Jack Tapper's Lazy “Reporting” Ignores Facts

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

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

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

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

House's Public Option: Good News and Bad News

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

The Good News

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

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

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

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

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

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

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

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

The Bad News

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

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

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

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

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

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


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

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

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

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

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

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

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

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

The Truth About Reconciliation That Time (Magazine) Forgot

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

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

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

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

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

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

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

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

Bipartisan Health Care Reform Nearly Dead?

During the Sunday talk shows the most important line came from White House advisor David Axelrod. His statements indicate the chance of bipartisan health care reform is becoming increasingly remote.

On This Week, David Axelrod redefined bipartisanship as simply including Republican ideas in the bill. He only “hopes it will come with Republican votes.”

This is new willingness on the part of the White House to go it alone on health care reform. I suspect what happened is the White House saw just how watered down legislation would need to be to get Republicans' support and was very not happy.

I looked at a draft outline of the “bipartisan” Senate Finance Committee's bill, and it is terrible. All the recent reporting has indicated that it has only gotten worse.

I don't know if the Obama administration concluded that the Finance Committee's bill would be unworkable politically, practically, or both. On a political level, there are probably enough liberal members of the House and Senate who will kill any reform resembling the Finance Committee's bill. They would rather take the “swiss cheese” version of a good bill that would be the result of using reconciliation over the complete version of a bad “bipartisan” bill.

The White House may also be concerned that the Finance Committee's bill would on a practical level be unworkable. It would be implemented too slowly, not do enough to make health care affordable, and not slow the growth in cost. If Obama signs a health care “reform” bill that could still leave low income people with medical bills in the ten of thousands, it could discredit the reform, the president, and the party.

No one yet knows what final shape the bipartisan Finance Committee's health care bill will take, but it is not going to be pretty. Obama has said he would rather have 85% of what he wants with 70 votes than 100% with 52 votes. The problem is any bill that can get 70 votes in the Senate will probably be closer to 35% of what he wants. Obama needs to ask himself if that is good enough for him personally, and also if he will be able to sell it to the more progressive members of his party. Axelrod is indicating the answer might be no.

Obama To Progressives: Stop Working to Elect Democrats

While President Obama has yet to tell his progressive grassroots supporters directly, his words and actions make it clear that he wants progressives to stop working to elect Democrats. The problem is that Obama has a strange, overwhelming bipartisanship fetish. Apparently, getting good legislation passed, truly fixing our health care system, and providing Americans with the best possible care at the lowest possible price is all less important than the approval of a handful Republican senators.

Obama has said so himself multiple times: “The president has told visitors that he would rather have 70 votes in the Senate for a bill that gives him 85 percent of what he wants than a 100 percent satisfactory bill that passes 52 to 48.” In other words, Obama is happy to make our health care system 25% worse solely for the approval of Republican Senators Grassley, Hatch, and Snowe.

The progressive grassroots community worked hard over the past four years to give the Democrats their largest majority in the Senate in decades. Once Al Franken is seated, the Democrats will have a filibuster-proof 60 seats. Despite massive wins (and dismal poll numbers for Republicans), Obama is obsessed with watering down important legislation to win a few votes from any Republican senators.

Since Obama values “bipartisanship” more than getting the best possible legislation passed, progressives are hurting their cause by working to elect Democrats. Every Democratic Senator elected makes the Senate Republican Caucus smaller and more conservative. That means legislation needs to be pushed even farther to the right to gain the support from an ever-shrinking pool of GOP Senators.

As long as Obama values the votes of a few Republican senators more highly than fulfilling campaign promises, grassroots activists should be working to elect moderate Republican senators instead. Obama's action makes it clear that the progressives should support Republican Mark Kirk for Senate in Illinois and Republican Mike Castle for Senate in Delaware.

If every bill is only going to be as liberal as the most moderate Republican senator, working to elect Democrats is counterproductive. Obama should be focused on fixing the country, not undermining the Democratic party by forfeiting to a few Republicans the incredible power of shaping legislation just to gain the label “bipartisan”.

Public Option Genie Will Soon Be Out of the Bottle

Very soon, the CBO will release a score for the House Democrats' draft health care legislation. Their bill contains a relatively strong self-financing public option. My research has led me to conclude that including a strong public option will result in the bill being scored several hundred billion dollars cheaper.

The House bill is very similar to the draft legislation from the Senate HELP committee. Both fix the size of credits, which would be given to help individuals buy health insurance, to the "reference premium". In both, the "reference premium" is the average of the three cheapest available plans. I explained previously how offering a much cheaper public option would reduce the cost of the "reference premium" and dramatically lower the amount in subsidies the federal government will need to pay out.

While the two bills differ slightly in who is eligible for subsidies, (House is people between 133%-400% of FPL, Senate HELP is 150%-500%) the general effect of including a strong public option should be the same. The strong public option could easily reduce a bill's score by $100-$300 billion.

Once the savings of a strong public option is scored, it should dramatically change the nature of the debate. Already an overwhelming number of Americans support the public option. Once it is clear it will also save the country hundreds of billions, it will be hard to argue against it on vague ideological grounds. Members of the Democratic leadership, who once thought they would be able to use the public option as a bargaining chip, will quickly find out that including a public plan is the only way to receive significant grassroots support.

Soon the public plan genie will be out of the bottle, and it is going to be very difficult to put it back in.

“Private” Health Insurance Co-ops Are Not A “Public” Option

Dear Wall Street Journal, New York Times, Minneapolis Star Tribune, and the Rest of the Mainstream Media,

A privately-run cooperative is in no way, shape, or form a public option. By definition, a “privately” run entity is not “public”. It is not a public plan compromise. It is not a watered-down form of a public option. It bares no resemblance to a public plan. It would lack the benefits of a public plan and would do nothing to reduce cost.

Senator Conrad admits the privately-run cooperatives already exist. There is nothing legally stopping someone from creating health insurance cooperatives right now. This "compromise" is the status quo. Senator Conrad's plan is simply a complete and total defeat for supporters of the public option. It is ethnically irresponsible to report it as anything else.

What Obama's Health Care Letter Really Says

Barack Obama sent a letter to Senator Kennedy and Senator Baucus providing some details about how he wants health care reform to be structured. I will go through the letter line by line to tell you want he is really saying.

Cost:

“At this historic juncture, we share the goal of quality, affordable health care for all Americans. But I want to stress that reform cannot mean focusing on expanded coverage alone. Indeed, without a serious, sustained effort to reduce the growth rate of health care costs, affordable health care coverage will remain out of reach”

This line is pretty straight forward. Health care reform must primarily reduce cost for most Americans to get a majority of the country on board. He says “reduce the growth rate” -- not bring down the cost. Some argue that America dramatically overpays for health care, and we should be able to actually reduce cost and not just slow its increase. He is saying health care reform must be real but not a truly dramatic overhaul. Also implied is that the metric to judge reform will be cost and not coverage. Like in Massachusetts, coverage will not be truly universal; a small percentage of people will be left out for now (mainly a few hard-to-reach individuals and illegal immigrants).

Health Insurance Exchange:

“The plans you are discussing embody my core belief that Americans should have a choices for health insurance, building on the principles that if they like the coverage they have now, they can keep it. But for those who don't have such options, I agree that we should create a health insurance exchange – a market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that's best for them, in the same way the Members of Congress and their families can.”

Health insurance exchanges have wide bipartisan support from basically everyone, including Obama. There are two other subtle points here. First he uses the phrase “don't have such options,” which implies he is willing to not make it easy for people who currently have employer health insurance to opt out of it. The exchange might be only for those currently without insurance from an employer. If you want to opt out of your employer's health plan, you may not get any help from your employer or the government in buying your own insurance plan.

There might also be a “don't reinvent the wheel” message here. There is no need to write news rules governing a health insurance exchange. Just use the same rules for the current federal employee health exchange or one of the state employee exchanges.

Public Option:

“I strongly believe that Americans should have a choice of a public health insurance option operating alongside private plans. This gives them a better range of choices, make the health care market more competitive, and keep insurance companies honest.”

This is good but not great news for progressives who support a public plan. “Strongly believe” and “should” is relatively week language. He could have said, “...(must and/or need) to have a choice of a public health insurance option” He could have also said “I will not accept reform without a public plan”.

He wants a public option available now (not a trigger that might put a plan in place depending on future events), but there is still some wiggle room. “Should” still leaves him room to break his campaign promise about a public health insurance option. It is a statement which sets the public option in quickly drying concrete but not in stone. He does not give any indication about how he wants the public option to be structured. I believe that the fix is in for Senators Schumer's compromise public plan.

Mandates:

“I am open to your ideas on shared responsibility. But I believe if we are going to make people responsible for owning health insurance, we must make health care affordable. If we do end up with a system where people are responsible for their own insurance, we need to provided a hardship waiver to exempt Americans who cannot afford it. In addition, while I believe that employers have a responsibility to support health insurance for their employees, small businesses face a number of special challenges in affording health benefits and should be exempted.”

On employer mandates, it is clear that big companies will be required to provide health insurance, small businesses will not.

On an individual mandate, despite campaigning against it, Obama is prepared to accept it now. A “hardship waiver” for Americans “who cannot afford it” is a nice piece of legal-ese to give Obama an out. The message is that he wants any subsidy to help people buy health insurance to be based on their ability to afford it. This will allow him to have a “hardship waiver” that is meaningless. For example, the waiver could allow people to not buy insurance if it cost more than 15% of their income, but the bill could fully subsidize the cost of insurance when it is goes over 10% of their income.

Savings:

“I am also open to your ideas about giving special consideration to the recommendations of the Medicare Payment Advisory Commission (MedPAC), a commission created by a Republica Congress. Under this approach, MedPAC's recommendations on cost reductions would be adopted unless opposed by a joint resolution of the Congress.”

Ezra Klein explains how important this is for reducing the cost of health care and as entitlement reform. The message is that the structure of Medicare health care payments are too important, too wonky, and too open to special interest lobbying; Congress can't be trusted to be involved in the nitty-gritty of it any longer.

Bipartisanship:

“I know that you have reached out to Republican colleagues, as I have, and that you have worked hard to reach a bipartisan consensus about many of these issues. I remain hopeful that many Republicans will join us in enacting this historic legislation that will lower health care costs for families, businesses, and governments, and improve the lives of millions of Americans.”

These lines should be the most encouraging to progressives. Bipartisanship is nice but not at the cost of completely watering down reform. He does not need Republicans to join the Democrats; he is only “hopeful” that they will. There is also an implied threat. Republicans may claim that they will vote against the Democrats' health care bill, but when it comes time to publicly denying millions of Americans health insurance, they will think twice. Those who vote against health care reform will be hammered on their vote in the next election.

Soda Tax Just For Show, According To GOP Senator

On Monday, Senator Baucus and Senator Grassley released a paper outlining possible sources of revenue to pay for health care reform. Among the several proposals was the idea of imposing new “lifestyle taxes.” One possible “lifestyle tax” would be a new excise tax on sugar-sweetened beverages. Some in the media have dubbed this the “soda tax."

Several news outlets (1, 2, 3, 4) have jumped on the story of a possible “soda tax,” even though there is almost no chance that it will ever be enacted. When Grassley was asked last week if there would be a new tax on soda, he responded with an unequivocal “No.” He explained that the soda tax is only being brought up to “get it shot down early so it doesn't become part of the debate. I don't think it's going to have any legs at all.”

While talk of a “soda tax” might make for good headlines, it is not really news. Its inclusion as one of many possibilities is more about window dressing and less about serious policy debate.

Ted Kennedy Abandons Liberals on Health Care Reform

This is probably the worst sign yet for the public health insurance plan. Ted Kennedy has abandoned liberals on the issue of his career. On his senate website, Ted Kennedy no longer publicly supports providing all Americans with the choice of a public health insurance option. He continues the trend started by the Obama administration of trying to whitewash over support for a public plan.

Only a week ago, Ted Kennedy's website still promoted giving all Americans the choice of signing up for Medicare. Now, under the issue of “health care” there is no longer any reference to offering people the choice of a public health insurance plan.

I highly respect Ted Kennedy and his long career of fighting for what he believes in. But now is the time for health care reform. Important health care reform legislation is being written as we speak. To see Kennedy quietly abandon a core principle of the progressive agenda is very disappointing.

See what Ted Kennedy's website said about health care reform last week and now.

A Public Plan is the End All, Be All of Health Care Reform

The goal of health care reform is to provide universal access to affordable, quality health care to every American. There are two ways to achieve this goal. One is through the use of a public health insurance plan. There other is through a very highly regulated health insurance market.

It is technically possible to achieve real health care reform without a public plan. We can call this the Dutch or Swiss model. Switzerland pays a lot less for health care than the United States but still much more than most of the first world. What is required is a very highly regulated health care market. There would need to be a list of all conditions and procedures that must be covered; a limit on co-pays, out-of-network charges, out-of-pocket expenses, etc.; and rules preventing customer shopping and dropping. Premiums must be based on community risk. Hopefully there would be a special board or court to deal with insurance companies which refuse to pay for procedures.

The other way to achieve real health care reform is to simply offer a public plan option. All that is needed is to provide all Americans with the option to purchase a plan offered by the government. The plan would be affordable, low hassle, and wouldn't turn down anyone based on pre-existing conditions. The public plan could be modeled after Medicare or the health care plan that members of Congress have. Very little regulation would be needed for the private health insurance market. For-profit health insurance companies would need to offer plans as good as the public plan or they would slowly lose customers and market share.

Given the Republican party's nearly religious devotion to de-regulation, I fear for the longer term success of a highly regulated private-only health care market. The chance that a decade from now Republicans would start stripping many of the health care regulations that make the system work is very real. A popular public plan would be much more politically difficult to modify or eliminate.

Public Plan: The Progressive Caucus' Power In the Balance

The fight over including a public plan in this year's health care reform bill will be a critical test of the Progressive Caucus' power. While the Progressive Caucus, with its 78 members, is currently the largest caucus in the House, it has failed to exert leverage in proportion to its numbers. The need to get bipartisan support in the Senate limits the Progressive Caucus' ability to move legislation leftward.

The ability to use reconciliation to pass health care reform changes everything. The Democrats can pass a bill without any Republican support and afford to lose several moderate Democrats. If the Progressive Caucus manages to hold together, they can effectively dictate the terms of health care reform.

On April 2nd, the Progressive Caucus sent a letter Nancy Pelosi and Harry Reid claiming that the majority of the caucus would not support health care legislation which did not contain a public plan option. Now that the Democrats can pass health care reform with simple majority in the Senate, there is no excuse for compromising on the public plan.

Senator Max Baucus has made statements that he might abandon the public plan (which Obama campaigned on) in order to get Republicans to sign on to health care reform. If the Progressive Caucus wants to be taken seriously, they must vote against and kill any “bi-partisan” health care bill if it does not contain a public plan. By voting against an insufficiently progressive health care bill, they can force health care reform to be passed through reconciliation, where they would have more influence.

Wisely or not, the Progressive Caucus drew a line in the sand. Since health care reform can be passed without Republican support, there is no excuse for compromising on one of their (and Obama's) core principles. If a health care bill passes without a public plan option, it will prove that the Progressive Caucus is nothing more than a paper tiger. In politics, if you make a threat you must be prepared to carry it out or lose all credibility.