Ross' Crippled And Useless Co-ops

One of the changes that the Blue Dogs demanded be part of the House's health care bill was health insurance cooperatives. Today, Blue Dog Mike Ross' amendment which includes language for the state-based cooperatives passed in committee.

The language about establishing and regulating the the co-ops is good. The entire idea suffers from a single massive problem which will cripple the cooperatives. The amendment states:

the Commissioner may make grants and loans for the establishment and initial operation of not-for-profit, member run health insurance cooperatives (in this subtitle individually referred to as a "cooperative") that provide insurance through the Health Insurance Exchange or a State based Health Insurance Exchange under section 208.

The biggest problem with Ross' co-op idea is that it cripples the state based co-ops in the cradle. By only allowing the cooperatives to sell insurance on the “Health Insurance Exchange” or state exchanges, it will be nearly impossible for cooperatives to ever gain significant market share or negotiating power.

By 2019 the CBO projects that only around 36 million Americans will use the Exchange. That will be only around 10% of the population. Kent Conrad has repeatedly said a health insurance cooperative will need at least half a million members to be able to negotiate competitive rates.

Even if every single person using the Exchange signed up for a same (and only) insurance cooperative in their state, roughly half the states would simply not have enough potential members to be workable. Assuming as many as a third of all Americans getting insurance through the Exchange signed up for the same (and only) insurance cooperative in their state, only the 4 largest states (CA, TX, NY, and FL) would have barely have sufficient membership. If only 15% of people using the Exchange wanted to use an insurance cooperative, no cooperative would likely ever be able to achieve a workable market concentration.

Restricting the public plan to the Exchange was done purely for political reasons. It was done to prevent people from being “force on to government-run health insurance.” Restricting private cooperatives to only the Exchange is just stupid. There is just no way the cooperatives as designed by the Ross amendment will ever be able to provide true competition. The Exchange will need to be expanded dramatically before the idea could even legitimately be entertained. If the Blue Dogs truly want to give health insurance cooperatives a chance of succeeding, they must make them available to everyone.

Delay Delay Delay

Senator Baucus has just abandoned hope of marking up a health care bill in his committee before the August recess. This is by my count the 8th deadline Baucus has missed and will put his committee three months behind schedule. The move will farther promote the Republicans desire to kill reform through continuous delay.

The chance of Baucus finding a bipartisan compromise grows increasingly remote.

Baucus' Plan Cost Less By Doing Much Less

Senator Baucus proudly touted what is in fact a very bad CBO score for his possible bipartisan bill. Almost everyone in the mainstream media parroted his claim that the CBO projection was, in fact, good without question. The Washington Post, Politico, WSJ, and CQpolitics all reported the “good news.” If the media know basic math their reporting would be more critical.

Baucus is very proud that the CBO said his bill would be under $900 billion and “would cover 95 percent of Americans by 2015.”

It is true that his bill would cost roughly 10% less than the House bill, which has a price tag just over $1 trillion. But Baucus' bill would cover 12% less uninsured by 2015. The CBO concluded the House bill would cover 97 precent of Americans by 2015. So Baucus' plan is cheaper simply because it leaves roughly 6 million more people without insurance. That is 12% of the projected number of uninsured in 2015.

On the basis of price per uninsured Americans covered by 2015, Baucus' plan is more expensive than the House bill. The CBO score does not prove Baucus' bipartisan bill is better written. It only proves it is less cost effective reform.

Blue Dogs Kill Public Plan's Cost Savings

The original public plan proposed by the House would use a modified Medicare payment rate. That would make it 10% cheaper than private health insurance. A public plan that used Medicare rates would be a real cost saver for the individuals, small businesses, and the government.

To gain the support of some of the Blue Dogs the party leadership agreed to change the public plan to be similar to what is in the Senate HELP Committee. The CBO concluded that a public option constructed how the Blue Dogs want, would not be noticeably cheaper than private insurance or save the government much money.

It is a deal like this that I have long expected. I have no doubt that this particular compromise had been in the work since the beginning. I'm not surprised that the CBO report on the savings of the original House public option were kept secret. The only hope for a true robust public option is that the CBO concludes the change demanded by the Blue Dogs explodes the cost of the bill.

Conrad's Co-ops Plan Is Worthless

I previously wrote how you would be able to tell if Conrad's co-ops proposal is worthless. The point of the public plan is to provide strong competition for the for-profit health insurance companies. Competition would steal some of their customers and drive down their profit margins. Real competition would be bad for their corporate bottom line.

Yesterday, following reports that the Senate Finance Committee might embrace Conrad's co-ops as a replacement for the public option, stock prices of for-profit health insurance companies soared. From Reuters:

The S&P Managed Health Care index of large U.S. health insurers closed 6.5 percent higher.

Aetna rose 12.6 percent, Coventry was up 12.7 percent and Cigna was 7.7 percent higher, all on the New York Stock Exchange. Centene rose 7.9 percent.

It is clear that the people who have billions invested in health insurance believe that Conrad's idea of a loose association of co-ops simply will not provide strong competition. They believe it would not drive down the cost of premiums for average Americans and will not hurt the massive profits of the insurance companies. Wall Street has spoken, Conrad's “alternative” is worthless compared to a real public option.

Blanche Lincoln Has Good Reason To Reject Baucus' Compromise

Democratic Senator Blanche Lincoln sits on the Senate Finance Committee. She represents the state of Arkansas. Wal-Mart is headquartered in Arkansas and is the largest private employer in the state.

A month ago Wal-Mart angered many other large businesses by coming out in support of an employer mandate. Wal-Mart's support for the employer mandate was a needed boost to Obama's effort to reform health care.

What Wal-Mart is strongly against is the idea of a “free rider” provision. A “free rider” provision would make businesses not providing their employees with health insurance benefits pay a fine if their employees are getting health insurance from the government. They would be responsible for paying part of the cost of an employee's subsides on the exchange and half the cost of employees on Medicaid. The “free rider” provision would be very bad for a company like Wal-Mart, which employs a lot of low income workers and many individuals with disabilities.

Baucus's possible “compromise” health care legislation is expect to include the “free rider” provision which Wal-Mart strongly opposes. As long as Baucus' proposal includes the “free rider” provision demanded by the Republicans, he should have a tough time gaining Senator Lincoln's support. It is not just possible defection from the liberals on the Senate Finance Committee that Baucus should be worried about.

Is It The Blue Dogs Or Obama To Blame On Health Care?

I do feel that some of the blue dogs are way out of touch with their constituents and way too in touch with health insurance lobbyists. But in defense of the blue dogs, I think many just want to know that they are not going to get stabbed in the back.

No member of the Democratic caucus should be forced to make a tough vote if there is no chance that the bill will become law. No one knows what Obama is thinking or what he is planning. If he is going to completely scrap the House bill in conference and back Baucus' bill, why should the blue dogs vote for the House bill?

It is one thing to stand with your president; it is another thing to stand out on a cliff without him. Obama's refusal to draw lines, make demands, or commit to proposals is leaving everyone guessing.

Obama's willingness to give Senator Baucus complete leeway does (and should) make blue dogs nervous. Is Obama humoring Baucus, just desperate to pass anything, or planning to make a hybrid in conference?

It is easy to blame the blue dogs for not standing with the party, but they can't really be blamed if Obama is unwilling to provide them with leadership or cover.

Cap Health Benefits Is A Middle Class Regressive Tax

I will soon write about the many problems inherent in trying to cap the exclusion for employer provided health insurance benefits at a set level and taxing the value above that as income. But I feel I need an entire post to explain why a cap on the exclusion would be a middle class regressive tax. Politically, that is the worst possible tax and a terrible way to raise money for health care reform.

An exclusion cap would not affect low income individuals. It would primarily raise all its revenue from middle class workers and upper income individuals, but the burden would fall disproportionately on the middle class.

Take, for example, a teacher making $40,000 a year and a corporate lawyer making $500,000. They both receive the same very good health care plan valued at $21,000. If the exclusion is capped at $17,000, that extra $4,000 would be taxed as income. For the teacher that would be a whooping 10% increase in taxable income. For the lawyer it would be a mere 0.8%.

The size of health benefits do not vary nearly as much as income. It is very rare for insurance benefits to exceed a value of $30,000. While a CEO may make 30 times what one of his mid-level employee makes, it is not unusual for them to have health benefits of nearly identical value. Teachers, firefighters, policemen, etc... often are paid little but receive very good health insurance.

Good health insurance benefits can makes up a substantial portion of middle class individuals' total compensation. But they make up a relatively small percentage of the compensation for the rich.

Depending on the cap, less than 4% of the money raised from a cap on the exclusion would come from the richest 1% of the population. That is highly regressive given that the top 1% earns over 20% of all individual income in this country. In comparison a flat surtax on all income for all Americans would get over 20% from the richest 1%.

CBO: Public Plan Would Increase Tax Revenue and Workers' Wages

A new report from the Congressional Budget Office shows that a strong public plan would increase the federal government's tax revenue and wages for some workers. The CBO concludes:

if more employers purchased coverage through the exchanges than we anticipate and purchased somewhat less expensive insurance via the public plan, the principal effect on federal deficits is that those employers would end up increasing their workers’ taxable compensation and thereby would generate slightly higher tax revenues.

This is in addition to reducing the cost of insurance for individuals, reducing the cost of employer provided insurance for small businesses, and reducing the amount in subsidies the government will give to individuals help to buy insurance.

The public option would not cost the federal government money. It would, in fact, save the government money and increase revenue from taxes.

Begich, Dorgan, Feinstein and Warner Want a Public Option...But Only For Medicare Part D.

A group of 22 Democratic senators (including senators Begich, Dorgan Feinstien and Warner) recently sent a letter to Baucus strongly asking him to find greater savings from the Medicare Part D. One of their three ideas to find greater savings from Medicare Part D is to set up a Part D public option:

Create a Medicare-administered Part D plan that would compete against existing Part D plans. A model with a workable formulary is outlined in S.330, the Medicare Prescription Drug Savings and Choice Act of 2009. Such a plan could also serve as a national default plan for low-income beneficiaries.

I'm glad to see that Begich, Dorgan, Feinstien, and Warner support a strong public option for Medicare Part D. They clearly understand that HHS can do a better job of providing health insurance at a lower price than private insurance companies. They know that including a public option as part of an insurance exchange will dramatically reduce the cost for both consumers and the government.

The letter does raise one very important question: If Begich, Dorgan, Feinstein, and Warner support a public option for Medicare Part D, why are they not publicly supporting the idea as part of the new health insurance exchange? (According to DFA) They have already stated in the letter that they support the underlying logic of a public option. If a public plan is a good idea for Medicare Part D, it should be a good idea for the new health care exchange.

The $2.1 Million Reason Evan Bayh Does Not Support A Public Option

I strongly encourage you to read this great article aat Indystar.com. Why is the senate even debating including the incredibly popular idea of a public option? Your answer is right here:

Bayh contends the $2.1 million that his wife, Susan, earned from public health-care companies from 2006 to 2008 represents no conflict of interest...Susan Bayh, who was a midlevel lawyer for the politically active Eli Lilly and Co. while her husband was governor of Indiana, did not serve on the board of a single public health-care company until it was clear her husband was about to ascend to the U.S. Senate. Only one month before Evan Bayh was elected to the Senate in a landslide vote, his wife was appointed to serve on the board of what would become the nation's largest health insurance company -- and arguably the company with the most at stake in the health-care reform debate.

You Think $1 Trillion Is A Lot, Wait Until It Is Only $20,000

DaveJ at Openleft.org has made an excellent point. When middle class Americans find out what efforts to reduce the price tag of reform by reducing subsidies means to them, it could be very bad.

My understanding is that the Senate Finance Committee bill will likely force any family making over 300% of the FPL to buy insurance from a private insurance company at full price. That means an older couple making around $45,000 could be forced to pay a private insurance company over $10,000 in premiums alone. Add in co-pays and deductibles, and that couple could be forced to spend upwards of $20,000 on health care a year.

Voters when polled claim to care about the federal deficit and the cost of government programs, but it rarely becomes an election issue. In the abstract, voters might think for awhile that $1 trillion or $1.5 trillion sounds pricey. But when reform kicks in, they will know $20,000 is very expensive for them.

Reducing the official price tag might sound like smart politics now, but almost no one is going to change their vote because the official CBO number was $950 billion instead of $1.3 trillion. People's votes will change when they find out what Democrats consider “affordable” - forcing citizens to pay over 20% of their income to a private insurance company.

Politically it would be a very bad idea if the Democrats' compromises, intended to gain a handful of Republican votes, ended up making their signature program very unpopular.

Liberal Senators Tired Of Baucus' Sell Outs

The WSJ has a story which greatly indicates that large portions of the Senate Democratic Caucus has had enough of Senator Baucus' secret negotiations and selling out to special interests.

Senator Baucus reached an $80 billion “deal” with the pharmaceutical lobby. His “deal” (which should more accurately be called a sellout) denied reforms that could have resulted potentially in billions of dollars in savings.

A group of 22 Democratic senators sent Baucus a letter asking him to break his deal with the drug lobby. They want him to at the least implement a provision from the House bill which would save an additional $63 billion.

The timing of the letter is incredibly important. Baucus has privately promised to have his bill out of the Finance Committee before the August recess. To finish the bill on time he will need to wrap up his secret bipartisan negotiations next week. This could hurt his chances of finding a deal on time.

This is the first public statement by a large group of Democratic senators that they are unhappy with the Baucus is health care plan. After a month of Baucus repeated delays which threatens reform, the rest of the caucus may finally have had enough.

It should be remembered that every dollar Baucus gives away to the medical industry in sweet heart deals is a dollar that must come from tax increases on the American people.

Who Is Keeping The CBO's Public Plan Estimates Secret? - Updated

The House's bill contains a public option that would pay a Medicare rates plus 5%. According to the CBO this will make the House's public plan roughly 10% cheaper than private insurance. Since the size of subsidies are based on the average of the three cheapest plans it should dramatically reduce the cost of the bill.

Over a week ago Jonathan Cohn at New Republic was leaked a report that the House's public plan would reduce the cost of the bill by roughly $150 billion. The official bill has been out for days and the CBO must have evaluated the potential savings from the public plan. Yet no estimates have been released. Someone is purposely hiding the cost savings from the public plan.

Why would anyone keep the cost savings from the House's public option secret?

One likely possibility is that they are preparing to substantially change the public option to gain the support of more conservative Democrats. Ryan Grim reported that some blue dogs were working to replace the House's public plan with the Senate HELP committee's. The CBO projects that the HELP public plan would not be substantially cheaper and would not dramatically effect the overall cost of reform. This is because the HELP public plan does not base its payment rates on Medicare.

The Democratic party leadership may not want it to be publicly know just how much a strong public option would reduce the cost of reform, if they were preparing to compromise on it. If Progressive activists saw the CBO report about the strong public option, they may have vigorously fought a $150 billion sacrifice to gain the support of a few dozen blue dogs. There might be fear that the inter party battle could derail reform.

The only other possibility I can imagine is that Obama does not want estimates about a robust public option released until after the CBO calculated the effect of the new “MedPac on steroids” proposal. The new stronger MedPac should dramatically reduce the cost of Medicare and therefore also reduce the cost of a public option based on Medicare's payment rates. There might be a desire not to attach a number to savings from a strong public option until it is the greatest possible savings.

Either way someone is purposely keeping the CBO's estimates about the House's public option secret.

Updated: The members of the Congressional Progressive Caucus just sent a letter to Nancy Pelosi in which they claim that, "allowing providers to opt out of the public option has already created a loss of $91 billion in savings." This is clear proof that there is a CBO estimate about the savings from the strong public option which has not been released.

Simple Test To Determine If Conrad's Co-ops Are Worthless

The Senate Finance Committee bill will likely include Senator Conrad's private co-ops idea instead of a public option. I plan to eventually write a piece explaining why Conrad's co-ops will likely prove unworkable. But there is a simple test to determine if Conrad's idea is completely worthless.

Obama has repeatedly explained that he wants a public plan to provide competition to drive down cost and keep insurance companies honest. Any student of economics would know that no business wants to face competition. Competition takes away market share and reduces profit margins.

The health insurance industry will (and frankly should) fight anything that would provide real competition. Competition will take away customers, drive down the premiums that they can charge, and reduce their profits. Competition would be good for average Americans but bad for the large health insurance corporations' bottom line.

Whether it be a public plan or private co-ops, the for-profit health insurance companies will fight anything that has a good chance of reducing their profit margins through real competition.

If the private health insurance companies do not fight Conrad's co-op proposal as vigorously as they are fighting against the public plan, you know they don't think it has a chance of driving down the premiums they are charging Americans. If the insurance companies do not fight Conrad's co-op proposal tooth and nail, you will know his idea worthless and useless. If the health insurance lobby endorses a bill that includes Conrad's co-ops proposal, that is proof it is a terrible idea.

AP Continues To “Report” Made Up Numbers

The AP again falsely claims that the House health care reform legislation would cost $1.5 trillion.

Waxman's committee is the last of three House panels trying to finish the $1.5 trillion, 10-year legislation.

This is a completely made up number with no basis in reality. If you simply look at the CBO report on the projected cost of the bill, you will see that this a lie.

This is not the first time (and probably not the last time) AP “reported” fantasy and not reality about the price of health care reform.

Washington Post Lies About Public Plan and Medicare, Again

The Washington Post has again lied about a potential public option and about Medicare. David Hilzenrath wrote,

The issue of whether a public plan would be more successful at bringing costs under control is harder to evaluate. As a prototype for government-run health care, Medicare has failed to control costs and makes little effort to restrict care.

This a complete and total lie. Medicare has done a much better job controlling cost than private insurance. The Congressional Budget Office determined that Medicare Advantage, which is insurance for the elderly run by private insurance companies, almost always cost the government more than traditional Medicare. The cost of Medicare has increased at a much slower rate than the private market. A study by health policy expert Jacob Hacker shows that from 1997-2006 the private health insurance annual growth rate was 7.3% per enrollee, while for the same time period the Medicare growth rate was only 4.6%.

Almost all experts agree that a Medicare like public plan would be cheaper than private insurance. The Lewin Group, The Urban Institute, The Commonweath Fund, and the Congressional Budget Office all agree that a public plan structured like the one in the House bill would be cheaper than private insurance.

The reason the health insurance industry is so viciously fighting a public option is because they know it will be able to offer insurance at a lower price. Supporters and opponents of the public plan all agree that a public option would be cheaper than private insurance. To claim it is hard to evaluate if a public plan would control cost is untrue.

Is Cover What The Blue Dogs Are Really Demanding?

Politico published a list of changes to health care reform demanded by a large group of Blue Dogs. Overall, the demands are a grab bag of cost-cutting proposals, cost-increasing changes, vague ideas, and strange modifications.

What is most important about their list is that it very closely resembles what are likely to be the differences between the House bill and the bill from the Senate Finance Committee. The strong similarity is no coincidence.

I think many of the Blue Dogs genuinely want to see at least some of these changes implemented. But most importantly, I think what many of them want most of all is political cover and reassurance.

(Do the Blue Dogs really plan to do battle to make the Exchange state-based with national oversight instead national with state-based variations?)

They don't want to be on record having voted for a more liberal bill if what emerges out of conference is basically going to just be the Senate Finance Committee bill. I think their most important demand is that they aren't forced to stick their neck out any farther than is absolutely necessary.

Similarity Between Blue Dog Demands And Possible Senate Finance committee Bill:

--Adjust the value and cost of subsidy levels (The Finance bill's early draft language had less generous subsidies and lower standards for what would be considered a minimum plan.)

-- Provide affordability credits on a sliding scale from 100-300 percent FPL (Early draft language from Finance Committee also sets subsidies at a limit of 300% FPL instead of the House's 400%)

--Establish consumer-driven, state-based co-ops (Very likely to come out of Finance Committee)

--Create state-based exchanges with a federal fallback (State-based exchanges are in Senate HELP bill and likely in Senate Finance, unlike the House's current national exchange)

Baucus, A Man Can't Serve Two Masters

It is stories like this from the Washington Post which make it painfully clear what is wrong with our political system and why this country is the only industrialized nation without universal health care. I'm reminded of Matthew 6:24:

No one can serve two masters. Either he will hate the one and love the other, or he will be devoted to the one and despise the other. You cannot serve both God and Money.

Baucus spokesman Tyler Matsdorf claims that Baucus “is only driven by one thing: what is right for Montana and the country.” This is fully and completely a lie. You don't schedule a $10,000 a plate fund raiser for medical industry lobbyists more than 5 years away from your next election if you are not driven by the money.

Senator Baucus, you can only serve one master. Soon we will find out which one it is: the American people or big medical corporations.

The 6 Word Change That Could Save Health Care Reform And The Public Plan

Providing subsidies to help Americans afford health insurance is the single biggest cost driver in health care reform. The CBO calculates that the subsides in the House bill would cost $773 billion, and in the Senate HELP Committee bill they would cost $723 billion.

There are several ways to reduce the cost of those subsidies. You can further restrict who would qualify for subsidies, reduce the size of the subsidies, reduce what is considered minimum health insurance benefits, reduce the minimum actuary cost sharing, or change how you calculate the size of the subsidies.

Changing how you calculate the size of the subsidies seems to me the single best minor change to reducing the cost of health care reform. It would also dramatically strengthen the case for, and the cost savings from, a robust Medicare-like public option.

Currently both the House bill and the Senate HELP Committee bill calculate the size of the subsidies based on the “reference premium,” which is equal to “the average premium for the 3 basic plans in the area for the plan year with the lowest premium levels.” Lowering the price of the “reference premium” would dramatically reduce the cost of reform.

By simply redefining the “reference premium” to be equal to the premium of the lowest cost basic plan offered, it would substantially reduce the overall cost of health care reform. It would also dramatically increase the savings that result from the public plan proposed by the House Democrats.

The CBO concluded that the House's public plan would on average be “about 10 percent cheaper than a typical private plan offered in the exchanges.” It has also been reported that the public plan in its current form reduced the cost of the House's bill by $150 billion.

I'm assuming that since the public plan would be 10% cheaper it would reduce the size of the reference premium by 3.3%. I'm also assuming that the 3.3% reduction in the reference premium is responsible for the public plan reducing the cost of health care reform by roughly $150 billion.

If that is the case, redefining the “reference premium” to mean the premium of the lowest cost basic plan (which would be the public option) would farther reduce the cost of health care reform by roughly another $250 billion. Progressives should push for redefining the term “reference premium” as their solution for reducing the cost of the bill. It would not only produce dramatic savings but it would also make it harder to remove or change the public option in the House bill.

There is an expected change to the accounting rule dealing with Medicare payment rates, which would reduce the price tag of the House bill by $245 billion. Combined with the change I outlined above the cost of the House bill could be cut almost in half.

Conservative Union's “Principled” Stand is No Scandal

The American Conservative Union is one of the largest and most powerful conservative groups in Washington. Yesterday the Politico reported that they demanded $2-3 million from FedEx in exchange for taking their side in a legislative dispute against UPS. FedEx rejected their demands and a few days later, David Keene, the chairman of the ACU, signed a letter in support of UPS.

Some people are trying to depict this pay-or-play incident as a scandal. In fact, it is the exact opposite. This is proof that the ACU is truly dedicated to taking their principles to the ultimate conclusion.

On their statement of principles page they claim they believe: “That the market economy, allocating resources by the free play of supply and demand, is the single economic system.” As you can see, offering their political support in exchange for money is what they have always stood for.

Things like honor, credibility, integrity, truth, beliefs, and principle are just more resources that should be allocated based on the free market. They are just more resources that should be bought by the highest bidder. The American Conservative Union should not be attacked but celebrated for sticking strong to its conservative world view.

State Single Payer Amendment Compromise

In the House Education and Labor Committee an amendment was added to health care reform that would remove potential legal impediments preventing individual states from creating their own single payer systems. The amendment was passed with bipartisan support.

While I'm confident that the state single payer amendment will eventually be stripped from health care reform, it does produce an interesting question. Would the state single payer amendment be an acceptable bipartisan compromise over the issue of a public plan?

The idea would be appealing to the most liberal Democrats. A majority of the most dedicated advocates for a strong public option, support or would even prefer a single payer system. There is also a chance that a handful of liberal states could pass a single payer bill.

The idea might also be appealing for several reasons to Republican states rights advocates. Primarily it would kill the public plan and allow them to declare victory in that fight. Republicans might also believe that they will be able to stop any single payer bill on the state level or later when they are back in power in Washington. It would allow them to shift the tough decision and political battle to someone else. Politicians never like making tough decisions.

I don't think we will even see this deal proposed, and that is unfortunate. In many ways it is the best possible compromise. It is a deal where both sides can walk way declaring victory.

Wyden's Free Choice Proposal + Strong Public Plan = Half Trillion In Savings For Businesses

Senator Wyden's new “Free Choice Proposal” has recently gotten some positive attention (Ezra Klein, Jonathan Cohn). His idea is interesting but politically very problematic. There are also several important policy issues that would need to be worked out.

Basically, it would destroy the employer provide insurance system. Technically it would allow all employers to continue to provide health insurance or they could give their employees a voucher equal to at minimum “70% of the lowest cost Exchange plan.” Employees would use these vouchers to select any plan they wanted to on the Exchange. I'm sure a few companies might continue to provide insurance, but the vast majority would switch to providing vouchers. Wyden's plan would be politically problematic, because it would result in millions losing their current coverage.

Interestingly, he links the size of vouchers to the lowest cost plan on the Exchange. A new Medicare-like public plan would almost always be the lowest cost plan. The more robust the public plan, the cheaper the lowest cost plan will be.

Wyden's Free Choice Proposal would give businesses a huge incentive to fight for including the strongest possible public plan. If all businesses choose to provide a minimum voucher instead of insurance, simply including a strong public plan as part of reform should save them around $500 billion over a ten year window.

Jack Tapper's Lazy “Reporting” Ignores Facts

In a blog post today, ABC “reporter” Jack Tapper continues to push his own lazy and incorrect attack on health care reform. He would know that his argument is nonsensical if he had taken the time to learn about the actual health care reform bills before Congress. He states:

Importantly, the government might create circumstances – say, a public health care option that is less expensive since profit is not a concern and overhead is lower – where you might find your business forcing you into that public plan.

That is impossible under either the House bill or the Senate HELP Committee bill (and almost certainly will be impossible under the Senate Finance bill). In both bills, the public plan will only be available on the Health Exchange. No business will not be allowed to directly purchase the public option to put their employees on. Very small businesses will have the option of providing their employees credits to choose their own plan on the Exchange. The employees would be able to choose any plan on the Exchange whether it be a public or private plan. The legislation before Congress is clearly written to prevent anyone from being forced on to the new public plan.

Given his lack of dedication to the facts, I recommend that ABC News change his title from “reporter” to “conspiracy theory promoter.”

The Very Conservative House Democrats' Health Care Reform

While the health care reform bill released by the House Democrats will be to the left of whatever bill comes out of the Senate Finance Committee, it is important to note just how very conservative the bill is. It more a set of patches fixing the worst problems in our health care system than it is true reform.

The House bill is neither transformational change, radical reform, or a system wide overhaul. It is not “socialized medicine” (VA health system for all), universal single-payer (Medicare for all), a Medicare buy-in open to all, or even a complete individual self-selecting exchange system (Federal Employees Health Benefits Plan for all).

It is more notable for what the bill does not change than what it does. It does not change how insurance is paid for, who pays for it, or where most Americans get it from. The vast majority of Americans will only experience minor change.

Americans currently getting insurance from a federal program like Medicare, Medicaid, VA, and Tricare will continue to receive basically the same insurance. The majority of Americans who get employer provided insurance will receive the same or similar insurance from their company. The main change they will see is no longer fearing coverage denied for a pre-existing condition and perhaps a small reduction in co-pay for preventative care. Health insurance for the millions on a current federal program will be paid for with the same taxes as always, and the exclusion for employer-provided health insurance will remain unchanged.

Only the small percentage of Americans currently uninsured, self-insured, and employees at very small businesses will see a lot of change in their health care (at least for the first decade).

The poorest from that group will be given Medicaid, and the rest will get federal assistance in the form of credits to small businesses and subsidies for individuals to purchase an insurance plan offered on the new regulated market place. The new public plan which is supposed to provide “competition and keep insurance companies honest” will only compete for the roughly 8% of Americans who can get coverage through the exchange.

The bill does fix most of our health care system's worst problems. New regulation will hopefully stop the most morally reprehensible private insurance practices. The Medicare Part D “doughnut hole” problem will be improve, and a new Medicare payment structure should hopefully arrest the increase in cost. People who currently fall through the coverage cracks will get help buying decent health insurance which will be expensive but not crushingly burdensome.

The House bill does not transform our health care system, instead it patches most of the problems with our current confusing quilt of coverage. It is inherently very conservative because it tries to fix our current system, not replace it.

Same Sex Partner Coverage In House Bill?

Looking through the House Tri-Committee bill I found a small provision that could have huge implications for the gay community. On page 9-10 the term “dependents” and “family” are defined as:

DEPENDENT.—The term ‘‘dependent’’ has the meaning given such term by the Commissioner and includes a spouse.
…
FAMILY.—The term ‘‘family’’ means an individual and includes the individual’s dependents.

This passage gives the Commissioner wide power to define the term “dependent”. I believe this would allow the Commissioner to define “dependent” to include same sex partners legally connected in some manner (i.e., civil unions). My interpretation could be completely wrong, but I think the definition of “dependent” is something the LGBT community should keep a close eye on.

Public Plan Reduces Costs For Small Businesses

The House's America's Affordable Health Choice Act includes an “employer responsibility” provision. It is also know as an employer mandate or pay-or-play provision. The bill is written so that including the pubic option will reduce the burden of the employer mandate and costs for small businesses. This is very complicate but please stay with me.

An employer must provide “qualified” health insurance coverage for its employees or pay a penalty. The minimum amount that an employer most contribute to an employee's health insurance is no “less than 72.5 percent of the applicable premium...of the lowest cost plan offered by the employer that is a qualified health benefits plan.”

An employer may directly purchase health insurance for its employees or provide funds to the Health Exchange to enable their employees to select their own plans. For employers that provide their employees coverage through the Health Exchange the “applicable premium of the lowest cost plan” is equal to the “reference premium amount” in the area.

The “reference premium amount” is defined as “the average premium for the 3 basic plans in the area for the plan year with the lowest premium levels.”

Now, the CBO concluded that the public plan in the House bill would be on average “about 10 percent cheaper than a typical private plan offered in the exchanges.”

Since the public plan would be one of the three cheapest plans offered, it would reduce the size of the “reference premium amount” and also the size of the applicable premium.

Therefore including the strong public plan lowers the minimum amount an employer, who provide coverage through the Exchange, must pay to insure an employee.

At the start only small businesses will have the option of providing insurance through the exchange. Using some rough calculations the public plan should save small businesses, which have their employees selection a plan on the exchange, roughly $450 an employee a year. The public plan will potential save around $3 billion a year for the small businesses that are allowed to use the exchange. The amount of savings to business would dramatically scale upwards if more companies are permitted to using the exchange to provide coverage.

House's Public Option: Good News and Bad News

The House released its America's Affordable Health Choice Act today along with a preliminary CBO scoring. It will include a robust public option. There is some good and bad news about the public health insurance option:

The Good News

-The public option will be available nationwide and from “day one” on the new national health insurance exchange.

-The public plan will be run by the Department of Health and Human Services.

-The public option will pay doctors the same rates as Medicare plus 5% for the first three years.

-The public option will have the power to directly negotiate drugs prices.

-Roughly a third of all people buying health insurance through the exchange are projected to select the public plan (around 11 to 12 million). This is not a high enough percentage that the public plan will “dominate” the exchange. Incredibly important!

-The public option's premiums will be 10% cheaper than a typical private insurance plans.

-The public plan will drive down the cost of overall reform. The size of subsidies will be based on the cost of the three cheapest plans. By offering a cheaper public plan, the size of subsidies are reduced.

-The public plan will self-sufficient and not increase the federal debt.

The Bad News

-The public plan will not be available until 2013. The Health Insurance Exchange will not start until 2013, so no one can purchase the public plan until then.

-The public option will only pay Medicare rates for the first three years. After that it will need to negotiate its own.

-Medicare providers are not required to accept the public plan. (On the positive side: providers that are part of Medicare's network will be part of the public plan's network unless they opt-out.)

-Large businesses will not be allowed to choose the public plan. It is only available to individuals and small businesses getting coverage through the exchange.

-Only 30 million Americans will be able to select the public plan because of the above restriction. (On the positive side: starting in 2016, the Commissioner might allow some larger employers to give their employees insurance through the exchange)

-The public plan's power to negotiate drug/service prices will weaken because of restrictions which strongly limit the number of Americans who can choose to sign up for it.


Overall, I'm fairly happy with the structure of the public option but unhappy with the restrictions on who can sign up for it. Expanding access to the pubic option should be an easier political fight than changing its structure. If I had to choose, I would select a well structured public plan restricted to a few, over a poorly designed public option open to all.

Most importantly, the CBO has determined that the public plan would save individuals, businesses, and the federal government money. The CBO has also concluded that a public plan will not hurt the private insurance market. In effect, the CBO has destroyed the two main arguments against the public option.

"Reform" Results in More Uninsured By Obama's Reelection

The House Democrats just released their health care reform bill and its preliminary CBO scoring. While it has many very good proposals, it uses the worst and most cowardly way to make reform appear cheaper. The bill technically cost around $1 trillion over ten years, but that is basically a lie. It will really cost a trillion over seven years, because there is no reduction in the number of uninsured until 2013.

I consider the very slow roll out to be both a big moral and political disaster. This is not change you can believe in. This is change you will need to wait half a decade for.

Morally it completely undercuts the Democrats argument that our health care system is in crisis. It is salt in the wounds for all the Americans' who's stories of high costs and medical bankruptcies were used to push for reform. For the next four years they will see no relief and thousands of more will suffer their same fate.

Politically it is also incredibly stupid. The silly accounting trick might help get a “cheaper” bill passed, but it will but it could be equally (or more) damaging than failing to pass any reform at all. Voters will not expect the system to be fixed right away, but they will expect there to be some serious improvement before 2013. When there are MORE uninsured by the 2010 and 2012 elections then there are today, it will be terrible for the party. I can already picture the Republican attack ads.

The American people are demanding health care reform now. Not health care reform that we will only start going into effect some time in Obama's second term. Democrats better have a plan to spend up its implementation or else they will pay a huge price for failing to deliver.

NFR Throws Tantrum Over Small Employer Mandate

Tracy Mullin, the president of National Federation of Retailers, sent an over the top letter to its members asking them to fight against a very small employer mandate penalty.

The employer mandate that is part of the Senate HELP Committee's bill is very modest. If a firm with more than 25 workers does not provide health insurance benefits, it will be required to pay a penalty of $750 a year for full time employees and $375 for part time employees.

In the absolute worst case scenario (an employee working for federal minimum wage and exact minimum number of hours a year to be declare full time), the penalty would add only 5% to the cost of hiring an employee. For the vast majority of employees of large retail firms, it would only increase the cost of employing them by 2-3%. And that is only for firms who do not and do not plan to offer their employees some form of health insurance.

She attacks Wal-Mart for agreeing that an employer mandate might need to be part of health care reform. In the letter she makes ridiculous claims that the minor employer mandate “could quickly push our economic recovery back decades” and “could have long-lasting, devastating consequences to retailers throughout the country.”

Really, Ms. Mullin? That small percent-increase in cost will devastate retailers? I find that claim very hard to take seriously. For example, when the federal minimum wage is raised from $6.55 to $7.25, it will increase the cost of a full time employee by nearly twice the proposed penalty.

It is understandable that many retailers, who don't help their employees get health insurance, don't want to pay a small penalty. But it would be neither “catastrophic” or “devastating.” It is the over the top, sky is falling rhetoric that endangers health care reform. If you are serious about working “diligently on real solutions that would help fix our health care system,” you state your concerns, but tone down your childish temper tantrums.

Strong Public Plan or Massive Tax Increase

Jonathan Cohn reported that a preliminary CBO analysis of a strong public plan concluded that it would reduce the cost of the House's health care bill by $150 billion. That is a substantial amount of money. Since Obama wants health care reform to be budget neutral, if the strong public plan were removed there would need to be a massive tax increase to make up the difference.

Progressives should frame the choice clearly: A strong public plan or a massive tax increase.

Blue Dog Democrats, New Democrats, and supposed “fiscal hawks” who oppose a strong public plan need to be put on the spot. Why do you want to raise taxes instead of provide the American people with the strong public option they overwhelmingly support?

There will be nowhere for representatives who label themselves “fiscal conservatives” to hide. If they continue to oppose a strong public option they will be branded as liars, hypocrites, and corporate sellouts.

When the official CBO projections are released, it could be the start of a full on civil war within the party. If the Democratic leadership chooses a massive tax increase over a strong public plan, it will begin a devastating fight against their base. Obama will need to step into the fight, or it has a chance to not only derail health care reform but turn a huge swath of the grassroots base against the party for years.

Choosing to raise taxes instead of embracing a strong public plan, which is not only the goal of the grassroots but also proven to save money is the path to political destruction. It would be a slap in the face to the base of unimaginable proportions. It would be a clear message to the activists, donors, and volunteers who propelled the party to victory in the past two elections to just stay home in 2010.

How The Employer Mandate and Benefit Tax May Save The Public Option

While the public option is the part of health care reform which has received the most press, there are several other important, contentious issues which are making a bipartisan health care reform bill agreement elusive. Two difficult issues are the employer mandate and a new tax on employer-offered health care benefits.

Republicans are strongly against even the minor employer mandate in the HELP Committee bill. The problem is the employer mandate is currently the most cost effective way to expand coverage in the bill. It was almost solely responsible for reducing the CBO scoring of the HELP committee bill's cost per uninsured individual covered by roughly 50%. It also stops the politically damaging determination that millions of Americans will “lose” their employer coverage (even though they would still be getting coverage from the health care exchange). Without the employer mandate, they will need to dramatically slash subsidies offered to help people afford insurance to get a bill under $1 trillion.

The possible “compromise” Republicans might accept is a “free rider” provision that employers must pay for workers on Medicaid or getting insurance subsidies. This is strongly opposed by Wal-Mart (which for good reason supports the employer mandate instead) and presumably therefore unpopular with the two Democratic senators from Arkansas. Given how the “free rider” provision would disproportionately hurt low wage employers, it would be an incredibly tough pill for both liberal and conservative Democratic senators to swallow.

A new tax on employee health insurance benefits in any form is amazingly unpopular with the American people. It is a proposal that makes Democrats on the entire political spectrum very nervous. Not surprisingly Harry Reid was recently forced to tell Senator Baucus to drop the proposal. The Senate Finance Committee has started fresh the search for a possible funding source.

Yet, Republican Senator Grassley continue to push for this very unpopular tax on health insurance benefits. Grassley demands that all money for reform comes from the health care system. If Republicans are unwilling to agree to a new tax besides the one on health benefits, it will make a bipartisan bill unobtainable.

The more likely health care will be passed with a purely partisan vote, the more likely that it will include a real public option. If it were the sole point of contention standing in the way of bipartisanship, the pressure from centrist Democrats would probably be enough to kill it. At issue though are the other demands made by Republican senators which are unacceptable some liberal, moderate, and conservative Democrats. The public option may not be the issue which kills bipartisanship, but it should strongly benefit from its death.

CBO: Strong Public Plan Saves $150 Billion

This is some great news from Jonathan Cohn at The New Republic:

According to a pair of Capitol Hill sources, preliminary estimates from the Congressional Budget Office suggest that a strong public option--the kind that the House of Representatives is putting in its reform bill--should net somewhere in the neighborhood of $150 billion in savings over ten years.

I've written previously about how both the Senate HELP Committee bill and the House bill wrote the rules determining the amount of subsidies given to individuals to help them afford insurance was structured so that the Congressional Budget Office would score a strong public plan as saving large amounts of money.

I'm very pleased with these preliminary results from the CBO and they are right in line with my estimates. Last month, I calculated that a strong Medicare buy-in public option would make the HELP bill score between $200-$250 billion cheaper. The House bill has slight less generous subsidies than the previous version of the HELP bill I used to come up with my estimates. I'm also under the impression that the strong public plan scored by the CBO was not paying Medicare rates but Medicare rates plus 5-10%. These two factors should account for most of the difference between my estimate and the preliminary estimate from the CBO.

The only unfortunate piece of news is that my estimate was based on the assumption that the CBO would be unable/unwilling to calculate what effect competition from public option would have on reducing the cost of insurance from private insurance companies. It unfortunately appears that my assumption may have been correct. This mean the CBO is in fact understating the potential savings from a robust public option.

Overall this is all very good news and should greatly increase the chance that health care reform includes a strong public option. It is possible that Peter Orzag and Barack Obama were expecting these results from the CBO this whole time. Their focus on savings may have been part of a trap to trip up the opponents of a robust public plan. Of course, we also need to hope that the CBO doesn't conclude that a strong public plan would end up “dominating” the exchange.

Baucus, You Think You Can Reach A Deal With This Guy?

Senator Baucus is working to reach a bipartisan compromise on health care reform legislation. He is currently negotiating with his “coalition of the willing” which includes four Republican Senators and two other Democratic Senators.

One of the “willing” Republicans that Baucus thinks he can reach a deal on health care reform with is Senator Mike Enzi.

Thinkprogress.org is reporting that on Thursday Enzi tried repeatedly to amend the Senate HELP committee bill to deny anyone making over 250% of federal poverty level help purchasing health insurance.

For a married couple 250% of the federal poverty level is $36,425. Picture a married couple in their late 50's making around $37,000. Senator Enzi does not want them to receive any help buying health insurance. A decent health insurance plan for this couple would cost around $10,000 or more in premiums alone. (that does not take into account the cost of co-pays and deductibles.) That is an unaffordable 27% of their gross income or roughly 31% of their after tax income.

Millions of working class Americans simply can't afford to spend a third of their income on health care. Senator Enzi is actively working to make sure that health care “reform” still keeps decent health insurance financially out of reach for millions of working families. Keep in mind that this is the position one of the few "willing" Republicans who is even considering support any health care bill.

Dear Senator Baucus, how can you possibly think working to find a “compromise” with this man could possible produce meaningful affordable health insurance reform?

The Incredibly Illogical Washington Post Health Care Editorial

The Washington Post published an incredibly stupid, illogical, and intellectual inconsistent editorial about health care reform.

The editorial board wants Obama to push for an extremely unpopular tax on health benefits that he campaigned against. A significant number of Democratic senators have said they can't vote for a bill that includes a new tax on health benefits. As a result, demanding the inclusions of a tax on health benefits would end up killing health care reform.

But in the very next paragraph they tell Obama to drop his support for the very popular public option that he campaigned for, because it might “drag down health reform or make it impossible to secure Republican votes.”

The Washington Post is telling Obama to insist on including a policy he is against, even though it would end up killing the chances of passing reform. Yet, they are also telling him that he should give up on a policy he strongly supports, because it might kill reform.

You can ask Obama to support good policies regardless of their likelihood of passing the Senate. In that case, he should be pushing for a tax on health insurance benefits and a robust public option. Or you can promote compromise to make sure even an imperfect health care reform bill gets passed. If that is your argument, you ask him to pushing for a tax on health benefits. It is the one policy, even more likely than the public option, to end up preventing the passage of health care reform.

The health insurance companies are strongly against the public option because it is designed to create a competitive pressure that would reduce their profits. I guess we find out what a $25,000 ticket to a off the record private “salons” can buy the health insurance lobbyists at the Washington Post. A few hundred thousand will get you an intellectually inconsistent and dishonest attack on the public option.

Who Would Replace Senator Ensign? - Updated

The recent news that Senator John Ensign's parents gave his mistress a “gift” of nearly a $100,000 puts his career in jeopardy. It should not be long before a Senate Ethics Committee, Federal Election Commission, and/or Justice Department investigation is launched.

If Senator Ensign resigns or is forced out of office, who would take his seat? According to Nevada law, an interim senator would be appointed by the governor until the 2010 general election.

This would give the embattled and unbelievably unpopular Jim Gibbons the power to appoint a senator. This should prove to be very interesting to say the least. Picture a Republican version of the Governor Blagojevich/Senator Burris appointment.

The single biggest winner from this scandal could turn out to be Senator Harry Reid. He is up for reelection in 2010 and has weak poll numbers. It is likely that any Nevada Republican hoping to become a senator would prefer to run in the special election instead of challenging the well funded Harry Reid.

The special election could also be a boon to Harry Reid's son, Rory Reid. He is currently the Chairman of the Clark County Commission and laying the ground work for a possible run for Governor in 2010. He might be persuaded to try and join his father in the Senate if there is a special election. At the very least, the special election could have the same benefit for Rory Reid as his father. Republicans thinking about a gubernatorial campaign might choose to run in the special election instead of challenging Rory Reid for the governorship.

Update - The bad news for Senator Ensign keeps on coming. I'm looking for a combined total of all the extra money Ensign funneled to his mistress's family. That includes from raises, job for her son, job for her husband, severance, family "gifts", etc. My ballpark figure puts it in the hundreds of thousands.

The Truth About Reconciliation That Time (Magazine) Forgot

As the possibility of bipartisan health care reform breaks down there will be more reporting about possibly using "reconciliation" to pass reform. Karen Tumulty at Time recently wrote a piece talking about reconciliation. Unfortunately, like almost all the reporting about reconciliation she failed to mention one of the most critical components of the Byrd Rule.

In her article she states, "Opponents would have the power under Senate rules to strike every provision of the bill that cannot be shown to reduce the federal deficit. "

It is true that any Senator may ask a provision of the bill be stricken if it is found to be “extraneous”. But she failed to mention that a provisions will not be removed if the determination that it is extraneous is waived “by the affirmative vote of three-fifths of the Members duly chosen and sworn (i.e., 60 Senators, if no seats are vacant)”. This is incredibly important. Many of the provisions that can technically be removed, because they are extraneous, are incredibly popular.

These include regulations outlawing: excluding pre-exisiting conditions, charging women more than men for health insurance, dramatically raising someones insurance premiums after getting sick.

These regulations are not just very popular with the American people but also with the Senators. For these regulations to be removed Senators would need to publicly vote to eliminate them.

I can see the ad now. Senator (blank) supports discrimination against woman by voting to give insurance companies the right to charge women more than men. Senator (blank) voted to give your insurance company the power to refuse to pay your medical bills. Senator (blank) voted to give insurance companies the power to raise your premiums when you get sick.

Publicly voting against many of these popular regulations would be political suicide. No one wants to be labeled a defender of the insurance industry's most repulsive practices. While many important provisions can technically be stricken during reconciliation, the number that are will probably be much smaller.

(I'm also putting together a list of ways to possibly protect the essence of the insurance regulations so that they couldn't be stricken under reconciliation. To any of the Senate/House aides reading this, I would be happy to share.)

Public Plan Is The Canary In The Coal Mine

The public plan has been called a political “litmus test”, but in reality it is much closer to a canary in the proverbial coal mine. Several progressive (Ezra Klein, Matthew Yglesias, John Cohn) writers have published articles stating that while the public plan is important, it is not indispensable to real health care reform.

First, I will concede that it is technically possible to create a good health care system, that would be acceptable to progressives, without creating an open public option or single payer. The Netherlands and Switzerland are examples of good, highly regulated market-based systems. (More about that below)

The problem is, I see no reason to believe that there is any Republicans would support the heavy handed regulations needed if there is not a public option. I think Republicans and the health insurance industry would fight equally as hard (or harder) to kill these strong regulations as they are fighting to kill the public option. The public plan is more important than just offering a government insurance option. It is the first battle between policy experts promoting reform and industry lobbyist protecting profits. If lobbyists are able to kill the incredibly popular public option, it shows they have the power to dictate the shape of health care reform.

If strong grassroots support can't protect the public plan, I don't know how it will save dozens of smaller wonky regulations. The choice will never be between a public plan and a well structured highly regulated market. It is between real reform and fake reform. If the reformist can't win on the issue of a public plan they have almost no hope winning the battle for tough regulation.

Even if they did manage to create a highly regulated health care system without a public plan, I don't see how it would be nearly as stable. Public programs like Medicare, Medicaid, the Post Office, Social Security, etc. are politically very sticky. Eliminating them would be a huge political lift. On the other hand, removing regulations is easy. Regulations can be weakened or removed one at a time until the whole regulation safety net is unraveled.


Netherlands

To make a “market based system” work in the Netherlands and Switzerland requires a huge amount of heavy handed government regulation. In the Netherlands private insurance only covers relatively healthy people. The most expensive patients that need long term care are covered by a mandatory state run insurance plan. Private insurance companies must offer a well defined set of benefits and must do so at a fixed price for all. It is illegal to charge anyone a different price for any reason. This includes co-pays, deductibles, exclusions, and any other possible trick. They do allow they say of supplemental insurance that covers the few things not part of the basic benefits package.

They use a form of strong risk equalization. The government pools a large fraction of premiums and distributes the money as it sees fit to insurance companies to discourage cherry picking only health customers. There are powerful competition regulators that check for abuse, monopolies, cartels, and acts against customer interest.

Switzerland

Switzerland uses a similar system. In Switzerland people choose from highly regulated private insurance companies. Premiums are based on a strong community rating system with only minor variations based on only sex and age. All private insurance companies must offer at least the same government-defined basic benefits. All benefit plans most be open to all comers. Most importantly, it is illegal for insurance companies to make a profit on the basic benefits package. They may only make money on supplemental insurance that covers things like dentistry or private hospital rooms. It should also be noted that Switzerland has one of the most expensive health care systems. (that should make it a poor choice as a model for reform.)


I just can't see Republicans or the health insurance industry agreeing to this level of regulation. Is there any reason to believe insurance companies would be more willing to accept a law making it illegal to make a profit on basic health insurance plans than a public option?

The public plan is about more than just providing a public insurance option. It is smart policy, would reduce the cost of reform, and is incredibly popular. If the public plan is not included, it means this “reform” effort put the interest of big business and politicians over that of the public. If the battle over the public option is lost, the people advocating real health care reform in the public interest are in serious retreat. Like a canary in a coal mine, if the public plan is dead it means all the oxygen is quickly being sucked out of quality reform.

Obama Refuses to Take His Own Health Care Pledge

Organize for America is President Obama's political organization. He has asked his supporters to take the OFA pledge to “stand with the president” on his push for health care reform. The pledge states that health care 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 — Every American must have the freedom to choose their plan and doctor – including the choice of a public insurance option
•Ensure quality care for all — All Americans must have quality and affordable health care

The problem is that Obama refuses to stand by his own pledge. He and his advisors have repeatedly said that they support a public insurance option, but not that it must be part of health care reform. They will not draw a line in the sand and even say there are willing to forfeit the public option completely or accept private, non-profit co-ops instead.

Why should anyone pledge to “stand with the president” on his core principles of health care reform if he is unwilling to? It doesn't matter that I demand a public insurance option be part of reform if the president doesn't make the same demand. Barack Obama can get a public insurance option passed if he is willing to use reconciliation; instead, his advisors say he is willing to give up on the “core principle” to get the vote of a few Republicans.

Mr. President, if you are willing to forfeit the public option for political expediency it is not a “core principle”. It is a sign you have no principles.


*'including the choice of a public insurance option' was highlighted for emphasis

62 Million That Terrifies For-Profit Insurance CEOs

Quinnipiac released a new poll that once again shows overwhelming support for a public health insurance option. The Quinnipiac poll found:

Although 69 percent of voters nationwide say Americans should have the option of government- run health insurance, only 28 percent would choose to be covered by it.

Only 28 percent?! That is roughly 62 million Americans who want to sign up for an unknown and unproven public option right now. No one yet knows what the public option will cover, how much the premiums will be, or what doctors would be in the network. The public option is currently a complete unknown, yet 28% of Americans would choose this unknown public option over any private insurance plan. Given the current lack of information and the massive effort by Republicans to discredit the public plan, 28% is huge.

Could you imagine that statistic for any other product. You think 28% of Americans would prefer to drink a government made soda, eat at a government run restaurant, or buy a government build DVD player? I doubt it. This shows just how little respect a segment of America has for private health insurance companies.

I suspect when people really find out more about how the public plan will work it will prove to be even more popular. Any real public option should be noticeably cheaper than private insurance and not use any of the tricks that private insurance plans use not to pay claims.

It is this 28% which literally strikes terror into the hearts of health insurance CEOs. They know there is a large percentage of their consumers that want nothing to do with them. They know their only hope to hold on their market share and their profits is to do everything they can to deny these 62 million the alternative they want. This is why they are spending over $1.4 million a day to kill the public option.

Senator Carper Supports Trigger - Updated

Today on MSNBC, Senator Carper (D-DE) said that he does not want their to be a national public option available on day one. He said, he along with Senator Snowe (R-ME) supports a “trigger” mechanism. The American people will only get to choose a public option years from now if the insurance companies continue to fail. He said it should be like the “trigger” in Medicare part D.

It should be noted that criteria for “triggering” a public plan in Medicare part D is insurmountably high and useless. It deals only with the number of plans offered and not price or quality. It has yet to be triggered.

61 Most Important Words In The HELP Health Care Bill

The goal of many reformers is for the majority of Americans to get health insurance from something similar to the Federal Employee Health Benefit Program. It is an exchange where federal employees choose between several good insurance plans which meet a strict set of minimum criteria.

While this may be a good idea, it is politically impossible because it would cause the CBO to conclude that "millions of Americans would lose their current health insurance". (Even though the vast majority would get a better insurance plan of their own choosing, that is one of the many finer points that will be lost in the political attacks against reform.)

As a result, the HELP committee wanted to write a bill that would allow most Americans to get their health insurance via an exchange without the Congressional Budget Office (CBO) saying as such. They wrote the bill so that only individuals without insurance and employees of "qualified employers" can buy health insurance in the exchange. In the bill the "default" definition of a "qualified employer" is a business with 10 employees or fewer.

Using this default definition, the CBO determined that ten years from now only 27 million Americans will get their insurance through the exchange. But there is an very important clause dealing with the definition of a “qualified employer”: It gives states and the Secretary of Health and Human Services the power to change how few employees a “qualified employer” must have.

According to the HELP Bill, “the term 'qualified employer' means an employer that … meets criteria (including criteria regarding the size of a qualified employer) established by such State; or” by the Secretary of HHS defined as

NUMBER OF EMPLOYEES.— (i) ESTABLISHMENT.—The Secretary may by regulation establish the number of employees described in subparagraph (A)(ii)(II)(aa).
(ii) DEFAULT.—If the Secretary does not establish the number described in subparagraph (A)(ii)(II)(aa), such numbers shall be deemed to be 10.

I have no doubt that once the exchanges are up and running successfully that number will dramatically be scaled upward by individual states and/or the Secretary of HHS. While the CBO claims only 27 million Americans will get health insurance through the exchange 10 years from now, if things go as planned that number will probably be closer to 127 million. This is a fairly brilliant piece of CBO slight of hand.

And Another One Bites The Dust, GOP 2012

In less than a month, three possible 2012 Republican Presidential candidates have disqualified themselves. With the strange and ill timed resignation from Sarah Palin, she has all but eliminated any hope of winning in 2012. Rising GOP Stars Senator John Ensign, Governor Mark Sanford, and Governor Palin have all quickly fallen from grace.

This chain of events defies explanation. I can only guess that someone (Mitt Romney, Barack Obama, Tim Pawlenty, David Axelrod, etc) has mastered the control of powerful black magic.

Happy July 4th

Sanders' Slowdown For The Public Plan

Independent Senator Bernie Sanders has been making a splash on progressive blogs with his very public advocacy for including a strong public plan in health care reform. Sen. Sanders told Ezra Klein that he was going to “try and form a Coalition of the Unwilling. People prepared to stay strong for a strong public option.”

David Waldman at Congressmatters.com doesn't think Sen. Sanders will go so far as to actually filibuster a health care bill if it doesn't include a public option. But thanks to the reconciliation measure adopted as part of this years budget, Sanders' “Coalition of the Unwilling” doesn't need to. If there is no bill by October 15th health care reform must go through reconciliation.

former Senate majority leader Tom Daschle believes that a health care reform bill that goes through reconciliation will probably contain a “pure public option.”

Bernie Sanders' coalition doesn't need to filibuster health care reform without a public plan. They don't even need to vote against any bill without a public option. All they need to do is slow down the whole process. (a process which is already very much behind schedule) There are only 12 legislative weeks left before reconciliation is triggered. By dragging their feet and delaying the bill until October the "Coalition of the Unwilling" wins.