New Health Care Law a Republican Plan That Should Make Insurance Companies Proud

Now that President Obama and the rest of the Democratic leadership no longer need to hide from their base that the new health care law is in fact a pro-health insurance industry Republican plan as part of a push to enact the law, they are opening admitting the plans true originals. This bill is a not a “progressive” or “centrist” piece of legislation but a Republican idea put forward by the Heritage foundation and is almost identical to the reform advocated by the health insurance lobby.

In his first interview since signing the new bill into law Obama acknowledges that the bill is basically Romneycare and clearly based of a decades old proposal from the Heritage Foundation as an alternative to Bill Clinton's health care plan. Last week, Nancy Pelosi basically made the same acknowledgment.

Romneycare

There are no significant differences between the new health care law and the one proudly signed into law by Mitt Romney. The very poor were put on Medicaid. People with employer provide insurance kept it and employers faced a small penalty for not offering insurance. Those without either Medicaid or employer provide insurance are force to buy mildly regulated private health insurance. There is a new purchasing pool marketplace, called the connector, (basically the new state-based exchanges) for people to buy private insurance and there is some subsidies meant to help people afford it.

Heritage Foundation plan from the 90's

The new health care law championed by Obama is strikingly similar to the Republican alternative Clinton's health care plan put forward by Sen. John Chafee (R-RI) and has basically the same structure as the Heritage Foundation plan from the same time. Does this description of it in Reason sound familiar:

In a nutshell, Heritage proposes that consumers be able to choose from among a host of health-care options ranging from traditional insurers to health maintenance organizations (HMOs). Using refundable tax credits that decrease as income grows, Heritage would empower families to choose plans on the basis of coverage, service, and price. As part of the "healthcare social contract" thus formed, Butler says, heads of households would be required by law to buy basic health-care coverage "to protect society from citizens who would try to exploit the good nature of ordinary Americans" by free-riding on the system.

The tax deduction for employer-provided health insurance would be phased out, in favor of the family-based tax credit. Families could still choose to join group plans. But by helping people buy insurance directly, rather than relying on employers to provide it, Heritage would solve the "portability" problem, in which employees are trapped in undesirable jobs because they're afraid of losing health coverage.

Butler and health-care analyst Edmund Haislmaier introduced the key elements of the Heritage plan in a 1989 book, A National Health System for America. In 1992, Heritage began to tout the Federal Employee Health Benefits Program (FEHBP) as a model for how a national consumer-choice system in health insurance might function. Robert Moffit, deputy director of domestic policy studies at Heritage and a former manager of FEHBP, became one of the foundation's key spokesmen on the issue.

Heritage's embrace of FEHBP--a regulated and flawed government program, according to some critics--nevertheless provided a great "hook" that may well have enhanced the foundation's overall sales pitch on health-care reform. As voter disaffection with elected leaders soared, Heritage could say, "What is available for Congress and its employees should be made available to every American family." This message resonated with the public.

An individual mandate forcing people to buy private insurance on an exchange with a sliding scale of tax credits and the program is paid for by phasing out the tax deduction for employer provided insurance. Sound familiar?

AHIP plan

Most disturbing though is how closely this new law mirrors the health care reform proposal put forward by the health insurance lobby, AHIP, in December of 2008. (PDF, short but well worth a read)

AHIP's plan to expand coverage had several key components:

• Provide Medicaid to all those under 100% FPL.


• Provide tax credits for those up to 400% FPL to buy private insurance


• Force everyone to buy private health insurance with an individual mandate


• Some new regulations like ending guaranteed issue


• Have state agencies one stop place to buy insurance for small employers and individuals (state-based exchanges)


• “Allowing benefit packages to vary based on actuarial equivalence”

Not surprisingly the health insurance companies are very supportive of the idea of forcing people to be their customers and having the federal government pick up the tab. Massive government subsidies and a force captive costumer base for the only major industry exempt from federal anti-trust laws sounds like a winning combination for the health insurance industry no matter how you slice it. Also AHIP does not really seem interested in covering poor people who are more likely to have chronic health problems.

While there are a few difference between the new health care law from President Obama and AHIP's reform plan, they are minor compared to the overwhelming similarities. If AHIP did not get everything they, wanted they sure got pretty close to it.

Time to stop pretending

This new law at its heart is a pro-private health insurance, pro-big business Republican bill. It is not liberal or progressive, and it would be hard to justify even calling the law “centrist” because it lacks very popular elements like a public option and drug re-importation--reforms wanted by the broad "center" of the country.

It is nearly identical to previous Republican bills and laws. It is strikingly similar to a plan from the Heritage Foundation. It almost exactly follows the same proposal put forward over a year ago by the health insurance industry itself. After it passed, the drug companies spent big on ads thanking Democrats for passing this massive giveaway to their industry.

The law is a completely wasteful and poorly designed piece of corporate welfare. It is nothing for progressives to be proud of. If you want to argue that we should have supported it because the rampant corruption in our Congress and the fact that a huge number of senators are wholly owned by the health care industry means that this wasteful, pro-corporate bill was the only way to get some help to some people in need, I can at least accept the honesty of that argument. But let’s all stop pretending this was some great victory over the health care industry and for progressive policy.

USA Today/Gallup Poll: There Is Too Much Government Involvement In Health Care - And We Need More Government Involvement

One of the problems with policy polling in this country is that regular Americans simply don't understand policy--which is often not their fault. Some pieces of legislation, like the recently enacted health care law, are so complex, I doubt a majority of professional Washington DC journalists fully understand it. It seems people latch on to buzz phrases like “too much government” without really thinking through what that means while, at the same time, actually believing something quite opposite.

Take, for example, the new USA Today/Gallup Poll:

Do you think the health care legislation: (percentage who said “yes”)

Will expand government's role in health care too much: 65%
[…]
Should include a public option: 52%
Doesn't go far enough in regulating the health care industry: 51%

These are some pretty amusing findings. At minimum, 16-17% of the country believes the new health care law will expand the government's role in health care too much, but also want the government to do more to regulate the health care industry and be more directly involved by offering a government-run insurance option. There really is a significant part of the country that wants to expand the role of government in health care while, at the same time, complaining that the role of the government in health care has been expanded too much.

While Republicans have managed to raise fears about some nefarious “government takeover of health care” in general, it appears Americans actually want more government involvement that will protect them from the worst practices of the private health insurance industry. I think this poll is a great example of how Democrats managed to completely lose the messaging war on a macro level, while progressives actually won the battle of public opinion on the issues like a public option and tougher health insurance regulations.

Let's Talk About Your Local Ballot Initiatives

Elections are not just about choosing your representatives, political executives, and party standard bearers. Election season is about more than the horse race between Republicans and Democrats. For a large part of the country, election day is an important moment of direct democracy, through ballot initiatives and referendums. The initiative process allows citizens to directly vote on laws and state constitutional amendments. On FDL Elections, we hope provide some increased focus on this part of the democratic process, and want to hear about what state and local ballot initiatives are happening in your area.

Twenty-four states plus the District of Columbia allow for ballot initiatives, where regular people collect signatures to put a question up for a vote. Three other states don't allow ballot initiatives, but do allow for popular referendums, aka citizen veto, where citizens can force a popular vote on an existing law. All states allow for legislative referendums, where a part of the government can choose to put on issue up for a vote.

During this election season, millions of Americans will be voting on hundreds of different state and local ballot initiatives and referendums. Please share with us any good, bad, or frankly just weird ballot propositions that you might have the chance to vote on. Clearly, California's marijuana legalize ballot initiatives will be one of the most covered proposition in 2010, but it won't be the only important issue brought up for a popular vote. For example, also in California, proposition 16 (which is being pushed heavily by the private utility company PG&E), is a particularly egregious ballot initiative that deserves more attention.

Let us know if there are any state or local ballot initiatives that you are directly involved in, and what you are doing to help pass or defeat the initiatives. Please share your thoughts and ideas in the comment section.

Perceptions of Health Care Reform Might Weigh Heavily on Dems in November

Looking at a new Washington Post/ABC News poll, one set of numbers on health care really stuck out to me. It was the questions about what people think health care reform will do to them personally, and what they think it will do to the system as a whole. And, overall, the numbers look very bad for Democrats:

12. In the long run, do you think [ITEM] will get (better) as a result of these changes to the health care system, get (worse), or remain about the same?

          3/26/10 - Summary Table*

                                           Better   Worse   Same   No opinion
a. the overall health care system
   in this country                           37      44      15         3
b. the quality of the health care you
   receive                                   18      44      35         3
c. your health insurance coverage            17      42      38         3
d. your ability to get health insurance      48      25      25         2
*item c asked if insured; item d asked if not insured (N=94)

13. In the long run, do you think [ITEM] will (increase) as a result of these changes to the health care system, (decrease), or remain about the same?

          3/26/09 - Summary Table

                                 Increase   Decrease   Same   No opinion
a. Your health care costs           55         11       30         4
b. The overall costs of health
   care in this country             60         16       21         3

A lot more people think their personal health care will get worse as a result of reform than believe it will get better. You also have a strong majority thinking the bill will make both their health care cost more, and increase the overall cost of health care in this country.

These are not good numbers for Democrats. It is tough to think constituents would be very happy that their member of Congress voted for a bill that they believe will personally make them worse off, even if they actually thought it would make the whole system better for most. In that circumstance, I can see people thinking that maybe it was right vote, but that doesn't mean they are enthusiastic about that vote.

Of course, the problem is that people don't even think that they are going to be worse off to make the system as a whole much better. They seem to think the bill, for the most part, will make many parts of our health care system worse and/or more costly.

How this plays out in November is hard to guess. The health care bill does almost nothing, good or bad, until 2014. In the short term, no one's insurance is likely to get worse or more costly as a direct result of the new law. So, it is possible people might see that the bill is very modest, incremental, and doesn't really affect them. This could cause the dissipation of the current anger and heated opposition to the law.

But (and that is a huge “but”) our system is slowly collapsing, and costs are increasing at out of control rates. Millions of people's health care coverage is likely to be more expensive, and their coverage worse, in a year--regardless of whether the bill had passed or not. It is very possible that people will incorrectly blame this continued deterioration of health care on the new law, or blame Democrats for passing a big health care reform law without dealing with any of the problems.

I suspect what most people think has happened or hasn't happened as a result of the new law will play a huge role in November. If people realize it has done almost nothing, they might make the election about more recent and more pressing issues. If, on the other hand, Democrats end up owning all the terrible problems with our broken health care system--where people incorrectly blame the new law for their current problems, and people express their anger at the Democrats who failed to the deliver on their big promises (which, for the most part, don't really start until 2014)--the midterms might not be pretty.

Budget Reconciliation Instructions: An Incredibly Important, Potentially Powerful Tool for Progressive Change

With health care and student loan reform passed, one of the next tasks Congress will soon take up is the annual budget. The “budget resolution” is a non-binding resolution by Congress outlining how they plan to spend money. The budget resolution is not law (so doesn't need to be signed by the President), and, as a result of the Senate rules officially limiting debate time, it can't be filibustered. From the perspective of progressives hoping to achieve policy change over Republican and Conservative Democratic obstructionism, the most important part of non-binding budget resolutions is the potential to include reconciliation instructions. Reconciliation instructions allow Congress to later take up a reconciliation bill that can't be filibustered in the Senate, and, as a result, is one of the best hopes for passing progressive legislation.

Budget reconciliation bills follow different rules from almost any other bill in Congress. In the Senate, debate is limited to only 20 hours, and no part of the bill can violate the Byrd rule (the bill must relate to the budget). Since debate is limited in the Senate, that means budget reconciliation bills can't be filibustered and need only simply majority to pass. As we have seen, this can be a powerful tool for progressive change. With helath care and student lending reform coming under the last budget’s instructions, we see how critical reconciliation instructions can be.

The ability to make later changes to the Senate health care bill that couldn't be filibustered by using reconciliation played an important role in convincing House Democrats to first vote for the Senate version unchanged. A more dramatic example is the huge progressive victory scored with student loan reform, which was also part of the recently passed reconciliation bill. Student loan reform ended tens of billions of dollars in government waste going to enrich banks as part of a huge corporate welfare program, and redirected much of the money to help needy students afford college. The changes could never have passed under regular order because all the Republicans plus a few Democrats, like Blanche Lincoln (D-AR) and Ben Nelson (D-NE), were determined to use the filibuster to protect the profits of the private lenders at huge expense to the taxpayer.

To bring up a reconciliation bill, Congress must first include reconciliation instructions to deal with a specific issue in a budget resolution. This is why the reconciliation instructions included in the upcoming budget resolution are so important.

Senate Majority Leader Harry Reid (D-NV) promised Bernie Sanders (I-VT) and Jeff Merkley (D-OR) a vote on the public option in the next few months. The public option can't overcome a filibuster, so its only hope of becoming law is using a reconciliation bill. The only way a reconciliation bill can be used to pass a public option is if Congress first passed a budget resolution with reconciliation instructions that could be used for health care-related matters. If the upcoming budget does not include reconciliation instructions that could be used for health care, then you know Reid and Sanders were just blowing smoke.

The potential progressive use of reconciliation goes well beyond possibly creating a public option. There are many "budget related" reforms that our country needs that may have majority support in the Senate, but probably can't get 60 votes to overcome a filibuster. Reconciliation could, in theory, be used to deal with global warming by putting a price on carbon dioxide and other greenhouse gases. Potentially, reconciliation could even be used to deal with the problem in the financial sector of “too big to fail” by using taxes and fees to make it unprofitable for a financial institution to reach a very large size and/or level of inter-connectivity. It even might be possible to get a form of public campaign financing passed using reconciliation to try to deal with the "Citizens United" ruling.

Even with health care reform, adding a public option is only one of the many improvements that could be achieved using reconciliation. The new money for the high risk pool will likely run out well before 2014 (PDF), so that program will need more funding. Extra money could also be provided for states that want to institute early exchange pilot programs or expand Medicaid sooner. Reconciliation could potentially (depending on the interpretation of the Byrd rule) be used to add a state single payer opt-out, Medicare buy-in, create state or national all-payer systems, create a national exchange, increase the minimum medical loss ratio, provide more affordability tax credits, etc.

If you want a piece of progressive legislation to pass in this current political environment, you are going to want reconciliation instructions included in the upcoming budget resolution that could be potentially used to such ends. The budget reconciliation instructions alone do not guarantee that you will get the reconciliation package you want, but it is a critical first step. If Democrats don't include any reconciliation instructions in the budget, regardless the purpose, it will be a foolish act of unilateral disarmament in the face of Republican obstructionism. It will also be proof that Reid’s promise of a public option vote in the next few months was never meant to mean anything more than a meaningless show vote, destined to fail.

What Progressive Victory Looks Like: Ending Corporate Welfare To Help Regular Americans

Yesterday was actually big victory for progressivism. Not in health care, but in student loan reform. Finally, a wasteful and worthless corporate welfare program was eliminated. The taxpayer dollars that were being thrown away on private profits will now be redirected to help low income students attend college and pay down the debt. This is what progressive victories look like.

One can have a legitimate argument with libertarians about what the scope of the government should be. Should the government try to help poor kids attend college, should it try to provide everyone with basic health care, should the government try to stop global warming, should the government build highways, etc. But once the decision is made that the government should try to do something, the work of progressivism is to make sure the government achieves that goal in the best, most cost effective manner possible. To make sure it is done in a way that most benefits regular Americans (or at least minimizes the damages as much as possible) while making sure the program is a cost effective use of taxpayers’ money.

This is what the student loan reform portion of the reconciliation bill did. It has been abundantly clear for years that the direct student lending program provided the same loan services at a much cheaper cost to the taxpayers than the weird private/public government guaranteed FFEL program. The FFEL program was corporate welfare at its worst, a program where the government gave private banks huge amounts of money to do something the government could do itself for much cheaper. The FFEL program should have been shut down years ago, but big money lobbyists and their friendly senators kept it alive for far too long.

It is interesting, too, that one part of the health insurance reform law will take similar action against Medicare Advantage. Again, this is an incredibly wasteful corporate welfare program where the government subsidizes private companies to provide a service the government itself is able to provide for much cheaper. The government gave money to private insurance companies to provide Medicare-style coverage that happened to cost the government way more than just directly giving seniors insurance through regular Medicare. The program completely overpaid these companies, again using taxpayer money to provide for private profit. Thankfully, the formula has been changed by the new law to make Medicare Advantage much less wasteful.

This is not progressivism

Contrast the progressive victory achieved with student loan reform and what the new health care law will do to expand coverage.

For years, Medicare has proven that the government can provide high quality health insurance much cheaper than private health insurance companies. Yet, when the bill tried to expand coverage, it used massive subsidizes to the wasteful private insurance industry, and a mandate forcing people to buy their overpriced products. It is a liberal goal, but not the least bit “progressive” because it was designed with the explicit goal of unnecessarily wasting huge amounts of taxpayer money and regular people's premiums to protect the private profits of huge corporations.

Most importantly, they kept out a public health insurance alternative which could serve as a benchmark, like the direct lending program did in student loans, and Medicare did with Medicare Advantage. Without a benchmark, it will be much harder in the long run for the American people to see just how much of their money is being stolen by this weird system set up to enrich unnecessary corporate middlemen with public money.

It is ironic that while the new law reforms the hugely wasteful private health insurance exchange for Seniors, Medicare Advantage, to bring it on par with Medicare, the law also creates the same wasteful private insurance exchange model writ large.

This health care portion of this bill will help some people, but it is not progressivism. There will not be a progressive health care victory until the system is reformed to remove the massive amounts of waste and corruption that were built directly in to the new structure. Progressive reform will be achieved when the system is set up to actually provide every American with quality affordable health care, and does that with the most cost effective use of tax dollars possible.

The Fight For The Public Option Was The Fight For Better Regulation

I fought for the public option because I simply didn't trust the ability of our current government to strongly enforce regulations against some extremely wealthy corporations without it. After watching the finance sector collapse, taking down our whole economy, I would expect my skepticism to be broadly shared. The incredible size of the collapse of the financial sector was not due solely to a lack of regulation, but was helped by the lack of tough enforcement of the regulations we had.

The danger of the weak regulations in the new health care law is especially serious because most enforcement is left up to the state insurance commissioners and state exchanges. The state insurance commissioners who are not already too close to the insurance companies are often desperately underfunded and unable to go up against insurance companies top-notch legal teams.

The other problem is that one party in our two-party system has a dangerous love of de-regulation. I don't know why anyone would put trust in the long-term success of a health care system completely devoid of tough regulatory enforcement, and when the Republican party is in power, they seem to have a pathological disdain for enforcing regulations.

Public programs are unlike regulations in this country. People use public programs and come to like them. It is much harder to kill a popular public program than it is to let a regulatory system slowly get corrupted through weak enforcement. Once a public program gets going, it creates a voting block of constituents who use it.

As we can see only two days after the bill was signed into law, the insurance companies are already looking for new loopholes to exploit to screw over sick children. This is what the for-profit health insurance companies do, this is what they are designed to do, this is how they make money. This can be stopped, and a highly regulated private health care system can work in theory, but only if you have dedicated, well-funded enforcers, and a government always on its toes looking to plug every loophole the insurance companies find.

If there were a public option, things might be different. It would be a constant quality benchmark with which to compare the private insurance companies. It would ensure that even if all the private insurance companies come up with a clever plan to keep out a specific group of sick people, there would be a good public option for them that was not trying to screw them over. Private insurance companies would not just fear regulations, but the bad word-of-mouth, which could cause people to flee to the public option. Since the government would need to closely monitor its public option, it would have a strong financial interest in making sure other companies were not breaking regulations to drive away sick, unprofitable customers, who could then possibly end up on the public option.

I always saw the public option as the single biggest stick to ensure the success of the new regulations. It did not matter how big it was as much as it mattered that it was out there, waiting to grab huge market share if the private insurance companies did something that truly disgusted the American people. As a benchmark, it would force insurance companies to prove their worth fearing a future Congress might start to question why they were wasting tax credits on a middleman when the public option can do it better and cheaper.

Without the public option, we must rely only on the tough determination of regulatory enforcers to protect us. Of course, regulators trying to boss around massive health insurance corporations with billions of dollars and continued exemption from anti-trust laws is going to be a very difficult task--one I fear our current state and federal government is not up to. But, for the millions of Americans that will need to depend on this new regime, I hope I'm wrong.

The Death of the Public Option: After Parade of Lies, Democratic Leadership Now Stands Naked

After a full year of debate and dozens of excuses, the Democratic leadership now stands naked in their opposition to the public option. President Obama, House Speaker Nancy Pelosi, and Senate Majority Leader Harry Reid all claimed they that wanted one. They are the three most powerful people in Washington and have huge margins in both chambers. It is ridiculous to believe that the public option could not have become law if the leadership really wanted it. Yet, for months, people were lied to so the Democratic leadership could maintain the insane myth that the public option's death was not their fault, but the fault of some insurmountable obstacle. What this mythic “insurmountable obstacle” actually was has shifted so many times it is hard to keep track.

Broad bipartisanship

First there was the excuse that health care reform must be bipartisan, and that you simply can't do something so big without broad bipartisan support. We were told the public option must go to get a number Republican votes. That proves clearly wrong.

Olympia Snowe

When hope of broad bipartisanship faded, we were told that the public option must go because Olympia Snowe did not want it--and Snowe was the linchpin to everything. Now that reform has passed without Snowe, this, too is revealed to be a myth.

The "government takeover of health care" attack

We were told the public option would result in Republicans attacking the bill as a “government takeover of health care,” yet when the public option was dropped, the socialist nightmare, scaremongering attacks did not dissipate. If anything, they increased.

Ben Nelson, Joe Lieberman, and 60 votes

After Snowe refused to play along, we were told that the public option had over 50 votes in the Senate, but it was that damn 60-votes-for-cloture hurdle it could not overcome, so we need to sacrifice it for Joe Lieberman and Ben Nelson. Of course, not only was no effort made to strongarm these two into standing with their caucus on what was just a procedural vote, but Obama did not even call Lieberman to politely ask him to please support the public option or early Medicare buy-in.

You can't use Reconciliation

When some people said we should then use reconciliation for the whole bill, the idea was laughed at. We were told the Byrd rule would gut the most important parts of the bill, like the very important new insurance regulations. Of course, now we are using reconciliation and the new insurance regulations in the reconciliation bill were not removed by the Byrd rule.

We no longer have 50 votes in the Senate

Once they decided to use the reconciliation sidecar, we were told, as if by magic, there were no longer 50 votes in the Senate for the public option. The Senate leadership blamed the House, saying it was now the House that no longer had the votes for a public option (even though they passed it before).


We no longer have the votes in the House.

It is hard to know for a fact because right after the Senate blamed the House, the House leadership turned around and blamed the Senate. Steny Hoyer said they did have the votes and claimed it was the Senate's fault. He claimed Obama did not ask to put a public option in the reconciliation bill because the Senate did not have the votes.

Reconciliation must pass unchanged so it does not go back to the House

When the reconciliation bill was brought to the Senate floor, where any Democrat could have offered a public option amendment to force an up-or-down vote on the public option, a new excuse was found to stop that. We were told the Senate must pass the reconciliation bill unchanged, so it could go straight to the President's desk without another vote in the House. We were told leadership would whip against any amendments to make health care reform slightly better. This myth, too, withered in the face of reality.

Changing reconciliation will “KILL THE BILL!”

Because of a successful Republican Byrd rule point of order, the reconciliation bill would be force to go back to the House for another vote anyway. At this point, the excuse for not offering a public option amendment got weird. Senators like Michael Bennet (D-CO) took to saying saying it would “kill the bill,” and tried to falsely equate “the bill”--the reconciliation fix, which is mainly a package of minor tax changes that do not take effect for years--with the comprehensive health insurance reform measure already signed into law.

Occam's razor

I'm sure there were some other excuses that I have forgotten to mention. The important thing is that, in the end, they did use reconciliation. They also could have added the public option to a reconciliation bill that could have passed with a simple majority, and had it not endanger the bulk of the health care reform provision. In the end, all their excuses fade away or became weird nonsense about some possible later promise and not wanting to risk anything.

It is foolish to believe that a President, Senate Majority Leader, and Speaker of the House with historically large majorities couldn't get a public option--which roughly 65% of the country supported--if they really wanted one. Clearly, if they all really wanted to include a public option, they could have done it using reconciliation. To accept their many different excuses of powerlessness requires one to completely suspend reality.

Occam's razor teaches us the simplest explanation is usually the correct one. Here, the simplest explanation is that, months ago, Obama promised to kill the public option as part of a secret deal with the for-profit hospital lobby, and that for months he lied to the American people about supporting the public option while working behind the scenes to stop it.

So, when exactly does that changing the way Washington works thing start again?

Electoral Reform: Proportional Representation Will Require Constitutional Change But Produce Fewer Changes Than Instant Runoff

I personally think the nation would be much better off if we could adopt instant runoff voting, also called “alternative voting.” I think Tom Friedman is right about that, but I support if for different reasons then he does:

[G]et states to adopt “alternative voting.” One reason independent, third-party, centrist candidates can’t get elected is because if, in a three-person race, a Democrat votes for an independent, and the independent loses, the Democrat fears his vote will have actually helped the Republican win, or vice versa. Alternative voting allows you to rank the independent candidate your No. 1 choice, and the Democrat or Republican No. 2. Therefore, if the independent does not win, your vote is immediately transferred to your second choice, say, the Democrat. Therefore, you have no fear that in voting for an independent you might help elect your real nightmare — the Republican. Nothing has held back the growth of independent, centrist candidates more, said Diamond, “than the fear that if you vote for one of them you will be wasting your vote. Alternative voting, which Australia has, can overcome that.”

I don't think instant runoff voting would radically move our system, but I think it would be a big improvement. It might be used to elect some “centrists,” but I really think that would be a minor effect. The bigger gain would be allowing accountability in solid red and blue districts and states. Places where people might want to unseat a governor or senator because they seem corrupt, but the voters don't want to move ideologically in the other direction. It would also allow third parties to gain traction. Not so much to gain a huge number of seats, but to inject new ideas into the system. Traditionally in this country, third parties have also been a source of new policies. While these third parties fade away, it is often because a major party co-opted most of their platform. The third party starts losing elections, but after winning the the war on policy.

I know some people, like Matthew Yglesias, support proportional representation. Proportional representation is where multiple members are elected from a single, larger district, and the winners are selected based on the relative share of the vote each member or party gets. While I think it is a good idea in the abstract, the problem is that it is pretty meaningless in this country without massive changes through constitutional amendments. Therefore, it is misguided to make it part of a push for election reform.

You simply can't do proportional representation for president, governor, or senator and you can't do it properly for House races in over a dozen states. These are the positions that dominate our politics. The number of national office races that could be affected by proportional representation would be relatively small.

Making the electing of House members “better” only for the big states is basically worthless because the Senate is still the choke point. Proportional representation might, in theory, help elect third parties from some big states get to the House, but it will not help third parties gain traction in runs for the governorships or the Senate. Without being able to field candidates in those races, I don't see how third parties would not end up in the same shape they are now.

Proportional representation might be good in theory, but due to the constitutional limitations of our system, it's effect in this country would be very small. Instant runoff voting, even if you think it is a less perfect system, would have a much greater reach, so probably could do dramatically more good. It is one of the only positive changes to how we elect all our politicians that, I think, is achievable without massive constitutional changes.

Suprise! The Reconciliation Bill Will Need To Go Back To The House

Late last night, Republicans won two parliamentary points of order that resulted in a few lines being removed from the reconciliation bill. Since the Senate can now no longer pass a bill that is word-for-word identiacal to one that passed the House, it must go back to the House for a final vote. Who could have possibly guessed this would happen? Wait, anyone could have seen this coming.

Now that the reconciliation bill must go back to the House, there is no reason for Senate Democrats to not offer amendments that could make health care reform better. Possibilities include minor changes to the state waiver for innovation, adding a public option (which the House whip says he has the votes for), adding Medicare buy-in, higher medical loss ratios, etc. Senate progressive have until roughly 2 pm to offer amendments.

But, instead of acting like the “ferocious advocates” for progressive health care reform, Senators seem like they just want to take a nap.

Senator Bernard Sanders, independent of Vermont, who supports not just a public plan but also a government-run Medicare-for-all system, said he had secured a commitment from the majority leader, Harry Reid of Nevada, for a future vote on a public plan, when it could well be harder to pass. But Mr. Sanders also said Democrats were smart to quit while they were ahead.

“Is it possible that if I or somebody else introduced the public option today, that it conceivably would go back to the House and be passed?” he asked. “Is it possible? Yes. Is it possible that it would fail? Yes. Is it possible then you would not have the reconciliation bill? Absolutely. Is that a risk work taking at this moment? I think not.”

This is absurd. Way to not want to risk a relatively minor bill in order to deliver on your promises, core principles, and moral convictions. Let's not forget, if the House does not have the votes for the reconciliation bill with a public option, they can just amend the bill again and send it back to the Senate. It is called the legislative process.

Senate Democrats hardly offer real profiles in leadership and courage.

Ron Wyden's Disingenuous State Opt-Out Argument Against Individual Mandate Lawsuits

I'm very disappointed that Sen. Ron Wyden (D-OR) has decided to make an extremely disingenuous argument against the pending individual mandate lawsuit based on his waiver for state innovation provision. I've always been a big supporter of this provision, but what Wyden is saying is just dishonest. From Huffington Post:

Sen. Ron Wyden (D-Ore.) has a message for all the attorneys general and Republican lawmakers who are threatening lawsuits and claiming that an individual mandate for insurance coverage is unconstitutional: You don't have to abide by it -- just set up your own plan.

[…]

"Why don't you use the waiver provision to let you go set up your own plan?" the senator asked those who threaten health-care-related lawsuits. "Why would you just say you are going to sue everybody, when this bill gives you the authority and the legal counsel is on record as saying you can do it without an individual mandate?"

This is not accurate. You see, the problem is that the individual mandate starts in 2014, but states can't get a waiver to try a different system, potentially one without an individual mandate, until 2017. So, there is nothing states can do to stop the individual mandate from being in effect for at least three years.

Whether you agree with an individual mandate or not, it is just wrong to say people shouldn't complain because, at some point in the future, they might possibly have a way for states to opt out of it. If the state waiver started in 2014, Wyden's argument would be perfectly valid, but as the law currently stands, his statement is pure baloney.

Wyden also seems to be glossing over the serious problem of system entrenchment. While it would be easy for a state to experiment with a new health care system in 2014 if they could get a waiver right away, trying to start a new system in 2017 would be much more difficult. The law requires them to put all the effort into setting up this exchange system. Expecting a state to start all over by uprooting this new system and putting up a whole different system after only three years is a huge hurdle.

I really wish Democrats would fix the problems with Wyden's state waiver provision to make it start right away. It could even be offered as a reconciliation amendment if Democrats had not taken this ridiculous no amendment stance. But until it is fixed, it is very inappropriate to claim that it is somehow an answer to anger against the individual mandate. If you think the individual mandate is wrong, the possibility that it might only be forced on you for three years is not really a solution. Ideally, Wyden's "state waiver for innovation" would be one of the provisions in this law that might actually get "fixed" before 2014.

Frosh Sen. Michael Bennet Won't Offer Public Option Amendment, Still Seems Not To Understand How Legislative Process Works

Oh, poor, poor Michael Bennet (D-CO). He just doesn't seem to understand how the legislative process works. He took to the Senate floor to praise what the “Patient Protection and Affordable Care Act”--which was signed yesterday by President Obama--will do. That bill is now law. Today they are working on a completely different bill, a budget reconciliation bill, which mostly contains some tax changes that will not go into effect for years.

Bennet falsely equates what the already-passed health insurance law will do with what this reconciliation bill will accomplish. He claims that trying to make improvements to this minor "sidecar" would be to “play games with the lives of thousands of Coloradans and millions of Americans, and I won't do it.”

That is absurd. The bill that expands insurance coverage was already signed into law. This reconciliation bill, with its minor changes for the employer mandate, and changes to the excise tax, is not playing games with the lives of millions of Americans. Whether this new bill passes or not it will have little impact on our health care system.

Bennet also claims that merely offering some popular amendments to improve the reconciliation bill would kill it. This is completely nonsense. Changing the bill will only send it back to the House for another vote, where it would likely pass. Because of Byrd rule points of order, the bill will almost certainly need to go back to the House for another vote, anyway. Of course, if there are not enough votes for the amended reconciliation bill in the House, they can always amended the bill again to their liking and send it back to the Senate for a final vote. This is how the legislative process works.

In a moment of pure comedy, Bennet states that he “will continue to fight for the [public option] until we get a vote.” Clearly Bennet doesn't have the vaguest understanding of what the word “fight” means--because he doesn't even need to fight to get a vote on the public option. All he needs to do is exercise his right as a senator, and politely ask for a vote on the public option by offering an amendment.

It is completely within his power to get a vote on the public option at this very moment because of the rules of reconciliation. All he needs to do is offer an amendment, and it will get an up-or-down vote in the Senate. In fact, a reconciliation that deals with health care is basically the only time Bennet can be assured to get an up-or-down vote on the public option.

I guess taking one very simple step to ensure that you get a vote on the public option, at the time when you most easily can, is just too hard a fight for Michael Bennet.

Could Sen. Robert Bennett (R-UT) Be The First Victim Of The Anti-Individual Mandate Anger?

Sen. Robert Bennett (R-UT) is in a serious fight for his political survival. His is currently getting challenged from the right by several Republican candidates who think he is too liberal to be the Republican nominee for Senate. The recent enactment of the health insurance reform law and the anti-individual mandate effort it stirred up could turn out to be a real liability for Bennett.

Prominent conservatives, like Erick Erickson, have realized that Bennett was for the individual mandate before he was against it. Bennett helped write the Wyden-Bennett health care reform proposal which was built on the core idea of forcing everyone to buy health insurance. Since Democrats decided to include it in their health care plan, this idea has become very unpopular with the Republican base and elected officials. Powerful groups on the right like the Club for Growth have been using Bennett support of the individual mandate in attacks against him.

Utah uses a multi-stage caucus process to choose nominees, potentially giving a relatively small number of highly-driven activists the ability to have a large impact. Last night was the first step in the process where local caucuses choose delegates to attend the party convention on May 8th.

The Republican caucus last night saw very high turnout and we should know the result of this afternoon. If Bennett fails to win the nomination over the course of the caucusing process, he may ironically be the first victim of the anti-individual mandate push from the right.

The Second Day Of Senate Consideration Of Reconciliation "Fixes"

The Senate worked late into the night burning up roughly seven hours of the mandatory 20 hours of debate on the reconciliation bill meant to add "fixes" to the new health care law and reform student loans. Since debate time is limited on reconciliation bills they can't be filibustered and therefore need only the constitutionally required simple majority to pass.

The Democrats are hopeful that the floor speech part of the reconciliation process will end by this afternoon and the Senate can then start voting on motions and amendments. By tradition the reconciliation process allows for unlimited amendments which are all voted on in “relatively” rapid pace during what is called a “vote-arama.” The Republican game plan is to try to poke holes in the bill with Byrd rule points of order and force Democrats to take tough votes against popular sounding amendments -- like Tom Coburn's (R-OK) amendment to prohibit health insurers from providing sexual offenders with erectile dysfunction medication.

In their misguided desire to not change the reconciliation, Democrats are not planning to offer real amendments of their own that could make health care reform better, improve our economy, or help America get better health care. Nor are they even planning to turn the table on Republicans by forcing them to vote against very popular amendments like repealing the health insurance industry's antitrust exemption. It would be a chance to make Republican take a tough vote and if it did end up in the final bill, it is very unlikely to cost them any votes in the House given the overwhelming majority that voted for a stand-alone bill to repeal the antitrust exemption.

This may be Democrats last chance to improve health care reform and try to make it more popular before the November election. Sadly, it appears an opportunity wasted.

The House Will Likely Need To Vote On Reconciliation Package Again; Time “Fix It Later” Is Now

On Sunday, the House passed the Senate health care bill and a reconciliation package that contains a number of so-called fixes. That reconciliation package is being taken up today in the Senate. Because of the strange nature of the Byrd rule, which requires every part of the reconciliation package to affect the budget, it is highly unlikely the Senate will be able to pass the exact same reconciliation bill that the House passed. Since both chambers must pass the same bill word-for-word, that means the House will, in all likelihood, need to vote on the reconciliation package one more time before it can become law.

The rules of reconciliation are a bit complicated. During the reconciliation debate, any senator can raise a Byrd rule point of order claiming some part of the bill violates the Byrd rule. The parliamentarian advices the chair if the point of order is validate. If the chair decide to take the advice of the parliamentarian and uphold the point of order that part of the bill is removed, unless 60 senators vote to waive the Byrd rule for that provision. All 41 Senate Republicans have pledged to prevent waiving the Byrd rule for any provision of the bill.

Given these restrains, it is almost assured that some part of the reconciliation package will violate the Byrd rule. From my reading of the bill section 2301 Insurance Reforms (PDF) seem the most glaring of provisions that might violate the rule.

SEC. 2301. INSURANCE REFORMS.

(a) Extending Certain Insurance Reforms to Grandfathered Plans- Section 1251(a) of the Patient Protection and Affordable Care Act, as added by section 10103(d) of such Act, is amended by adding at the end the following:

`(4) APPLICATION OF CERTAIN PROVISIONS-

`(A) IN GENERAL- The following provisions of the Public Health Service Act (as added by this title) shall apply to grandfathered health plans for plan years beginning with the first plan year to which such provisions would otherwise apply:

`(i) Section 2708 (relating to excessive waiting periods).

`(ii) Those provisions of section 2711 relating to lifetime limits.

`(iii) Section 2712 (relating to rescissions).

`(iv) Section 2714 (relating to extension of dependent coverage).

`(B) PROVISIONS APPLICABLE ONLY TO GROUP HEALTH PLANS-

`(i) PROVISIONS DESCRIBED- Those provisions of section 2711 relating to annual limits and the provisions of section 2704 (relating to pre-existing condition exclusions) of the Public Health Service Act (as added by this subtitle) shall apply to grandfathered health plans that are group health plans for plan years beginning with the first plan year to which such provisions otherwise apply.

`(ii) ADULT CHILD COVERAGE- For plan years beginning before January 1, 2014, the provisions of section 2714 of the Public Health Service Act (as added by this subtitle) shall apply in the case of an adult child with respect to a grandfathered health plan that is a group health plan only if such adult child is not eligible to enroll in an eligible employer-sponsored health plan (as defined in section 5000A(f)(2) of the Internal Revenue Code of 1986) other than such grandfathered health plan.'.

(b) Clarification Regarding Dependent Coverage- Section 2714(a) of the Public Health Service Act, as added by section 1001(5) of the Patient Protection and Affordable Care Act, is amended by striking `(who is not married)'.

I think it is likely that this section, or parts of this section, will be found in violation of the Byrd rule. (If not, it raises some interesting questions about the claims of Kent Conrad , and the media's willingness to believe them, that comprehensive health care reform could not have passed using just reconciliation because it would strip out non-budget related reforms like these.)

If this section or any other is removed because the Byrd rule the bill will need to go back to the House for a final vote. Both senior Democrats and senior Republicans believe some changes will be made as a result of the Byrd rule.

Meanwhile, the Democratic Senate leadership is currently whipping against members’ attempts to offer amendments to make health insurance reform better--like adding a public option--by making the absurd claim that they are trying to pass this bill unchanged--even though that is almost a certain impossibility.

For all the people who said “pass the bill and fix it later,” the “later” is now. The big health care bill has become law, and now reform supporters have a vehicle with which to fix health care reform that can't be filibustered. A chance Democrats are unlikely to get again for years. This is probably the best opportunity Democrats have to get some important improvements through Senate, yet the silence from many in the “fix it later” crowd is deafening.

Obama's Health Insurance Reform Is Now Law Of The Land

Now that President Obama has officially signed HR 3590, the “Patient Protection and Affordable Care Act,” it is the law of the land. It was a historic moment. Like it or hate it, the legislation is now a significant part of this America's socio-economic makeup, and will define the new health care reality in this country moving forward.

There are some very good things in the bill, and some pretty awful things. It would provide millions with health insurance through Medicaid and put some much needed regulations on the books, but it will also further entrench the private health insurance industry and further erode a women's reproductive rights.

The debate about this bill is over -- it is now the law of the land. The fight now turns to where you go from here. This bill can be changed, amended, and modified (for better and for worse), but no one honestly expects it to be repealed or completely replaced. Even though it is an extremely poor foundation to build on, it will be the foundation health care reform activists will need to deal with.

I hope everyone that fought to actually provide everyone in this country with quality, affordable health care will not stop until that goal is truly realized. I hope people that fought to end the abuses of an immoral, for-profit health insurance system will not give up. I also want to thank everyone involved for their hard work trying to advance health care reform.

If you want discuss some of my thoughts about possible actions to advance real health care reform look here.

Obama to Sign Health Care Reform Next Hour; Senate Begins Debate on Reconciliation “Fixes”

Today, at 11:15 AM EDT, President Obama will sign the HR 3590, the “Patient Protection and Affordable Care Act,” making the bill law. Politically, it will be billed as a big win for the President, who has spent over a year trying to get a health care insurance reform bill passed. This moment could possibly go down as one of this presidency's biggest accomplishments.

Soon after the bill is signed into law, the Senate will begin consideration on HR 4872, the “Health Care and Education Reconciliation Act” (at 2:15 PM). This reconciliation bill contains some “fixes” to the health care bill, as well as student loan reform. Because reconciliation bills have a set debate time, they can't be filibustered, requiring only the constitutional simple majority for passage. The consideration of the reconciliation bill is expected to take the Senate about a week.

This reconciliation bill might be the last chance for Democrats to deal with looming, politically damaging problems caused by the inclusion of an individual mandate, enforced by the IRS, which forces people to buy private insurance. Reconciliation could be used to strip the individual mandate out of the new law, or it can be used to add a public alternative, which makes the individual mandate significantly less unpopular. Foolish Democrats in the Senate seem dead set against dealing with what will likely be a toxic issue for them in November.

Dems Reap All The Red-Baiting Pain With None Of The Socialist Gain

Democrats did not offer a truly socialized health care system like they have in the United Kingdom. They did not just pass a universal single payer health care system like "Medicare for all." Not only did the bill not include a public option, but the regulations on the private insurance companies are extremely loose. Despite passing an extremely industry friendly, pro-private market, health insurance expansion bill, Democrats were still attacked by Republicans as socialists pushing a “government takeover” of health care.

Similarly, the bill with the Nelson abortion language and President Obama's executive order will be perhaps the biggest political and policy victory for the anti-abortion movement in decades. On the policy front, it will likely cost millions of women the abortion coverage they now have, and, on the political front, you have a Democratic president signing an anti-choice executive order. Yet, even on the same day as their huge victory, Republicans were still calling the health care bill the most pro-abortion piece of legislation since Roe v. Wade. Bart Stupak (D-MI), through brilliant negotiation and an iron will, scored a huge victory for the “pro-life” movement, yet he was rewarded by a Republican screaming out at him “baby killer.”

Democrats did almost everything they could to bend to Republican criticism. They dropped the public option, rolled back a woman's right to choose, and added cruel, costly, and stupid restrictions on undocumented immigrants buying of health insurance; yet the Republicans still levied the same attacks, regardless. Fearing the “government takeover of health care” line, Democrats dropped the incredibly popular public option leaving themselves with the politically toxic individual mandate forcing people to buy only private insurance. Yet, even with the public option gone, the Republican screams about how it is a socialist nightmare remain unchanged.

Democrats get accused of being socialist and baby killers no matter how hard they try to appease Republicans or kick their own progressive base. They have taken all the political blame for “socialism” without the political and policy upside of providing people with a popular public program like Medicare available to all.

If this health care fight finally taught congressional Democrats that Republicans will always tell insane lies and that they simply can't ever be appeased with policy changes, it just might have all been worthwhile. If you are going to get the blame either way, do the legislation the smart way to at least get maximum credit when it works.

Sadly, I doubt the lesson was learned.

Yes, The Health Bill Really Lacks Serious Cost Controls

I was debating whether I should do one final piece to show that the health care bill about to be signed into law lacks serious cost control. Fortunately, Ezra Klein, who is a big supporter of the bill, accidentally did my job for me.

In his piece "The five most promising cost controls in the health-care bill," Klein tries to make the case that the bill does contain a lot of serious cost control. The problem is, three of his five ideas just don't hold up. His five promising cost controls are:

(1) Create a competitive insurance market:

The idea of lousily regulated health insurance exchanges is not new. The Federal Employee Health Benefit plan (FEHB) has been a health insurance exchange for several decades now. With roughly 8 million users, it is bigger than any state exchange will be. Yet, the evidence is that health care costs on the FEHB grow at at effectively the same rate as the rest of the employer market. Even Klein himself has admitted this. Exchanges will probably smooth out the fluctuations and imbalances in the individual market and should reduce some amount of administrative overhead in a small part of the health insurance market, but the evidence they will systematically bring down cost is sorely lacking.

(2) The Medicare Commission:

Despite the huge carve-outs to protect most of the more costly aspects of the Medicare program from changes by the commission, this idea could potentially to do some cost control.

(3) A tax on "Cadillac plans":

The first problem is that this tax does not kick in for eight years (2018). Given its unpopularity and poor design, it is hard to imagine it survives as is. Also, the claims that taxing benefits will really control costs seem dubious at best. I agree with the assessment of the Center for Medicare and Medicaid Services, which concluded the excise tax's ability to bring down National Health Expenditures would be very minimal.

(4) Medicare "bundling" programs:

This is a good idea. Paying for quality and not quantity is a smart move. Ideally, this will help bring down cost.

(5) Changing the politics of reform:

Now this is just silly. Changing the politics of reform is not “in the bill.”

Klein is basically arguing that the bill's promised affordability subsidies and individual mandate are unsustainable because the bill lacks sufficient cost control (which is true). But, he argues, now that the government has made promises it can't keep, it will eventual need to deal with real cost control, or cut services.

I do hope the solution is real cost control reform, but I fear Republicans will kill the program with a thousand cuts. Only a small group of Americans will use the exchanges and qualify for tax credits. I can easily picture a scenario where Republicans slowly reduce tax credits, scale back insurance actuarial values, add co-pays for preventive services, reduce what must be covered in the minimum package, etc., instead of taking on the insurance companies, drug makers, and providers to actually bring down costs.

So, the bill does really lack serious cost control.

In Klein's attempt to defend the bill, he points to five cost controls. Only two seem to show some promise. Two others are dubious, with little evidence to back up the belief that they will bring down prices and one "cost control" is not even in the bill at all, just a vague hope for a better tomorrow. If this is really the best defense of the cost controls you can get from a strong supporter of the bill, my case about how the bill really lacks true cost control reform has basically already been made.

Now that the bill has passed, I would hope people can focus on its many failings more openly. Almost all the real cost controls were dealt away by President Obama to big health industry lobbies last spring. As a country, we will actually need to deal with health care cost control if we hope to stay competitive in the international marketplace. Pretending that this bill will accomplish way more than it really will is not a good path to much needed further action.

Health Care Reform: Where Do We Go From Here?

Now that this bill will become law the important question is where do we go from here on health care reform?

I have said before that I think this bill is deeply flawed and, most importantly, does not provide an clear pathway to eventually getting real reform. But now that this bill is the new reality, now is not the time to stop fighting. I do not plan to stop fighting until we have achieved real health care reform. Like it or not, we are effectively forced to work from this new starting point. All the groups that were saying this bill must pass because it is a "positive first step" now need to quickly begin preparing for the next step.

What to do next is a question that has been weighing heavily on my mind lately. I'm going to lay out all the possible actions that I have thought could be pushed for on a federal, state, and organizational level. Some of these ideas, I think, are workable, and some, I think, are more fanciful. This is not meant to be an edict to the progressive community, but just an attempt to ferret out some potentially smart actions. There are many hardworking groups, big and small, that care about real health care reform, and there is no reason that all of them need to push for one particular set of changes.

I would love to hear your thoughts about my list of ideas--and about any other possible, directed actions you think could make health care better. Keep in mind that the main part of the bill goes into effect in 2014, so it is critical to make changes before the concrete really starts to set, and this new, mandated private insurance system becomes entrenched.

Federal Actions:

1. In the next few days, strongly push for a senator to introduce a public option amendment during reconciliation, which would force an up-or-down vote in the Senate. (This effort is already in the works)


2. Based on Harry Reid's promise to Bernie Sanders, strongly push to make sure the next budget -- which will shortly be voted on -- contains reconciliation instructions that could be used to add a public option.


3. Maintain a strong, continuous campaign for the public option. Effectively try to make it a litmus test in all Democratic primaries until the pressure is so strong they pass one. Ask Democrats to vote against any budget that does not have reconciliation instructions that could be used to create a public option.


4. Try to get small changes to the state waiver provision enacted to allow states to try single payer or other more effective health care systems. (This could appeal to Democrats and Republicans because it would technically allow states a way to get rid of the individual mandate.)


5. Focus on possible bipartisan efforts to pass drug re-importation.


6. Focus on regulation enforcement by pushing for a national exchange with a national insurance commissioner to enforce new regulations.


7. Run a campaign to make exchanges possibly workable by repealing the insurance anti-trust exemption and instituting plan standardization, strong risk adjustment mechanisms, and a central provider reimbursement negotiator (all-payer system).


8. Try to effectively eliminate for-profit health insurance through direct law or an extremely high minimum medical loss ratio (roughly 93%).


9. Advocate for a slight re-design of the exchange/affordability tax credit system so that it is less destructive to abortion rights.


10. Push for single payer through a slow expansion of Medicare and/or Medicaid.


11. Try to fix the undocumented immigrants language to at least allow them to buy insurance with their own money.


12. Try to get bipartisan pressure in Congress to adjust the individual mandate, or eliminate it until there is a public alternative.

State Level Actions (which are, alas, somewhat restricted by the bill that passed):

1. Try to get as many states as possible to adopt the Cantwell “Basic Health Plan” for people making between 133% and 200% FPL.


2. Try to get as many states as possible to create their own public options with auto-enrollment.


3. Push to make state based exchanges possibly workable with strong risk adjustment mechanisms and a central provider reimbursement negotiator (all-payer system).


4. Make all insurance companies in state exchanges sell a defined standard plan to provide apples-to-apples comparison shopping.


5. Effectively end for-profit health insurance in the state and/or new state exchanges with law or very high minimum medical loss ratio.


6. Begin laying the groundwork for a better health care system with the state waivers that start in 2017.

Organizational

1. Given how much enforcement is left up to the states, create a national campaign infrastructure to ensure that progressives are elected in those states with elected insurance commissioners leading up to 2014.


2. Using the co-op program money, work with labor unions and progressive organizations to create well-run, cost effective, non-profit insurance companies all across the country.

Thoughts? Ideas? Just please try to say focused on talking about best possible ideas for moving forward.

Signed, Sealed, but Not Delivered: Six Big Flaws Need Fixing to Make New Law Meaningful Health Care Reform

This health care reform bill passed late last night and soon to be signed into law is a seriously flawed piece of legislation, for it fails to achieve the goals of real health care reform. Now that it is essentially the law of the land, the country needs to work diligently at the federal and state levels to correct many of the most egregious problems with the legislation before the reform package fully goes into effect in 2014. The six main areas that need to be fixed are: cost control, enforcement, individual mandate, abortion, competition, and immigration.

1) Lack of Real Cost Control

This bill does not create real cost control and will not bring down premiums for most Americans. Congress and state legislatures need to adopt real cost control measures like: drug re-importation, Medicare direct drug price negotiation, a public insurance option, Medicare buy-in, or a central provider reimbursement negotiator (all-payer system). These changes would save the government and regular Americans hundreds of billions of dollars over the next decade.

The bill also needs to provide a better pathway for states to opt-out of this bill so they can experiment with better health care models that could truly bring down cost.

2) Dangerously Weak Enforcement

There are some good new regulations, but regulations are only as good as the strength of the agency tasked to enforce them. This bill is dangerously lacking in this area, leaving enforcement mainly up to the same state insurance commissioners that now often lack the will, funding, or power to hold the private insurance companies honest. Only a national exchange and a federal insurance commissioner would have the power to make sure the new regulations are more than over-hyped window dressing.

3) Individual Mandate

The individual mandate, which uses the IRS to force people to buy a product from a poorly regulated, private industry, is an affront to the American people. The policy is not needed, and must be corrected before it has a chance to go into effect. People must be offered the choice of a public alternative, or the individual mandate must be repealed. Alternatives like a back premium payment system could achieve a similar policy goal to an individual mandate without a massive expansion of the IRS or government coercion.

4) Abortion

This bill is a massive rollback of a woman’s right to choose. It would take away the abortion coverage of millions of Americans. The system of exchanges and affordability tax credits could easily be modified to ensure federal funds are not used to pay for abortions, while still not taking away the ability of women and small businesses to buy insurance packages that cover abortion. Having an individual mandate that forces women to buy insurance, but also a law that prevents them from getting insurance that covers a legal medical procedure, is a disgusting abuse of women’s rights.

5) Lack of Health Insurance Competition

The bill will do almost nothing to address the problem of lack of competition in the health insurance market. Repealing the anti-trust exemption and adding a public option would be two big steps toward solving the problem. Creating an all-payer system would make it easier for new insurers to enter new markets. Requiring a standardized insurance package, instead of a confusing set of choices based on actuarial value, would allow Americans to do real apples-to-apples comparison shopping. Finally, adding much stronger risk adjustment mechanisms would force insurance companies to compete on quality instead of on avoiding the sickest Americans.

6) Immigration

Under this almost-law, undocumented immigrants would not be allowed to buy insurance on the new exchanges, even if they are willing to pay the full cost of the insurance with their own money. This policy is not only cruel and immoral, but fiscally irresponsible. The more undocumented immigrants that pay for their own health care, the more taxpayers save by not being forced to pick up the cost of undocumented immigrants' uncompensated care when they use the emergency rooms.

The White House and Democratic leaders have made many promises about health care reform throughout this long and winding process—from guaranteeing affordable, quality care for everyone to pledging tougher regulation of the medical industrial complex that created this broken system in the first place. If the majority party wants to honestly deliver on these promises—not to mention if they want to remain in the majority—then a concerted and immediate effort is required to prove that this week’s legislation is truly the first step toward reform, and not the last.

Harry Reid Makes Vague Promise Of Public Option Vote “Later,” So Others Give Up Guaranteed Vote Now

It appears Harry Reid (D-NV) has promised Senate liberals a vote on a public option in the next few months. It sounds like this vague promise of “fixing it later” was more than enough to get Bernie Sanders (I-VT) to completely flip-flop on offering a public option amendment during reconciliation. From Huffington Post:

In the end, of course, the public plan still faces the same institutional hurdles it had in the previous go-rounds -- mainly that there aren't 60 supportive senators to break a filibuster. But aides on the Hill are already looking to future reconciliation vehicles to which they can attach the policy, which would in turn allow for it to pass via an up-or-down vote.

"I very much appreciate Majority Leader Reid's continuing support for a public option and I am grateful for his commitment to bring legislation before the full Senate within the next several months," Sen. Sanders said in response. "It's imperative that we have a vote on this issue and I'm glad that is going to happen... It is my judgment that a majority of members in the House and Senate would support a public option when it comes up for a vote."

This is probably the single worst trade since the beginning of this process. If Sanders offered a public option amendment to the reconciliation, he would be guaranteed an up-or-down, simple majority vote on an amendment to a bill that can't be filibustered. Given that the big health care bill would have already been passed if the reconciliation bill is in the Senate, there is no need to worry the public option would derail the original Senatet bill. So, it sounds like Sanders and the other public option supporters in the Senate traded away a rock solid guarantee for a vote on a public option in exchange for a vague promise that they might possibly get a vote later. Way to negotiate!

It is good that they are at least talking about possibly putting in reconciliation instructions into the next budget that could be used to pass a public option with only a simple majority in the Senate. Promising a vote in a few months on the public option under regular order, which could be filibustered, would be so pathetic, it would make everyone involved look like fools.

I guess we will know in a month or two if they added potential public option reconciliation instructions to the budget, and whether or not Harry Reid is possibly true to his word. Personally, given his behavior over the last year, I'm not holding my breath.

The Great Public Option Flip-Flop: Sanders Will Now Work To Deny the American People an Up-or-Down Vote

Previously, I have explained how if just one single senator that supported the public option offered an amendment during reconciliation, it would force an up or down vote on the matter. This means it would only take 51 votes to include a public option, and, at the very least, we would finally get to see on the record the senators that stood up for the American people, and which ones were fighting to protect the profits of the health insurance industry. Only a week ago, Bernie Sanders (I-VT) promised to stand up, if no other Democratic senator would, to offer a public option amendment and provide the country with a measure of accountability on the issue.

Well, it did not take long for Sanders to break his promise on the public option. Sanders has completely flip-flopped, and will now work to deny the American people the up-or-down vote that they deserve. From Burlington Free Press:

The National Journal reported on its Web site Thursday that Sanders and Sen. Jeff Merkley, D-Ore., would shelve an amendment to the bill during the reconciliation process in exchange for assurances the proposal would be resurrected later.

A statement by Will Wiquist, a Sanders spokesman, confirmed the report. “Bernie is a strong supporter of a public option and will continue to work to create a system that provides competition for private insurance companies as a way to hold down skyrocketing premiums,” Wiquist said by e-mail. “He thinks majorities in the House and Senate would support a public option.”

“Given the very delicate situation at this time and the challenge facing Speaker Pelosi as she rounds up votes, Bernie and other senators have concluded that offering a public option amendment now could undermine the entire process.”

This, of course, is nonsense. The House must first pass the current comprehensive Senate bill, so it can be signed into law before the reconciliation package can go to the Senate. Once the big Senate bill is law, whether the reconciliation bill passes or not will have very little affect on health care policy in this country. Given that worrying about possibly derailing only the reconciliation package by trying to include a very popular and important improvement to the bill is silly. Also, why would you worry about a public option derailing the bill if you believe, as Sanders claims, that it does have a majority of support in both chambers of Congress.

This is an incredibly disappointing moment. Is there not one single member of the Democratic caucus in the Senate that thinks the American people deserved to know if their senators really support the public option or care more about protecting the profits of the private insurance companies? I just wish our representatives would have the decency not to lie to their supporters about what they will do, and not make promises they quickly break.

If the supporters of the public option won't fight for it now in a reconciliation bill, when it has the best chance of passing with a simple majority vote, why should we ever trust their promise of getting to it "later?"

Math-Magical: The Mythic Savings In The Reconciliation Package

Congressional Democrats seem extremely pleased with themselves over how they fiddled with the design of an excise tax on employer-provided insurance that will not kick in for eight years (and then grow faster after another two years) to make it look like it will bring in a huge amount of money in the years 2020 through 2029. Given the incredibly stupid design of the excise tax to begin with, no one who understands politics should doubt for a second that this tax will ever go into effect as planned, or bring in this huge amount of revenue.

Let us leave the huge caveat that many think the inherent assumptions made by the CBO about the savings from the excise tax are very dubious. The claim from the CBO is that every dollar in reduced insurance benefits will result in exactly one dollar in increased in salary. I'm going to just focus on the many future political problems with the excise tax.

To make it look like the excise tax will bring in a huge amount of money, they have indexed the tax to only the consumer price index instead of the CPI plus 1%. This is far below health care inflation even in countries with very slow rates of increase in health care cost. What this means is, each year, the excise tax will likely hit more and more people until it gets to a point where even very basic insurance packages would run afoul of the excise tax. Also, the subsidies that those on the exchange get will get smaller and smaller. From the CBO report:

Relative to H.R. 3590, the reconciliation proposal would make a number of changes that would affect its longer-term impact on the budget. In particular, it would increase the subsidies offered in the new insurance exchanges and would reduce the impact of an excise tax on health insurance plans with premiums above certain thresholds. An important component of the longer-term analysis is that, beginning in 2019, the reconciliation proposal would change the annual indexing provisions so that the premium subsidies offered through the exchanges would grow more slowly; over time, the
spending on exchange subsidies would therefore fall back toward the level under H.R. 3590 by itself. Another key component of the longer-term analysis is that, beginning in 2020, the reconciliation proposal would index the thresholds for the high-premium excise tax to the rate of general inflation rather than to inflation plus one percentage point.

These "savings" from these changes are nothing more than accounting sleight of hand--the issue of dealing with these changes is simply kicked down the road by ten years.

If the excise tax were only a cap on the amount of insurance benefits that are tax deductible, this might (and that is a huge might) possibly work out. People would just be paying more and more taxes on the health benefits package from their employer each year, but the quality of the packages could stay the same. Of course, even that would probably cause a political uproar, resulting in the tax continuously being “fixed,” just like the AMT.

The problem is that the excise tax is a flat tax of 40% on the value of the entire insurance package. It is not even a set cap on the value the employer pays for. This 40% rate is higher than many Americans marginal tax rate. This means that it simply does not make sense for an employer to ever offer employees the choice of an insurance package that costs more than the new excise tax limit. This would make it effectively impossible for many people with employer-provided coverage to buy a quality insurance package, even if they were willing to pay more in premiums with post tax dollars. If you actually wanted a tax to remain intact for the next twenty years, this is not how you would design it.

The excise tax's design was foolish in the first place, and, in some ways, it has only gotten worse with this reconciliation package. Of course, the tax does not kick in for 8 years, so it is some future Congress’s and future President's problem. Nothing says fiscal responsibility more than dumping a huge political mess on your successors.

There is simply no way to believe, given its ill convinced design, that this will not be heavily modified or scrapped in the future. Democrats might be proud of their “math-magical” CBO score showing huge deficit reductions in the next twenty years, but I don't think anyone should boast about illusions that will never come true. This second decade projections are based on the false assumption that a poorly thought-out, huge, new tax will remain completely unchanged for the next two decades. The changes might be needed for process reasons, but Democrats should not proudly brag like they will actually happen.

This is the equivalent of a president saying they have a twelve-year plan to end the budget deficit. He can just propose a bill now that says taxes will remain the same for the whole eight years of his presidency, followed by everyone's taxes jumping to an 92% tax rate the year after the president leaves office.

Kent Conrad Scores Special Student Loan Deal For North Dakota In Reconciliation Package

It looks like Kent Conrad (D-ND), who chairs the Senate Budget Committee through which any reconciliation bill must pass, scored a nice, little, special deal for his home state as part of the student loan reform portion of the reconciliation package. From the summary of the bill:

Section 2213. Agreements with State-Owned Banks. This section amends Part D of Title IV to direct the Secretary to enter into an agreement with an eligible lender for the purpose of providing Federal loan insurance on student loans made by state-owned banks.

Guess which is the only state-owned bank in the entire country--that's right, it is the Bank of North Dakota.

Personally, I like the idea of state-owned banks to handle the states' own bank accounts, and make long term investments in the local economy. The Bank of North Dakota has done some good for the state, and could be a model for others. If the one provision in this bill encourages a few other states to create state-owned banks, it might not even be a bad thing. But, as it currently stands, this is clearly a special deal secured by Kent Conrad for his home state.

I said all along that Democrats just couldn't help themselves when it came to special deals in the reconciliation package. Even though they knew special deals like this were helping to kill support for the bill, they still slipped more special deals into the reconciliation package. A reconciliation package whose main point was to "fix" all the the problematic special deals in the first bill. Sometimes it seems like Democrats never learn.

Health Care Reconciliation: Increases In Affordability Tax Credits Only Temporary

One of the Democratic leadership's talking points for the reconciliation bill is that it increases affordability tax credits for people on the exchange. What they aren't saying is that the increase in subsidies in the Senate bill is only temporary. From the CBO:

An important component of the longer-term analysis is that, beginning in 2019, the reconciliation proposal would change the annual indexing provisions so that the premium subsidies offered through the exchanges would grow more slowly; over time, the spending on exchange subsidies would therefore fall back toward the level under H.R. 3590 by itself.

This means that the increase in affordability tax credits provided by the reconciliation package starting in 2014 would disappear only a few years afterwards. That is a pretty big caveat. Given that this reconciliation bill does not include a public option, Medicare buy-in, a national exchange, a higher medical loss ratio, all-payer, or direct Medicare drug price negotiations, and is unlikely to keep the National Insurance Rate Authority, and now add the fact that the much touted increases in affordability tax credits are only temporary, and it becomes apparent that this reconciliation package is a tremendous wasted opportunity.

Way to go, House Democrats! You basically get one bill a year that can't be filibustered, and this is all you can think to do with it to "improve" the Senate health care bill?

It‘s Not That the Health Care Bill Does Too Little Good, It’s That It Does Too Much Harm

The greatest problem with the Senate health care bill is not that it does “too little” to help people. The problem is that the bill does too many terrible things to help all the bad actors.

The Senate bill further entrenches the private health insurance system. It continues the terrible pattern of privatizing our social safety net in such a way that business skims 20% off the top. It makes sure the big, life saving medications of the future remain incredibly expensive, so as to enrich the drug industry. It takes a giant step towards eroding women's reproductive rights. It wastes hundreds of millions to fortify the same, broken health care system that is crushing our economy. The worst part is I don't see anything in this bill that might serve as a path to real reform. There is no public option or Medicare buy-in. There is no proper state single payer waiver. There is no mechanism to move to an all-payer system and/or a clear path to force for-profit companies out of the health insurance market.

I would gladly fight for a smaller health care bill that just gave Medicare to people over 50 who don't want to keep their current insurance. That would help fewer uninsured people, but would do it the right way. It would be real help, and it would be done in a simple, cost effective, and fiscally conservative manner. It would be a small step, but, importantly, it would be a step in the right direction. That would actually be a health care reform foundation I would be proud to build on.

I have no problem fighting for incremental reform as along as it is improvement done the right way, or at least with a pathway in the right direction. What I do have a real problem with is taking big steps if they are steps in the wrong direction. If anyone can actually explain how this bill, which will funnel hundreds of billions of dollar into private hands, and force millions of Americans to be customers of the same private health insurance companies that helped ruin our health care system, will actually serve as a vehicle for the real reform we will eventually need, I would love to hear it. Personally, I just don't see how the fight will be easier in the future, once the health insurance industry is a few hundred billion dollars richer, and already has a captive market thanks to the IRS.