The Harry Reid is in the process of merging the two Senate bills, but what the final Senate product will be is still a secret. For the most part, the bill from the Senate Finance Committee (SFC) is expected to serve as the base that the new Senate bill is being built upon. It is by far the worse of the two Senate committee bills.
Here is a compare/contrast between the new House version and the Baucus version of the Senate bill. The House bill is superior in many ways:
It covers more people. The Senate Finance Committee (SFC) bill, written by Max Baucus, would only provide coverage to an additional 29 million people. The House bill with extend coverage to roughly 36 million individuals. That is 7 million more people.
Contains a public health insurance option. The SFC bill did not contain a public option.
Employer mandate instead of "free rider” provision. The “free rider” provision is a terrible and probably unworkable idea that would hurt low-income Americans.
Stronger, better regulated exchange. At the insistence of Olympia Snowe, the SFC's exchange was made basically worthless, the equivalent of a health care yellow pages. The House bill will let the exchange use its power to help hold down premiums and get the best deal for customers.
Lower out-of-pocket cap. The House bill places an annual out-of-pocket limit on expenses for individuals at $5,000 and families at $10,000. The SFC places the annual limit at $5,950 for individuals and $11,900 for families
Higher quality insurance plans. In the House bill's lowest qualified plans must have an actuarial value of 70 percent. In the SFC bill, the lowest qualified plans must only have an actuarial value of 65 percent.
More generous affordablity tax credits. The House bill will provide working class American families more help affording health insurance than the SFC bill will.
Tighter age ratings. The House bill will only allow insurance companies to charge older people twice as much as younger individuals. The SFC bill would let insurance companies charge older people four times as much. The health insurance lobby has been pushing hard for an age rating of 5:1.
Minimum medical loss ratio. In the House bill, there is a minimum medical loss ratio of at least 85%. An insurance company needs to use 85 cents of every dollar it brings in through premiums to pay for claims. The SFC bill does not have a minimum medical loss ratio.
One national exchange instead of state-based exchanges. Creating a single national exchange is better than having states create 50 different state-based exchanges like the SFC bill. It should increase efficiency and bring down cost.
Better ombudsman. Both bills would create a new health care ombudsman office (or offices) to help people deal with insurance companies. In the SFC bill, people would only be allowed to seek help from the ombudsman if their internal appeals last more than three months, or they were facing a life-threatening situation. The House bill puts no restrictions on when a person could seek help from the ombudsman.
These are not the only eleven ways the House bill is significantly better than the bill written by Baucus, they are just some of the most glaring examples.
I previously wrote about how Olympia Snowe (R-ME) was trying to make health care “affordable” by reducing the minimum definition of what qualifies as “insurance.” Her solution to the fact that real health insurance would still be unaffordable for millions if the nation adopted the bill she wrote: let everyone buy worthless junk insurance. This is probably one of the worst ways to make insurance “affordable,” and it seems that Baucus now thinks it is great idea.
Three weeks ago, Baucus properly rejected this terrible idea when he voted against an amendment by Sen. Enzi (R-WY) to reduce the actuarial value of the lowest quality plans (bronze level) from 65% to 60%. Now that Sen. Snowe seriously wants this modification, Baucus is singing a different tune.
On a conference call with reporters, Baucus said lowering the “so-called bronze plan, down to 60 would also help address affordability.” He talked about possibly reducing the actuarial value of the bronze plan and increasing the number of people who could buy the catastrophic insurance called “young invincible” plans. The exact changes Snowe told Ezra Klein she wanted made:
Just thinking out loud here, maybe you make the “young invincible plans” more available to people, or bring down the bronze plans to 60 percent [of expected actuarial value].
Empress Snowe made a decree and Democrats rush around trying to make it happen. The Democrats' desperate attempts to adopt all of Snowe's (a member of a powerless minority party) terrible ideas is sickening. She has been slowly ruining reform with her demands. Her unneeded vote is not worth the terrible compromises she has demanded. Senate Democrats need to stop bowing to her whims and put together the best bill they can to help the American people.
Polling shows the Americans just don't really care that a bill is “bipartisan.” What they want is real reform with a public option, which will make life for regular people in this country better.
Gerry McEntee is president of the American Federation of State, County, and Municipal Employees (AFSCME). He leads the one of the largest unions in America and has been one of the most vocal advocates for progressive health care reform. He is one of the few establishment figures willing to openly challenge Obama for repeatedly breaking his word in regards to health care reform. Apparently, demanding that someone at least attempts to keep their promises is an unacceptable slight, according to a cowardly anonymous “senior White House 0fficial.”
We have had just about enough of his gratuitous slaps,” said a senior White House official Friday, calling the politically charged language “outrageous and unacceptable” from an ally — even from one that had, the official noted, devoted substantial resources to health care efforts.
“He’s doing his members a real disservice,” said the official, who said that while all other labor leaders had been careful to keep their opposition to elements of health care proposals modulated and largely inside the tent, McEntee was “beyond the pale.”
That's interesting because the progressive community thinks Obama breaking most of his top campaign promises about health care with secret deals are the real gratuitous slaps. Having top progressive reform priorities (like allowing Medicare to save billions by directly negotiating drug prices) sacrificed in a back room in exchange for campaign ads from PhRMA is what is beyond the pale.
Looking back at Obama's campaign health care plan, it is shocking how many promises he broke without a fight. Obama promised:
-A new national health exchange open to all Americans -A new public plan available to all Americans to compete with private insurance
-An employer mandate to provide health insurance
-A minimum medical loss ratio for insurance companies
-To allow people to import cheaper drugs from Canada or Europe
-To repeal the ban that prevents the government from directly negotiating with drug companies
Note none of these promise are part the Senate Finance Committee bill. Obama has made no effort to fight for the inclusion of some of these promises (public option, employer mandate, minimum medical loss ratio) and months ago even made secret deals promising to actively work to kill other promises (drug re-importation, and direct drug price negotiation).
During the election Obama actively campaigned against two policies. One was the individual mandate favored by Hillary Clinton (and the health insurance industry) and the other was a tax on employer-provided health insurance supported by John McCain. These two issues, that Obama fought against during the campaign, are part of the Baucus bill. Since taking office Obama has spent dramatically more time and political capital fighting hard to include these two provisions he opposed than he has spent trying to include top progressive/labor union priorities he supported like the public option.
Obama is now pushing for policies he claimed to strongly oppose (individual mandate and tax on health insurance benefits). He refuses to fight for provisions he promised to support (public option and employer mandate). And in a double whammy, during a series of secret back room deals (breaking his promise for complete and open transparency) he promised different industries to actively oppose popular ideas he once claimed to champion (drug re-importation, and direct drug price negotiation).
The question is who is gratuitously slapping whom. Is it the Obama administration, which with repeated broken promises stabbed in the back the labor unions? Or was it McEntee for simply calling bullshit when he sees it?
Most of the major unions in American are not happy with the Baucus bill, which recently passed out of the Senate Finance Committee. Today, they chose to make their objections known very publicly, in defiance of Rahm Emanuel, by taking out several of full-page newspaper ads.
“He told us that we really don’t want to be looked upon as the group that stopped meaningful health-care reform,” [Gerald McEntee, president of American Federation of State, County, and Municipal Employees] said in an interview yesterday. “We would love to be on the exact same page as the White House, but we see ourselves as fighting for our members.”
The newspaper ad claims that the inclusion of “a public health insurance plan option is essential to reform.” The ad also stressed labor 's opposition to the new excise tax on high-end health insurance benefits. The ad called it an unacceptable, “new tax on the middle class.”
The fact that many labor unions strongly object to the Baucus bill should not be a surprise. The new excise tax on health insurance benefits would disproportionally hit middle class union members. The new tax is highly middle class regressive.
The Baucus bill also lacks a public option. In some ways the lack of public option symbolizes Baucus's refusal to truly rein in the different health care industries. The health insurance companies will not face new public competition, price control regulation, or medical loss ratio requirements. Both PhRMA and the hospital industries cut sweet heart deals, dramatically limiting the potential of health care reform to reduce the overall cost of health care in this country.
The spiraling upward costs of health insurance is crushing local government budgets and governmental employees. The incredibly high price of insurance and pharmaceuticals in America, compared to the rest of the world, is making our manufacturing sector uncompetitive globally. This is killing our manufacturing base and manufacturing unions.
The Baucus bill would hit many union members from both ends. It would tax their benefits above a set value, but too little to prevent the cost of their insurance to keep growing above that level.
The public opposition push from the Unions comes just days after the health insurance industry launched an attack on the Baucus bill. It is the latest sign that the White House's strategy of keeping all the stake holders at the table maybe unraveling
*Notably absent from the list of unions who sponsored the ad were the International Brotherhood of Teamsters and the SEIU.
I know many on the left have taken to calling Republican Senator Olympia Snowe, President Snowe. This has been in response to the Democratic party leadership willingness to do almost anything to gain/keep Snowe's support for health care reform. Frankly, this does not fully encompass just how much power has been handed over to Snowe.
Mr. Reid will gather the group in his office, on the second floor of the Capitol for its first official meeting on Wednesday. The group includes Senator Max Baucus, Democrat of Montana, the Finance Committee chairman, Senator Christopher J. Dodd, Democrat of Connecticut, who was acting chairman of the HELP committee when it passed its health care bill and representatives from the White House.
Jim Manley, a spokesman for Mr. Reid, said that Senator Olympia J. Snowe of Maine, the lone Republican on the Finance Committee to vote in favor of the bill, would be invited to future sessions. And Mr. Manley said the Democratic leader was prepared to go to substantial lengths to hold Ms. Snowe’s support.
“He is prepared to do what he can to keep her on board while putting together a bill that can get the 60 votes necessary to overcome a Republican filibuster,” Mr. Manley said.
After all, many presidents (Nixon, Clinton, Truman, Johnson) have tried and failed to get the health care bill they wanted passed the United States Senate. Snowe is basically being told that she can write whatever health care bill she wants. This is more say than has been offered to any president in the past 100 years.
You see Snowe has achieved a level of power far in excess of that of a mere president in our multi-branch system of government with its checks and balances. The mock title “President Snowe” simply does not do justice to the amount Max Baucus, Harry Reid, Rahm Emanuel, and Barack Obama have invested in her. Her sway on the issue of health care reform is closer to that of absolute monarch than of any American president in history. I think Empress Snowe more properly summarizes how completely some in the Democratic leadership are prepared to defer to her.
I'm sure Chairman Baucus, Senate Majority Leader Reid, and President Obama are all pleased that Republican senator Olympia Snowe voted for the Baucus bill in committee. Their goals have long been to pass anything they could slap the label “health care reform” on and declare victory. Sadly, Snowe's support could signal a bad day for real reform.
Snowe has long been opposed to some of the most important elements of reform. I'm not just referring to her opposition to a real public option and her support for a worthless trigger proposal.
Snowe opposes a real employer mandate, and instead favors a disastrously stupid “free rider” provision. It could have serious consequences for low-income workers.
She is against giving the exchanges the power to negotiate with private insurance companies. This is a provision that should help keep down the cost of health care. It would save individuals money and the government money. Snowe fears it is too much government involvement. John Kingsdale, who runs Massachusetts's exchange, called Snowe's insistence that the exchanges not have the power to negotiate price with insurance companies a recipe for disaster.
Just today, during the committee hearing, she reaffirmed her support for “national plans.” This would allow health insurance companies to sell national plans in any states. Individuals state would lose the power to regulate these insurance plans sold in their states. The national plans would be exempt from all minimum benefit requirements mandated by the state legislature. This has been for a long time one of the top goals of the for-profit health insurance industry.
These are only the few changes that I know Snowe requested. Other good ideas, like a minimum medical loss ratio for insurance sold on the exchange, a stronger regulator, and a better defined minimum benefits package, could also have been excluded at the request of Snowe. For Example, Cantwell's “basic health plan” amendment did not get Snowe's vote in committee. It may be left out of the merged bill because Snowe opposes it.
I fear all of these terrible ideas from Sen. Snowe will make their way into the final bill. Obama has signaled his desperation to win the support of Snowe, and seems willing to accept any idea she has regardless how bad. Snowe's vote may make it easier for the Democratic leadership to declare a political victory, but the cost of winning Snowe's support could be that health care reform is a policy failure. In which case, it is the American people who are the real losers.
The vote on the Senate Finance Committee health care bill is scheduled for Tuesday. The committee has 13 Democarts and 10 Republicans. The big vote to watch for is Republican senator Olympia Snowe. She is seen by many as the only possible Republicans vote for any health care reform legislation. If Snowe does vote for the bill in committee it could be used as an excuse for including her worthless trigger idea in the bill which is brought to the full senate floor.
“The public option with a trigger would be a compelling thing to put in the merged bill if the Finance bill has the endorsement of Snowe,” said the aide. “When progressives howl, you can point to Snowe’s support.”
The other votes to watch are that of Democratic senators Ron Wyden and Jay Rockefeller. Both Wyden and Rockefeller have been treated poorly by Baucus throughout the process of writing the committee's bill. One or both (as long as Snowe is a yes) could cast a protest vote against the bill. Regardless, the bill is expected to pass out of committee.
Looking through the CBO letter about the Baucus bill, there is one striking fact that most of the media is overlooking. The CBO claims in the report that they did not score the full bill. They admit to completely ignoring a huge provision that is projected to reduce the cost of the bill by roughly $44 billion, but would deprive millions of Americans of health insurance. The paragraph below, from page 8, has been widely criticized, but it is the start of the next paragraph (that I highlight) which should get more attention.
An amendment adopted by the committee would require that, beginning in 2012, the Director of the Office of Management and Budget (OMB) certify annually whether or not the provisions of the legislation are projected to increase the budget deficit in the coming year. If the Director determined that they were projected to increase the deficit, he or she would be required to notify the Congress, and exchange subsidies would be automatically adjusted to avoid the estimated increase in the deficit for that year.
The estimates presented in this preliminary analysis do not incorporate the potential effects of using this proposed failsafe mechanism, although CBO and JCT estimate that the amended mark would increase the deficit in fiscal years 2015 through 2018.
This means the CBO analysis being widely reported does not come close to reflecting the real cost of the bill, or the real increase in coverage. For some reason, the CBO did not report what they expect to be $44 billion in savings.
Looking at CBO chart on page 3: in 2015, money going to affordability tax credits would need to be cut by $10 billion (13%). In 2016, they would be cut by $20 billion (21%). In 2017 the cut would be $13 billion (8%), and in 2018 the cuts would only $1 billion (1%).
Depending on how the cuts to the affordability tax credits were structured, there would between one and six million more uninsured Americans each year from 2015 to 2017 than the CBO letter indicates. The preliminary CBO analysis did not “incorporate” this $44 billion in savings or the several million increase in the number of uninsured Americans.
I suspect this incredibly stupid “failsafe mechanism” will not make it into the final bill, but the CBO still should have scored this huge provision. It is currently part of the bill. The job of the CBO is to score the whole bill, and not to ignore provisions that would make the bill look bad.
I'm highly disappointed with the institution of the Congressional Budget Office. They must have known that their preliminary analysis would be widely reported without more critical examination. Sadly, the CBO report makes clear only on page 8 that their score does not come close to really modeling the effect of the passing the legislation they were given into law.
For starters, being “covered” under Baucus's reform really is no guaranty of financial security. The yearly cap on out-of-pocket expenses for a family is $11,900 (and that is not counting the cost of premiums, which could be double that). How many middle income families have the financial reserves to take that kind of hit if a spouse needs serious medical treatments over the course of a few years? This bill would reduce--but will not end--one of the greatest shames in our nation. That of “under-insured” Americans forced into medical bankruptcy.
The other major problem is that there is no major reduction in the number of uninsured until 2014. It will be roughly 44 months after the bill is signed before we start seeing a noticeable reduction in the number of uninsured. There is not one but two elections before anything really gets started. Looking closely at the new CBO report, it won't be until 2014 or 2015 that we start seeing a serious reduction in the number of uninsured.
Even after the bill is in full swing, around 2015, the number of uninsured who will be “covered” is only 27-29 million. Even after reform is fully implemented their will still be 24-25 million people in this country without health insurance, a full 9% of our population. Ignoring undocumented immigrants you are still talking about 17 million Americans without health insurance. This bill will not produce universal health care. It will not even produce near universal health care. After this bill goes into effect we will need another almost equally massive reform effort if we want to get to universal health coverage.
Just to give you a comparison, let's look at Switzerland (the second to last major industrialized nation to adopt universal health care). In 1994, the Swiss decided to reform their health care system partly because roughly 4% of the country was without health insurance. This number of 4% was considered to be unacceptable by the Swiss. I hope that sinks in. Baucus's bill would hopefully get us to a place five years from now where we have 9% of people in our country without health insurance. That is still dramatically worse than where Switzerland was before it decided to undertake serious health care reform.
Even if Baucus's bill works as hoped, we would still have the dramatically more of our people uninsured than any industrialized nation. We will still have the cruelest, least fair, most wasteful, and most expensive health care system of any rich nation. It will only get us to a place that any European nation would consider shockingly unacceptable.
Would Baucus's bill be an improvement on the currently awful state our health care system? Yes, but starting from a terrible place is no excuse for aiming incredibly low. The nicest thing I could say about it, is that Baucus's bill will improve the grade of our nation's health care coverage from a F to a D-. We will still be the absolute bottom of the class compared to all other rich nations. Let's not try to pretend that this is anything short of an awful bill that would still leave us with a terrible health insurance system. This is not change we can believe, this is the change than I might have expected from a President Mitt Romney.
This seems very strange to me and shows the depth of ill will there must be on the Senate Finance Committee these days. Baucus publicly screwed over Wyden on his free choice amendment a few days ago, but Baucus's slight of Rockefeller was longer and maybe more serious.
Rockefeller chairs the Senate Finance Committee subcommittee on health care. Not only did Baucus skip over the Rockefeller's subcommittee, but he selected two lower ranking Democratic senators (Conrad and Bingaman) with less health care experience to be part of his “gang of six.”
Rockefeller has been very public with the fact that he is both unhappy with both the shape of the Baucus bill and the secretive way it was written. Baucus now needs Rockefeller to help vote the bill out of committee, but seems to have left the job of twisting Rockefeller's arm completely up to the White House.
Baucus himself keeps saying Rockefeller will vote for the bill, but hasn’t talked with him. Obama has urged him to, both in person and on the phone, and now the West Virginian’s colleagues seem to be giving him space to let the president’s words sink in.
Rockefeller said Tuesday that “nobody” has approached him. “Has Baucus talked directly to me? No.”
The fact that Baucus has not personally asked Rockefeller for his vote just seems like bad politics--and like an incredibly dick move. This is behavior you would expect at a middle school semi-formal, not from the "world's most deliberative body."
A few days ago, I wrote that the CBO screwed up Ron Wyden's amendment by failing to fully score it, after telling Wyden that they had. As a result, Max Baucus wouldn't let it come up for a vote on the Senate Finance Committee. Wyden is now threatening to vote against the entire bill, which could keep the Senate Finance Committee from reporting one.
So what actually happened?
FDL has obtained the two CBO letters that were sent to Wyden, one on September 22 (PDF) and another on September 29 (PDF), which indicate that Baucus was not correct when he told Wyden that the amendment had not been scored. It had. There was a "proposal variant," as the CBO calls it in the September 29 letter, that they indicated they could not score. But that wasn't the amendment Wyden submitted, which was supposed to be voted on that night.
Here's what happened:
Sept 16: Baucus introduces his America's Health Future Act. Wyden submits his “free choice” amendment shortly thereafter, something he had be working on for several months.
Sept 22: The CBO sends Wyden an email, saying they have fully scored amendment. As had been previously reported, they score the amendment as saving $1 billion:
From [deleted] cbo.gov] Sent: Tuesday, September 22, 2009 9:03 AM To: [deleted] (Wyden) Cc: Sandy Davis Subject: free choice amendment
[deleted]
Below is our analysis of amendment #C1. As I mentioned, we modeled this as giving all employers access to the exchange starting in 2015 The savings were a little smaller than Ihad anticipated but it is still a net saver.
Wyden # C1
Relative to the Chairman’s mark, the amendment as modeled would reduce the net impact on federal deficits by about $1 billion over 10 years. There would not be substantial effects on the total number of people with insurance coverage or the sources of that coverage, relative to the Chairman’s mark.
According to sources familiar with the exchanges between Wyden and Baucus, an attempt was then made to create a modified compromise version of the amendment which could have a better chance of passing the committee, and it was submitted to the CBO.
September 29: The CBO sent a another letter to Wyden. They indicated they were unable to fully analyze this new modified version of the amendment, which they called the "free -choice proposal variant":
From [deleted] Sent: Tuesday, September 29, 2009 4:22 AM To: [deleted] Cc: [deleted] Subject: Wyden free choice proposal variant
Unfortunately we will not be able to estimate the impact of the full-blown version of this proposal -- involving vouchers -- in the near term. The complexities of working out how the voucher amounts would be determined, who would keep the savings, the tax treatment of those savings, the potential for favorable or adverse selection -- and how individuals and firms would resopnd to the resulting incentives -- would take some time to work out.
As we indicated to Senator Wyden's staff, amendment # C as drafted -- which involved setting up combined reinsurance pools for employer plans and exchange plans -- seemed most similar to us to allowing firms to purchase coverage through the exchange; that is, to let all of their workers choose among the exchange plans. Thus, we modeled the effect as allowing all firms to do so starting in 2015 (which is sooner than under the mark). We assumed that there would be resulting reductions in tax-preferred health care spending that would be translated into taxable wages as a result of market forces -- without involving specific provisions for vouchers -- and that effect was factored into the $1 billion reduction in net federal costs that CBO and JCT estimated for the amendment.
So Wyden never introduced the "variant."
October 2: Shortly after midnight, Wyden introduces his original, fully scored version of the amendment -- not the modified version which the CBO had not analyzed. Baucus let Wyden bring it up as the last amendment on the last day of mark up. Debate started at approx. 1:00 am. Roughly half an hour into it, Baucus surprised Wyden by declaring that he would rule it out of order (there would not be a vote on the amendment):
BAUCUS: Now, the fact is CBO has not scored this amendment. CBO has not analyzed this amendment. I justs checked a few minutes ago with CBO.
A late night text message sent to Kent Conrad by someone at the CBO supposedly backed up Baucus's claim.
According to sources familiar with what transpired, the CBO never withdrew its score for the Wyden amendment before Wyden introduced it. They confirmed this to Wyden the next day.
The big issue is that Baucus blindsided Sen. Wyden at 1:45 in the morning on the very last day of mark up. For reasons of protocol and simple good manners, Chairman Baucus had the duty to inform Wyden that he would be ruling his amendment out of order before doing it publicly at 1:45 am. Given the proper warning, Wyden would have had the chance to confirm with CBO director Elmendorf that his amendment was fully scored and should not be ruled out of order. Wyden did try to argue that he was indeed correct, but to no avail (I guess late night text messages sent to Conrad trumps logic). There was no one from CBO present at the hearing to settle the matter.
You can watch the whole debate unfold at the C-Span Video Library, it starts at the 76:30 mark in the video. Baucus's blindsiding of Wyden beings roughly 30 minutes into the debate and is captured below:
Since it was to be the last amendment on last day of mark up, Wyden was left with no recourse, and was forced, unfairly, to withdraw his amendment. He was denied a vote on the amendment some policy writers considered the single most important possible change to health care reform.
Jane Hamsher reports that Wyden was asked to not criticize Baucus's terrible bill in exchange for getting a vote on his prized amendment. To promise Wyden a vote, only to declare the amendment out of order (when it should not have been) is a powerful slight to Wyden. If there was indeed such a deal, it makes the Baucus blindsiding a serious violation of trust.
This is the quintessential ending to Baucus's handling of the health care reform bill. It was defined by extreme secrecy, zero transparency, endless delays, back room sweetheart deals to industry, and a complete disdain towards other Democratic senators on the committee. It is the perfectly undignified end to a shameful committee process.Why is all this imporant? Well, Wyden's amendment would have provided everyone with the ability choose their own plan on the new exchange -- and that means a public option, if one is available. Which is why, even though it was supported by policy wonks, it was opposed by the Chamber of Commerce.
As I get more information about Cantwell's “basic health plan” amendment the more I like it. (The modified amendment is available here.) I really wish Cantwell would stop calling it a public option. It is not a public option. I think it is an idea which should be debated on its own merits and not get drawn into the battle for a real public option.
As I have said before, what Cantwell's amendment would do is allow states to create a much better exchange for those under 200% of FPL. It is an exchange with well-defined minimum benefit package with fixed co-pays, out-of-pocket limits, and deductibles. It would allow real economies of scale to affect negotiations, and mandate a minimum medical loss ratio of 85% for participating insurers. Insurers would be required to meet “specific performance measures and standards,” and their performance would be publicly reported. The basic health program must provide a choice of at least two or more similar plans.
This is closer to a Dutch-, Belgian-, Swiss-style, well-regulated, private system. You get to choose from several similar well-defined plans, knowing all of the plans provide sufficient coverage. It is like Medicare Advantage without the option of Medicare. (It would still be dramatically improved if one of those plans was a public option. Medicare Advantage plans cost noticeably more without providing better coverage.)
The main exchanges in the Baucus bill will likely be confusing, loosely regulated marketplaces with dozens of incomprehensible choices. They will lack mechanisms that might engender the best possible bargain or drive down cost. I wish that Baucus's exchanges could be more like Cantwell's “basic health plan” exchanges.
Judging from an interview Cantwell did with Ezra Klein, I don't think I'm alone.
Why only go up to 200 percent of poverty? A lot of the concern right now is for people between 200 percent and 400 percent of poverty because they don’t have as much in the way of subsidies.
Because right now, that’s where 75 percent of the uninsured population lives. They need the health insurance. You create models within our system that are efficient. I’d be willing to do more, but that’s a different question.
What about me? I make more than 200 percent of poverty. What if I want to join your plan?
That’s for another day, Ezra. This is a big mountain to climb. We’ve got to get a foothold and this is the foothold.
It sounds like Cantwell also doesn't have a very high opinion of Baucus reform plan. I think it is clear that she sees expanding her “basic health plan” as a way to slowly replace Baucus's terrible exchanges with a much better ones.
It sounds like Cantwell also doesn't have a very high opinion of Baucus's reform plan. I think it is clear that she sees expanding her “basic health plan” as a way to slowly replace Baucus's terrible exchanges with a much better ones.
Cantwell's amendment is a good but sadly insufficient idea. It is really at best a “foothold.” It is how all the exchanges should be run, not a small subset for some people in some states. If the current Senate Finance Committee bill was passed into law, Cantwell probably hopes progressives will fight hundreds of smaller battles using her amendment to gradually marginalize Baucus's terrible exchanges. I appreciate the effort represented by Sen. Cantwell's amendment; like Wyden's state experimentation amendment it could be a tool progressives might use to fight for real reform at the state level. But I think it is far too early to begin a strategic retreat, to prepare to fight another day. Now is not the moment to accept defeat. This is a perfect time to fight, if only elected Democrats can be forced to remember what the party stands for.
When the Senate Finance Committee starts work again on Tuesday things should get heated. Here are some of the more interesting amendments to watch out for.
Free Choice Amendment – Wyden C1 What it hopes to do: It would allow employee's who do not like their current employer provided health insurance to ask for a voucher to buy insurance for themselves on the new exchange.
Background: Wyden's Free Choice Amendments is very important to the Senator. He has gone so far as to say that it is “a prerequisite to supporting the bill.” The CBO concluded it would have very little effect on overall health insurance and only save $1 billion. Wyden has been selling his amendments to conservatives as a way to increase choice and to liberals as a way to give more people access to the public option. This amendment is a wild card with the possibility of some bipartisan support. The amendment is opposed by the Chamber of Commerce.
What to look for: Watch to see if any Republicans (especially Snowe) decide to back Wyden's free choice amendment. Also check out how Baucus and Conrad vote. The amendment may upset the delicate balance of back room deals and compromises Baucus has tried to achieve.
Applying Regulation To Large Group and Self-Insured Market – Rockefeller C1 What it hopes to do: It would apply all new insurance regulations to self-insured and large group market
Background: The bill as currently written would exclude insurance provide by large employers from most of the new consumer protection regulations. While big business (i.e. the Chamber of Commerce) is opposed to the amendment it should be very politically difficult vote for any Democrats to vote against it. No one wants to be on record voting against protecting everyone from some of the worst insurance practices
What to look for: Watch to see if any Democrat besides maybe Baucus votes against the amendment. Also important is to see how Snowe votes. If she supports the amendment it should make it into the final bill.
Various Public Option Amendments - Schumer, Cantwell, Rockefeller What it hopes to do: Add a public option to Baucus' bill.
Background: Senators Rockefeller and Schumer have been the most vocal supporters of the public option on the Senate Finance Committee. Rockefeller is likely to introduce a robust public option tied to Medicare, while Schumer plans to introduce a “level paying field” public option which must negotiate it's rates independent from Medicare. Schumer and Rockefeller have been working closely on the issue and have not yet decided on the best political strategy. They may choose to only introduce Schumer's weaker public option in an attempt to show the idea of a public option has strong support. They might also introduce two public option amendments hoping to give conservative Democrats cover of voting against the robust public option but supporting the weaker “compromise.”
What to look for: First watch to see how many public option amendments are debated. Pay close attention to the CBO scores each public option gets. Baucus's use of the second lowest cost plan as the benchmark for determining tax credits may prevent the CBO from scoring the public option as saving money. Finally, pay attention to how conservative Democrats (Baucus, Carper, Lincoln, Conrad, Nelson) vote on Schumer's “level playing field” public option.
“Safety Net” Trigger Amendment – Snowe C1 What it hopes to do: It would trigger a weak state base public option if a low standard of affordablity is not met in any state at some time in the future.
Background: The new message from prominent Democrats seems to be that what ever Sen. Snowe wants is a great idea. Despite being a worthless fig leaf Peter Orszag, Harry Reid, and Bill Clinton have all talked positively about it. The idea of a trigger is opposed by all the other Republicans on the committee along with many liberals who think it is worthless.
What to look for: It is possible liberals could join with Republicans to kill Snowe's trigger. Pay attention to how the more progressives Democrats like Schumer, Rockefeller, Stabenow, and Cantwell vote. If they vote for the amendment it is probably because they got pressure to do so from leadership. Also pay attention to how Baucus votes. A trigger will likely insure that the final bill won't get more than 1-3 Republican votes in the Senate. If he supports the trigger amendment it is a clear sign he has fully given up on any hope of broad bipartisan support.
If Snowe's trigger amendment is not brought for a vote in committee it might be a sign that enough liberals on the committee have threatened to vote against it. If it failed in committee it would be more politically difficult for Reid to insert the idea when he combines the two committee bills.
Eliminating The CO-OPS - Rockefeller C11 What it hopes to do: Remove co-ops from the bill
Background: Conrad created the idea of the non-profit co-ops instead of a public option in an attempt to find broad compromise. The idea failed miserably. Liberals Democrats and conservative Republicans both attacked the idea. The idea seems to be losing support with even Conrad admitting they should be stronger.
What to look for: Watch to see which progressive members of the committee vote against the co-op idea. The votes of Republicans Snowe, Grassley, and Enzi should be interesting. All three were part of the Gang of Six that negotiated the co-ops idea. With Grassley and Enzi unlikely to support the bill, it is interesting to see if they will vote against the co-ops idea they helped create.
The Los Angeles Times highlighted today a troubling aspect of Baucus's health care reform bill. The bill basically gives a non-governmental non-profit, the National Association of Insurance Commissioners the power to write law.
Enforcement Mechanism. The National Association of Insurance Commissioners (NAIC) will devise an NAIC Model Regulation within 12 months of enactment that is consistent with the new Federal law with regards to Federal health insurance rating, issuance and marketing requirements. This model becomes the new Federal minimum standard without any further Congressional action. The new model should be developed by NAIC with input from all NAIC members, health insurance issuers, consumer groups and other qualified individuals. Representatives shall be selected in a manner so as to assure balanced representation among the interested parties.
The main problem with this, besides handing over the Congressional power to make laws to a non-governmental association, is that:
"The NAIC is clearly an organization that is dominated by the insurance industry," said California Lt. Gov. John Garamendi, a former state insurance commissioner...
The group's 56 members are public officials -- the elected or appointed chief insurance regulators of the states, the District of Columbia and five U.S. territories -- responsible for enforcing laws that vary widely in rigor depending on jurisdiction.
But the association itself is a private organization not subject to open meetings and public records law, noted J. Robert Hunter, insurance director of the Consumer Federation of America and a former Texas insurance commissioner.
"They have no transparency," he said.
If trusting the power to write the rules governing consumer protection to a non-government group with no transparency isn't bad enough, it gets worse. Members of the NAIC have gone on to get lucrative jobs at private insurance companies.
It is not often that progressives and the Wall Street Journal are in complete agreement, but sometimes the facts are plain for everyone to see. The Wall Street Journal is running a story today about what a massive boon to the for-profit health insurance corporations Baucus's health care bill would be.
The health-system overhaul proposed by Sen. Max Baucus would create millions of new insurance customers without subjecting health insurers to government-run competition -- two key victories for the much-maligned industry.
The math here is very simple: Individual Mandate (millions of new customers) – Competition (public option) = Huge Profits
The health insurance companies got the individual mandate they wanted, even though Obama campaigned against it. They also scored a huge victory when Baucus did not include the a public option in his bill, something Obama did campaign on.
The outcome is still uncertain. "I think there's only a limited chance that this could get worse [for the insurance industry]," said Sheryl Skolnick, who follows health-care services at financial-services firm Pali Capital Inc. "When all is said and done, the health plans should say a prayer of thanks to the Senate Finance Committee."
Senate Finance Committee Chairman Max Baucus said at the begin of today's hearing that there would not be time to get to the public option amendments today. He expects to debate and vote on the public option amendments on Tuesday.
Yesterday, Sen. Schumer and Rockefeller pushed hard for a vote today on their public option amendments.
The order in which the three public option amendments and Snowe's “safety net” trigger amendment are brought up for a vote should be the focus of intense back room negotiations over the weekend.
Another wild card on Tuesday will be the issue of co-ops. The idea has drawn bipartisan opposition on the Committee. It is possible that the liberal Democrats could join with conservative Republicans and strip the co-ops idea from the bill.
Sen. Bill Nelson proposed an amendment which would fill the Medicare part D dough nut hole. He would pay for the change by making the pharmaceutical industry pay a rebate for the overcharging of dual eligible Medicare/Medicaid seniors. The amendment would fully cover the cost of filling the dough nut hole and provide an additional $50 billion in government savings. The amendment would violate the secret deal reach between PhRMA, The White House, and Chairman Baucus.
Democratic senators Baucus, Menendez, and Carper vote against the amendment. All Republican senators also voted against the amendment.
Democratic senators Nelson, Rockefeller, Conrad, Lincoln, Bingaman, Schumer, Wyden, Kerry, Stabenow, and Cantwell voted in support of the amendment. The amendment failed 10 to 13.
The Los Angeles Times has good piece addressing one of the most underreported problems with the Baucus bill. The Baucus bill lacks sufficient mechanisms to slow the out of control increase in premium.
Democrats have shied away from regulating premiums in the face of charges from business leaders and Republicans that controlling what insurers charge would be meddling too much in the private sector.
As a result, while states have long supervised what companies charge for mandated automobile and homeowners insurance, the idea has been largely banished from the health care debate...
Nor are lawmakers seriously considering any proposals to regulate what doctors, hospitals, drug makers and other health care providers charge -- a strategy used by several European countries to control health care spending.
There are some countries that have universal health care provided primarily by a regulated marketplace of private insurers (Switzerland and Netherlands). These countries use a variety of heavy handed regulations to slow the growth of premiums.
A robust public option was meant to be the mechanism to control health care cost instead of pricing regulation. The idea was to have a public option that would not dominated the market, but would dramatically reshape the marketplace. A strong public option which could sell insurance plans at cost would provide the competition needed to discourage private insurance companies from gouging costumers. A public option would also allow the government to introduce and encourage the adoption of delivery system reforms which could hopefully produce high quality, low cost health care. If the reforms work for the public option, the hope is that they will be copied by private insurance companies.
If you don't have a robust public option than the system needs strong heavy handed cost control and pricing regulation. Baucus's plan has neither. Under the Baucus bill, everyone would be forced to buy insurance from private insurance companies, the government would foot the bill when the cost of premiums go over some percentage of income, and there is no regulation preventing insurance companies from raising premium as much as the can get away with. No one should doubt that this is a recipe for a costly disaster.
In a stunning moment during the Senate Finance Committee markup Sen. Tom Carper defended a secret deal that the White House, Baucus, and PhRMA had reached. The White House has long denied the deal. Carper publicly acknowledges that part of the deal was that PhRMA would run millions of dollars worth of campaign ads in support of health care reform.
According to Carper the “golden rule” in Congress is that secret back room deals in exchange for advertising buys must be honored. Carper's statement below,
I was not involved in negotiations with PhRMA but I believe that the administration was, obviously PhRMA was, and I presume this committee was involved in some way in those negotiations.
And what PhRMA agreed to do through those negotiations is to pay about 80 billion dollars over 10 years to help fill up half the donut hole. That's my understanding. And they are prepared to go forward and to honor that commitment. As I understand it, the commitment from our colleague Senator Nelson would basically double what was negotiated with PhRMA.
And whether you like PhRMA or not -- remember I talked earlier today in our opening statements, I talked about four core values, and one of those is the golden rule, treat other people the way I want to be treated?
I'll tell you -- if someone negotiated a deal with me and I agreed to put up say, 80 dollars or 80 million dollars or 80 billion dollars and then you came back and said to me a couple of weeks later -- no no, I know you agreed to do 80 billion and I know you were willing to help support through an advertising campaign this particular -- not even this particular bill, just the idea of generic health care reform? No, we're going to double -- we're going to double what you agreed in those negotiations to do. That's not the way -- that's not what I consider treating people the way I'd want to be treated.
That just doesn't seem right to me.
Carper was speaking in opposition to an amendment from Sen. Bill Nelson and Sen. Jay Rockefeller. The amendment mirrors what Henry Waxman did in the House to close the Medicare Part D doughnut hole by requiring drug manufactures to provide rebates for the overcharging of dual eligible Medicare/Medicaid recipients. Recently a group of House Democratic freshmen sent a letter to Waxman to asking him a rewrite the bill to reflect the Medicare Part D language in the Baucus bill.
PhRMA's board approved the $80 billion in price reductions on June 19. On June 30, the Hill reported that PhRMA began running ads in the districts of vulnerable Democratic House freshmen.
Igor Volsky at the Wonk Room has done a good job explaining many of the more important modifications made to the Baucus bill. To his list I would add three important changes which address a few of my own concerns with the Baucus bill.
Better Ombudsman Office Baucus decided to significantly strengthen the new ombudsman office by basically adopting the Bingaman amendment I discussed the other day. Originally the costumer would need to fully exhaust all internal appeals before being able to seek help from the ombudsman's office. Now if the appeal last longer than three months they can get professional help from the ombudsman's office. Access to the ombudsman's services still needs to be improved but this is a step in the right directions.
No Multiple Exchanges The bill would no longer allow states to create multiple exchanges. Originally states could allow “other entities” to operate multiple exchanges in the state. This was a bad provision that would not only dilutes the bargaining power of individual using the exchanges, but could easily become a way for insurance companies to game the system.
National Plans Restricted Baucus' bill would have allowed insurance companies to sell “national plans” which would be exempt from state benefit mandates. This has been a long time goal of the health insurance industry and would have effective gutted most states' insurance regulations. Fortunately, this provision has be changed to allow individual states opt-out of allowing national plans to be sold in their state. States with very good benefit mandates can now at least prevent their state from being flooded with lower quality “national plans.”
