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First, I want to compliment/thank Ezra Klein for doing a series of posts (see here, here, here and here) Wednesday summarizing and explaining the major provisions of Senator Baucus’ health reform bill. The summaries were helpful and clear.
Ezra’s last installment, Five Ways to Improve Max Baucus’ Bill, contains some helpful suggestions, and like they say about the general effort "there is 80 percent agreement" on what he’s suggesting.
So what’s the 20 percent? And what is he describing by the 80 percent?
If you walk through the first four recommendations, they are generally ideas or principles liberal Democrats have been supporting from the beginning:
1. Get rid of the "free-rider" provision that creates perverse incentives that distort employers hiring decisions. Everyone agrees with Marcy that this is a bad provision. This doesn’t exist in the Senate HELP or House Committee bills.
2. Increase the subsidies and impose lower caps on what consumers would have to pay in out-of-pocket costs. The HELP and House bills generally do that; they should do more.
3. Phase in Sen. Wyden’s "free choice" idea, by quickly expanding eligibility for employees at larger businesses to choose insurance (and receive subsidies) from the Exchange, starting in 2015. The House bill allows this expansion to occur, starting in . . . 2015; it just needs to be more certain, rather than be left solely to the discretion of the Secretary of HHS (hello, Olympia Snowe?).
4. Create real competition with a public option, [*ahem*] allowing those eligible for the exchange to choose a government directed, not-for profit insurance option that is not driven by the incentives that have created today’s perverse private insurance system. As Ezra notes, the availability of the Public Option as a choice will help induce the private insurers to comply with the reform regulations:
It’s much likelier to happen, however, if they’re protecting themselves against real competition in the market. And if it doesn’t happen even in that scenario, then at last people will actually have somewhere to go.
Bravo, Ezra!
But his last recommendation is, uh, strange:
5. Do things the Republicans want, to get bipartisan support. Uh, the things the Republicans want us to do are exactly opposite from the first four items, especially creating competition with a public option or increasing costs by expanding subsidies and lowering out-of-pocket limits. And despite their co-sponsorship of Sen. Wyden’s bill before it mattered, the Republicans are adamant about not exposing insurers who now serve the employer-based market to any competition from a public plan.
You can’t do 1-4 and then expect to gain Republican votes, no matter what else (and what else is there?) you offer them.
I’ll just add one more thing. With the exception of the peculiar free-rider section, which doesn’t appear in the House or HELP bills, implementing Ezra’s recommendations 2-4 means moving the bill towards the House/HELP Committee bills.
In other words, Ezra’ points are an implicit endorsement for using those bills, not the Baucus bill, as the foundation for discussion (and for Harry Reid to use for the Senate bill). Then if Baucus has refined/improved some of their ideas (and he has) fine; take the improvements and give Baucus credit. But the real kudos go to the House and HELP bills.
And that includes the House revenue provisions. Ezra praises the tax on high-end insurance plans and notes that the differential between health inflation and general inflation means this item will tax more and more plans over time and pull in more and more revenues. That helps Baucus’ plan claim revenue savings into the second decade. But Ezra correctly fears that Congress will intervene, just as it does every year on the AMT.
The House bill includes a surtax on the wealthiest, justified on its own, which is simply a recognition that if you want to ensure sufficient revenues to pay for expanding health coverage, you’re going to have to look outside the health system, just as we do for Medicare. To turn the revenue triggers on their heads, if the cost-saving measures work as well as hoped, then Congress could consider reducing/repealing the surtax or redirecting it to deficit reduction, or whateer, but if not, we’re going to need the surtax.
[Added Thursday a.m.: The Baucus tax on high-end insurance is structured so that over time, it undermines the economics of the employer-based insurance model. That's where he's going. That's all the more reason to start building a Medicare II public plan system to replace the system we have.]
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I suppose the fifth point is a mandatory add-on since Klein works at the Post. I note that there is still no explanation of what the public option is or its size in terms of membership. Both of these are important to know to guage how attractive or unattractive the PO would be, and so how successful or unsucessful. As for exchange access in 2015, why do we need to wait 5+ years?
I was just about to say! Almost sounds like someone else added that on!
Yes, it’s The David Broder Rule. I guess everyone at WaPo is now required to worship at The High Temple of Broderism… Unless one’s an extreme right Republican like Krauthammer, of course.
I take it you and Ezra are connected at the hip.
No, not even close. Ezra is likely read by many in the Beltway because he’s written a lot about health reform. He’s written posts suggesting the public option wasn’t that important, and that a bill without one would not be that bad — the White House view. Now he’s saying the way to fix the Baucus bill is to add a viable public option that can pressure the insurers to comply with regulations and provide a backstop even if they don’t. And he wants it in the context of Wyden’s approach, which opens the exchange, so that even more people could choose the public option. Just acknowledging the movement, because that’s a swing issue in Congress.
Sigh. What happened to Ezra?
from wonking to wanking in 180 days …
Otherwise, I guess it’s a good column from Ezra. For once, I noticed some real ideas and clarity of thought. Maybe WaPo hasn’t completely muzzled him yet?
The right wing has left absolutely no doubt possible that no matter what is in a health care bill, it will be opposed. This morning in the House the wingers were ranting about the mandatory provisions that They Asked For, as if the imposition of insurance on those unable to afford it now were imposed by … President Obama. Face it, these cynical political gymnasts are going to use the bipartisanship ruse to infect health care with right wing anti-public interest provisions, and then attack the bill because it isn’t in the public interest. Duh.
Wise up or go down, progressive legislators.
meanwhile, comments from the peanut gallery (Reid): “Although we don’t agree with everything in this bill, Finance Committee’s mark represents critical momentum in this process.”
I think we need to call on Rockefeller, Cantwell, Stabenow, and Schumer, all of whom have indicated serious concerns, to stop BaucusCare from moving out of Finance. Schumer is basically begging for people to people to call him and ask him to put a hold on it or vote against it (as of Tuesday). The Burris opposition is reassuring but its also not where the action is. This can be stopped well before full Senate or reconcilation (although why anyone would want take this dog into reconcilation I have no idea).
The goal here should be to lower the cost of health care in the nation to something more typical of the civilized world. The public option MAY help to do that- or may not depending on how it is structured and implemented. Something that will DAMNED well do it is for the govt. to set limits on what everyone can charge—so ownership, no control, just legal limits on charges for medical care and for insurance…that’s what EVERY other nation does.
I don’t know much about the senate rules, but it might be better to let the bill out of committee and then let the whole senate ignore it and use the health committee bill as the model.
if we stop BaucusCare in Finance, then the health committee bill becomes the only option, Schumer basically said on Tuesday that if it gets out of committee, it may become politically too difficult to stop.
I just wish Reid would show some spine and call a dog a dog instead of heralding it as “critical momentum” – it’s momentum alright – for record insuranceco executive bonuses.
Interesting. Do you have a link for the Schumer quote?
There have been a jillion words written about what Obama and the democrats should do with the majorities we got in the last election.
At this point, these are the ones that make the most sense:
http://www.huffingtonpost.com/…..89304.html
After 8 years of the miserable mistakes and the arrogance about making those mistakes, all the GOP has left is the effort to obstruct the attempt to salvage something from those 8 years. With their track record, how much slack do they have left to do that, with the voters?
I think, not much. Just run the good, honest, bills that we need for change, up to the Hill, and KEEP running them up there. The more the repubs and their compeers, the blueroaches, block them, the better for us. That is ALL that Obama needs to do, to break them.
That he isn’t doing it; that he hasn’t figured out that there is NO policy he can advance that will put them on his “side”, is a recipe for another political disaster, even worse than 8 years of George Bush and these people. We are in a political war, and it’s one that we must not lose.
And right now, we are losing it.
”5. Do things the Republicans want, to get bipartisan support.”
What ever happened to real hardnose politics? At this point, I think you’d get more bipartisan support by doing things that Republicans really, really DON’T want and then offering a deal. Like making the top tax rate 98% and ending existing pork barrel in their states.
As the American philosopher Willie Sutton said, ”You can get more with a kind word and a gun than you can get with just a kind word.”
That may be where Baucus wants to go. It is certainly where companies want to go. They want to offload health insurance schemes about as fast as they did pension schemes, but they know they need at least a Hollywood western facade of a place for them to go. Baucus’ plan provides that. He enables dumping employees onto the private insurance market, aka the Internet Exchange, which happily also reduces insuresters cost of sales by digitalizing it, cutting out those pesky commission agents.
Taxing higher benefit insurance schemes is absurd. It drives down the lowest common denominator insurance product, already cut full of holes, while doing nothing to drive down cost. It hikes government revenue a tiny bit. Reversing Bush’s generous-to-the-rich tax cuts, however, would raise government revenue over a trillion dollars. That’s more than the artificial cap the political class tells Americans is all we should pay for real access to affordable health care.
Baucus – rather, the author’s of “his” plan – has succeeded in temporarily sidelining debate about what credible reform should look like and how and how much we ought to pay for it. He’s made the snowball veer toward the ravine, instead of at the insuresters enjoying their apres ski X-O cognacs in the lodge at the bottom of the slope.
It’s time to correct course and redirect energy toward the real thing, not Baucus’ bastardization of it. I think it’s also time to label Max a “Democrat”; like silent Joe Lieberman, he’s well right of the “centrists” and capering in GOP la la land.
Some may want to join Emptywheel’s cross-post already in progress: “Pay2Play Ceci: “The Most Influential Players” Love MaxTax”
None of the bills address the real problem facing the US, namely, the destruction of the dollar. And health care costs are key to this problem. Sprott September Commentary: Total US Government Obligations At $118.6 Trillion. Over 89 trillion of this is unfunded Medicare obligations. Current health care costs are 16% of GDP and increasing at rate of 10% per year. This is unsustainable.
According to Sprott:
This can only result in inflation and an undermining of the dollar, which will drive the cost of oil to unsustainable levels for the US economy.
The US has to get a handle on health care costs and this can only come from real competition in the insurance industry or by going to single payer, and also increased competition among providers. The US must go to single payer, or at least a real public option instead of a watered down faux solution that preserves the status quo. Moreover, there must be more competition in the health care industry and that means training more heatlh care personnel, including physicians and nurse practitioners.
Powerful interests are resisting these necessary changes that would increase real competition, but with the boomers entering retirement, the US is facing bankruptcy or currency destruction if nothing meaningful is done soon.
The Congress is back in session and doing the dirty work for the Medical Industrial Complex.
mcconnell $3.3M, hatch $2.9M, baucus $2.8M, grassley $2.7M,
lieberman $2.6M, burr $2.4M, ensign $2.4M, cornyn $2.2M, kyl $2.1M,
conrad $2.1M, cantor $1.8M boehner $1.7M, coburn $1.2M, j wilson 800K
were paid by the Medical Industrial Complex to kill Health Care Reform.
(Source: OpenSecrets.org)
12 Million Americans were denied health care coverage by the Medical Industrial Complex because they had a pre-existing medical condition. 12K Americans are denied insurance coverage everyday by a for-profit Insurance bureaucrat. (Source: WaPo Article 05′ by Harvard Prof. E. Warren)
More than 22K Americans between the ages 24-64 die each year because they don’t have adequate health insurance coverage. (Source: Chu, M.C. & J. Rhoades, The Uninsured in America, 96′-07′)
Medical malpractice lawsuits are a hot topic but, are they? Tort Reform is such a “red herring” and is easily disproved. A 2004 report by the Congressional Budget Office said medical malpractice makes up only 2 percent of U.S. health spending. Even “significant reductions” would do little to curb health-care expenses, it concluded.
Citizens for Tax Justice pointed this out. The tax legislation enacted under President George W. Bush from 2001 through 2006 will cost $2.48 trillion over the 2001-2010 period. This includes the revenue loss of $2.11 trillion that results directly from the cheney/bush tax cuts as well as the $379 billion in additional interest payments on the national debt that we must make since the tax cuts were deficit-financed. Over the upcoming decade (2010-2019), the costs of the health care proposals approved by three committees in the U.S. House of Representatives are projected to be around $1 trillion and deficit neutral(that means they’re paid for). In 2010, when all the cheney/bush tax cuts are finally phased in, a staggering 52.5 percent of the benefits will go to the richest 5 percent of taxpayers. The cheney/bush tax cuts were deficit-financed, which increased the national debt and resulted in greater interest payments on that debt. cheney/bush administration never even tried to pay for their tax-cuts. So, for the price of cheney/bush’s tax-cuts for the wealthiest 5%, we could have had Health Care for every American. Instead Americans got bupkus and cheney/bush’s republican campaign contributors/golf buddies got filthy rich off of the Blood Money from No-Bid, Cost-Plus Federal Contracts.
Follow the Money: Link
Call Congress and demand, Single-Payer Health Care for All!
(Toll Free # House and Senate)
1-866-338-1015_______________1-866-220-0044
1-800-473-6711_______________1-866-311-3405
Sign Single-Payer Petition: Link
Don’t let the Medical Industrial Complex steal your Health Care from you and your family by donating huge sums of money to Crooked Politicians in order to maintain the Status Quo. Keep up the good fight.
SEMPER FI!
If 80 percent of a maniac’s plan is that he not chop off my legs and one of my arms, but 20 percent of his plan is that he chop off one of my hands, does that make it an 80-percent-good plan?
According to McConnell and Lamar Alexander, the Republicans want the focus to be about “reducing costs.”
They claim that eliminating the anti-trust exemption for insurance companies (also a blue dog plank) and allowing sales across state lines will improve competition better than any “guv’mint run” healthcayuh.
The problem is, we all know that the state lines plea is disingenuous, because, even though it may result in some less expensive plans being sold in different markets, it is certain those plans would be of far less value in providing health care, too. It’s the incorporate-in-Delaware game.
What’s the objection to removing the anti-trust exemption? Would insurance companies be able to pool their risk if they were less monolithic than McDonalds?
Can you explain your 3rd paragraph using different words please? It does seem reasonable that doing away with the local monopolies will increase competition and consequently pressure premiums downwards for the same/comparable levels of coverage.
The insurance companies will find the state that has the most lax and favorable rules regarding their operations and that is the state from which they will fan out selling to the rest of the country.
By “allowing insurance companies to compete across state lines” means that the insurance companies saw what a similar operation allowed the credit card companies to do.
OK but since they will all be subject to the same national rules under the HCR law, and also all still subject to whatever state-wise laws exist wherever they’re offering product (ideally 50x), how does that hurt subscribers? I’m against them profiting off misery on general principle of course, so them becoming more profitable from picking e.g. Maryland for the master corporation does grate a bit. But the key thing is what happens to we the subscribers.
IANAL but I believe the result is, if the insurers are allowed to operate across state lines, it doesn’t matter the laws in the individual states. In this instance, the insurers would be bound by the laws of the state they are selling from, not the state they are selling in.
Again, the analogy would be best expressed by how so many of the credit card companies incorporate out of South Dakota which has very limited and loose laws governing card rates and such. Yes, the insurance companies have to comply with federal laws but there are still a lot of ways average folks can be screwed by the state level laws.
OK, I understand the concern now and thanks for ’splaining me. Something to keep an eye on as the real bills start developing now.