From the WaPo’s summary of the House health reform bill:
A previous version of the House bill carried an estimated cost of $1.04 trillion over 10 years, but House negotiators were able to lower the price tag in part by expanding Medicaid coverage to a broader slice of the population, the equivalent of all individuals who earn about $16,200 per year. The original House legislation had sought an increase to 133 percent of the federal poverty level, or about $14,400 per year, the same level proposed in the Senate bill.
The adjustment reflects findings by congressional budget analysts that covering the poor through Medicaid — which currently pays providers far less than Medicare* — is far more cost-effective than offering subsidies for private insurance policies, something the bill would provide to middle class individuals who lack access to affordable coverage through their employers.
The main revenue sources in the House bill include a surcharge on wealthy taxpayers and changes to Medicaid and Medicare worth about $500 billion in cost savings over 10 years, according to the CBO.
CBO estimated that a Public Option available only to the uninsured, self-insured and small businesses (less than 20 employees) would have saved the federal budget $110 billion over ten years, if the PO paid health care providers at Medicare rates plus 5 percent. The savings would be only $25 billion if the PO were required to negotiate rates with providers. If Congress chooses negotiated rates, it raises budget costs by $85 billion for the limited access exchange(s).
These saving would have arisen because with lower prices for public option insurance, and pressure on private insurers to lower their premiums or lose market share, there would have been less need for federal subsidies to achieve the same level of “affordability.” So the switch from Medicare+5% rates to negotiated rates means that premiums for everyone in the exchanges, both public and private plans, will be higher, whether you get a subsidy or not, and on top of that we’ll need $85 billion more in subsidies.
Given that increase, the House needed to lower the bill’s total costs, so it removed about 3 million or so people from the exchange; those whose income is between 133 percent and 150 percent of the federal poverty level will become eligible for Medicaid, whose payment rates to providers are so much lower than private and Medicare rates that it saves more money than it would have cost to provide subsidies in the now higher-cost exchange markets.
So, in order to protect private insurers from competition from a lower-cost PO and avoid paying providers Medicare rates plus 5 percent, which Blue Dogs think is too low, the House bill would pay providers even less (or no more*) than Medicare and take more than 3 million people completely out of the private market.
But of course, the market carve-out for Medicaid saves money, which means that if Blue Dogs really wanted to save money, they would enlarge the Medicaid carve out — say, up to 250 or 350 percent of FPL. In other words, if the fiscal-deficit scolds were genuinely serious about reducing the cost of the reform bill, they would expand eligibility to public health care to a lot more people and forget about shielding private insurers from competition.
But then they’d be accused of creating a powerful argument for Medicare for all, and we can’t have that. Because as Joe Lieberman reminds us, those government entitlement programs just increase the deficits — uh, except when they lower them.
The next time one of these clowns complains about the federal deficit, they deserve a rhetorical pie in the face. Use Rediwhip; it’s cheaper.
_________
* Update: A provision in the earlier House bills would increase Medicaid payments to match or come close to Medicare payment levels. If this provision is still in the revised bill, it should mitigate concerns that Medicaid payments will unduly discourage providers from treating more Medicaid patients.
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65 Comments







Single payer universal coverage would be even more Blue Dog friendly. But it’s not about that, is it?
It’s much simpler. American system of governance and democracy are incompatible.
Fuckyes!
Yay! Redi-Whip! But laced with epoxy or polyester resin for staying power. Have these folks ever been forced to listen to themselves?
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F minus?? That really blows. Didn’t know there was such a thing. I guess I didn’t get the lowest grade you could all those times. i feel better now.
As a physician, I would be willing to work for Medicare +5% rates. I can’t work for Medicaid. The paperwork is impossible and requires additional staff and software for billing. The reimbursement rates for a 20 minute medication monitoring appointment are as follows: full fee is $90 (low for my geographic area), Blue Cross $75, Medicare $38 and Medicaid less than $15. It is almost impossible now for patients to find doctors who accept Medicaid, most of whom work in high-volume clinics. Access to care will be markedly reduced if more are added to the Medicaid rolls. Bad idea.
The object of the excercise is not to save money or deliver healthcare. It is to give insurance companies as much as they can. We have gone from single payer to a robust public option to the less than robust public option of HR3200 to the joke option Pelosi now favors. I would like to say that no one could have foreseen this but in fact many of us did.
This was always going to be a sellout. The best thing the Congressional Progressive Caucus could do at this point is kill this bill. This really is an example where the cure is worse than the disease.
So friggin’ true. Health cartel stronger and richer, people weaker and poorer.
Pharmaceutical costs through the roof. Essentially NO problems solved. But yesterday Howard Dean and Alan Grayson came out with full throated endorsements. The Prog Caucus is the last firewall, the last hope. Historically they have been bandy-legged weaklings who exhaust easily. I don’t have much faith in them, but I’m ready to be surprised.
I just got an e-mail from the DCCC asking for money to help support the new health care plan ! Makes me want to throw my computer across the room.
Don’t do that. Send ‘em a flame.
We need to get this insurers’ bailout bill killed dead.
“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.” Thomas Jefferson
“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.” Thomas Jefferson
Since that has lately become the rallying cry for right-wing nut-gangs, I for one would appreciate it if you would keep it off these pages.
on edit: there are way too many people in this country who are now taking this statement quite literally, and that cannot possibly end well.
It’s his boilerplate comment. Every couple days he comes by and lays that line on us. Not the deepest of thinkers, I suppose.
oh.
well…
Sometimes I get sucked in, and other times I jump in very much on purpose.
I think that one qualified for both. *g*
Yes, but that is more and more likely to be the outcome of the abuse heaped upon the people by a Predator State.
You’re not gonna come out with the police state scenario, are you? I think we had enough of that crap in the comments during the primaries.
“I will believe violence will overcome violence when you can convince me that darkness will overcome darkness.” M K Gandhi
What’s wrong with a police state?
I vote for Idaho.
Rubini and a few other economists are predicting another crash. The government appears to be a wholly owned subsidiary of Goldman Sachs, and Wall Street demands rising profits from the Insurance industry.
How do you think this will be resolved?
I agree we’re in for another crash. We’re losing half million jobs a month. That eventually affects the revenue of the the likes of GS. Do I think we may be headed for another depression? Very possible. I don’t see people taking up arms. What would that resolve? The people didn’t resort to arms in 1931 and through some fits and starts, and WWII, came out of it. I’d like to think we can get some people into government who are smarter and more responsible than those we have now.
Watts like riots and massive protests would most likely get those limp spined Dems to finally find their balls. Purging Congress of it’s current denizens, not backing down on necessary real change, banging pots and pans, – yeah, that might do it. But waiting endlessly for trickle down to finally reach you tends to have a pressure cooker effect. – Blow Up.
It would take critical mass organized on populist principles across traditional left/right divides to choke off economic productivity in order to get what is needed.
I think it could be just a spontaneous outpouring of pent up discontent. Think Argentina.
Thank you for the beautiful Gandhi quote.
These changes in the House bill represent a betrayal of the spirit of providing healthcare for everyone. The consequences are profound both in the access to providers (doctors) and in affordability. My Blue Dog here in NY-20 voted against the robust public option in yesterday’s whipcount. His name is Scott Murphy. If there is a third party candidate endorsed by the Working Families Party here when the election comes, they can count on my vote.
I just got an email requesting support for a petition from HCAN to support this watered down piece of crap. I wrote back a dear HCAN letter. So long.
Thanks. It’s my favourite. The good thing about that is I never have to look it up. *g*
Good for you. Can’t believe HCAN is supporting this travesty. I knew they were pretty bad, but I thought they had limits. Foolish, wasn’t I. Jason Rosenbaum, what do you have to say on behalf of your organization? Is George aboard with this nonsense. I can’t believe he’d be pleased at your doing this.
I don’t know this guy Frederic, maybe he is just some conservative troll. But is it possible that rather than being a shallow thinker he has actually thought this thing out to the end and is using Jefferson’s words to cut to the chase? Are the insurance companies not tyrannical? 45,000 are dying every year. Seems to me that the war is already being waged.
I don’t see we ought to give up what has been a left-wing rallying cry, just because the wing-nuts also use it. Jefferson is ours, not theirs.
So now we are going to censor Thomas jefferson because something he wrote is being used by people we don’t agree with? And are you SURE that Jefferson himself did not mean it literally? I confess I have not researched the matter but I DO know that he was a Revolutionary. I DO know that he wrote a document that HE had to know was an incitation of open rebellion and might well lead to a bloody shooting war . I DO know that he was well aware he would be hanged publicly if the war had been lost.
Those words cut both ways and I am not at all sure he did not mean them literally.
We should keep in mind that by far the bigger “public plan” in this bill is now the Medicaid expansion. The “option” for the uninsured will now probably insure less than the 9-10 million projected in the July CBO estimates, and maybe even nobody at all, because it doesn’t pay at Medicare rates.
And, as I noted in by diary to the right, the Kucinich amendment got stripped out.
I should correct one point: One of the points I neglected to mention is that in the earlier bills, the House agreed both to expand Medicaid (up to 133% of FPL) AND increase the payments to providers to match or come close to Medicare rates. In addition, the earlier bill would have the Feds cover 100% of the additional costs of the Medicaid expansion — the Medicaid rates have been kept low to encourage states to cover more people, since they had to share a larger percentage of the costs.
If these revised payment provisions are still in the revised House bill, then the providers who cover the newly eligible Medicaid people (up to 150% of FPL) will be paid at or near the higher Medicare rates — and that should alleviate part of your concern about providers refusing to take more Medicaid patients.
i thought it was just primary care providers, not all providers. am i misremembering? … will go look for the direct quote if you are unsure.
There was a story about a week ago that said the +5% applied to primary care folks, but an agreement negotiated with Blue Dogs also applied that to hospitals, etc; part of an agreement to “fix” the alleged underpayment problem in key states with barking dogs.
thanks. i think my info was from the cms report.
Seems I can’t wait to campaign against fascist Dems next election. Not voting for Retardlicans but campaigin’ against so called Dems. Dems are making a mockery of Dem Party..Americans will suffer under Repukeadems.
There have been very few times in my life when I’ve felt as uninformed as i do right now about the whole health-care issue (which, in my defense, seems to change hourly). May I say, however, that Scarecrow and other front-pagers here have done a wonderful job – but if one misses a day or two, it’s a pretty confusing area to try to catch up on.
The savings would be only $25 billion if the PO were required to negotiate rates with providers.
And is there anything in the bill which would require, or even provide incentive, for the providers to negotiate, in good faith or otherwise?
From my uninformed view, it looks like the insurance industry just got a bill which allows them to say “go screw yourself” when the govt comes-a-calling to try to renegotiate for lesser rates.
Folks who were once rejected for “pre-existing conditions” will now have to turn over their first born for the privilege of being covered by insurance companies which will find new and improved ways to deny payment for health care.
Will providers negotiate in good faith? I think eventually they will. My problem with the rates question has always been the difficulty of getting sufficient providers signed up in advance so that the PO could begin as soon as its permitted. I’m less worried about the eventual rates than about getting started.
Then there’s the question of whether, and how fast, Congress allows the exchange eligibility rules to expand. Expansion should increase the bargaining power of the public option. If the PO is allowed to grow, AND the rates it offers are not confiscatory, then it’s logical to expect eventually that providers will deal with it to expand their revenues/profits. Eventually, a larger exchange pool would allow the PO to move towards “Medicare II” rates — that is, the PO administrators would have the same incentives (and mechanisms) Medicare now has to conduct cost of service studies to help set provider rates — so the difference between “Medicare rates” and “negotiated rates,” while important early on for estimating “savings,” could, in theory, eventually disappear. I think this is a start up problem, so the early years and the rules for expansion will be critical — which means there will be battles ongoing within the administrative structure.
from montanamaven’s interview, i learned a bit about how and why medicare and medicaid reimbursement rates are effed up the ama:
http://seminal.firedoglake.com/diary/9748
How do you hide corporate greed from the American public? Oh, that’s right you call it “fiscal responsibility.”
This bill sounds like a recipe for disaster. Shifting more people to Medicaid screws doctors, but also patients. As Dr. lynnb mentioned above, no doctors can survive at Medicaid rates and more and more simply refuse to take Medicaid patients, which means the patients will have to look harder to find doctors to see them, and more than likely will get their care from high-volume providers who won’t have the time to really get to know them.
And from a financial standpoint, don’t states also pony up some of the money for Medicaid? (I’m no expert here, so I could be wrong) So the impact on the federal deficit doesn’t even take into account the money that will have to be kicked in by the states to handle all those new Medicaid patients.
Does this bill allow anyone to switch to the (so-called) public option, or only a narrow slice of the populace?
Yes, and FL continually works to lower the payments to doctors to the point Medicaid dies on the vine, along with the public school system.
I think you’re missing the part about Wall Street’s Cold Dead Fingers. They did not spend the past 35 years systematically dismantling and outsourcing the world’s most productive economy to stop now. After the Citizens United decision unleashes corporate money into an electoral system they almost totally dominate, what would the mechanism be that would allow for organizing folks to participate through normal channels and have a chance of defeating a corporate controlled state?
What do you mean another crash? If you stay up for a few days on low interest rates, monetary methamphetamines, and begin to crash and then conjure up a few trillion to cover the first wave of losses, fiscal cocaine, you’re going to become alert again, alert but incoherent, before you finally crash harder.
It would appear you’ve pretty much given up hope of avoiding a “Soylent Green” scenario.
I haven’t.
Anything is possible, but the nihilism of those with their hands on the levers of power appears bottomless.
That said, who could have imagined in 1988 that the Berlin Wall would fall down in one year’s time?
The transformations that the US is facing with respect to its economic, political and military power are in reality the second shoe dropping on the end of the Cold War era.
I’d hope we’d not travel Argentina’s path before we’d see an uprising, and I’m not seeing the Kirschners as a win, either in absolute terms or relative to the region.
For the past 50 years, Argentina saw Peronismo 1.0, a repressive dictatorship, Peronismo 2.0, followed by a viciously brutal military dictatorship, Alfonsinismo, Peronismo 3.0, even more corrupt than before, and then a series of incompetent presidents who oversaw a complete, total and utter economic collapse, and then the leftish Kirschner brigade which once the music stopped on the economic bubbles which had inflated Argentina’s feeble economy, is meeting a similar fate to its centrist, Peronist and right wing predecessors amidst a region where progressive governance of various flavors is flourishing.
Part of this is because Argentina is like Dallas, in that both have no real geographical reason to exist as a settled place, and that its European heritage leads many Argentinians to expect to live like Europeans without having to really do much of anything. The US has a reason to exist, economically and in strategic location, and our European entitlement has been used to throw us deep into debt to fund Wall Street profits without giving us any economic security.
Got a brochure from BCBS wanting me to send an attached Post Card to our Rep to fight health care reform…imagine that.
You wouldn’t be in North Carolina by any chance would you?
This adds to my concerns that we are evolving into a two or tri level of quality of health care.system. Even the public option can be so turned. The physicians and other bedside providers deserve immense credit for warding this off so far. By expanding the low pay off programs and expanding the higher pay offs with no premium ceilings will add pressure toward lower levels of care for the poor.
The Dutch seem to be going that way, and yes. They are noted for their proclivity to solve medical problems by euthanasia.
Of course that would be just dandy to this culture of winners and losers determining worth as a human.
The first principle of the Canadian system has been an insistence on the same level of care for all has found the most enduring support of the people. Though I think this is softening with the Conservatives in power.
The economics must be made to fit the human rights issues not the other way around.
If Medicaid provider rates are the same as Medicare — and earlier versions of the bill did that — then the concern you’re raising is mitigated. I agree the provision of care should be both adequate and the same for all from any public system irrespective of income.
Quality of care must be equal for all regardless of whether public or private. The care is either good enough or not. That’s what drives the money people crazy. They want the privilege buying life. It is also why the market has no place in health care nor protection of any other human right.
Uwe Reinhardt refers to the “principle of solidarity” when describing a distinguishing characteristic of many European systems. It requires the national system, however organized, to provide sufficient/adequate care for all, and charges each based on ability to pay/income. But even within that framework, that applies to what the public system strives to guarantee. As i understand these systems, that principle doesn’t preclude the wealthy from buying “more” if they want, and it’s hard to see how or why you would prevent that. The public interest is in making sure everyone has what’s needed, however that is defined.
excellent, excellent points. thanks.
Thanks Selise.
It has been 10 years give or take since I treated a patient but I have now the high honor of being a chronically ill Medicare patient. I don’t think my observations are too far off for today.
About 10% of my patients were pro bono, I had to limit Medicare/Medicaid (not the same rate as ‘care in my state) to about 25%. Otherwise I could have not been able to afford. much more than office expenses, if that.. Yes. The higher paying insurance younger patients filled in the gaps. This gives the insurance companies and employers some legitimate complaints.
If fees or salaries for bedside providers are limited for increased number of patients I do think the quality will falter for those groups.
It seems so clear. We need one system with one reasonable pay out scale. Medicare/Medicaid pay outs are simply not adequate for good enough care today. But I truly believe eliminating all the waste of multiple forms and protocols along with reining in the drug companies would more than make up for a reasonable across the board pay out.
We need single payer.
amen!
if we are all in the same program, in addition to the “principle of solidarity” that scarecrow mentions, our interests are aligned in making the system work. if there are multiple systems for people with varying degrees of political power, then of course the powerful will have a great system and the poor not so much.
It is I think a mistake to make comparisons about reimbursement rates between private insurers on the one hand, and Medicare and Medicaid on the other. These reimbursement rates are different because they are designed to be different.
Private insurers can reimburse providers for the same service at higher rates because by covering generally healthier people, their outlays rise at a slower rate than their premiums rise. Whereas for Medicare and Medicaid the reverse is tue.
No comparison that fails to take this into account is meaningful.
So now that the congress has been unable to provide a meaningful alternative to private insurers and has instead opted to proceed along the lines Obama set out of building on the existiing system, with all the devastating consequences,the entire government has been rendered useless.
What should we do now that we have to act on our own behalf?
-Maybe withhold paying taxes until a single payer system is passed
-Start campaigns to recall our reps and senators if they fail to reject this current diluted mess of proposals in favor of a single payer system.
-Start a campaign to defeat Obama in 2010 by promoting a willing candidate now
-continue sending emails and calls to our elected officials with all attendant threats to have them removed
A way to maximize this effort should be discussed and adopted in the quickest manner. It looks like the task of governing has fallen on us, the people.
I make the comparisons in reimbursement because that is what happens at the bedside. Hospitals and most of my colleagues and I have swallowed what amounts to loss in treating publicly supported patients. And gladly so. It is what we should do. However to expect to pay the same rates for all of the people will not work.
There should be NO distinction in quality of care. And I think no distinction in pay out. But what is reasonable has to be settled on. I stand to be proven wrong but I think the only workable solution is non-profit single payer. Plus nationalizing the pharmaceutical industry,. An honest look at the results of their research and marketing over the past 30-40 years shows that the most of the basic research on the few useful new drugs developed was funded by the U. S, taxpayers.
You’re going to bring the full weight of the Larry Craig brigade of the Restless Leg Syndrome union of America down on your ass if you’re not careful.
LOL
I agree totally that the brunt basic research in many fields, including computer systems. biotechnology nanotechnology and most basic science eminates from the NIH or heavily subsidized labs by way of federal grants such as MIT.
I feel though that genuine patent rights should still apply in Pharma but that it needs to stay within a scope that still bears a close relationship with the actual cost burden assumed by the patent claimer.
The ultimate price of a drug patents not withstanding must bear a close relationship to how much it costs to make it.
As soon as they send up crappy trial balloons that do not enjoy public support, we continue to shoot them down. It is still early enough in the day to continue that.
As I’ve said before all this debate has ever been about is pushing numbers around to gain political favor in one way or another. There are so many areas the government can make laws that cut fraud, increase competition, create opportunity but instead choose to play a fruitless game for votes. This is complicated by government and that is why I also stressed to keep government out of things it is not properly equipt to handle. They can promote fairness and equality and mold business but not take part in is to such an extent because an entity that large cannot handle the load nor does the people working in it have the inert passion to work for the good of those who need the help.
As the health care debate rages on, my SRS (Sickening Republican Syndrome)is a constant flare up. I concede that any single payer system will have start up problems: and on a national scale, probably for a number of years. Evenso, we have to take the first step. Years of doing nothing has exacerbated the lack of access to ever more Americans. The previous administration did everything it could to sweep the idea from public consciousness; and to this day continues to show it’s distain for those affected with it’s obstuctionist posturing.
The irony is that the debate invariably cycles back to the issue of money. Yet the same people have no problem finding money to send some of our healthiest citizens to fight in far off misadventures–the ultimate “die quickly” scenario.
If those legislators opposed to a national plan looked around, they’d see that deficits abound in initiative emanating from the Capitol. Evenso therein lies an opportunity. Let these, and their like-minded supporters in the federal ranks, apply their convictions for others to themselves. Let’s allow them to give up their taxpayer subsidized medical coverage in favor of one of the private pay options offered by the private insurers whose interests they protect.
Sounding more poignant with each passing day.
Words, words,words. Medicaid this, +5 that, subsidies, premium ceilings, exchange pools – yada, yada, yada. All this wankering wonkiness is a classic display of re-arranging the deck chairs on the Titanic. We need to speak with one voice on ONE theme. MEDICARE FOR ALL.