsider some of its elements. Then streamline the bill down to the essentials. What really matters when it comes to health care reform?

• Restraining costs. There’s some interesting cost containment ideas buried in the current health care reform proposals. Paring the legislation down to its essentials will allow Democrats to make these ideas more prominent. Add some stronger malpractice reform language for good measure. Sure defensive medicine’s impact on costs is perceived as being far greater than it is, but let’s face it, Democrats have a perception problem. Pushing malpractice reform takes a talking point away from Republicans, shows independents that Democrats can stand up to trial lawyers, and can become a symbol for how serious Dems are to tackle runaway medical costs.
• Unshackle Consumers with Pre-Existing Conditions. In America today, if you don’t get coverage through your employer and you have an existing medical condition, you’re out of luck. You may want to buy health insurance. You might be able to afford health insurance. But if you don’t already have coverage, you’re not going to get it. And if you do have coverage you’re stuck with it. Carriers can raise the rates, lower the benefits or both and you’ve got nowhere else to go. Most voters know someone in this predicament. Many voters are in it themselves. Require carriers to accept all applicants (what’s called “guarantee issue.”) But do so responsibly. Either require everyone to buy health insurance (called an “individual mandate”) or impose a meaningful penalty for failing to do so. Otherwise, costs will skyrocket as everyone waits until they need coverage before they purchase it – the equivalent of buying auto coverage from the tow truck driver hoisting your car after an accident (what’s called “adverse selection”). The problem is that Republicans have painted individual mandates as the devil’s work, forcing consumers to buy policies they may not want. So let the carriers provide the discipline: if a consumer fails to purchase coverage within a specified period of time after becoming eligible for it (for example by becoming too old to be covered as a dependent on their parent’s policy or losing employer-sponsored coverage) allow carriers to exclude pre-existing conditions for 12 months and to charge a 10 percent higher premium for two years. This makes those who choose to self-insure accountable for their decision while still allowing themselves a path back to responsibility.
• Reduce the Number of Uninsured and Underinsured. Most Americans acknowledge there’s something wrong with America’s high number of uninsured. Whether the actual number is 47 million uninsured (greater than the population of California) or some lower number, the fact is it’s too many. Those with coverage pay a tax to support the uninsured, estimated at roughly $1,000 per year in higher insurance premiums. So expand Medicaid. Close the doughnut hole in Medicare prescription benefits. Offer subsidies to Americans who cannot afford premiums, but fail to qualify for government programs. Just don’t create new bureaucracies to do it. Voters know new agencies generally do more harm than good. Why feed the suspicion?
• Reduce the Cost of Health Care Reform. If a reform package sets in motion medical cost containment, makes coverage portable, and reduces the number of uninsured – and that’s about it, the cost will be far less than what’s currently contemplated. Put on the table a tax on the wealthiest Americans (removing the tax cut President George Bush gave those earning more than $1 million per year. Then offer to replace the tax with revenue provisions Republicans offer. If they object to any revenue increases of any kind, then they will have fully embraced their branding as the do nothing party.  That’s a recipe for turning their current momentum into failure.

Which brings me to advice for Republicans. Waving a sheaf of paper at a presidential address on the floor of Congress is not proof of a Republican plan. Introduce a plan that the Republican caucus in both the Senate and the House can support. Submit it to the CBO for scoring. Treat it like a real bill. Demand hearings. Declare it a starting point for negotiations and then set up a time and place for a meeting to negotiate. If Democrats don’t show up Republicans will have enough political fodder to last two, maybe three, election cycles.

Sure, Rush Limbaugh won’t like it. He wants President Obama to fail and wants Republicans to fight every step he tries to take. But independent voters want America to succeed. They don’t care about who gets the credit, but they do care about appropriate progress. And they know achieving this means legislation that both President Obama and Republicans consider acceptable. So put together something that can gain votes beyond a Chamber of Commerce luncheon (see the above for some ideas). Remember, obstinacy is not a rallying cry. And if the GOP is not not careful, someone will remind voters that Republicans controlled Congress and the White House for six years, but never even considered meaningful health care reform. Voters don’t want the wrong health care reform, but that does not mean they don’t want any health care reform. The status quo is imposing hardship on more and more Americans. They need and deserve help. If Republicans want voters to return them to power in 10 months, they need to demonstrate leadership today.

As far as changes go, please get real. Allowing plans to sell across state lines undermines state’s rights. Republicans are for state’s rights, remember? Telling voters in California that policy makers in South Dakota will determine what’s adequate consumers protections when it comes to health insurance is lousy public policy. Republicans should go through their various proposals and cobble together a coherent package. And they should make it clear they want to pass some kind of health care reform. Proclaiming the status quo as adequate is unlikely to fly as a platform for very long.

The Massachusetts Senate race is the story of the week – and then some. Yes, it will have long term political ramifications, but eventually it will be yesterday’s news. Some other issue, scandal, disaster or discovery will take its place. For now, however, Senator-elect Brown’s upset gives both Democrats and Republicans a chance to prove they’re the party of the future, not the party of the left or of no or of, worst of all, the recent past. Whether either will choose to seize the opportunity is anyone’s guess. What’s yours?

Of course, what’s significant about the Massachusetts special election is not what I think it should mean, but what the actual impact it has on health care reform. Which I’ll be writing about as soon as the crystal ball clears a bit.