There are many parts of health care reform that potentially violate the Byrd rule and potentially could be stripped out of health care reform if it passes using reconciliation. Yet it is important to remember just how much of health care reform could be easily passed using reconciliation. Many of the important provisions do directly relate to government revenue. Harry Reid recently said that reconciliation could accomplish 65 percent of what his party thinks is necessary.
Expanding Medicaid or the CHIP program to cover everyone below a set percent of the Federal Poverty Level can be passed using reconciliation. Simply expanding Medicaid to everyone below 150% of the FPL could reduce the number of uninsured by at most 26 million. The CBO says expanding Medicaid to Americans below 133% of the FDL would reduce the number of uninsured by 11 million, with a potential for several million more if strong efforts were made to enroll everyone eligible. While it may not be the best policy or the most cost effective way to expand coverage, simply expanding Medicaid to cover everyone below 300% of the FDL would offer coverage to almost all uninsured Americans. It could also be done using reconciliation.
Providing uninsured individuals money to help purchase insurance (either as subsidies, vouchers, or tax credits) should also pass using reconciliation. It is one of the major costs in health care reform.
Tax credits and/or subsidies to small businesses who offer their employees health insurance should be protected from the Byrd rule. They would be a significant source of federal spending.
Different fixes or improvements to the Medicare Part D “doughnut hole” issue have been proposed. Closing the doughnut hole would cost several billion and would also likely be protected.
All the different changes to Medicare which are projected to save money should survive reconciliation. Fixing the overpayment for Medicare Advantage would save over $100 billion. Efforts to move away from the fee-for-service payment structure are projected to also save hundreds of billions. For the most part the important cost saving changes to Medicare should be able to pass using reconciliation.
Several different tax ideas are being considered to help pay for health care reform: reducing the tax deductions for the wealthy, a surtax, taxing “Cadillac” health insurance plans, soda tax, liquor tax, etc... Any tax that increase revenue should be protected.
These are are not the only aspects of health care reform that I believe will be easily passed using reconciliation, they are just the major pieces I'm 95 percent confident will not violate the Byrd rule. The major problems with getting these reforms passed using reconciliation is cost. The bill will need to be revenue neutral after only 5 years.
This should demonstrate that even though there are problems with using reconciliation, it can be used to dramatically improve the lives of millions. Savings from Medicare reform alone -- even without any new taxes -- could pay for fixing the Part D doughnut hole as well as dramatic expansion of Medicaid that could reduce the number of uninsured Americans by almost half.
Washington Post Publishes Lies About Health Care Reform
The Washington Post has recently taken to publishing straight up lies. The article states:
Max Baucus's original health care reform proposal that he wrote earlier this year included a robust public option. Even a few weeks ago he told Montanan Democrats that he supported a public option.
Jeff Bingaman has repeatedly said that he supports a public option. He even voted for Senate HELP committee bill which includes a public option.
Arlen Specter has been promoting his support for a public option every chance he can get now that he faces a Democratic primary challenger.
Baucus, Bingaman, and Specter have not drawn a line in the sand on the issue of the public option. All three would not vote against health care reform simply because it doesn't include public option. They would all being willing to negotiate on the issue of a public option in exchange for the broad support needed to pass health care reform through regular order.
Being willing to vote for reform without a public option is completely different than opposing a public option. Either the three senators told the Washington Post that they have been repeatedly lying to their constituents, or the Washington Post should print a retraction.
Obama would like, but doesn't need, Republican votes to achieve his goal. But seven conservative Democratic senators -- led by Max Baucus (Mont.) and including Blanche Lincoln (Ark.), Kent Conrad (N.D.), Jeff Bingaman (N.M.), Ben Nelson (Neb.), Mary Landrieu (La.) and Arlen Specter (Pa.) -- oppose the public option as well. So by shilling for the insurance industry, they've made it thus far impossible for Obama to take advantage of the Democrats' majority in the Senate.This statement is simply false. It is true that Mary Landrieu and Ben Nelson have said they are likely to oppose a public option (although Nelson is technically open to the idea). Reporting also indicates that Kent Conrad does not like the idea. But Max Baucus, Jeff Bingaman, and Arlen Specter have all publicly and repeatedly stated that they support a public option.
Max Baucus's original health care reform proposal that he wrote earlier this year included a robust public option. Even a few weeks ago he told Montanan Democrats that he supported a public option.
Jeff Bingaman has repeatedly said that he supports a public option. He even voted for Senate HELP committee bill which includes a public option.
Arlen Specter has been promoting his support for a public option every chance he can get now that he faces a Democratic primary challenger.
Baucus, Bingaman, and Specter have not drawn a line in the sand on the issue of the public option. All three would not vote against health care reform simply because it doesn't include public option. They would all being willing to negotiate on the issue of a public option in exchange for the broad support needed to pass health care reform through regular order.
Being willing to vote for reform without a public option is completely different than opposing a public option. Either the three senators told the Washington Post that they have been repeatedly lying to their constituents, or the Washington Post should print a retraction.
Reid Chooses A Place On The Public Option Continuum
Senator Majority Leader Harry Reid has just let his preference be known about the public option. He claims wants a public option that is not government-run like Medicare but instead, a “private entity that has direction from the federal government so people that don't fall within the parameters of being able to get insurance from their employers, they would have a place to go.”
Harry Reid could mean a few different things with his statement. The first is that he really does mean something very similar to Medicare but is only trying to muddle the debate. Very few people seem to really understand how Medicare is run on a day to day basis. Only part of Medicare is really "run by the government." Like many government programs, most of its functions are contracted out to private companies. Medicare does not directly collect claims from providers but contracts out many of the administrative functions to private companies.
Progressives should not be very bothered if a public option contracted out the most of the administrative functions to a private company. As long as the government is the ultimate insurer, payer, and decider on the issue of claims, that is what is really important. What is most important is that the private entity contracted by the government has no financial stake in whether a claim is or is not denied.
I suspect what Harry Reid really wants is what I labeled the “national semi-independent non-profit” public option. I think this has less to do with a political philosophy and more to do with budgetary optics. Having the government collect premiums and pay out claims would appear to be an expensive expansion of government (even if it is budget neutral). To make the public option appear off the federal government's budget you can create a new non-profit trust or company from which all claims are paid. You can also mandate that this new non-profit entity is run by a government appointed board and is directly regulated by some part of the department of HHS.
With a “national semi-independent non-profit” public option, the devil is always in the detail. It is possible to set it up so that it would behave in a manner that is almost indistinguishable from a government run program. It is also possible to set it up so that it ends up completely failing or acting indistinguishably from current private insurance companies.
What I think Reid is advocating is much closer to (and probably to the left of) Schumer's single national cooperative compromise. The health insurance equivalent of the Corporation for Public Broadcasting, Federal Reserve, Amtrak, FDIC, etc... It does not sound anything like Conrad's worthless idea of small independent regional cooperatives. Reid seems to want a single national plan with direct government oversight; both are critical ingredients missing from Conrad's proposal.
Harry Reid could mean a few different things with his statement. The first is that he really does mean something very similar to Medicare but is only trying to muddle the debate. Very few people seem to really understand how Medicare is run on a day to day basis. Only part of Medicare is really "run by the government." Like many government programs, most of its functions are contracted out to private companies. Medicare does not directly collect claims from providers but contracts out many of the administrative functions to private companies.
Progressives should not be very bothered if a public option contracted out the most of the administrative functions to a private company. As long as the government is the ultimate insurer, payer, and decider on the issue of claims, that is what is really important. What is most important is that the private entity contracted by the government has no financial stake in whether a claim is or is not denied.
I suspect what Harry Reid really wants is what I labeled the “national semi-independent non-profit” public option. I think this has less to do with a political philosophy and more to do with budgetary optics. Having the government collect premiums and pay out claims would appear to be an expensive expansion of government (even if it is budget neutral). To make the public option appear off the federal government's budget you can create a new non-profit trust or company from which all claims are paid. You can also mandate that this new non-profit entity is run by a government appointed board and is directly regulated by some part of the department of HHS.
With a “national semi-independent non-profit” public option, the devil is always in the detail. It is possible to set it up so that it would behave in a manner that is almost indistinguishable from a government run program. It is also possible to set it up so that it ends up completely failing or acting indistinguishably from current private insurance companies.
What I think Reid is advocating is much closer to (and probably to the left of) Schumer's single national cooperative compromise. The health insurance equivalent of the Corporation for Public Broadcasting, Federal Reserve, Amtrak, FDIC, etc... It does not sound anything like Conrad's worthless idea of small independent regional cooperatives. Reid seems to want a single national plan with direct government oversight; both are critical ingredients missing from Conrad's proposal.
The Many Possible Public Options
In the heated debate over the public option what is often overlooked is that there is not any one “public option.” There are in fact several different public options being proposed. They run the gambit from the very robust to the weak and nearly useless. I'm going to try and explain the different configurations of the public option proposals and place them on a rough robust-to-weak continuum. The continuum does not just represent a left/right divide on the issue, but also a divide on their potential cost savings. The more robust public option the more money it will save the government and the consumer.
Medicare Buy In
The strongest and most robust public option proposed is the straight “Medicare buy in.” It would simply allow individuals under the age of 65 to buy Medicare at an actuarially sound premium level. The option would provide the greatest cost savings to the government and the consumer. Senator Rockefeller's “Consumers Choice Health Plan” would be a Medicare buy in for the first few years. After that establishment period, the plan would progressively become weaker in several ways.
Medicare Rates Plus
A slightly less robust way to construct a public option is some form of a “Medicare rates plus” option. Doctors who accept Medicare would need to accept the public option, but it would pay Medicare rates plus anywhere between an additional 1%-20%. The higher the additional reimbursement rates, the less robust (and more expensive to consumers) the option would be.
Medicare Rates Plus With Opt Out
The next step down is a “Medicare rates plus with opt out” configuration. This is very similar to a “Medicare rates plus” option but providers who accept Medicare would not need to accept the public option. This configuration becomes less robust depending on the additional reimbursements and how easy it is for doctors to opt out. The original public option in the House bill which passed the House Ways and Means Committee and the House Education and Labor Committee include this style of public option. It would pay Medicare rates plus 5% and allow doctors who accept Medicare to opt out of the program.
Level Playing Field
A “level playing field” option was first proposed by Chuck Schumer in an attempt to win over moderates. The government would create a new government run insurance company. It would behave like private insurers and directly negotiate payments with providers. It would not be allowed to piggy back on Medicare's rates. Depending on the details, it would either allow providers accepting Medicare to opt out or require the plan to create a new network from scratch. The public option compromise in the House Energy and Commerce Committee and the public option in the Senate HELP Committee bill are both “level playing field” style public plans.
National Semi-Independent Non-Profit
The absolute minimum that I would classify as a public option is a national semi-independent non-profit. The government would provide money and expertise to establish a new national non-profit health insurance company. It would not be a government entity and its employees would not be federal employees. It would be highly regulated and have direct government oversight. The top level of the organization (top management, CEO, and/or board members) would be appointed by the federal government. They would be appointed by either Congress, the president, the secretary of HHS or some combination of all three. The single national cooperative compromise Schumer offered Grassley and Conrad would be an example.
I left off the continuum Conrad's idea of small regional co-ops. In no way, shape, or form are they a public option or would they fulfill the goals of a public option. Not only would they fail to fulfill the goals of a public option, but the severe restrictions placed on them means they would be unlikely to ever even get off the ground. An issue I did not deal with is whether the public option would be open to all businesses or only offered on the new exchange. Opening the public option to all would make it more robust, but it seems the overwhelming political consensus is to make it only available on the new exchange.
There is currently no one public option. There is not even one robust public option and one weak public option. There dozens of ways to configure a public option in discussion. Each change effects a plan's relative “robustness.” Some options would even start off robust then become weak. Beyond the buzzwords of “public option” and “robust” there is an ocean of nuance.
Americans Are Equally Supportive of Single Payer And An Individual Mandate
The AARP just released a new poll on health care reform. It shows that support for a single payer health care system is statistically even with support for an individual mandate to buy health insurance.
Single payer health insurance is supported by 44% of all Americans polled while an individual mandate is supported by 45%.
Interestingly, the question for single payer was:
It is unfortunate that single payer (Medicare for All) is not even being considered. While it may not quite have majority support, it is an idea with significant mainstream backing. It should also be noted that some critical components of the Democrats health care plan also lack majority support.
Single payer health insurance is supported by 44% of all Americans polled while an individual mandate is supported by 45%.
Interestingly, the question for single payer was:
To what degree do you favor or oppose the following health care proposals? Having a national health plan in which all Americans would get their insurance from a single government plan.People over the age of 50 were much more strongly opposed (34% support to 60% opposed). Given that many people over 50 are on Medicare, and Medicare is very popular, I suspect that this question was not the best way to ask about single payer health insurance. If the question had been “Do you support giving everyone Medicare?” I think it would have polled much better with the over 50 group.
It is unfortunate that single payer (Medicare for All) is not even being considered. While it may not quite have majority support, it is an idea with significant mainstream backing. It should also be noted that some critical components of the Democrats health care plan also lack majority support.
Public Option: Reconciliation Protection, Part 1
It is becoming more and more clear that efforts to find a bipartisan bill are falling apart. I think the only way that health care reform will be passed is using reconciliation. The strange rules of reconciliation mean that some parts of the bill could be stripped out by the Byrd Rule. The Byrd Rule basically says that anything in a reconciliation bill must cost or save money. This is part one of a series where I provide ideas on how to protect the many parts of reform from the Byrd Rule.
It is possible that any public option can pass using reconciliation. Even though the public option is meant to be revenue neutral, it will take in large amounts of money (in the form of premiums) and spend large amounts of money (in the form of reimbursements for procedures). This alone might protect a public option from the Byrd Rule. If not, things get a bit more difficult.
We know for a fact that the the original House robust public option has been scored by the CBO as saving billions. Since the size of subsidies are based on the three cheapest plans, offering a cheaper public plan reduces the size and cost of the subsidies. For that reason a robust public option based on Medicare payment rates should be protected.
A very robust public option does not seem to have the votes in the Senate or the House. Chuck Schumer's “level playing field” public option, found in the Senate HELP Committee bill and House Energy and Commerce Committee bill, seems the most likely to pass. Unfortunately the CBO says it does not save a substantial amount of money. I can think of four politically acceptable ways to protect the “level playing field” public option:
1) It would need a large $10 billion loan and/or seed money fund to start with. The cost of that loan or start up fund might be big enough to save it.
2) The plan could be written to pay the government a profit for a few years or pay back a high interest loan. The revenue this would bring in might protect it.
3) Subsidies are currently based on the average of the premiums of the three cheapest plans. The bill could be rewritten to base the size of the subsidies on only the cost of the public option's premiums. This would not only save money, but would make the public option an essential part of scoring the overall bill.
4) Finally, the public option could be robust for only a very brief period of time. It would pay Medicare rates for only the first year or even a few months. This time period could be adjusted so that it is just long enough to save just enough money to make the “level playing field” public option safe from the Byrd Rule.
It is possible that any public option can pass using reconciliation. Even though the public option is meant to be revenue neutral, it will take in large amounts of money (in the form of premiums) and spend large amounts of money (in the form of reimbursements for procedures). This alone might protect a public option from the Byrd Rule. If not, things get a bit more difficult.
We know for a fact that the the original House robust public option has been scored by the CBO as saving billions. Since the size of subsidies are based on the three cheapest plans, offering a cheaper public plan reduces the size and cost of the subsidies. For that reason a robust public option based on Medicare payment rates should be protected.
A very robust public option does not seem to have the votes in the Senate or the House. Chuck Schumer's “level playing field” public option, found in the Senate HELP Committee bill and House Energy and Commerce Committee bill, seems the most likely to pass. Unfortunately the CBO says it does not save a substantial amount of money. I can think of four politically acceptable ways to protect the “level playing field” public option:
1) It would need a large $10 billion loan and/or seed money fund to start with. The cost of that loan or start up fund might be big enough to save it.
2) The plan could be written to pay the government a profit for a few years or pay back a high interest loan. The revenue this would bring in might protect it.
3) Subsidies are currently based on the average of the premiums of the three cheapest plans. The bill could be rewritten to base the size of the subsidies on only the cost of the public option's premiums. This would not only save money, but would make the public option an essential part of scoring the overall bill.
4) Finally, the public option could be robust for only a very brief period of time. It would pay Medicare rates for only the first year or even a few months. This time period could be adjusted so that it is just long enough to save just enough money to make the “level playing field” public option safe from the Byrd Rule.
Is Firedoglake Now The Largest Health Insurance PAC?
I'm very impressed that Jane Hamsher at Firedoglake.com has had so much success raising money to thank House members for standing up for the public option. In the past week her “Stand Up For The Public Option” page on ActBlue.com has raised $397,684 for progressive Democratic House members.
For a comparison I went to opensecrets.org to see how much money the HMOs and private health insurance companies have given to the federal candidates this year. According to Opensecrets.org, if Firedoglake.com's effort to save the public option was a health insurance company, it would be the single largest donor in terms of candidate donations for the 2010 election cycle. It raised barely less than the total donations from all the different 45 chapters of the Blue Cross/Blue Shield Association, which donated a total of $524,606 to federal canidates for 2010. All health service/HMOs companies have given a total of $1,781,080 to federal canidates so far this cycle.*
*This post needs several caveats. First, the data on Opensecrets.org is not updated frequently (ActBlue.com is updated by the second. Second, this is only about donations directly to federal candidates this year. It does not count money spent on things like lobbyists, donations to other PAC's, direct advocacy commercials, etc... These activities account for the vast majority of industry money spent on trying to shape the health care reform debate.
Signs Bipartisanship Reform Is Breaking Down Are Everywhere - Updated
It appears that Baucus group still has a lot of very important issues the have not been agreed to. It also appears the co-ops idea may already be dead because of attacks from the left and right. Can Obama get away with supporting a bill with zero alternative to the current health insurance companies?
Waxman and Rockefeller have requested potentially explosive information about health insurance company profits for when Congress returns (and right before Baucus needs to make a deal with Republicans or not). It should really fire up the progressive base for a public option and make a deal very tough.
Schumer is telling fellow Democrats to prepare for a partisan bill.
And Democrats are looking into how to pass health care reform using reconciliation.
Update - Jan Schakowsky, who is very close with President Obama, just said the health care might need to be passed with a party line vote.
Waxman and Rockefeller have requested potentially explosive information about health insurance company profits for when Congress returns (and right before Baucus needs to make a deal with Republicans or not). It should really fire up the progressive base for a public option and make a deal very tough.
Schumer is telling fellow Democrats to prepare for a partisan bill.
And Democrats are looking into how to pass health care reform using reconciliation.
Update - Jan Schakowsky, who is very close with President Obama, just said the health care might need to be passed with a party line vote.
“I think that at some point everyone’s going to see that the Republicans simply are not going to agree to any kind of healthcare reform that the insurance industry isn’t supporting and that, reluctantly, we’re going to have to do it without them,” said Rep. Jan Schakowsky (D-Ill.).
“If we have to, we will,” said Schakowsky, a chief deputy whip and the chairwoman of the Congressional Progressive Caucus's healthcare task force.
Don't Trust Conrad On Reconciliation
For months the only Democrat who ever talked about reconciliation was Kent Conrad. He only spoke of reconciliation to talk about what a terrible and unworkable option it would be. I have seen him repeatedly say it would leave the bill looking like "Swiss cheese."
The media has often uncritically quoted Conrad on using reconciliation to pass health care reform. But Conrad is not some impartial expert. He has a strong, vested and personal interest against using reconciliation.
Looking at a variety of issues (public option, size of subsidies, structure of the co-ops, direct Medicare drug price negotiations, employer mandate, etc) Conrad is probably one of the 4 or 5 most conservative Democrats in the Senate. Reporting on the Huffington Post indicates that he might be in fact to the right of even a few of Republicans. If health care reform passed using reconciliation Conrad's vote would not be needed, and what passes could be to the left of what he wants.
For instance, Conrad is against the public plan and says it is does not have the votes. Yet Senator Chuck Schumer seems fairly confident that health care reform will include a public option. Even if the public option must be passed using reconcilation. I think the chairman of the Senate Rules Committee should know how to get around the procedural problems with using reconciliation.
Conrad is also part of the gang of six in the Senate Finance Committee trying to write a bipartisan bill. Being part of the gang of six has given Conrad a disproportionately huge amount of control of the health care debate. If attempts to write a bipartisan bill were abandoned, the gang of six would be dissolved. Conrad would lose much of his power to shape the debate.
Conrad doesn't want health care to be passed using reconciliation. It would strip him of much of his power and might end up producing a bill that he votes against. When Conrad talks about the problems with using reconciliation, his words should be taken with a large grain of salt.
The media has often uncritically quoted Conrad on using reconciliation to pass health care reform. But Conrad is not some impartial expert. He has a strong, vested and personal interest against using reconciliation.
Looking at a variety of issues (public option, size of subsidies, structure of the co-ops, direct Medicare drug price negotiations, employer mandate, etc) Conrad is probably one of the 4 or 5 most conservative Democrats in the Senate. Reporting on the Huffington Post indicates that he might be in fact to the right of even a few of Republicans. If health care reform passed using reconciliation Conrad's vote would not be needed, and what passes could be to the left of what he wants.
For instance, Conrad is against the public plan and says it is does not have the votes. Yet Senator Chuck Schumer seems fairly confident that health care reform will include a public option. Even if the public option must be passed using reconcilation. I think the chairman of the Senate Rules Committee should know how to get around the procedural problems with using reconciliation.
Conrad is also part of the gang of six in the Senate Finance Committee trying to write a bipartisan bill. Being part of the gang of six has given Conrad a disproportionately huge amount of control of the health care debate. If attempts to write a bipartisan bill were abandoned, the gang of six would be dissolved. Conrad would lose much of his power to shape the debate.
Conrad doesn't want health care to be passed using reconciliation. It would strip him of much of his power and might end up producing a bill that he votes against. When Conrad talks about the problems with using reconciliation, his words should be taken with a large grain of salt.
Why You Should Donate $1,200 For A Robust Public Option
I'm glad to see that Jane Hamsher at Firedoglake.com has had so much success raising money for a public option. ($360,000 so far)
I want to address the issue of a robust public option not from a political or policy perspective, but from a personal finance perspective.
We know for a fact that the robust public option in the House bill would be 10% cheaper than typical private health insurance. The average health insurance premiums for a family of four is $13,000 a year. If you are struggling to pay for health insurance the public option would be a choice for you that would save you around $1,300 a year.
If your donation of $1,200 secured the creating of a public option you would still end up saving money. Over the next ten years (accounting for health insurance inflation) signing up for a robust public option could saving a family of four around $25,000.
Donating $1,200 to save $25,000 is not good politics-- it is a smart investment in your future.
I want to address the issue of a robust public option not from a political or policy perspective, but from a personal finance perspective.
We know for a fact that the robust public option in the House bill would be 10% cheaper than typical private health insurance. The average health insurance premiums for a family of four is $13,000 a year. If you are struggling to pay for health insurance the public option would be a choice for you that would save you around $1,300 a year.
If your donation of $1,200 secured the creating of a public option you would still end up saving money. Over the next ten years (accounting for health insurance inflation) signing up for a robust public option could saving a family of four around $25,000.
Donating $1,200 to save $25,000 is not good politics-- it is a smart investment in your future.
Obama Calls His Own Website A Liar
The problem is President Obama and Obama's website have two radically different messages on the public option.
Yesterday Obama told the American people during a radio interview:
This lack of consistence makes it very hard for anyone to trust Obama. If he said honestly that he might need to sacrifice one of his core principles, like the public option, to insure that other important reforms to our health care system get passed that would be a message the progressive base might understand. (They would not be happy but they might at least understand.) Remember it is not just the "left of the left" demanding a public option. It was Obama who told his supporters to demand the public option as a "bedrock requirment" for reform.
Pretending that the public option was never a core principle when you have it still list on your own website as one of the three “Principles” and a “bedrock requirement” makes you look like a lying scumbag. (I foolishly thought that "bedrock requirements" were the same thing as "core princples.") Progressive now have no reason to trust Obama and have no idea what else could be cut from a final bill. If Obama is willing to change what is his “core principles” on a daily basis, everything is on the table.
Obama's supporters don't need "to show Congress where the American people stand." President Obama needs to show the Congress and the American people where he stands.
*Highlighting was mine
Yesterday Obama told the American people during a radio interview:
"We are willing to make compromises," Obama told his radio audience. But he said he is not willing to give up on "core principles."The only problem is that the public option is (or at least was) a “principle” of health care reform. On his DNC website, Obama is still asking people to “stand with the president” by taking the following pledge:
Obama tried to clear up what he described as confusion surrounding his health-care proposal. He described the public option -- a government-run provider -- as only a small, and optional, part of his overall initiative.
"What we've said is, we think that's a good idea," Obama said of publicly funded health insurance. "We haven't said that's the only aspect."
The Principles
President Obama has announced three bedrock requirements for real health insurance reform:-Reduce Costs — Rising health care costs are crushing the budgets of governments, businesses, individuals and families and they must be brought under controlNow we have to show Congress where the American people stand.
-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
This lack of consistence makes it very hard for anyone to trust Obama. If he said honestly that he might need to sacrifice one of his core principles, like the public option, to insure that other important reforms to our health care system get passed that would be a message the progressive base might understand. (They would not be happy but they might at least understand.) Remember it is not just the "left of the left" demanding a public option. It was Obama who told his supporters to demand the public option as a "bedrock requirment" for reform.
Pretending that the public option was never a core principle when you have it still list on your own website as one of the three “Principles” and a “bedrock requirement” makes you look like a lying scumbag. (I foolishly thought that "bedrock requirements" were the same thing as "core princples.") Progressive now have no reason to trust Obama and have no idea what else could be cut from a final bill. If Obama is willing to change what is his “core principles” on a daily basis, everything is on the table.
Obama's supporters don't need "to show Congress where the American people stand." President Obama needs to show the Congress and the American people where he stands.
*Highlighting was mine
A Robust Public Option Would Mean No New Taxes
Let's make it clear that a robust public option is about more than offering the choice of a non-profit option. Including a robust public option would save the government a huge amount of money and eliminate the need to create a massive new tax increase.
The CBO found that the original strong public option in the House would save the federal government around $60 billion. The House's original public option would also cost about, “10 percent lower than that of a typical private plan offered in the insurance exchanges.” That means choosing the public option would save an average family roughly $1,300 a year.
If the public option were allowed to piggy back on Medicare's provider network, as progressives would prefer, it would save an additional $91 billion (for a total of $150 billion). The House public option pays Medicare rates plus 5%. Simply allowing everyone using a health care exchange to buy into Medicare (with actuarially sound deficit neutral premiums) would create even more savings. Based on calculations using CBO data a Medicare buy-in robust public option should reduce the price tag of health care reform by just over $200 billion. A Medicare buy-in would be around 15% cheaper than a typical private plan.
The CBO also found having access to a robust public option would increase wages and therefore increase tax revenue. Money saved on health insurance would be returned to employees in the form of increased salaries. Currently the public option is restricted to only individuals and small businesses using a health care exchange.
There are several ways to expand access to the public option. You could increase the maximum size of businesses that would be allowed to use the exchange. You could also adopt something like the Wyden Free Choice Proposal. It would allow employees to take the amount being spent by their employer for their health insurance and use it to select their own plan on an exchange. Depending how and how many Americans would have the option of selecting the public plan, it could increase tax revenue by $100 billion as a result of increased wages.
Health care reform is going to currently cost between $900 billion and $1 trillion. Obama has demanded that it be budget neutral. Around $600 billion of that will come from savings in current government programs. That last $300-400 billion would need to come from a massive new tax increase. Including a robust public option would eliminate or dramatically reduce the need for any new taxes. When progressives fight for a robust public option they are also fighting to prevent a massive new tax increase.
The Benefits of a Medicare buy-in style robust public option open to all:
1)It would reduce the cost of health care reform by around $200 billion.
2)It would reduce the cost of offering health insurance to employees for businesses.
3)It would increase wages and as a result could increase tax revenue by billions without a tax increase.
4)It would provide competition and a benchmark in the health insurance market.
5)It would offer Americans the choice of a public option that could save them 15% or around $2,000 in premiums a year.
5)It would eliminate or dramatically reduce the need for a $300-400 billion tax increase.
If you are truly against tax increases you should be for a very robust public option. If you don't support a robust public option you are not a fiscal conservative.
PS. I agree with experts like the Urban Institute and believe that a public option would saving dramatically more money than I outlined here, but these numbers should be fully scorable by the very conservative CBO.
The CBO found that the original strong public option in the House would save the federal government around $60 billion. The House's original public option would also cost about, “10 percent lower than that of a typical private plan offered in the insurance exchanges.” That means choosing the public option would save an average family roughly $1,300 a year.
If the public option were allowed to piggy back on Medicare's provider network, as progressives would prefer, it would save an additional $91 billion (for a total of $150 billion). The House public option pays Medicare rates plus 5%. Simply allowing everyone using a health care exchange to buy into Medicare (with actuarially sound deficit neutral premiums) would create even more savings. Based on calculations using CBO data a Medicare buy-in robust public option should reduce the price tag of health care reform by just over $200 billion. A Medicare buy-in would be around 15% cheaper than a typical private plan.
The CBO also found having access to a robust public option would increase wages and therefore increase tax revenue. Money saved on health insurance would be returned to employees in the form of increased salaries. Currently the public option is restricted to only individuals and small businesses using a health care exchange.
There are several ways to expand access to the public option. You could increase the maximum size of businesses that would be allowed to use the exchange. You could also adopt something like the Wyden Free Choice Proposal. It would allow employees to take the amount being spent by their employer for their health insurance and use it to select their own plan on an exchange. Depending how and how many Americans would have the option of selecting the public plan, it could increase tax revenue by $100 billion as a result of increased wages.
Health care reform is going to currently cost between $900 billion and $1 trillion. Obama has demanded that it be budget neutral. Around $600 billion of that will come from savings in current government programs. That last $300-400 billion would need to come from a massive new tax increase. Including a robust public option would eliminate or dramatically reduce the need for any new taxes. When progressives fight for a robust public option they are also fighting to prevent a massive new tax increase.
The Benefits of a Medicare buy-in style robust public option open to all:
1)It would reduce the cost of health care reform by around $200 billion.
2)It would reduce the cost of offering health insurance to employees for businesses.
3)It would increase wages and as a result could increase tax revenue by billions without a tax increase.
4)It would provide competition and a benchmark in the health insurance market.
5)It would offer Americans the choice of a public option that could save them 15% or around $2,000 in premiums a year.
5)It would eliminate or dramatically reduce the need for a $300-400 billion tax increase.
If you are truly against tax increases you should be for a very robust public option. If you don't support a robust public option you are not a fiscal conservative.
PS. I agree with experts like the Urban Institute and believe that a public option would saving dramatically more money than I outlined here, but these numbers should be fully scorable by the very conservative CBO.
Conrad's Incredibly Dishonest “FAQ” On Co-ops
Conrad has created a frequently asked questions web page about his co-ops plan. Of course, Conrad does not address any of the important questions about his co-ops plan.
You know he is purposely being incredibly intellectually dishonest because he answers the question, “Have co-ops proven themselves a successful business model in other industries?”
No Conrad, the question isn't have co-ops been successful in other industries. The single most important question about health insurance co-ops (and one he does not answer) is, “Have they been tried in the past, and have they been successful at reducing costs for Americans?”
The answer to that question is that hundreds have been tried in the past and all but a handful have failed, gone out of business, or become for-profit companies. The idea has been tried repeatedly before and has failed.
A few years ago, Iowa tried to encourage health insurance co-ops. Only one was formed and failed within two years. There is every reason to suspect the same pattern will be repeated with Conrad's idea of small state based co-ops.
Conrad's co-ops proposal is worse than an untested, ill-conceived idea. It is an idea that has been tried and tested. It is an idea that we know will fail.
If Conrad wanted to truly address the thousands of unanswered questions about his idea, he should simply release the legislative language for his idea.
You know he is purposely being incredibly intellectually dishonest because he answers the question, “Have co-ops proven themselves a successful business model in other industries?”
No Conrad, the question isn't have co-ops been successful in other industries. The single most important question about health insurance co-ops (and one he does not answer) is, “Have they been tried in the past, and have they been successful at reducing costs for Americans?”
The answer to that question is that hundreds have been tried in the past and all but a handful have failed, gone out of business, or become for-profit companies. The idea has been tried repeatedly before and has failed.
A few years ago, Iowa tried to encourage health insurance co-ops. Only one was formed and failed within two years. There is every reason to suspect the same pattern will be repeated with Conrad's idea of small state based co-ops.
Conrad's co-ops proposal is worse than an untested, ill-conceived idea. It is an idea that has been tried and tested. It is an idea that we know will fail.
If Conrad wanted to truly address the thousands of unanswered questions about his idea, he should simply release the legislative language for his idea.
Bipartisanship Is Dead - Updated
Every indication is that bi-partisan reform is dead. Baucus' Gang of Six is blowing up in his face.
Last week Grassley accused Democrats of having a secret plan to kill grandmothers. Now Grassley has set a new impossible standard for bipartisanship. He will vote against a bill he personally thinks is great unless it wins a dozen other Republicans' votes.
Previously Enzi demanded that Obama and Pelosi abandon our entire system of government. He refuses to support any deal unless he is promised that his deal will remain unchanged. He wants the entire House of Representatives to have no say in health care reform.
Now Enzi doesn't even want to see real reform at all. He wants to break reform into smaller pieces that get passed one at a time.
PS. The RNC is not going after the co-ops proposal, could anyone have seen that coming.
Update- It appears Senator Kyl just declared that Grassley will not be able to found Republicans votes for any bill he comes up with.
Last week Grassley accused Democrats of having a secret plan to kill grandmothers. Now Grassley has set a new impossible standard for bipartisanship. He will vote against a bill he personally thinks is great unless it wins a dozen other Republicans' votes.
Previously Enzi demanded that Obama and Pelosi abandon our entire system of government. He refuses to support any deal unless he is promised that his deal will remain unchanged. He wants the entire House of Representatives to have no say in health care reform.
Now Enzi doesn't even want to see real reform at all. He wants to break reform into smaller pieces that get passed one at a time.
We do need to get it right. We need take the time to do it. I think the only way it will happen is we need to break it down into smaller parts than we have now and put it through one at a time.
PS. The RNC is not going after the co-ops proposal, could anyone have seen that coming.
Update- It appears Senator Kyl just declared that Grassley will not be able to found Republicans votes for any bill he comes up with.
The Swiss Amendment
The Swiss Amendment as I define it would force every insurance company to sell “basic qualified” health insurance on a non-profit basis. Premiums collected for basic minimum insurance can't be used for profit or executive pay. At minimum 90% of the premiums collected for basic insurance must be paid out in claims. Insurance companies could sell for-profit “complimentary coverage” (this would cover dental, optics, non-generic non-life saving medication, etc...) only to costumers that it already provides non-profit basic insurance for. Only funds from complimentary coverage could be used for profits or executive pay.
Background
Switzerland has a universal health care system. It uses something similar to a regulated health insurance exchange for people to select a private plan. Insurance is sold using community rates. There is an individual mandate that people must buy basic health insurance (In Switzerland this is called, “social health insurance”). The government provides people with subsidies to help buy private insurance. There is not a government run public option for people to choose. But Switzerland has a very important law that makes their private health insurance system some whate workable. All social health insurance plans must be not profit-making. Additional "complimentary coverage" can be sold to costumer for profit.
Ideally, I do not think the Swiss health care system is one that we should replicate. While Switzerland does have a universal system and pays less than us per capita on health care, it is still one of the most expensive systems in the world. If we are trying to reduce health care spending, copying another very expensive (but much less expensive) system does not seem like a smart move.
I do think that if we are going to have a health care system that relies heavily on private health insurance we do need the copy the Swiss amendment. If the government is going to provide some people money to help afford health insurance, it should subsidize health care, not corporate profits.
If there is a public option the Swiss amendment would be very important but not critical. There would at least be a comparison to help Americans determine if the for-profit insurance companies are ripping off costumers and the government.
Without a public option the Swiss amendment is essential to avoid a complete fiscal disaster. An individual mandate and subsidies based on the average price of the cheapest plans offered in an area would create a perverse incentive for private insurance companies to increase premiums, gauge costumers, and rip off the American taxpayer. Competition would be insufficient to control cost for many years.
Most health insurance markets are highly concentrated and it is very difficult for new insurance companies to expand into new markets. Creating provider networks requires a large costumer base, but costumers won't sign up for a plan unless there is significant provider network. Doctors also won't sign up with insurance plans that don't have customers. It is a classic catch-22. That is why a government backed public option is so important.
If there is not a public option at minimum there must be the Swiss amendment to avoid disaster. There is no ideological reason that Republicans or conservative Democrats should oppose the Swiss amendment. It is unconscionable to force everyone to buy insurance and provide government money to help people afford minimum insurance without at least the Swiss amendment. Without it, health care reform is a massive transfer of money from the taxpayers to health insurance profits and their millionaire executives.
Background
Switzerland has a universal health care system. It uses something similar to a regulated health insurance exchange for people to select a private plan. Insurance is sold using community rates. There is an individual mandate that people must buy basic health insurance (In Switzerland this is called, “social health insurance”). The government provides people with subsidies to help buy private insurance. There is not a government run public option for people to choose. But Switzerland has a very important law that makes their private health insurance system some whate workable. All social health insurance plans must be not profit-making. Additional "complimentary coverage" can be sold to costumer for profit.
Ideally, I do not think the Swiss health care system is one that we should replicate. While Switzerland does have a universal system and pays less than us per capita on health care, it is still one of the most expensive systems in the world. If we are trying to reduce health care spending, copying another very expensive (but much less expensive) system does not seem like a smart move.
I do think that if we are going to have a health care system that relies heavily on private health insurance we do need the copy the Swiss amendment. If the government is going to provide some people money to help afford health insurance, it should subsidize health care, not corporate profits.
If there is a public option the Swiss amendment would be very important but not critical. There would at least be a comparison to help Americans determine if the for-profit insurance companies are ripping off costumers and the government.
Without a public option the Swiss amendment is essential to avoid a complete fiscal disaster. An individual mandate and subsidies based on the average price of the cheapest plans offered in an area would create a perverse incentive for private insurance companies to increase premiums, gauge costumers, and rip off the American taxpayer. Competition would be insufficient to control cost for many years.
Most health insurance markets are highly concentrated and it is very difficult for new insurance companies to expand into new markets. Creating provider networks requires a large costumer base, but costumers won't sign up for a plan unless there is significant provider network. Doctors also won't sign up with insurance plans that don't have customers. It is a classic catch-22. That is why a government backed public option is so important.
If there is not a public option at minimum there must be the Swiss amendment to avoid disaster. There is no ideological reason that Republicans or conservative Democrats should oppose the Swiss amendment. It is unconscionable to force everyone to buy insurance and provide government money to help people afford minimum insurance without at least the Swiss amendment. Without it, health care reform is a massive transfer of money from the taxpayers to health insurance profits and their millionaire executives.
Was Grassley's "Death Panel" Talk Obama's Wake Up Call?
Obama has long tried, and so far failed, to reach a bipartisan agreement on health care reform. He has given incredible leeway to Max Baucus to come to some kind of agreement with Chuck Grassley. Obama has been very malleable, willing to concede on several important issues to gain some Republican support.
Until this last week, the concessions demanded by Grassley at least seemed to have an ideological basis. They seemed to be on issues where there was a real philosophical difference on the role of government. The issue of the government run public option, the issue of an employer mandate, the size of subsidies, what new taxes should pay for reform, etc...
But everything changed on Wednesday when Grassley told people to be afraid the Democrats had a secret plan to kill grandmothers. He was attacking a small end-of-life counseling provision which Sarah Palin dubbed “death panels.” Until last week, end of life counseling has never been a partisan or ideological idea. It has been long championed by dozens of Republicans over the years.
Grassley was not fighting against an idea for ideological reasons. He decided to shamelessly fear monger about what should have been a completely noncontroversial proposal. I think Grassley showed that day that he is not and has never been an honest broker during the health care negotiations.
Yesterday at a town hall, Obama made a statement which seemed to be directed squarely at Senator Grassley. Obama said,
PS, it appears that Grassley knows Obama was directly going after him.
Until this last week, the concessions demanded by Grassley at least seemed to have an ideological basis. They seemed to be on issues where there was a real philosophical difference on the role of government. The issue of the government run public option, the issue of an employer mandate, the size of subsidies, what new taxes should pay for reform, etc...
But everything changed on Wednesday when Grassley told people to be afraid the Democrats had a secret plan to kill grandmothers. He was attacking a small end-of-life counseling provision which Sarah Palin dubbed “death panels.” Until last week, end of life counseling has never been a partisan or ideological idea. It has been long championed by dozens of Republicans over the years.
Grassley was not fighting against an idea for ideological reasons. He decided to shamelessly fear monger about what should have been a completely noncontroversial proposal. I think Grassley showed that day that he is not and has never been an honest broker during the health care negotiations.
Yesterday at a town hall, Obama made a statement which seemed to be directed squarely at Senator Grassley. Obama said,
So when I have people who just a couple of years ago thought this was a good idea now getting on television suggesting that it’s a plot against grandma or to sneak euthanasia into our health care system, that feels dishonest to me.To my knowledge this is the first time Obama has criticized one of the Republicans who are part of Baucus' “Gang of Six.” This could be the wake up call Obama needed. Proof that Grassley was not delaying reform for ideological reason but to simply hurt Democrats.
PS, it appears that Grassley knows Obama was directly going after him.
Co-ops, Exchanges, Gateways, and The Need For A Public Plan
In 2000 the General Accounting Office did a study of health insurance purchasing cooperatives. This study should shed important light on the issue of insurance co-ops pushed by Senator Conrad and the problems of health insurance exchanges without a public option. The study found that:
The five purchasing co-ops that the GAO investigated work in a manner very similar to the state based health insurance exchanges that are likely to be a part of health care reform. Like the state based exchanges, they pool together health insurance purchases for small employers.
The California and the Florida co-ops at one time were both larger than many of the state based exchanges are projected to be. The CBO calculates that roughly 11% of the Americans will get health insurance from an exchange. The California co-op once had more members than that 11% that state exchanges are expected to enroll. While state based exchanges should give individuals and small businesses greater choice, they are unlikely to do anything to reduce premiums.
Another model of how new health insurance exchanges are likely to work is the Federal Employee Health Benefits Program. The FEHB is a health insurance exchange for federal employees. It does a great job of offering many choices but a terrible job at controlling cost. From 1985-2002 the premiums in the FEHB program grew only 0.1% slower than the rest of the private insurance market. The FEHB does not include a public option.
Finally, there is the example of Massachusetts. They implemented reform that would be similar to what Baucus is proposing. It also created a new health care exchange for small businesses (called the Commonwealth Connector) which did not include a public option. Massachusetts' reform did a good job at reducing the number of uninsured, but failed to control the spiraling cost of health insurance. Now Massachusetts is looking at some massive structural reforms to control cost.
There are only two “successful” health insurance companies which are co-ops, Group Health Cooperative in Washington and HealthPartner, Inc. in Minnesota. Conrad wants to replicate these instead of a public option. Even the National Cooperative Business Association admits that competition drove most of the health insurance co-ops out of business or forced them to abandon the co-op structure. While Group Health Cooperative provides a good quality of care, its premiums are still spiraling out of control.
Whether it is the Federal Employee Exchange, Commonwealth Connector, gateways, or state based purchasing co-ops; efforts to pool individuals and small businesses in a single health insurance marketplace does not help control cost. State based exchanges should help provide individuals and small business employees with greater choice. But without a public plan or massive structural changes, they will do basically nothing to arrest the devastating increase in cost of health insurance.
Despite efforts to negotiate lower premiums, cooperatives have only been able to offer premiums that are comparable to those in the general small group market. The cooperatives we reviewed typically did not obtain overall premium reductions because (1) their market share provided insufficient leverage, (2) they could not produce administrative savings for insurers.These purchasing co-ops may or may not be part of the co-op proposal promoted by Senator Conrad. (Note: Conrad has repeatedly refused to provide any concrete details for his co-ops idea.) The study makes it clear that collective purchasing co-ops will be useless at reducing premiums or controlling the spiraling cost.
The five purchasing co-ops that the GAO investigated work in a manner very similar to the state based health insurance exchanges that are likely to be a part of health care reform. Like the state based exchanges, they pool together health insurance purchases for small employers.
The California and the Florida co-ops at one time were both larger than many of the state based exchanges are projected to be. The CBO calculates that roughly 11% of the Americans will get health insurance from an exchange. The California co-op once had more members than that 11% that state exchanges are expected to enroll. While state based exchanges should give individuals and small businesses greater choice, they are unlikely to do anything to reduce premiums.
Another model of how new health insurance exchanges are likely to work is the Federal Employee Health Benefits Program. The FEHB is a health insurance exchange for federal employees. It does a great job of offering many choices but a terrible job at controlling cost. From 1985-2002 the premiums in the FEHB program grew only 0.1% slower than the rest of the private insurance market. The FEHB does not include a public option.
Finally, there is the example of Massachusetts. They implemented reform that would be similar to what Baucus is proposing. It also created a new health care exchange for small businesses (called the Commonwealth Connector) which did not include a public option. Massachusetts' reform did a good job at reducing the number of uninsured, but failed to control the spiraling cost of health insurance. Now Massachusetts is looking at some massive structural reforms to control cost.
There are only two “successful” health insurance companies which are co-ops, Group Health Cooperative in Washington and HealthPartner, Inc. in Minnesota. Conrad wants to replicate these instead of a public option. Even the National Cooperative Business Association admits that competition drove most of the health insurance co-ops out of business or forced them to abandon the co-op structure. While Group Health Cooperative provides a good quality of care, its premiums are still spiraling out of control.
Whether it is the Federal Employee Exchange, Commonwealth Connector, gateways, or state based purchasing co-ops; efforts to pool individuals and small businesses in a single health insurance marketplace does not help control cost. State based exchanges should help provide individuals and small business employees with greater choice. But without a public plan or massive structural changes, they will do basically nothing to arrest the devastating increase in cost of health insurance.
Death By A Hundred Grassley Hissy Fits
Obama wanted health care reform to have a strong public option. It is a smart policy which would save money. Senator Grassley and the rest of Republicans threw a hissy fit screaming about a “government take over of health care.” Baucus gave Grassley what he wanted on the public option.
The Democrats wanted an employer mandate because it would be impossible to strengthen our current employer health care system while expanding coverage without one. Grassley again threw a hissy fit about an employer mandate and screamed about millions of people losing their jobs. Baucus gave Grassley what he wanted and embraced the dangerously stupid idea of a “free rider” provision instead.
Several Democrats and Republicans all support the very simple idea of helping older people pay for a living will if they want one. Some Republicans, including Grassley, began screaming “death panels” and about government plans to “pull the plug on grandma.” Only a few days later Baucus again gave in to Grassley's hissy fit.
What provision will be killed next by fear-mongering hissy fits: the individual mandate (the health care tax?), subsidies to buy insurance/expanding Medicaid (massive welfare expansion?), community ratings (fat people/smoker give away?), Co-ops (health insurance Fannie Mae?), minimum health insurance benefits (oppressive, heavy handed government regulation?), eliminating the huge Medicare Advantage give away to insurance companies (taking away Medicare from old people?), capping the deduction of expensive employer provided health insurance (massive new middle class tax hike?), etc...
I promise you that the optional help paying for living wills (“death panels”) will not be the last provision killed by some super crazy fear mongering. The Republicans will strip health care to nothing one issue at a time. This is why Democrats needed to fight for the public option. Once the Republicans found out that Obama would give in to their hissy fits, they started trying to kill the bill one provision at a time.
The Democrats wanted an employer mandate because it would be impossible to strengthen our current employer health care system while expanding coverage without one. Grassley again threw a hissy fit about an employer mandate and screamed about millions of people losing their jobs. Baucus gave Grassley what he wanted and embraced the dangerously stupid idea of a “free rider” provision instead.
Several Democrats and Republicans all support the very simple idea of helping older people pay for a living will if they want one. Some Republicans, including Grassley, began screaming “death panels” and about government plans to “pull the plug on grandma.” Only a few days later Baucus again gave in to Grassley's hissy fit.
What provision will be killed next by fear-mongering hissy fits: the individual mandate (the health care tax?), subsidies to buy insurance/expanding Medicaid (massive welfare expansion?), community ratings (fat people/smoker give away?), Co-ops (health insurance Fannie Mae?), minimum health insurance benefits (oppressive, heavy handed government regulation?), eliminating the huge Medicare Advantage give away to insurance companies (taking away Medicare from old people?), capping the deduction of expensive employer provided health insurance (massive new middle class tax hike?), etc...
I promise you that the optional help paying for living wills (“death panels”) will not be the last provision killed by some super crazy fear mongering. The Republicans will strip health care to nothing one issue at a time. This is why Democrats needed to fight for the public option. Once the Republicans found out that Obama would give in to their hissy fits, they started trying to kill the bill one provision at a time.
Take Away Grassley's Health Care Veto
President Obama, Senate Majority Leader Harry Reid, and Chairman Max Baucus have all given Republican Senator Grassley incredible power in the health care debate. In an effort to create a bipartisan bill, Senator Grassley has been given a practical veto over any health care proposal.
As thanks for giving Grassley a very influential seat at the table, he has decided to spread absurd, slanderous lies about the Democrats' (including President Obama's) health care reform ideas. According to the Iowa Independent, at a town hall meeting,
In the House bill, there is counseling for end of life,” Grassley said. “You have every right to fear. You shouldn’t have counseling at the end of life, you should have done that 20 years before. Should not have a government run plan to decide when to pull the plug on grandma.This scurrilous lie is not only absurd but also stupid. It is ridiculous to claim that anyone wants to kill people's grandmas. The idea that the House Democrats have some secret plan to kill old people is pure insanity.
The lie is also just stupid. Basically, everyone's grandmas are covered by the government run single payer health insurance program, Medicare. If Grassley was truly worried about a “government-run plan” deciding to pull the plug on grandparents, he would advocate repealing Medicare. Since Grassley has never made any effort to eliminate Medicare, he probably feels all the Grandmas have nothing to fear from a government-run plan.
Grassley is not only lying to the American people but he is trying to convince Americans that Democrats and the government employees have a secret plan to kill their grandmas. This rhetoric has no place in this important debate and neither should Senator Grassley. It is time for the Democratic leadership to tell Grassley to stop lying or kick him out of the bill writing negotiations.
Medicare is Government Run Health Insurance
Everyone actively involved in the health care debate knows that Medicare is a government run, single payer health insurance program. Unfortunately, this fact is not stated often enough. It is a long standing joke that an old woman told a senator, “keep the government's hands off my Medicare,” but I think it does speak to a great ignorance in our country. I think allowing the myth to persist has been a big failing of the Democratic Party.
I have not seen, but would love to see, some public polling to find out how many Americans actually don't know that Medicare is government run health insurance. I think the number would be surprisingly high. It is painful to watch people on Medicare scream about the government takeover of health care. The government took over their health insurance years ago.
I partly blame the media for not vigorously stating that Medicare is government run single payer health insurance. They should be asking anyone who warns of a “government takeover” if they then want to repeal the government run Medicare program.
But, I mostly blame the Democratic party for not getting the message out. The government run single payer program called Medicare is one of the party's greatest achievements and one of the most popular government programs. The Democrats should be singing its praises, not tip-toeing around it.
Government run Medicare doesn't just provide peace of mind to millions of seniors. It has also consistently outperforms the private insurance companies. Government run Medicare (and the government run Veterans Health Administration) have higher customer satisfaction than private insurance. Government run single payer Medicare has done a much better job at controlling the spiraling increase in premiums than private insurance. When government run Medicare competes head to head with private health insurance (Medicare Advantage) government run Medicare in almost all cases was cheaper. Medicare is proof the government can do a better job of providing health insurance.
For too long the Democrats allowed “free market” Republicans to convince Americans that the government can't do anything right. Some Americans so strongly believe this idea that they assume something as popular as Medicare can't be run by the federal government.
The Democrats need to state clearly and often that Medicare is government run single payer health insurance. They should extol the benefits of the government run Medicare program at every town hall meeting and TV appearance.
The American people will not trust the federal government to be more involved in health insurance unless they are shown proof that the government can do the job well. Government run Medicare is the proof that Democrats should offer to skeptical voters. The government was given complete control of a large part of the health insurance market and has done a good job with it for decades.
*I state 14 times in this article that Medicare is government run.
I have not seen, but would love to see, some public polling to find out how many Americans actually don't know that Medicare is government run health insurance. I think the number would be surprisingly high. It is painful to watch people on Medicare scream about the government takeover of health care. The government took over their health insurance years ago.
I partly blame the media for not vigorously stating that Medicare is government run single payer health insurance. They should be asking anyone who warns of a “government takeover” if they then want to repeal the government run Medicare program.
But, I mostly blame the Democratic party for not getting the message out. The government run single payer program called Medicare is one of the party's greatest achievements and one of the most popular government programs. The Democrats should be singing its praises, not tip-toeing around it.
Government run Medicare doesn't just provide peace of mind to millions of seniors. It has also consistently outperforms the private insurance companies. Government run Medicare (and the government run Veterans Health Administration) have higher customer satisfaction than private insurance. Government run single payer Medicare has done a much better job at controlling the spiraling increase in premiums than private insurance. When government run Medicare competes head to head with private health insurance (Medicare Advantage) government run Medicare in almost all cases was cheaper. Medicare is proof the government can do a better job of providing health insurance.
For too long the Democrats allowed “free market” Republicans to convince Americans that the government can't do anything right. Some Americans so strongly believe this idea that they assume something as popular as Medicare can't be run by the federal government.
The Democrats need to state clearly and often that Medicare is government run single payer health insurance. They should extol the benefits of the government run Medicare program at every town hall meeting and TV appearance.
The American people will not trust the federal government to be more involved in health insurance unless they are shown proof that the government can do the job well. Government run Medicare is the proof that Democrats should offer to skeptical voters. The government was given complete control of a large part of the health insurance market and has done a good job with it for decades.
*I state 14 times in this article that Medicare is government run.
The Terrible Secret About The Wyden-Bennett Healthy Americans Act
Senator Wyden continues to promote his Healthy Americans Act. His biggest selling point is that the CBO claims the plan will save the government money. The problem is that the Healthy Americans Act saves money by quickly becoming useless.
It is Cinderella's pumpkin carriage of health care reform. At first it seems great, but after a few years it turns into a useless gourd. Its massive cost savings are nothing more than accounting illusions.
The Wyden-Bennett bill would eliminate the tax exempt status of employer-provided health insurance benefits. It would replace this with a standard tax deduction to help buy insurance and additional subsidies for low income wage earners. This all sounds good, but here comes the rub.
Neither the tax deduction nor the subsidies to make buying health insurance affordable are indexed to the cost of health insurance. According to the CBO:
Second, the government provided financial help for people to afford insurance will quickly become worthless. From 2000-2008 employer-provided health insurance “premium increases have been between 5 and 14 percent per year.” During that same time period the Consumer Price Index (CPI) increases by only between 1.6 and 3.8 percent per year. The cost of health insurance premiums is growing at twice the rate of CPI. The tax deduction to help people buy health insurance will therefore grow at half the rate of the cost of the insurance.
The subsidies to help low income Americans buy insurance would grow only at the rate of the gross domestic product per capita. From 1997-2007 the average annual growth rate was only 1.8 percent. So the subsidies would grow at a rate of only about 1/5 the rate of increase for health insurance.
At first the Healthy Americans Act would probably work well, but it would quickly fall apart moving forward. The cost of buying insurance would rapidly outpace the tax credits and subsidies provided by the government. Within a decade health insurance would quickly become unaffordable for millions of Americans. And within several years the minimum qualifications for health insurance benefits would cover almost nothing.
I don't believe that Congress would allow the tax deduction and subsidies to buy insurance to grow at a rate so much slower than the cost of insurance. Congress would probably eventually index them to the growth rate in health insurance (either permanently or on an annual basis). Of course if they do that, it will erase almost all of the Healthy Americans Act's much celebrated cost savings for the government. The Wyden-Bennett bill looks fiscally responsible but only by using accounting tricks that would eventually make health insurance prohibitively expensive to many Americans. The bill is only cheap because it does a terrible job of providing affordable health insurance in the long term.
It is Cinderella's pumpkin carriage of health care reform. At first it seems great, but after a few years it turns into a useless gourd. Its massive cost savings are nothing more than accounting illusions.
The Wyden-Bennett bill would eliminate the tax exempt status of employer-provided health insurance benefits. It would replace this with a standard tax deduction to help buy insurance and additional subsidies for low income wage earners. This all sounds good, but here comes the rub.
Neither the tax deduction nor the subsidies to make buying health insurance affordable are indexed to the cost of health insurance. According to the CBO:
First, the amount of the new health insurance deduction would grow at the rate of general price inflation and thus would increase more slowly than the value of the current tax exclusion. Second, the minimum value of covered benefits that all participating health plans had to provide would initially be set at the level of the Blue Cross/Blue Shield standard option offered to Federal workers in 2011 (we assume that the system’s inaugural year would be 2012); but under your proposal that average value would from that point forward be indexed to growth in gross domestic product per capita rather than growth in health care costs. Because Federal premium subsidies would be based on the cost of providing that level of coverage, the cost of those subsidies would grow more slowly over time.There are several incredibly troubling problems with the bill. First, what qualifies as minimum health insurance is not based on a set of benefit requirements, it is based on a dollar amount which is indexed to the growth in the gross domestic product per capita.
Second, the government provided financial help for people to afford insurance will quickly become worthless. From 2000-2008 employer-provided health insurance “premium increases have been between 5 and 14 percent per year.” During that same time period the Consumer Price Index (CPI) increases by only between 1.6 and 3.8 percent per year. The cost of health insurance premiums is growing at twice the rate of CPI. The tax deduction to help people buy health insurance will therefore grow at half the rate of the cost of the insurance.
The subsidies to help low income Americans buy insurance would grow only at the rate of the gross domestic product per capita. From 1997-2007 the average annual growth rate was only 1.8 percent. So the subsidies would grow at a rate of only about 1/5 the rate of increase for health insurance.
At first the Healthy Americans Act would probably work well, but it would quickly fall apart moving forward. The cost of buying insurance would rapidly outpace the tax credits and subsidies provided by the government. Within a decade health insurance would quickly become unaffordable for millions of Americans. And within several years the minimum qualifications for health insurance benefits would cover almost nothing.
I don't believe that Congress would allow the tax deduction and subsidies to buy insurance to grow at a rate so much slower than the cost of insurance. Congress would probably eventually index them to the growth rate in health insurance (either permanently or on an annual basis). Of course if they do that, it will erase almost all of the Healthy Americans Act's much celebrated cost savings for the government. The Wyden-Bennett bill looks fiscally responsible but only by using accounting tricks that would eventually make health insurance prohibitively expensive to many Americans. The bill is only cheap because it does a terrible job of providing affordable health insurance in the long term.
You Can't Negotiate With People Who Accuse You Of Genocide
Sarah Palin was the GOP's Vice Presidential candidate and is one of the most prominent figures in the Republican party. On Facebook, she has accused President Obama of wanting to create a government “death panel” that would refuse to provide health care to “the sick, the elderly, and the disabled.” She is leveling the unbelievable accusation that Obama wants to commit genocide on a massive scale. Her claim is that Obama is an equal to such evil historic monsters as Hitler, Stalin, and Pol Pot.
Her talk of a “death panel” is not just a purely false distortion of a serious debate. It creates an incredibly dangerous environment that could encourage individuals to take up violence to stop the impending “downright evil” plan.
I understand that Obama wants health care reform to be bipartisan, but there is simply no negotiating with people who publicly accuse you of planning genocide. As long as such insidious lies are being promoted by the leaders of the Republican Party, a real policy debate will be impossible.
Several important Republicans (Snowe, Collins, Grassley, Enzi, Graham, etc..) claim to want to achieve a bipartisan consensus on health care reform. If they truly want to see health care reform they must denounce these horrible lies and demand that Sarah Palin apologizes. Honest negotiations are impossible as long as they provide implicit consent for those trying to poison the debate with wild accusations. If Republican senators like Grassley, Enzi, and Snowe do not denounce these destructive lies and the liars telling them, it is proof they are not interested in compromise.
They need to stand up in defense of reform or step away from the negotiating table. If they do not try to tone down the insane rhetoric it is a clear indication they are only interested in causing the Democrats a political defeat and not fixing our broken system.
Her talk of a “death panel” is not just a purely false distortion of a serious debate. It creates an incredibly dangerous environment that could encourage individuals to take up violence to stop the impending “downright evil” plan.
I understand that Obama wants health care reform to be bipartisan, but there is simply no negotiating with people who publicly accuse you of planning genocide. As long as such insidious lies are being promoted by the leaders of the Republican Party, a real policy debate will be impossible.
Several important Republicans (Snowe, Collins, Grassley, Enzi, Graham, etc..) claim to want to achieve a bipartisan consensus on health care reform. If they truly want to see health care reform they must denounce these horrible lies and demand that Sarah Palin apologizes. Honest negotiations are impossible as long as they provide implicit consent for those trying to poison the debate with wild accusations. If Republican senators like Grassley, Enzi, and Snowe do not denounce these destructive lies and the liars telling them, it is proof they are not interested in compromise.
They need to stand up in defense of reform or step away from the negotiating table. If they do not try to tone down the insane rhetoric it is a clear indication they are only interested in causing the Democrats a political defeat and not fixing our broken system.
Demand The Draft
Politico is reporting that Senator Snowe asked Senator Baucus to provide every member of the “coalition of the willing” a draft of what they have so far in their health care reform bill. Senator Baucus should by now have provided Senator Conrad, Bingham, Enzi, and Grassley with this document.
The American people have the right to see this draft. Too many millions of lives will be affected by this legislation. It is unconscionable that the draft has been kept secret. We have the right to spend the August recess scrutinizing their proposal just like the senators are. Secret negotiations are the antithesis of a free and open democracy.
Some of their ideas are so dangerous ill advised that they deserve real public scrutiny.
I think every member of the media and the public should demand the the release of the draft. The goal of the media should be to inform the public not help a group of senators keep secrets.
The American people have the right to see this draft. Too many millions of lives will be affected by this legislation. It is unconscionable that the draft has been kept secret. We have the right to spend the August recess scrutinizing their proposal just like the senators are. Secret negotiations are the antithesis of a free and open democracy.
Some of their ideas are so dangerous ill advised that they deserve real public scrutiny.
I think every member of the media and the public should demand the the release of the draft. The goal of the media should be to inform the public not help a group of senators keep secrets.
Co-ops Tried and Failed
To quote the brilliant Albert Einstein, “Insanity is doing the same thing over and over again and expecting different results.”
Health insurance co-ops sound like a good idea, the problem is we know they just don't work. The idea was tried several times before and they repeatedly failed. I would like to thank Thinkprogress.com for this great video.
Health insurance co-ops sound like a good idea, the problem is we know they just don't work. The idea was tried several times before and they repeatedly failed. I would like to thank Thinkprogress.com for this great video.
Baucus' Number One Goal Is A Bill That Just Looks Pretty
A new article in The Hill about Medicaid expansion speaks volumes about why Baucus is the wrong person to write health care reform. He is quoted as saying:
What Baucus is really saying is that it is more important that his bill looks good instead of being good. Looking at his top priorities it is clear his number one goal is that the he writes a bill that looks pretty. He wants it to be “bipartisan.” He wants it to come in below the random (but pretty) round number of a $1 trillion. He wants his bill to be “paid for.”
The problem is that Baucus achieves his goal of a pretty bill in the worst ways possible. Instead of looking for real reforms to drive down cost, he uses short cuts, loopholes, budget tricks, and cost shifts.
Covering the uninsured costs a lot of money, so Baucus “reduces” the cost of his bill by simply leaving some 17 million Americans uninsured. Real health insurance is expensive, so Baucus just watered down the minimum definition of what qualifies as insurance. Expanding Medicaid would require a large financial commitment, so Baucus just shifts the price tag off of his bill and on to the state budgets. To make his bill cost less than $1 trillion over 10 years, he only expands coverage for 7 of the 10 years.
Baucus' is writing a bad health care reform bill because he has all the wrong priorities. He is more focused on optics than on quality. Instead of making his goal to provide every American with affordable insurance, he has placed more importance on writing a bill that looks good. His bill will appear cheap but at a great cost to the working class Americans who really need help.
“We can’t foot the entire bill for the states. We just can’t do that,” Baucus said. “We can’t let U.S. taxpayers pay the full state bill” for the expansion.This claim is stupidity in its purist form, and I know Baucus is not stupid. It is not like states' revenue comes from magical pots of gold. Whether through state taxes or federal taxes, the U.S. taxpayer will be paying the bill either way. People don't care if their higher taxes are the result a new federal tax or just a federal mandate that causes an increase in their states' taxes.
What Baucus is really saying is that it is more important that his bill looks good instead of being good. Looking at his top priorities it is clear his number one goal is that the he writes a bill that looks pretty. He wants it to be “bipartisan.” He wants it to come in below the random (but pretty) round number of a $1 trillion. He wants his bill to be “paid for.”
The problem is that Baucus achieves his goal of a pretty bill in the worst ways possible. Instead of looking for real reforms to drive down cost, he uses short cuts, loopholes, budget tricks, and cost shifts.
Covering the uninsured costs a lot of money, so Baucus “reduces” the cost of his bill by simply leaving some 17 million Americans uninsured. Real health insurance is expensive, so Baucus just watered down the minimum definition of what qualifies as insurance. Expanding Medicaid would require a large financial commitment, so Baucus just shifts the price tag off of his bill and on to the state budgets. To make his bill cost less than $1 trillion over 10 years, he only expands coverage for 7 of the 10 years.
Baucus' is writing a bad health care reform bill because he has all the wrong priorities. He is more focused on optics than on quality. Instead of making his goal to provide every American with affordable insurance, he has placed more importance on writing a bill that looks good. His bill will appear cheap but at a great cost to the working class Americans who really need help.
Baucus' Radioactive Compromise
The Washington Post has some details about where Baucus' “coalition of the willing” negotiations currently are, and it does not look good. I'm amazed that any politician would think what they are proposing is a good idea.
To start with, Baucus' plan reduces cost by simply leaving around 17 million Americans uninsured. Over a third of uninsured Americans would remain uninsured under his proposal. It would only extend coverage to 94 percent of Americans, compared to the House bill that would cover 97 percent of Americans. That is 9 million more uninsured.
To help pay for reform Baucus wants to squeeze money out of seniors on Medicare. His plan “would require wealthier seniors to pay more for prescription drug coverage under Medicare, and they would charge co-payments for clinical lab procedures.” Making seniors pay more for medication and lab tests seems like a very easy sell. (I'm sure that is going to sell so much better than taxing millionaires.)
The current state of negotiations would impose a 35% excise tax on insurance companies for providing insurance plans worth over $21,000 a year for a family. That would affect 7 percent of taxpayers' policies. That is around 20 million Americans who would very likely be getting less generous health care plans as a result.
Baucus' plan would also not include the extremely popular public option. His plan could easily be described as the anti-labor bill. It would impose a new tax on health insurance which would fall heavily on union members and would not provide them with a public option they strongly support. I would not be surprised if labor worked to kill reform instead of accepting what Baucus is offering.
The proposal has a “free-rider” penalty instead of an employer mandate. There are many who think it would be a nearly impossible bureaucratic nightmare to enforce. The “free-rider” provision is also strongly opposed by Wal-mart.
Let's have a quick summary of Baucus' plan. It would increase the price of drugs for some seniors, and make them pay billions in new lab test co-pays. It would impose a new tax on health care benefits. The tax would result in millions of Americans getting less generous health insurance (i.e. losing their current health care coverage). If passed, his bill would only reduce the number of uninsured Americans by less than 2/3rd leaving around 17 million still uninsured. The bill will piss off seniors, progressives, labor unions, and millions of people with good health insurance. Have fun selling that to the American people.
To start with, Baucus' plan reduces cost by simply leaving around 17 million Americans uninsured. Over a third of uninsured Americans would remain uninsured under his proposal. It would only extend coverage to 94 percent of Americans, compared to the House bill that would cover 97 percent of Americans. That is 9 million more uninsured.
To help pay for reform Baucus wants to squeeze money out of seniors on Medicare. His plan “would require wealthier seniors to pay more for prescription drug coverage under Medicare, and they would charge co-payments for clinical lab procedures.” Making seniors pay more for medication and lab tests seems like a very easy sell. (I'm sure that is going to sell so much better than taxing millionaires.)
The current state of negotiations would impose a 35% excise tax on insurance companies for providing insurance plans worth over $21,000 a year for a family. That would affect 7 percent of taxpayers' policies. That is around 20 million Americans who would very likely be getting less generous health care plans as a result.
Baucus' plan would also not include the extremely popular public option. His plan could easily be described as the anti-labor bill. It would impose a new tax on health insurance which would fall heavily on union members and would not provide them with a public option they strongly support. I would not be surprised if labor worked to kill reform instead of accepting what Baucus is offering.
The proposal has a “free-rider” penalty instead of an employer mandate. There are many who think it would be a nearly impossible bureaucratic nightmare to enforce. The “free-rider” provision is also strongly opposed by Wal-mart.
Let's have a quick summary of Baucus' plan. It would increase the price of drugs for some seniors, and make them pay billions in new lab test co-pays. It would impose a new tax on health care benefits. The tax would result in millions of Americans getting less generous health insurance (i.e. losing their current health care coverage). If passed, his bill would only reduce the number of uninsured Americans by less than 2/3rd leaving around 17 million still uninsured. The bill will piss off seniors, progressives, labor unions, and millions of people with good health insurance. Have fun selling that to the American people.
Media Shocked That Progressives Are Not Helping Obama, After He Says He Plans To Betray Them
Talking Points Memo wonders why the blue team is not showing up to support Obama's health care reform efforts. The Plum Line is shocked that Obama's campaign email list is not able to turn out large numbers of volunteers at the town hall meetings. Marc Ambinder at The Atlantic can't understand why liberal groups are unable to match the anti-reform protesters.
Let's make this clear: Progressive health care activists hate insurance companies. They know (normally from personal experience) that what the insurance companies do is evil. They make money by taking people's premiums and then later refusing to pay for their treatments. You do not become a liberal health care reform volunteer because you are worried about the long term growth rate of health care cost and its eventual effect on budget deficits. Their single biggest goal is freedom from the insurance companies.
Obama knows that the number one goal of liberal health advocates is single payer, with a robust public plan being an acceptable compromise to most. Obama has repeatedly said that he will not fight for the public option he promised. Obama would prefer “bipartisan reform” to good reform. He is letting ultra-conservative Mike Enzi write health care reform. He is giving the wishes of the 5th most conservative senator more weight than the promises he made to his base.
No one should be surprised that liberals are not spending their weekends to show support for health care reform that Mike Enzi is writing. Obama has repeatedly said he will sell out the goals health care reform advocates to win over a handful of Republican senators. There is nothing shocking about the fact that progressives don't feel like helping Obama when he is actively advertising his willingness to betray them. He as already sold them out to PhRMA on the cheap.
Let's make this clear: Progressive health care activists hate insurance companies. They know (normally from personal experience) that what the insurance companies do is evil. They make money by taking people's premiums and then later refusing to pay for their treatments. You do not become a liberal health care reform volunteer because you are worried about the long term growth rate of health care cost and its eventual effect on budget deficits. Their single biggest goal is freedom from the insurance companies.
Obama knows that the number one goal of liberal health advocates is single payer, with a robust public plan being an acceptable compromise to most. Obama has repeatedly said that he will not fight for the public option he promised. Obama would prefer “bipartisan reform” to good reform. He is letting ultra-conservative Mike Enzi write health care reform. He is giving the wishes of the 5th most conservative senator more weight than the promises he made to his base.
No one should be surprised that liberals are not spending their weekends to show support for health care reform that Mike Enzi is writing. Obama has repeatedly said he will sell out the goals health care reform advocates to win over a handful of Republican senators. There is nothing shocking about the fact that progressives don't feel like helping Obama when he is actively advertising his willingness to betray them. He as already sold them out to PhRMA on the cheap.
41% Of Virginia Republicans Think Obama Wasn't Born In The United States
This is a shocking statistic from a new PPP poll of Virginia. When asked if “Do you think Barack Obama was born in the United States?” 41% of Republicans responded no.
Only 32% of Republicans think Obama was born in this country. More Virginia Republicans think Obama was not born in the United States than think he was.
Only 32% of Republicans think Obama was born in this country. More Virginia Republicans think Obama was not born in the United States than think he was.
The Progressive Way To Make Health Care Reform Cheap
The greatest irony of the entire health care reform battle is that it is the left wing progressives that are the ones pushing for reforms that would save the government huge amounts of money. The “centrist” and “fiscal conservative” Democrats are doing everything to make reform more expensive for the federal government. It is the Blue Dogs in the House and conservative Democrats like Baucus and Conrad who are killing almost every cost saving idea.
If the left hopes to take back the health care debate, I recommend that over the August recess they put together a series of amendments that would slash the cost of reform in half. Show that progressive reform is the only true fiscally conservative reform.
Public Option Savings
The Blue Dogs in the House have tried to water down the public option until it becomes useless. Baucus and Conrad are working closely with Republicans to kill the idea. A robust public plan or a Medicare buy in option could reduce the cost of health care reform by around 20%.
The Blue Dogs want the public plan to not be able to pay rates based on Medicare's payment structure and allow doctors accepting Medicare patients to opt out of the public plan. We know from a letter written by the Congressional Progressive Caucus that the CBO projected the effect of allowing Medicare doctors to opt out would increase the cost of reform by roughly $91 billion.
The original House public plan would pay Medicare rates plus 5%. The Blue Dogs want to not allow the public plan to take advantage of Medicare's payment structure. According to Politico:
The progressives would also like a robust pubic option to be available to all individuals and businesses. Currently it is purposely restricted to only the Exchange. We know that opening a robust public option to all would increase workers' wages and federal tax revenue. The CBO wrote:
Drug Savings
The House bill would fix one of the greatest taxpayer rip offs in the past decade. When Medicare Part D passed it took away the Medicaid drug benefits for the elderly poor who are duel eligible for Medicare and Medicaid. As the result, the government now pays 20% more to provide those individuals with drug benefits. Fixing that give away to the drug industry would save as much as $86 billion. Last Friday the House Energy and Commerce Committee also passed an amendment which would allow the government to directly negotiate drug prices. (I have not yet seen a CBO analysis of the potential savings from this change) Not surprisingly Senator Baucus made a “deal” with the drug lobby and refuses to adopt either of these cost saving proposals.
Another progressive idea to reduce the cost of health care would be to eliminate the tax free status of direct-to-consumer pharmaceutical advertising. Not only did the drug industry spend $4.8 billion on advertising direct-to-consumer, many experts believe that the practices drive up the cost of health care by encouraging unneeded and expensive medication. Taxing these ads at the corporate tax rate (35%) should net around $20 billion in taxes to help pay for reform. It should have an even greater effect by reducing the overall cost of our health care system.
Drug reimportation is a progressive idea which is also likely to be left out of health care reform. Although the idea received a lot of attention in the past. A 2004 CBO report projected that it would reduce total drug spending by $40 billion over ten years.
These ideas are only a few of the progressive proposals to reduce the cost of health care reform and none of them will be considered by Senator Baucus' bipartisan “coalition of the willing.” If you added a robust public plan (and/or Medicare buy in) open to all, it should reduce the price of his reform bill by around $230 billion. The drug reforms I outlined should score as saving at least an additional $100 billion. (I suspect that they CBO would score them as saving substantially more.) If the congressional progressives dedicated their staffs to finding cost cutting solutions they should be able to find at least another hundred billion in savings.
The progressive solutions I described should reduce the cost of Baucus' plan by a third. That would allow the bill the be paid for almost exclusively through savings in current programs and nearly eliminate the need for new taxes.
If the congressional progressives want to bring health care reform back to the left, they should spend August coming up with progressive reforms to save money. Publicly present these reforms to the “conservatives” in the party along with the CBO scoring. Force them to public defend their desire to protect the health industries at a massive cost to the taxpayers.
If the left hopes to take back the health care debate, I recommend that over the August recess they put together a series of amendments that would slash the cost of reform in half. Show that progressive reform is the only true fiscally conservative reform.
Public Option Savings
The Blue Dogs in the House have tried to water down the public option until it becomes useless. Baucus and Conrad are working closely with Republicans to kill the idea. A robust public plan or a Medicare buy in option could reduce the cost of health care reform by around 20%.
The Blue Dogs want the public plan to not be able to pay rates based on Medicare's payment structure and allow doctors accepting Medicare patients to opt out of the public plan. We know from a letter written by the Congressional Progressive Caucus that the CBO projected the effect of allowing Medicare doctors to opt out would increase the cost of reform by roughly $91 billion.
The original House public plan would pay Medicare rates plus 5%. The Blue Dogs want to not allow the public plan to take advantage of Medicare's payment structure. According to Politico:
allowing doctors and other health care providers to negotiate rates with the government under a public option would cost the government about $60 billion, according to a preliminary CBO estimate.Based on previous CBO estimates, I can conclude that if the public plan paid straight Medicare rates it should save around an additional $30 billion. That means allowing people on the Exchange to buy into Medicare or a public plan directly modeled off of Medicare would reduce the cost of reform by about $180 billion.
The progressives would also like a robust pubic option to be available to all individuals and businesses. Currently it is purposely restricted to only the Exchange. We know that opening a robust public option to all would increase workers' wages and federal tax revenue. The CBO wrote:
if more employers … 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.Without a full CBO analysis I can't properly predict how much new tax revenue would be generated by allowing all businesses and individuals the choice of a robust public plan or having the ability to buy into Medicare. My extremely rough calculations is that it would generate around $50 billion in new taxes over the ten year window.
Drug Savings
The House bill would fix one of the greatest taxpayer rip offs in the past decade. When Medicare Part D passed it took away the Medicaid drug benefits for the elderly poor who are duel eligible for Medicare and Medicaid. As the result, the government now pays 20% more to provide those individuals with drug benefits. Fixing that give away to the drug industry would save as much as $86 billion. Last Friday the House Energy and Commerce Committee also passed an amendment which would allow the government to directly negotiate drug prices. (I have not yet seen a CBO analysis of the potential savings from this change) Not surprisingly Senator Baucus made a “deal” with the drug lobby and refuses to adopt either of these cost saving proposals.
Another progressive idea to reduce the cost of health care would be to eliminate the tax free status of direct-to-consumer pharmaceutical advertising. Not only did the drug industry spend $4.8 billion on advertising direct-to-consumer, many experts believe that the practices drive up the cost of health care by encouraging unneeded and expensive medication. Taxing these ads at the corporate tax rate (35%) should net around $20 billion in taxes to help pay for reform. It should have an even greater effect by reducing the overall cost of our health care system.
Drug reimportation is a progressive idea which is also likely to be left out of health care reform. Although the idea received a lot of attention in the past. A 2004 CBO report projected that it would reduce total drug spending by $40 billion over ten years.
These ideas are only a few of the progressive proposals to reduce the cost of health care reform and none of them will be considered by Senator Baucus' bipartisan “coalition of the willing.” If you added a robust public plan (and/or Medicare buy in) open to all, it should reduce the price of his reform bill by around $230 billion. The drug reforms I outlined should score as saving at least an additional $100 billion. (I suspect that they CBO would score them as saving substantially more.) If the congressional progressives dedicated their staffs to finding cost cutting solutions they should be able to find at least another hundred billion in savings.
The progressive solutions I described should reduce the cost of Baucus' plan by a third. That would allow the bill the be paid for almost exclusively through savings in current programs and nearly eliminate the need for new taxes.
If the congressional progressives want to bring health care reform back to the left, they should spend August coming up with progressive reforms to save money. Publicly present these reforms to the “conservatives” in the party along with the CBO scoring. Force them to public defend their desire to protect the health industries at a massive cost to the taxpayers.
Compromise To The 8th Degree
The goal of many on the left is universal single payer health insurance. The simplest way to achieve this goal would be to expand Medicare for all. Currently there are around 80 votes for single payer in the House. So liberal Democrats have rsigned themselves to a series of compromises on top of the compromises.
Compromise 1. Jacob Hacker invented a political compromise known as the public option. It would simply allow individuals or businesses the option of buying in to Medicare or a Medicare like program.
Compromise 2. Some fear that this public plan would be too popular (why some elected officials would be afraid of providing people with an incredibly popular government program is beyond me). So the compromise was to restrict the public option to the Exchange. At first the Exchange will only be open to roughly 36 million people who work for small businesses or buy individual coverage.
Compromise 3. Some hospitals and health care providers are worried that Medicare underpays providers. So the public plan was further compromised and made less affordable for individuals. The public plan would pay Medicare rates plus 5-10%.
Compromise 4. Some doctors thought the public plan should not piggyback on Medicare's provider network, even though it would pay more than Medicare. To deal with these concerns the public plan was compromised again and made even less affordable. Medicare providers would be allowed to opt out of the public plan while still being allowed to accept Medicare patients.
Compromise 5. A handful of Blue Dogs complained that even the compromise Medicare-plus rates were too low. To gain their support, the public plan was again weakened and again made less affordable for average Americans. Ross' amendment would make the public plan negotiate rates not based on Medicare.
Compromise 6. Chuck Schumer in an attempt to over come the near insurmountable hurdle of 60 votes in the Senate was asked to create what would be an even greater compromise. His “level playing field” public plan would create a new government insurance provider completely separate from Medicare. It would need to independently create its own provider network and negotiate its own rates.
Compromise 7. Senator Grassley reject Schumer's compromise so Senator Conrad tried to come up with something Grassley would support. His idea was private non-profit health insurance cooperatives. Schumer offered a compromise of his compromise. The government would help set up single new national non-profit insurance company with a co-op legals structure. The federal government would maintain minor oversight through some permanent seats on its board of directors.
Compromise 8. Grassley rejected Schumer's compromise of his previous compromise. Conrad has decided to offer Grassley a complete capitulation. Conrad's proposal is simply to make some seed money available for “others” to set up co-op insurance companies if they wanted. (Who these “others” are who have the expertise, desire, skills, and time to create massive new non-profit insurance companies from scratch is a very good unanswered question.)
The co-ops would have not permanent government oversight. They would not be available nationwide or available from day one. There is zero guarantee that there would be a new co-op in your insurance market for you to sign up for. In fact, there is no guarantee that any new co-ops would ever be started or survive beyond a few years.
The worst part is health insurance co-ops have been tried repeatedly before. Most failed or turned into for-profit companies. Only handful still survive. So Conrad's “compromise” is to offer an idea which already exists and has failed.
The media falsely reports that Conrad's co-op proposal is a compromise between liberals who want a strong public option and Republicans who do not want insurance companies to face any new public competition.
It is a compromise of a compromise which was a compromise that is itself a compromise of a previous compromise from a former compromise of a much reduced compromise of the original compromise of the goal of many on the left.
At some point an idea is so reduced through repeated compromises as to be worthless. Conrad's co-ops are not an acceptable or legitimate compromise for progressives. It is a warm bucket of highly diluted spit stamped with the word reform.
Compromise 1. Jacob Hacker invented a political compromise known as the public option. It would simply allow individuals or businesses the option of buying in to Medicare or a Medicare like program.
Compromise 2. Some fear that this public plan would be too popular (why some elected officials would be afraid of providing people with an incredibly popular government program is beyond me). So the compromise was to restrict the public option to the Exchange. At first the Exchange will only be open to roughly 36 million people who work for small businesses or buy individual coverage.
Compromise 3. Some hospitals and health care providers are worried that Medicare underpays providers. So the public plan was further compromised and made less affordable for individuals. The public plan would pay Medicare rates plus 5-10%.
Compromise 4. Some doctors thought the public plan should not piggyback on Medicare's provider network, even though it would pay more than Medicare. To deal with these concerns the public plan was compromised again and made even less affordable. Medicare providers would be allowed to opt out of the public plan while still being allowed to accept Medicare patients.
Compromise 5. A handful of Blue Dogs complained that even the compromise Medicare-plus rates were too low. To gain their support, the public plan was again weakened and again made less affordable for average Americans. Ross' amendment would make the public plan negotiate rates not based on Medicare.
Compromise 6. Chuck Schumer in an attempt to over come the near insurmountable hurdle of 60 votes in the Senate was asked to create what would be an even greater compromise. His “level playing field” public plan would create a new government insurance provider completely separate from Medicare. It would need to independently create its own provider network and negotiate its own rates.
Compromise 7. Senator Grassley reject Schumer's compromise so Senator Conrad tried to come up with something Grassley would support. His idea was private non-profit health insurance cooperatives. Schumer offered a compromise of his compromise. The government would help set up single new national non-profit insurance company with a co-op legals structure. The federal government would maintain minor oversight through some permanent seats on its board of directors.
Compromise 8. Grassley rejected Schumer's compromise of his previous compromise. Conrad has decided to offer Grassley a complete capitulation. Conrad's proposal is simply to make some seed money available for “others” to set up co-op insurance companies if they wanted. (Who these “others” are who have the expertise, desire, skills, and time to create massive new non-profit insurance companies from scratch is a very good unanswered question.)
The co-ops would have not permanent government oversight. They would not be available nationwide or available from day one. There is zero guarantee that there would be a new co-op in your insurance market for you to sign up for. In fact, there is no guarantee that any new co-ops would ever be started or survive beyond a few years.
The worst part is health insurance co-ops have been tried repeatedly before. Most failed or turned into for-profit companies. Only handful still survive. So Conrad's “compromise” is to offer an idea which already exists and has failed.
The media falsely reports that Conrad's co-op proposal is a compromise between liberals who want a strong public option and Republicans who do not want insurance companies to face any new public competition.
It is a compromise of a compromise which was a compromise that is itself a compromise of a previous compromise from a former compromise of a much reduced compromise of the original compromise of the goal of many on the left.
At some point an idea is so reduced through repeated compromises as to be worthless. Conrad's co-ops are not an acceptable or legitimate compromise for progressives. It is a warm bucket of highly diluted spit stamped with the word reform.
Time Spreads Confusion About Health Care Reform
Joe Klein published an article in Time magazine which does more to confuse his readers than inform them. He does not seem to understand the basics of the current health care debate. In his article he states:
An “exchange” could be described as a health-care superstore. It would be a single place where an individual or business could compare the prices and benefits of several plans. An “exchange” is like a highly regulated Orbitz for health insurance.
The “co-ops” being proposed would be non-profit health insurance companies. They would be health insurance companies that are member owned and operated. They would sale health insurance plans just like Aetna, Humana, Cigna, etc. The “co-ops” could be described as the equivalent of a credit unions, but for health insurance instead of banking.
The “exchanges” are where you compare all the insurance plans. The “co-ops” are non-profit insurance companies that would sale insurance plans. An “exchange” is a marketplace, while a “co-op” would be just one of the many companies selling health insurance policies in that marketplace.
Most important for long-term reform, a system of health-care superstores — the wonks call them "exchanges" or "co-ops" — where individuals and small businesses can go to buy a plan, could be included.This statement is dangerously uninformed. The “exchanges” and the “co-ops” are two radically different proposals. They are in no way similar.
An “exchange” could be described as a health-care superstore. It would be a single place where an individual or business could compare the prices and benefits of several plans. An “exchange” is like a highly regulated Orbitz for health insurance.
The “co-ops” being proposed would be non-profit health insurance companies. They would be health insurance companies that are member owned and operated. They would sale health insurance plans just like Aetna, Humana, Cigna, etc. The “co-ops” could be described as the equivalent of a credit unions, but for health insurance instead of banking.
The “exchanges” are where you compare all the insurance plans. The “co-ops” are non-profit insurance companies that would sale insurance plans. An “exchange” is a marketplace, while a “co-op” would be just one of the many companies selling health insurance policies in that marketplace.
The Long Arm Of Chuck Schumer
New York Senate Democrat Chuck Schumer is a natural deal maker. He is the type of guy who was born to be in politics. As health care reform moves forward, it is interesting to see how much he is shaping the debate behind the scenes. His public plan, his campaign language, and his strategy to promote reform are all slowly being adopted by the vast majority of Democrats.
A few months ago Baucus asked him to come up with a compromise public plan which could win over the conservative wing of his party. Chuck Schumer did as he was asked and created his “level playing field” plan. It would be a government-run plan but would not use Medicare's payment rates. I suspect Schumer worked with his party to find a compromise that would be acceptable to over 50 Democratic senators, but probably not all 60.
Senator Grassley threw a hissy fit over any public plan, so Baucus scrapped Schumer's well constructed compromise. Baucus than asked Conrad to come up with anything that would make Grassley happy, and he completely cut Schumer out of the negotiations.
Conrad created the idea of co-ops with federal seed money. Schumer told Conrad his idea was unacceptable, but would work with him to find a compromise of his compromise. He created an outline of a national co-op that might be acceptable to enough liberals. Reporting indicates that Conrad rejected Schumer's suggestions. Not surprisingly, there is now a near full blown rebellion against the Conrad's co-ops in the Democratic Party.
While Conrad and Baucus have remained cloistered in their secret meetings, Schumer's “level playing field” public plan has caught fire. The Senate HELP committee adopted a public plan nearly identical to Schumer's compromise. Not surprisingly, in the House the Blue Dogs and the Progressive Caucus have tentatively agreed to a public option nearly identical to Schumer's compromise. In fact Blue Dog Ross' amendment which changes the structure of the public plan used the subtitle: “Level Playing Field for Public Option.”
I expect to hear the phrase “level playing field” a lot in the coming months. Schumer was also railing against the insurance company villians long before it started getting fashionable.
Currently all the focus in the Senate has been on Senator Baucus because he is the Chairman of the Senate Finance Committee. But Baucus works in near isolation from his party and is sowing an incredible amount of ill will with the rest of his caucus.
All this time Schumer has been unusually quiet about an issue that he is personally invested in. Schumer got almost a fourth of all Democratic senators elected while head of the DSCC in 2006 and 2008. I'm very interested to see when and how he plans to weigh in on co-ops versus the public option. Indications are that Schumer could put together a large group to bring down the co-ops proposal.
A few months ago Baucus asked him to come up with a compromise public plan which could win over the conservative wing of his party. Chuck Schumer did as he was asked and created his “level playing field” plan. It would be a government-run plan but would not use Medicare's payment rates. I suspect Schumer worked with his party to find a compromise that would be acceptable to over 50 Democratic senators, but probably not all 60.
Senator Grassley threw a hissy fit over any public plan, so Baucus scrapped Schumer's well constructed compromise. Baucus than asked Conrad to come up with anything that would make Grassley happy, and he completely cut Schumer out of the negotiations.
Conrad created the idea of co-ops with federal seed money. Schumer told Conrad his idea was unacceptable, but would work with him to find a compromise of his compromise. He created an outline of a national co-op that might be acceptable to enough liberals. Reporting indicates that Conrad rejected Schumer's suggestions. Not surprisingly, there is now a near full blown rebellion against the Conrad's co-ops in the Democratic Party.
While Conrad and Baucus have remained cloistered in their secret meetings, Schumer's “level playing field” public plan has caught fire. The Senate HELP committee adopted a public plan nearly identical to Schumer's compromise. Not surprisingly, in the House the Blue Dogs and the Progressive Caucus have tentatively agreed to a public option nearly identical to Schumer's compromise. In fact Blue Dog Ross' amendment which changes the structure of the public plan used the subtitle: “Level Playing Field for Public Option.”
I expect to hear the phrase “level playing field” a lot in the coming months. Schumer was also railing against the insurance company villians long before it started getting fashionable.
Currently all the focus in the Senate has been on Senator Baucus because he is the Chairman of the Senate Finance Committee. But Baucus works in near isolation from his party and is sowing an incredible amount of ill will with the rest of his caucus.
All this time Schumer has been unusually quiet about an issue that he is personally invested in. Schumer got almost a fourth of all Democratic senators elected while head of the DSCC in 2006 and 2008. I'm very interested to see when and how he plans to weigh in on co-ops versus the public option. Indications are that Schumer could put together a large group to bring down the co-ops proposal.
Why Obama Now Needs The Public Plan
There was a time only a few months ago when it looked like health care reform could actually be easy. Obama's approval rating was sky high. Baucus and Kennedy had gotten all the different industries to the table. A small but noticeable number of Republican senators claimed to be open to reform. Everyone thought the reform train was rolling out, so no one wanted to be left at the station.
Not so long after those first heady months, everything started to unravel. Obama's approval rating started dropping. The Republican meme that killing reform would kill Obama slowly became party doctrine. Baucus and Grassley failed time after time to make their own deadlines. And probably most devastating, the CBO score came back, and it was bad.
It seemed at first there was hope reform could be a big win-win. Doctors gave a little, Phrma gave a little, insurance companies gave a little and there would be enough to pay to get everyone insured. It seems they were hoping several relatively painless changes like more preventative care, payment structure changes, competitive bidding, electronic records, etc. would have their powers combine into huge savings.
If that first CBO report of health care reform came back at only $500 billion it might all have worked. The medical industries would accept some reforms in exchange for a massive new customer base. Liberals would be forced to give up on the public option in exchange for extremely generous subsidies to the poor and middle class. The bill could have been paid for all through savings or only minor, indirect taxes. A decent bipartisan reform bill would have been quickly passed over some progressive objections.
When CBO director Elmendorf refused to score most of the potential savings the grand coalition fell apart. The knives came out and someone (if not everyone) was going to be the loser. What industries would take a huge hit to their profits? Would liberals be forced to accept very small subsides and getting everyone only bad technical insurance? Would Republicans swallow large tax increases?
When reform went from deal making to knife fighting, Obama lost all hope of easy bipartisan reform. His only hope is to rally his base for an arm twisting partisan bill. The only thing which can rally the base is the public option.
The health care activists tend to be the people who were screwed over by insurance companies or had loved ones that were. They aren't going to waste their weekends knocking on doors campaigning to give insurance companies huge checks from the government. They don't want to see the industry be forced to accept some sensible new regulations. They want to be free of them. They want to see these evil companies dismantled.
Some in the media wonder why Obama's progressive volunteers are not turning out in force for health care reform. The answer is simple. He has made it clear he is not committed to their main goal: freedom from the evil insurance companies.
Progressive activists will not rally around slogans like:
“Several new common sense regulations that end some of health insurance's worst practices in exchange for forcing everyone by law to pay thousands for their product.” or “Demand subsidy levels be 9% instead of 11% of income for families making over 300% of the FPL.”
If Obama wants to get the grassroots fighting with him for health care reform he needs to make a firm promise that he is not going to sell them out. Every time he makes a wishy washy statement about the public option, says everything must be on the table, and claims private cooperatives might be just as good, it is a blow to the grassroots' moral. It is Obama telling them he does not need them, does not want them, and will not stand with them.
If Obama wants to rally an army of activists to his cause all he needs to do is publicly say, “I will veto any bill without a real public option.”
Not so long after those first heady months, everything started to unravel. Obama's approval rating started dropping. The Republican meme that killing reform would kill Obama slowly became party doctrine. Baucus and Grassley failed time after time to make their own deadlines. And probably most devastating, the CBO score came back, and it was bad.
It seemed at first there was hope reform could be a big win-win. Doctors gave a little, Phrma gave a little, insurance companies gave a little and there would be enough to pay to get everyone insured. It seems they were hoping several relatively painless changes like more preventative care, payment structure changes, competitive bidding, electronic records, etc. would have their powers combine into huge savings.
If that first CBO report of health care reform came back at only $500 billion it might all have worked. The medical industries would accept some reforms in exchange for a massive new customer base. Liberals would be forced to give up on the public option in exchange for extremely generous subsidies to the poor and middle class. The bill could have been paid for all through savings or only minor, indirect taxes. A decent bipartisan reform bill would have been quickly passed over some progressive objections.
When CBO director Elmendorf refused to score most of the potential savings the grand coalition fell apart. The knives came out and someone (if not everyone) was going to be the loser. What industries would take a huge hit to their profits? Would liberals be forced to accept very small subsides and getting everyone only bad technical insurance? Would Republicans swallow large tax increases?
When reform went from deal making to knife fighting, Obama lost all hope of easy bipartisan reform. His only hope is to rally his base for an arm twisting partisan bill. The only thing which can rally the base is the public option.
The health care activists tend to be the people who were screwed over by insurance companies or had loved ones that were. They aren't going to waste their weekends knocking on doors campaigning to give insurance companies huge checks from the government. They don't want to see the industry be forced to accept some sensible new regulations. They want to be free of them. They want to see these evil companies dismantled.
Some in the media wonder why Obama's progressive volunteers are not turning out in force for health care reform. The answer is simple. He has made it clear he is not committed to their main goal: freedom from the evil insurance companies.
Progressive activists will not rally around slogans like:
“Several new common sense regulations that end some of health insurance's worst practices in exchange for forcing everyone by law to pay thousands for their product.” or “Demand subsidy levels be 9% instead of 11% of income for families making over 300% of the FPL.”
If Obama wants to get the grassroots fighting with him for health care reform he needs to make a firm promise that he is not going to sell them out. Every time he makes a wishy washy statement about the public option, says everything must be on the table, and claims private cooperatives might be just as good, it is a blow to the grassroots' moral. It is Obama telling them he does not need them, does not want them, and will not stand with them.
If Obama wants to rally an army of activists to his cause all he needs to do is publicly say, “I will veto any bill without a real public option.”
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