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The tax-subsidized mandates give the insurers a pipeline into the Treasury, but they don’t want competition from a public option. If they succeed in splitting those, Harry Reid will drown the pubic option in his bath tub.
There are now trial baloons being floated about splitting off the public option from the rest of the healthcare package, which might attract bipartisan support, and passing it via reconciliation on a 51-vote partisan margin. Per the New York Times:
Senate Democrats said Sunday that they were fleshing out plans to pass health legislation, particularly the option of a new government-run insurance program, with a simple majority, instead of the 60 votes that would ordinarily be needed to overcome a filibuster.
After consulting experts in Senate rules and procedure, the Democrats said they were increasingly confident that they could legislate creation of a public plan in a way that would withstand challenges expected from Republicans.
IMHO, it’s a trick, and if the public option gets separated from the mandates, it will never see the light of day. And if you don’t think these guys are tricky, per the LA Times:
"They [the insurers] have beaten us six ways to Sunday," said Gerald Shea of the AFL-CIO. "Any time we want to make a small change to provide cost relief, they find a way to make it more profitable."
30 Comments
I like the idea of mandates and no public option.
The mandates would hasten the citizen revolt that’s needed.
If we had firm mandates, there’d remain the issue of paying those premiums and most of the mandatees don’t have sufficient income to cover them. That would lead to a most interesting food fight between the conservatives and the insurers, because there are only two places to get the necessary money: taxes (which conservatives hate) and cost/profit trimming (which the insurers would hate).
To cover the mandates would cost somewhere between the $100 billion per year that Obama claims and $333 billion per year, which is the product 45.7 million currently uninsured and the $7290 per capita that the U.S. pays for healthcare. But the U.S. pays a trillion dollars per year more than the 10% of GDP that other developed nations spend. So there’s lots of room for trimming.
Right now there is a fascinating three-way struggle among:
* trimming the mandates,
* trimming the fat (including profits), and
* increasing taxes.
Of course the media, believing that every conflict is two sided, will tend to present these in pairs. Here’s today’s Wall Street Journal:
Individual Mandate? Not Without a Public Option You Don’t
From the comments:
Much to my chagrin, my fears are cementing; not waning.
Thanks. You were right on way back on May 19. Very impressive. (But on this like this we’d all like to be wrong.)
Kind of…
What would go through reconciliation is this:
- public option
- subsidies
- some exchange apparatus
- medicare/medicaid expansions
Basically, the hard stuff. Then, you’d have the mandates and other regulations.
So, having the public option go with the subsidies, which is probably the most popular part of the bill and what would really affect people, seems like smart strategy to me, especially seeing as there is no way the regulations could go through reconciliation unless the Byrd rule was waived for those provisions with 60 votes, which is possible if you’re talking about mandates or pre-existing condition regulations. (Who would want to vote against those?)
I feared the privateer mandate long before the “trigger”.
Both kill people.
Hi wigwam, where is the trick?
What if a powerful version of the PO, or an extension of Medicare to everyone, is passed in reconciliation with 51 votes, along with subsidies, and other financial measures including any necessary taxes to make things revenue neutral; and then in a separate second bill requiring 60 votes to overcome a filibuster Congress makes it illegal for insurance companies to: 1) deny coverage based on pre-existing conditions, 2) charge people with pre-existing conditions more than others are charged, 3) rescind anyone’s policy because they failed to report a pre-existing condition, or because they got sick while insured, 4) raise anyone’s premiums because they’ve gotten sick while insured: and 5) price individual insurance rates at greater than 20% above an insurance company’s rates per person to its best group customers?
And then in a third bill, also needing 60 votes for cloture, Congress takes up: the questions of a health insurance market exchange, and mandates for individuals and businesses, btw, a bill that may or may not pass?
Now, where is the trick?
My hypothesis/concern is that if the PO, which the insurers hate, gets separated from the mandates, which the insurers love, Harry Reid will drown the PO in his bath tub. My hypothesis is that once they are separated the PO is dead meat.
wigwam, I see but if the reconciliation bill is passed first, the regulation bill second, and the exchange/mandate bill third, then progressives have everything we want before the third bill even comes to a vote, right? So, where’s the trick?
Furthermore, if the Senate passes the third bill first, the House just has to hold off on accepting it until after the first and second bills are passed. Right?
I did not know that it was required that the reconciliation would have to pass before certain not-directly-related bills could be passed. In many people’s (admittedly twisted) minds, mandates make sense independent of any public option.
It’s not required that reconciliation go first. But it would be the easiest to pass and progressives could enforce that by filibustering or otherwise delaying it. Also Nancy Pelosi along with the progressive caucus could pigeonhole the third bill until the first two passed. In other words we can enforce the sequence of these bills so that reconciliation goes first.
Wigwam, I’m with you.
If they are separated, risk is the PO will be structured so it doesn’t survive (inevitable) judicial attack.
Everybody tried, face is saved, Obama delivers a health care bill and the insurance companies get the yummy mandate money.
Wait a minute:
Duh?
That would depend on Pelosi, whom I’ve not trusted ever since the the Protect America Act of 2007 and the FISA Amendments Act of 2008.
Different issues, different behavior. Pelosi is very sensitive about looking weak on defense. On the other hand, I think her district would not be happy with a sell-out on health care she can do something about. Anyway, she’s just said that she can’t pass a bill without the PO, so that should equally well apply to a mandate bill that comes up before reconciliation is passed.
I have no faith in Pelosi doing the right thing, regardless of what she says. We heard her saying all kinds of things before and after the Protect America Act and again before and after the FISA Ammendments Act, but ultimately she went with what those in power wanted.
wigwam, At this point I’m feeling that you’ve not directly addressed my reasons for liking splitting. These are:
1) We get to do reconciliation first and even have the opportunity to pass a bill opening Medicare to everyone. We can even provide subsidies to those enrolling in Medicare based on income, as long as we make this revenue neutral by paying for this in taxes. We know from previous experience with reconciliation that this would not be unconstitutional. Now let’s say there’s opposition to this. Then we can roll back the subsidies as a compromise. Medicare for those under 65 is then fully paid for by those opting in themselves, and they would opt in because the cost would be at least 20% less than private insurance. If we can’t get that through, we block every other health insurance reform bill that comes up, so that we force the President to compromise on at least Medicare extension without subsidies. Pelosi can’t stop us from voting against anything else, if we can get 40 plus progressives to stand firm, so we don’t have to trust her.
2. Once that passes we take up regulation based on pre-existing conditions, rescissions and the other 3 items I listed above. This is a 60 vote thing. But we’ve heard in past statements, even from Republicans that “everyone agrees” that insurance company abuses of this kind have to be ended. So here it looks like we have the votes to break a filibuster. Now once we get this done we have a very favorable situation to moving on to the third bill
3. The third bill addresses setting up the market exchange and providing mandates. Now notice that the power situation may have shifted. If we’ve gotten subsidies through under reconciliation, there is no reason for progressives to vote for this bill. The market exchange is not necessary for us because a) it’s really kabuki since the market doesn’t work under health care and b) new of cheap available Medicare insurance will spread without an exchange. Mandates are also not necessary for us and, in fact would be unpopular, so we ought to vote against them. If we do this what will happen to the bill?
Either, it will go down to defeat or, alternatively, Blue Dogs and Republicans will pass it, because the insurance companies will be lobbying in favor of this bill to save their own butts. That is, once we pass 1) and 2) then 3) becomes what the insurance companies need to survive and they will scream like stuck pigs to pass it. BTW, 1) and 2) can go into effect immediately. No waiting until 2013. On the other hand, if 3) passes, I’ll bet we suddenly find that the insurance companies have no problem about setting up the exchange within a year of passage, so that the mandates can become operative.
The alternative scenario for 3) is what happens if we fail to pass subsidies in 1). Then we probably don’t want to oppose mandates, but to compromise on a mandate/subsidy trade-off with the insurance companies. BTW, however, we should refuse any such trade-off if the Republican don’t vote for this bill. If the insurance companies want mandates, let them get the Republicans to vote for it so the Democrats have some cover. We would have no reason to do this alone.
Finally, if all three bills pass, I believe we have Jacob Hacker’s original PO passed, which is a much stronger PO than now is propsed in HR 3200.
Now tell me why we have to trust anyone except for progressives in order to get 1) through, and why once 1) is through, the leverage is not entirely in favor of 2) and perhaps 3)?
Great analysis here. I’ve been seeing the reconciliation bill go first. No guarantees of course, but that’s what it seems like now at least.
Leave the gun. Take the cannoli.
Mandates without a public option is simply an effort to provide massive profits to the insurance companies. It will do nothing to improve the lot of Americans in need of health care.
BTW, just to add to the above. I don’t see anything unconstitutional here, unless it’s the mandates in 3). And if those are declared unconstitutional, I don’t think progressives lose anything.
I agree that mandates are not the key element, but still an important one. Uninsured people showing up at emergency rooms under EMTALA are a problem that ripples throughout the entire system.
How will we mandate and subsidize undocumented immigrants? And if we can’t do that, how can we solve the emergency room problem?
By opening clinics and letting EMTALA cover them too?
I don’t think we can push that through this year. The Republicans and Blue Dogs will block that and I don’t think the progressives will dig their heels in for the emergency room problem.
In response to letsgetitdone @ 21
My concern is mandates without a public option, which is what the insurers want. Once we get a public opetion, whether it be “Medicare for all”, “buying into Medicare,” or some other robust public option, I’m no longer concerned about that scenario. But, once the two are split into different bills, I don’t trust Pelosi and Reid to process them in PO-first order. In fact, I predict that they would not. The President wants a quick victory, so I predict that the order would be least-controversial first. And that’s my concern here.
Thanks, I understand. But I don’t think you’re addressing my point that 40 plus House progressives can make sure that the PO comes before mandates in the sequence. Do you think they will fold? If so, it’s the progressives you don’t trust, rather than just Pelosi.
In addition, the least controversial of the three bills is probably the regulatory bill and the most controversial is the mandate bill. On the other hand, the regulatory bill does require 60 votes whereas the Medicare extension bill only requires 51 in the Senate. So ease of passage and extent to which a bill is controversial have to be traded-off in deciding which comes first.
Yes. I expect that many of them will, especially if they have promises from Pelosi and Reid.
Not sure what promises they’d get that would be worth the hit they’d take in their districts. However, assuming that they’d fold in the scenario I laid out, why wouldn’t they fiold just as or more easily in relation to a comprehensive compromise bill? That’s likely to be a a lot less popular among their constituents than a bill that extends Medicare and provides people subsidies to but into it according to their income (my bill 1). It seems to me that breaking up the bills into three is still our best bet. certainly, it’s our best bet for getting something new that will provide coverage for people within a year.