The Alan Katz Health Care Reform Blog

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Posts Tagged ‘Senate Health Education Labor and Pensions Committee’

Outlines of Senate Finance Committee Health Care Reform Plan Emerges

Posted by Alan on September 7, 2009

Senator Max Baucus of the Senate Finance Committee is circulating a draft health care reform proposal that could form the basis for whatever reform package emerges from Congress. If there is going to be bipartisan health care reform legislation, this is it.

The draft reflects ideas from six members of the Congressional panel who have spent months trying to find common ground – Democratic Senators Baucus (Montana), Jeff Bingaman (New Mexico) Kent Conrad (North Dakota) and Republicans Mike Enzi (Wyoming), Charles Grassley (Iowa), and Olympia Snowe (Maine). The group, often referred to as the Gang of Six, has been working under tremendous pressure. Democrats have been pushing for action and liberals are concerned about giving up on, among others, provisions for a government-run health plan. Republicans have been equally vociferous on their three colleagues, some arguing that the GOP should seek to defeat any health care reform plan in order to deliver a political blow to President Barack Obama and others opposed to specific elements such as how to pay for insuring the uninsured. Rumors of the gang’s failure have been constant and consistent fodder for bloggers, talk shows and news programs, yet they keep on moving forward. The draft proposal is the most concrete evidence yet that these rumors are unfounded.

As reported by the Associated Press, the plan circulated by Senator Baucus includes a fee on insurance companies to help fund coverage for the uninsured, enabling non-profit co-operatives to compete with carriers, authority for health insurance exchanges (note: there would be more than one) to help individuals and small business purchase coverage, expansion of Medicaid, tax credits to help low- and middle income Americans buy private coverage, and a requirement for insurers to disclose their administrative costs and profits.

The Wall Street Journal describes Senator Baucus’ plan as requiring “most Americans to carry health insurance” and, in addition to a fee imposed on all insurers, would include a tax on “insurance companies when they offer particularly generous health insurance plans.”  The Journal describes the exchanges as providing “standardized information on insurance plans and pricing." The article also makes explicit what is generally assumed to be a part of any health care reform plan: carriers will no longer be able to exclude coverage for pre-existing conditions; drop insureds who become ill; and will cap out-of-pocket medical expenses.

Bloomberg reports that Senator Baucus’ proposal “works to reduce Medicare costs by rewarding doctors based on the quality of care provided, not the number of treatments or tests administered.”

The cost of the proposal is estimated to be $900 billion over ten years. The Senator is emphasizing that what he is circulating is only a draft and subject to change. However, he warned Senate Finance Committee members that they would need to suggest ways to pay for any provisions they suggest that increases the cost.

So what does all this mean? Well let’s get the obvious elements out of the way: the devil is in the details; it’s unclear how well the proposal goes after medical cost containment because the media tends to focus on what’s easier to understand (insurance reform) – the good news is there are indications reducing health costs is significant part of the package.

It’s also clear the proposal will be unacceptable to both liberals and conservatives. No problem, the more ideological on both ends of the political spectrum would be unhappy with any reform Congress is capable of passing. Liberals will complain because it doesn’t give government enough control over the nation’s health care system; conservatives because it gives government too much control over the nation’s health care system.

However, ideologues don’t pass much legislation, moderates do. And the Senate Finance Committee’s is apparently getting ready to pass legislation far more moderate than what has already been approved by the Senate Health Education Labor and Pensions Committee or by the three House Committees with jurisdiction.

Which means if the Senate Finance Committee actually moves forward something along the lines of the package being circulated by Senator Baucus, for better or for worse, what passes for moderate health care reform legislation is more likely to become a reality sooner rather than later.

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

Health Care Reform 2009: Even More Required Reading

Posted by Alan on August 11, 2009

Welcome to the third edition of health care reform 2009’s required reading list. (The previous editions were Health Care Reform 2009: Required Reading and Health Care Reform 2009: More Required Reading). What I try to do in these cleverly titled posts is to pull together the articles and web sties offering meaningful insights into the current health care debate. I don’t always agree with the authors facts, reasoning or conclusion, but having them available can be a useful guide to what people are saying and thinking.

  1. If folks are going to argue over what’s in the House Energy and Commerce Committee’s legislation (the “America’s Affordable Health Choices Act“) we might as well all read the darn thing. And the various press releases, summaries and white papers associated with it. The Committee’s site has it all and more.
  2. When the Congressional Budget Office talks people listen. (To be precise, when the CBO writes, people read — especially lawmakers, public policy wonks, the media and the political groups seeking to sway the outcome of the health care reform debate). One of their most read pronouncements concerned the impact of a government-run health plan to compete with private carriers or through a health insurance exchange under the Energy and Commerce Committee’s bill. The CBO concluded enrollment in a public plan or exchanges would be relatively modest — by 2016 they project “nearly 3 million Americans who would be covered under an employment-based plan under current law … would choose instead to obtain coverage in the exchanges because the employer’s offer would be deemed unaffordable and they would therefore be eligible to receive subsidies via an exchange…”  When part-time workers are added in, the CBO estimates that the private carriers would lose approximately 9 million people to the exchange by 2016. Estimating that a public plan would offer premiums approximately 10 percent lower than typical private plans offered in the exchange,  the CBO concludes the public plan would have a “limited effect on the the proposal’s net budgetary impact,” implying enrollment would be modest. The CBOreport is a thorough analysis well worth an investment of time.
  3. When it comes to polling, trends often matter as much as the actual numbers. The Kaiser Family Foundation has been tracking the public’s attitude toward health care reform since March 2007.  Their July 29th Public Opinion on Health Care Issues finds a majority of Americans continue to believe “it is more important than ever to take on health care reform now.” While the percentage has declined since October 2008 from 62 percent to 56 percent, that’s still a striking result given the rhetoric surrounding the debate. Of course, it all depends on who you talk to: roughly 70 percent of Democrats believe this is the time for health care reform while approximately 60 percent of Republicans state “we cannot afford to take on healthcare reform right now.” Independents split 54 percent-to-42 percent in favor of moving forward with change now.
  4. Just because you see it on television doesn’t mean it’s true. Partisans on the left, right and middle have a tendency to misstate the facts. FactCheck.org, a project of the Annenberg Public Policy Center is an excellent source for the real scoop. They take on liberals and conservatives with equal fervor, for instance, debunking the euthanasia claims of the right and challenging President Barack Obama’s claim that health insurance companies are raking in “record profits.” 
  5. During the presidential campaign, one of Obama campaign’s most potent weapons was a site called “Fight the Smears.” It allowed the campaign to quickly respond to and debunk unfounded rumors. The White House is launching a similar site, called “Reality Check” to counter attacks on the president’s health care goals. The justifications are not surprisingly skewed to the Administration’s positions, but as a single source for President Obama’s positions on controversial issues it’s a great resource.
  6. Keeping the health plans straight without a program is nearly impossible. Even with a program it’s darn tough. The National Association of Health Underwriters offers a useful comparison between the Senate Health, Education, Labor and Pensions Committee legislation and the House of Representative’s legislation (HR 3200). In fact, NAHU has a wide range of useful legislative information of particular interest to health insurance brokers. (If you’re a broker and not a member of NAHU, now is the time to join. No other organization is as engaged or effective at representing the perspective of professional insurance brokers.) The Kaiser Family Foundation ahs a great tool for comparing various health care reform proposals as well.
  7. Health care reform is critical importance to state governments. They simply cannot afford the burden of increasing medical costs for programs like Medicaid (Medi-Cal in California). California Arnold Schwarzenegger made this point very clear in a letter to Congressional leaders urging them to pass health care reform, but warning against pushing the financial burden onto state governments. It’s an aspect of health care reform that is not receiving a great deal of attention, but is of critical importance. The letter does an excellent job of explaining the issue. 

Of course the most important document to read is the Senate Finance Committee’s compromise proposal. Unfortunately, it doesn’t exist yet, although there are plenty of stories on what it is likely to contain. Until it sees the light of day, however, reports on its provisions are merely conjecture, trial balloons or both. In the meantime, these sites and publications should provide some pleasant summer reading.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , , , , , , , | 11 Comments »

Progressives Will Face Tough Health Care Reform Choice

Posted by Alan on July 29, 2009

Just looking at the broad facts, liberals should be riding high. President Barack Obama occupies the White House. Democrats hold a 60-40 super-majority in the U.S. Senate and a commanding 256-178 majority in the House (with one more on the way after a special election in California later this year). Republicans are on an electoral losing streak of epic proportions and have yet to find a unified voice. It doesn’t get much better than this.

Except appearances can be deceiving and liberals will soon need to decide whether they are willing to vote for a bill that, in their view, improves America’s health care system but does not go nearly far enough or should they leave the system the way it is.

Note: This post was updated on July 30th to provide more details concerning the House Energy & Commerce Committee compromise and liberals reaction to it. Additions are presented in italics.

The evolution of health care reform legislation as it moves through Congress must frustrate progressives. It started off to their liking. Senator Edward Kennedy’s Health, Education, Labor and Pensions Committee pushed forward a bill that satisfied much of the liberal wish list. Good times continued when the House Ways & Means and the Education & Labor Committees passed equally progressive bills. That the affirmative votes on all three committee came exclusively from Democrats was not of great concern to supporters. Health care reform was coming whether Republicans wanted to join the parade or not.

Liberals were on a role, but then their moderate and conservative colleagues began to make their presence felt. And there are more of them than is generally acknowledged. While conservative talk show hosts like to brand the Democrats as a monolithic subsidiary of Mao-spouting communists, the reality is far different (actually, reality is usually different than that described by conservative talk show hosts, but that’s a topic for another day).  A party does not capture 60 percent of the Senate and 59 percent of the House by running cookie cutter candidates all pledged to the same ideology. The country is too diverse. The brilliance of Rahm Emanuel, then head of the Democratic Congressional Campaign Committee and now White House Chief of Staff, was that he discarded virtually the entire Democratic litmus test in his search for candidates. The only significant requirement he demanded of the candidates he recruited was that, once elected, they would vote for a Democrat for Speaker of the House. Meanwhile, the GOP who hewed closely to the beliefs and principles of their base. Moderates were scorned and labeled RINOs (Republicans in Name Only). They succeeded in recruiting ideologues who had no chance of winning outside the reddest of red districts.

Consequently, the Democratic caucus is chock full of moderates and even conservatives.  Which all but guarantees that liberals will be disappointed. There are simply not enough liberals in Congress to pass a bill without support from moderates.

So it should not have been a surprise when problems developed as the progressive juggernaut moved beyond some of the most liberal committees in Congress. The Blue Dog Coalition, a group of moderate Democrats in the House, objected to a host of provisions in the Ways & Means and Education & Labor bills. While they lacked the votes to hold up the legislation in those committees, they did such leverage in the the House Energy & Commerce Committee. The Blue Dog Democrats had an agenda for health care reform that differed in many respects from that of their more liberal colleagues.

Meanwhile, in the Senate, Democrats and Republicans on the Senate Finance Committee were working tirelessly to hash out a health care reform package that could garner bi-partisan support. To get there, Senator Max Baucus, Chair of the committee, was willing to jettison some of the more treasured elements of the liberal health care reform agenda.

Both the Blue Dog Democrats and the moderates on the Senate Finance Committee are making substantial progress. House Energy & Commerce Committee Chair Henry Waxman and Representative Mike Ross, speaking on behalf of the Blue Dogs, announced an agreement that will allow the full committee to begin marking up health care reform legislation. The specific changes to the bill from the versions passed by the Ways & Means and Education & Labor Committees are not yet public. But there are four major elements according to wire stories:

  • Keeping the 10-hear cost below $1 trillion by agreeing to $100 billion in cuts
  • Preventing a public plan from simply imposing Medicaid rates by allowing physiicans and other medical providers to negoiate rates with the government plan
  • Exempting businesses with payrolls below $500,000 (86 percent of all small businesses)  from any government mandates requiring them to provide health insurance to their employees
  • Postponing a full House vote on health care reform until after September 8th

At the same time, Senator Baucus and the ranking minority member of the committee, Senator Chuck Grassley, are making it known they are close to unveiling the Senate Finance Committee’s compromise. Their proposal is unlikely to include a government-run health plan. It may not include all the mandates and subsidies liberals seek. In short, they will reform the health care system, but leave much of what exists in place. Which puts progressives in an uncomfortable position.

Moderates and conservatives seem willing to defeat any health care reform legislation rather than vote for the kind of reforms liberals seek. Will liberals refuse to support legislation that does not go as far as they demand? As of now they are threatening to do just that. The Progressive Caucus is circulating a letter seeking 50 signatures (enough to defeat any bill) pledging to kill any legislation failing to contain a strong public plan.

That’s not yet known. That the compromise proposals will be attacked from both the left and the right is to be expected. And liberals are already expressing outrage at having their wishes denied. For example, the Associated Press quotes Representative Lynn Woolsey  as saying “They can’t possibly be taking us seriously if they’re going to bring this [compromise legislation] forward.”

But will liberals insist on getting their way even if it means letting the status quo stand?

Ideology and pragmatism are often hard to reconcile, but my prediction is that liberals will vote for moderate health care reform. The reason: Senator Kennedy and President Obama will eventually accept a compromise. Throughout his career Senator Kennedy has demonstrated the political wisdom of taking half a loaf now and continuing the fight for the rest another day. And, according to the Associated Press story cited above, the White House is already making clear the Administration is willing to settle for a more moderate bill.

With Senator Kennedy and President Obama’s urging, enough liberals will accept that even modest reform is preferable to the status quo. They won’t be happy with what it contains, or more accurately, what it doesn’t contain, but they will be among those applauding when President Obama signs the bill into law this Fall.

Added 9:05 pm July 29, 2009: As noted above, liberals are upset over any compromise that does not include a public health insurance plan. In a post on Politico.com, Glenn Thrush reports that “Two months ago, most of the 80-plus members of the Congressional Progressive Caucus signed a pledge that they would oppose any health care bill that didn’t contain a bona fide public option that would compete with private insurers. On Wednesday, they seemed willing to stick to their promise.”  He goes on to quote Representative Barney Frank as saying liberals might reject the House leadership’s  request to support a weakened public option. “I don’t think it would pass the House — I wouldn’t vote for it,'” the post quotes Rep. Frank as saying.  No one would cheer louder than Republicans to see health care reform fail because moderate and liberal Democrats fail to come together. Which is, to repeat my prediction from above, why I think liberals will eventually take a deep breath, vote for a moderate bill, and come back in 2010 fighting for more.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , , , , , , , , , , | 4 Comments »

Health Care Reform: A Historic Milestone

Posted by Alan on July 15, 2009

History was made today. The Senate Health, Education, Labor and Pensions Committee approved comprehensive health care reform legislation, the first Congressional committee to do so in decades. Never mind that the bill is well to the left of the emerging consensus concerning health care reform. Never mind that it passed on a party line 13-10 vote. What is meaningful is that a congressional committee moved comprehensive health care reform forward. Significantly, three House committees are likely to follow suit within the next three-to-four weeks.

The legislation approved by the Senate HELP Committee, which carriers a $600 billion price tag, would require individuals to obtain coverage, employers to help their workers pay for it, and carriers to accept all applicants regardless of their health conditions. Individuals and families earning up to 400 percent of the Federal Poverty Level ($88,000 for a family of four) would be eligible for subsidies. The Associated Press provides additional information and reaction to the Committees vote, but in my mind, the details are secondary. The vote itself is what is significant. Remember, the Clinton Administration health care reform proposal was never voted upon by any Congressional Committee.

The Senate HELP Committee’s action testifies to the tenaciousness of the Committee’s chair, Senator Edward Kennedy, the political skill of Senator Christopher Dodd (who is leading the Committee while Senator Kennedy battles cancer), the political standing of President Barack Obama, and the widely recognized need for meaningful health care reform. Given that Senator Kennedy has been advocating for universal coverage since the 1960s it is fitting that his Committee was the first to act

No doubt there will be some elements of the Senate HELP Committee’s proposal in whatever legislation, if any, eventually emerges from Congress. However, as noted previously here, the Committee’s version of reform is to a large degree a negotiating position for liberals in the Senate. The proposal being written in the House of Representatives will be even more liberal. It is the Senate Finance Committee, where its Chair, Senator Max Baucus and ranking Republican member, Senator Charles Grassley, are seeking to draft legislation that will earn at least some Republican votes, that the outlines of the ultimate health care reform package is taking place.

There are still numerous contentious issues to work through, any of which could derail health care reform altogether. However, there is a surprising amount of common ground coming into view. The  Robert Wood Johnson Foundation recently released a study, Emerging Common Ground? An Analysis of Health Reform Positions, that describes (perhaps overly optimistically) several of these areas of general agreement. Among them:

  1. the nature of private insurance market reforms;
  2. the need for, and the structure of, a health insurance exchange;
  3. whether and how a government-sponsored “public plan” should be created;
  4. how best to leverage Medicaid and/or public programs to expand access;
  5. whether an individual mandate is needed;
  6. the scope and authority of government involvement in comparative effectiveness research;
  7. sequencing and scope of payment reform; and
  8. whether to limit the tax exclusion on employer-based coverage as a reform financing mechanism.

I’m not sure I agree that all of these are settled issues, but the study is worth reading nonetheless.

As I’ve written before, I believe health care reform is coming, but that’s no reason to panic. The status quo, while comforting in its familiarity, is unsustainable. History is the story of change. Health care reform history was made today. But in context it’s only a milestone — a significant milestone, but solely a milestone. Consider it one big step in a long journey toward something truly historic.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Politics | Tagged: , , , , , , | 5 Comments »

Health Care Reform: Getting Ready for Crunch Time

Posted by Alan on July 7, 2009

For health care reform, the next few weeks will be critical. Congressional committees are poised to pass legislation (to put this in perspective, this never happened during the Clinton Administration’s reform efforts in 1993-94). President Obama and his aides will become even more engaged concerning the legislative language they would like to see Congress enact. Senate moderates will begin taking sides on critical issues. In short, this is when it all starts coming together. In the next few weeks, it will become clear if Washington will enact health care reform and, if so, what it will look like.

Events will move quickly, so I’m clearing out some short items that have been lingering in my “to blog” folder for awhile. They are a random assortment of items unlikely to become stand-alone posts. Taken as a whole, however, I hope they provide some useful background to the history about to unfold.

  1. Health care reform ideas are flying around the Capital in ever increasing numbers. Keeping track of them all can be a challenge. Good thing there’s the Kaiser Family Foundation’s health care reform proposal comparison tool. It makes comparing the entire plan or just particular issues across the various proposals simple.
  2. One of the plans we have yet to see details on will be presented in the next few days in the Senate Finance Committee. They are working hard to construct a legitimately bi-partisan proposal, which means it has the greatest likelihood of foreshadowing the legislation likely to emerge from Congress. To get an early taste of the coming debate in that committee, check out the dialogue between Senator Charles Grassley and Senator Charles Schumer on CBS’ “Face the Nation.”
  3. I’m a fan of the FiveThirtyEight.com blog. The site applies rigorous math to political topics. Very rigorous math: it’s prediction of election outcomes during the presidential primaries and the general election were eerily accurate. The site has a left-leaning bias on some topics, but overall, its posts are more nerdish than ideological. Recently it did an interesting analysis on how campaign contributions may derail a public option plan. Of course, whether Senators vote a certain way because of the contributions they receive or they receive contributions because of the way they vote is an open issue (which, to his credit, the author acknowledges). But the issue of causality does not change his conclusion: unless the several stars fall into place, a public option is unlikely to be part of the final health care reform package.
  4. Need more evidence a government-run health plan is losing momentum? As noted last week, Democrats on the Senate Health, Education, Labor and Pensions Committee feel the need to dress their public plan proposal in moderate clothing. Then there’s White House Chief of Staff Rahm Emanuel making clear today the Administration is willing to accept legislation without a public plan. According to the Wall Street Journal Mr. Emanuel says “’The goal is to have a means and a mechanism to keep the private insurers honest. The goal is non-negotiable; the path is’ negotiable.”  Mr. Emanuel goes on to say creating a public plan only if the private market proves incapable of offering competition would be one acceptable solution.
  5. Is a government-run plan even needed for health care reform to be meaningful? Uwe Reinhardt, an economics professor at Princeton, uses the German health care system as evidence it is not. This is not to say that the German system is an appropriate model for the United States, but it does undermine the argument that health care reform will only work if the government is both referee and player.
  6. All the health care reform attention is focused on what’s happening in Washington. Some folks think this is a mistake. Instead, the federal government should simply enable states to pass their own reform plans. This would allow solutions to reflect local values and enable the best ideas to emerge over time. I disagree. States lack the levers of power necessary to reform something as complex and critical as health care reform. In a post from 2007 I cited an article by Ezra Klein describing the many failed state health care reform efforts. That doesn’t mean, however, that every health care decision needs to be made at the national level. Meaningful structural change — and the financing required to implement it – requires the federal government. Implementing those changes can be managed and administered at the regional, state or even local level.
  7. The status quo is on life support. Health care costs are rising faster than either general inflation or wages. (To see for yourself, check out Tom’s Inflation Calculator). We have the opportunity today to enact responsible, meaningful reform. Without such intervention, the current system will eventually deteriorate until unwise and extreme proposals make sense. Fortunately, what’s likely to emerge from the current debate will be determined by moderates. This doesn’t mean the reforms won’t be flawed, but it does mean that there’s a chance for responsible reform sooner rather than later.
  8. The advocates of a single payer system know that the status quo is unsustainable. It is why some of them will oppose whatever moderate reforms emerge from the current health care reform debate. They are like a doctor who sees surgery as the solution to every ailment. If the patient takes medication, and it works, they don’t get to cut. Similarly, if reasonable changes increase access to affordable, quality health care coverage and reduces overall spending, the need for a single payer solution vanishes.
  9. Meanwhile, back at FiveThirtyEight, Nate Silver crunches some poll result numbers and points out that moderates are disappointed with President Obama’s handling of health care reform. Whether these results show President Obama needs to get more specific in describing his health care reforms (as Mr. Silver concludes) or whether he needs to focus more on pushing the right health care reform, is something to ponder.

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

Health Care Reform Common Ground Meets Reality

Posted by Alan on July 2, 2009

So much for common ground on health care reform in the United States Senate. It wasn’t that long ago, May 30th to be exact, that Senate Finance Committee Chair Max Baucus and Senate Health Education Labor and Pensions Committee Chair Edward Kennedy issued a joint statement that read, “”For both of us, reforming the nation’s health care system to cut cost, improve quality and provide affordable coverage remains the top priority on our two committees.  We have worked together closely over many months and will continue to do so.  We intend to ensure that our committees report similar and complementary legislation that can be quickly merged into one bill for consideration on the Senate floor before the August recess.”

That was then. This is now: The Associated Press is reporting that the Senate HELP Committee is moving forward with legislation to create a government-run insurance plan to compete with private carriers. This provision, along with one imposing a $750 per worker annual fee on large employers who fail to offer health care coverage to workers, guarantees the legislation will pass through the committee with only Democratic votes. As I described in yesterday’s post, the committee has tried to position their public plan as more innocuous than was originally contemplated. It is not.

Meanwhile the Senate Finance Committee continues to seek a bipartisan health care reform package. The Associated Press story notes that, “As a result, a government-run option for coverage is unlikely to be included. Negotiations are centered on a proposal for a nonprofit cooperative to sell insurance as a competitor to private companies.” Co-ops can be considered public plans, but unlike the version proposed by the Senate HELP Committee, it is far more likely health insurance cooperatives will result in a more fair marketplace. The devil dwells in the details and we have not seen those yet. But if Senator Baucus is sincerely seeking GOP votes, and it appears he is, his committee will avoid a result that would eventually lead to a single, government-run carrier.

(Democrats on the House side of the Capital also pledged to work together — and they are doing so. The three committees with jurisdiction in that chamber are all working from the Tri-Committee Health Reform Draft Proposal. They expect to have their work done by the end of July. Like the Senate HELP Committee, their plan will include a robust government-run health plan.)

What’s significant about the divergence in approaches by the Senate HELP and Senate Finance Committee is that it makes responsible compromise more likely. Senator Kennedy and House Democrats are providing a haven for liberals in the debate. If liberals had 60 votes in the Senate, or even 50 for that matter, their legislative versions would foreshadow the final package. But as I noted yesterday, the fact that the Senate HELP Committee needed to dress their public plan in fig leaves of compromise is evidence they do not have the votes. Moderates will dictate what health care reform legislation passes Congress.

The Senate Finance Committee recognizes this reality. Heck, they are this reality. Which is why what this committee proposes concerning a host of controversial issues — requirements for individuals and/or companies to buy health care coverage, the structure, purpose and powers of an Exchange to present coverage options to individuals and small businesses, cost containment provisions such as turning to comparative effectiveness research for treatment guidelines — is so important.

It is not the common ground between the Senate Finance and Senate HELP committees that matters. It is the compromises reached within Senate Finance that will foreshadow the health care reform bill that winds up on President Barack Obama’s desk for his signature.

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Senate Committee’s Revisions More Fig Leaf Than Compromise

Posted by Alan on July 1, 2009

The Senate Health, Education, Labor and Pensions Committee worked hard to produce a final draft of its health care reform legislation before Congress adjourned for the July 4th holiday. It made substantial progress, but failed to complete work some key elements, including those related to a government-run health plan and a requirement that employers obtain coverage for their workers. However, the broad outlines of their approach to a public plan are taking shape.

As I posted last month, the Senate HELP Committee and its chair, Senator Edward Kennedy, seemed intent on anchoring the left on several provisions, including a public health insurance plan. When first proposed, the government-run plan would be permitted to limit doctor and hospital payments to just 10 percent above those paid by Medicare. This would still have resulted in payments less than the providers’ actual costs in many instances, resulting in a cost shift to the private plans. This would create a tremendous premium gap between the private carriers and the public plan with the inevitable result that, eventually, the government plan would be the only carrier remaining.

Republicans and some moderate Democrats have made it clear that this chain of events is unacceptable. The response of the Senate HELP Committee is intriguing. Instead of simply ramming through their initial provision, they seem to be trying to dress it up as more moderate. According to Bloomberg.com  the committee will now call on the  public plan to abide by “the same rules for defining benefits, protecting consumers and setting premiums ‘that are fair and based on local costs.'” Although the government would pay the first three months of [the public plan’s] claims, these “would be considered a loan to be repaid over time,” according to Bloomberg. The government-run plan would be empowered to pay providers up to the “local average private rates.”

While this might sound like a retreat from their original position, it’s less movement than it is meant to convey. The public plan may pay up to the average rates paid by private carriers in a community, but it can also pay less. The Secretary of Health and Human Services would negotiate the reimbursement schedule. The Secretary is a political appointment of the President. Regardless of which party controls the White House, does anyone think the Secretary would — or should — seek to settle for the maximize payment amounts? If so, that anyone has not paid attention to what Democratic and Republican Administrations have done to Medicaid and Medicare providers.

Another fig leaf: although the public plan would be expected to pay its own way (after initial seed money) it would also be eligible for “‘risk corridor protections’ to offset or reclaim excessive losses,” reports Bloomberg. In other words, if the artificially low premiums it charges are not enough to pay its bills, a bailout from the federal government is already in place. Maybe I’m missing something, but recipients of bailouts are, by definition, not paying their own way.

What’s matters about all this is not that the Senate HELP Committee’s compromises are insubstantial, but that Democrats on the committee felt the need to compromise at all. It is a clear sign that support for a government-run health plan is waning in the Senate. Continued talk in support of health insurance co-ops as a possible compromise underscores this reality. So does the intensity of public health plan advocates campaigns against moderate Democrats. These campaigns are facing tough going in some states. For example, the Wall Street Journal’s Washington Wire blog reports that Senator Mary Landrieu continues to express reservations about a public option in spite television and radio advertising attacks on her by liberal groups like Move-on.org and Democracy for America. Senator Landrieu, through a spokes person, continues to be “committed to reforming the health care system and ensuring that all Americans are covered … but does not believe that healthcare reform starts with a public option. Senator Landrieu supports a predominantly private system that features a federal backup plan that serves as a safety net.”  Co-ops could serve this safety net function.

There’s a long way to go before the final act and advocates of public health plans will win a few skirmishes between now and then. The need for fig leaves, however, underscores that, for now at least, they are in danger of losing the war.

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Obama Administration Showing Flexibility on Public Health Insurance Plan

Posted by Alan on June 24, 2009

President Barack Obama wants health care reform. He sincerely believes we need to fix what’s broken in the current system because it is the right thing to do and as a necessary step to get America’s economy moving forward again. He has put forward what elements he wants to see as part of comprehensive reform package, but instead of plopping a finished product in the lap of Congress (as the Clinton Administration did during their botched health care reform effort), he is asking Congress to take the lead in developing legislation (imagine that, letting legislators legislate). He and his allies have made clear they are willing to discuss almost any idea. The mantra they repeat often is that “everything is on the table.”

Almost. President Obama has also repeatedly made clear that acceptable health  care reform must adhere to three core principles. As they are described on his Organizing for Health Care web site, reform must:

  • Reduce Costs — Rising health care costs are crushing the budgets of governments, businesses, individuals and families and they must be brought under control
  • Guarantee Choice — Americans must have the freedom to keep whatever doctor and health care plan they have, or to select a new doctor or health care plan if they choose
  • Ensure Affordable Care for All — All Americans must have quality and affordable health care

Don’t misunderstand. He has clear ideas on how these principles should be achieved, but he is not insisting Congress do things his way, only that they do them.  This approach was clear in President Obama’s Tuesday press conference when he was asked about the health care reform. His response to the first question on health care reform laid out his approach to the issue.

He began by emphasizing the need for reform. “So the notion that somehow we can just keep on doing what we’re doing, and that’s OK, that’s just not true. We have a long-standing critical problem in our health care system that is pulling down our economy. It’s burdening families. It’s burdening businesses. And it is the primary driver of our federal deficits.”

President Obama then focused on the need to control costs. “It means that we look at the kinds of incentives that exist, what our delivery system is like, why it is that some communities are spending 30 percent less than other communities, but getting better health care outcomes, and figuring out how can we make sure that everybody is benefiting from lower costs and better quality by improving practices. It means health  I.T. It means prevention. So all of these things are the starting point, I think, for reform. And I’ve said very clearly, if any bill arrives from Congress that is not controlling costs, that’s not a bill I can support. It’s going to have to control costs. It’s going to have to be paid for.”

President Obama next turned to the need to expand coverage to more Americans. “[W]hile we are in the process of dealing with the cost issue, I think it’s also wise policy and the right thing to do to start providing coverage for people who don’t have health insurance or are underinsured ….”

He then went on to describe the rationale for including a public health plan as one of the health plans available to American consumers. “As one of those options, for us to be able to say, here’s a public option that’s not profit-driven, that can keep down administrative costs, and that provides you good, quality care for a reasonable price as one of the options for you to choose, I think that makes sense.”

The President explicitly rejected the complaints of health insurance carriers who claim a public plan will drive them out of business. “But just conceptually, the notion that all these insurance companies who say they’re giving consumers the best possible deal, if they can’t compete against a public plan as one option, with consumers making the decision what’s the best deal, that defies logic, which is why I think you’ve seen in the polling data overwhelming support for a public plan.”

President Obama’s answer makes sense if the public health plan were just another non-profit competitor. In many parts of America for-profit health insurers compete vigorously with non-profit carriers. Sometimes they win. Sometimes they lose. But the competition between them is fair.

What the president’s answer ignores is the possibility — indeed, the likelihood — that competition between private for-profit and non-profit insurance carriers on one side and a government-run health plan on the other will not be a fair contest. The government, which would both regulates the market and,  under several proposals being promoted in Congress, run the public plan, might tilt the playing field in its own favor (take, for example, the Affordable Health Choices Act introduced by Senator Edward Kennedy and other Democrats on the Senate Health, Education, Labor and Pensions Committee.)

What is nice to see is that President Obama seems to appreciate the balance that must be struck if a public plan is not to undermine the private market. “So there are going to be some ground rules that are going to apply to all insurance companies,” he said. “I take those advocates of the free market to heart when they say that, you know, the free market is innovative and is going to compete on service and is going to compete on, you know, their ability to deliver good care to families. And if that’s the case, then this just becomes one more option.”

Interestingly, the President was not the only Administration member speaking about health care reform on Tuesday. Peter Orszag, the Director of the White House Office of Management and Budget appeared on the Diane Rehm show on National Public Radio. In responding to a question about health insurance profits, he observed that “One of the questions that will be in play during the reform process is whether additional competition, for example, through a public plan option, or a co-op or a non-profit, would be beneficial.”  (For those listening to the podcast, this comments begins at about the 29 minute, 18 second mark). He then goes on to say that co-ops could address a lack of competition in “a growing number of local markets.” (emphasis added).

This is an very significant statement. The health insurance co-ops being discussed in Washington are not government-run. The government provides seed money, either in the form of grants or loans, but once it’s up and running, the co-op is owned and operated by its members. They would be community based and would have to abide by the health insurance laws of their state.  Here is a senior official of the Obama Administration, one of its leading voices on health care reform, describing health insurance co-ops as comparable to a government-run public plan when it comes to providing competition.

Taken together, the President and his OMB Director are saying:

  • Competition in the health insurance marketplace should be preserved as it is beneficial.
  • The purpose of a public health plan is to increase competition in the health insurance marketplace.
  • Health insurance co-ops increase competition as much as a government-run plan.

For those who care about fair competition, please note that it is far more likely co-ops will compete on a level playing field than a government-run plan would — especially if co-ops are concentrated in local markets that need a new competitor.

None of this is to say that a government-run health plan will not be part of the final health care reform package. It does, however, underscore the point I tried to make in my previous post: the final outcome of the health care reform debate is far from settled. The Obama Administration is showing flexibility — and will need to in order to get comprehensive legislation passed. Now is not the time to panic. Now is the time to get involved.

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

Health Care Reform Is Coming. Don’t Panic.

Posted by Alan on June 22, 2009

The legislative process is like Kabuki Theater. Very stylized. Clear-cut characters. Starts off slow, proceeds through several acts, ends fast and furious. The Congressional tussle over health care reform is no exception. We have the champions of the left and right pounding across the stage, striking poses, shouting out their predictable lines, scaring the bejeebies (whatever they are) out of the audience (otherwise known as constituents) and generally creating high drama. This is important work as it gives the 24 hour news stations something to talk about and this, in turn, keeps the commercials from running together in an endless loop of paid messages for help fighting the IRS, encouragement to ask your doctor about the benefits of an unhealthy number of medications, easy ways to get low cost loans and willing buyers of your excess gold jewelry.

At the same time we have numerous audience members who are quickly losing whatever bejeebies they might possess. If you are among the 470,000 Americans employed by the health insurance industry, for instance or among the tens of thousands of health insurance brokers in this country, you might feel like people are out to get you. Good catch because people are out to get you. Don’t feel too bad, though, you’re not alone. They’re also out to get doctors, hospitals, pharmaceutical companies and a host of others. 

Every health care reform idea on the table is scary to someone. Government-run plans, exchanges, mandates to sell coverage, mandates to buy coverage, taxes, cost containment. The list of proposals go on endlessly. Everybody with a stake in health care (which is everybody) has something to lose from some these reforms and someone is out there working hard to make sure these stakeholders lose it. In the health care reform everyone is an archer and everyone is a target.

So as someone with a stake in the system, but who has also spent more time than sane people should involved in politics and the legislative process, I would like to offer some simple advice to my fellow targets:

         Don’t Panic.

Don’t get comfortable, but don’t panic.

The good news is the health care reform most likely to emerge from Congress will be far more moderate than the proposals whipping around the Capital hallways today imply. This is theater — and it’s politics. Everyone in Washington is busy staking out negotiating positions, trying to score points, and auditioning for an appearance on CNN, Fox or MSNBC. Which means what they say matters, but not as much as they’d like to think it does.

In negotiations you expect to compromise so you start off asking for more than you expect to get. Every eight year old discussing bed time knows this. So do politicians. What we’re seeing at this point is primarily Democrats and Republicans anchoring their positions. In Kabuki Theater, actors will strike stances that identify their role in the story. In Congressional theater, this role is played by lawmakers. 

Which leads us to the effort of scoring points. Nothing revs up the base like lambasting opponents. The number of people who make a living by keeping a significant portion of the American population seething is significant and appalling. These people (and I use the term loosely) paint the world in terms of good and evil, black and white, us and them. Anyone who disagrees with “us” is a traitor, a fool, a liar or all of the above. They care less about moving the country forward than in adding to their power or their bank account. (Have you ever noticed how often their diatribes are followed by an appeal for cash or an advertisement?) These blowhards replace bombast for thought. They have honed the cheap shot and the stiletto implication into art forms. Fortunately there’s a cozy spot in Hell reserved for them where they’ll have to listen to themselves blather for eternity. Until then, we’re the ones stuck in their noisy hurricanes of malicious hot air. 

The subset of these sub-humans who hold public office will be especially prominent during this portion of the legislative process. Ignore them. Like the extreme positions taken by negotiators, the extreme rhetoric spouting from these Katrinas of politics are designed to rile you up, get your money and generate news clippings, not educate or move the debate forward.

The real action on health care reform is taking place in the nooks and crannies of Washington where moderates dwell. For example, keep your eye on the Senate Finance Committee. They seem to be trying to find solutions the nation can afford and that might actually work. Track the movements of moderates in the Senate, too. Senators Olympia Snow and Susan Collins are the two trendsetters on the amazing-shrinking-group of GOP moderates. On the Democratic side of the Senate moderates gather weekly in a self-described  Working Group. (Insert your own snide comment here).

The fact is, in Washington moderates win. The system is designed this way. It may not seem like it, but that’s the way it usually goes. This is the point articulately made by Jay Cost in his HorseRaceBlog over at RealClearPolitics.com. In two postings (Part 1 and Part 2) he lays out the pivot points in the legislative process and applies them specifically to the current health care reform debate. (My thanks to John Nelson for sending these my way). What he shows is that the true partisans are merely the fodder necessary to get to the number of votes needed to turn legislation into law. These pivot points vary depending on the political context.

Need to overcome a filibuster? The most powerful Senator is not the true believers who immediately vote yes or no, but the Senator who represents the 60th vote for cloture. Only that Senator can move the bill forward. The rest simply set the stage. When it comes to health care reform, watch the moderates. They are the key actors in this play because it is from among their group, along with critical  negotiators like Senators Max Baucus and Charles Grassley, from which the decisive votes will come. 

With 17 votes (maybe 18 now that Senator Arlen Specter is a Democrat) the moderate Democrats in the Senate will determine the final shape of healthcare reform. They are the ones the partisans on both sides are already seeking to persuade or, failing that, threaten (good news for television and radio stations in their states looking to sell advertising time). If these partisans are serious about passing something, however, that something will need to earn the votes of these moderates. Keep in mind, Democrats have a large majority in both chambers of Congress, but they got it by appealing broadly to the electorate. Democrats rarely are genetically incapable of group thought even when there’s just a few of them. Put 60 into one room (say, the floor of the Senate) and the chances of agreement on anything controversial is reduced to a theoretical nil.

What all this means is that the partisan posturing of the current debate is simply sound and fury signifying the hopes and aspirations of sincere partisans and cynical pot stirrers (which is which is sometimes hard to tell, but there is a difference — only the latter are despicable). Eventually the play will reach its final act. At this point the moderates take center stage and with their arrival the odds of disappointed extremists on both sides  increases(disappointing extremists is, after all, what moderates d0).

This doesn’t mean they will come up with the perfect health care reform plan. If you care about the issue you need to make your voice heard. Moderates are capable of making bad policy — and whether the truck that runs you over is driven by a true partisan or a moderate doesn’t really matter, it still hurts. Moderates are more likely, however to produce reforms that are closer to something reasonable than might seem possible appear today.

In the meantime, let the loud and boisterous actors strike their poses. It’s all part of the play.

Posted in Barack Obama, Health Care Reform, Healthcare Reform, Insurance Agents, Politics | Tagged: , , , , , , | 22 Comments »

CBO Analysis Highlights Difficulty of Affordable Universal Coverage

Posted by Alan on June 15, 2009

Among the duties of the Congressional Budget Office is determining the financial impact of legislation proposed by lawmakers. Their highly credible analyses is given great credence within Congress. Which means today’s preliminary report on the health care reform package crafted by Senator Edward Kennedy and other members of the Senate Health, Education, Labor and Pensions Committee is especially important.

The CBO Preliminary Analysis of the Affordable Health Choices Act, released on Monday, underscores the challenge Congress faces in attempting to insure the uninsured without breaking the federal budget. Before discussing the finding, it is important to note: this is a preliminary analysis of draft legislation. The CBO analysis focused on “major provisions on health insurance coverage,” leaving several important elements out of their review. There are elements of the draft bill that have not yet been modeled, for example, allowing children through age 26 to be considered dependents on their parents’ policies. There are a host of other caveats involved. So it is best to treat the findings of this report as broad and directional.

Considering the sincere commitment Senator Kennedy and his allies have for universal coverage, the direction of the Congressional Budget Office’s conclusions must be disappointing.

Without intervention, the CBO estimates that by 2019 approximately 228 Americans under the age of 65 will have health care coverage, but from 50-to-54 million people — about 19 percent of this population — will not. If the HELP Committee’s health care reform package were enacted, the CBO estimates the percentage of uninsured would fall to 13 percent of the non-elderly population would still be without coverage — approximately 36 or 37 million.

The net increase to the federal budget for covering these 13-to-18 million Americans would be $1.o trillion between 2010 and 2019, most resulting from the subsidies the legislation would offer to individuals earning up to 500 percent of the federal poverty level purchasing coverage through a government-run Exchange.

In the CBO Director’s blog posting on the analysis, Director Douglas Elmendorf points out that while the study estimates that 39 million Americans would obtain coverage through the Exchange, “the number of people who had coverage through an employer would decline by about 15 million (or roughly 10 percent).” He pegs the net decrease in the nation’s uninsured at about 16-to-17 million people.

No one claims comprehensive health care reform will be easy. The Affordable Health Choices Act is only one reform package on the table. And, as Politico.com reports, the White House made clear it is not the Obama Administration’s plan.  The CBO preliminary analysis on the draft legislation developed by the Senate HELP Committee makes clear just how difficult — and expensive — it will be.  Will the CBO report convince lawmakers to scale back their ambitions for government’s involvement in America’s health care. Perhaps, but I wouldn’t count on it. Health care reform is as much about ideology as pragmatism. 

The CBO study should embolden Congressional moderates, however, to stand firm for comprehensive reform that neither breaks the budget of the federal government nor American families.

Posted in Barack Obama, Health Care Reform, Healthcare Reform | Tagged: , , , | 4 Comments »