Where Health Care Reform Stands Now: Who's Selling Out Whom For What

by: Ian Welsh

Mon Nov 09, 2009 at 06:00


It's time to evaluate where health care reform stands at this point.

Guaranteed Issue:  The best thing about the bill is unquestionably the fact that insurers have to issue policies to anyone who can pay.  No one can be denied coverage, no matter what pre-existing conditions they have.  This is a big deal. While it can help people of any age, it is most important to older people, who are more likely to have pre-existing conditions.  This also helps people who are stuck with very expensive insurance because they have pre-existing conditions and if they cancel their insurance wouldn't be able to get new insurance.

Individual Mandates and cost sharing:  An individual mandate forces people to buy insurance whether they want to or not. Insurance works better when everyone is covered and in the same risk pool.  It also shares costs throughout the population.  Individual mandates seem unfair, but they are generally instituted as part of changes to the system which reduce overall costs significantly. For example, relatively speaking, Canadian GDP/capita costs were reduced by one third  compared to what they would have risen to otherwise during the ten years after changing from a US style system to single payer.

If there is no cost reduction due to systematic changes in the system, however, all that an individual mandate does is share costs through the entire population and direct profits to private insurers and medical providers of various kinds by giving them a captive consumer based, forced by government mandate to buy their services.

People who don't have insurance right now are primarily younger people or those who feel they can't afford it.  What individual mandates will do, then, is subsidize older people's insurance costs and the price of guaranteed issue, which is very costly since it forces insurers to cover people who are very likely to get sick.  The people who subsidize this are, generally speaking younger and poorer.  

If subsidies were adequate, then in fact, it would be the government subsidizing the costs, through progressive income tax and corporate taxes.  However, since the subsidies in the various bills do not cover the full cost, poorer and younger people will subsidize older people.  Since many of those people didn't buy insurance because they are right on the edge financially already it means that some of them will go without food, not be able to pay tuition, or lose their homes as a result.  Many people are already on the edge already, this is one more burden for them.

No Robust Public Option: A robust public option is one that is large enough and with enough pricing power  to force down costs, and one which is available to everyone.  At this point, the public option will likely have between 5 to 9 million enrollees (the CBO says 6 million, but we'll be generous).  As such it will be smaller than most private insurers and will not have pricing power.  If it were linked to Medicare and could use Medicare's clout, it could reduce costs, but the Medicare +5 amendment, which would have had it paying providers at Medicare rates +5% was defeated.

The Congressional Budget Office has stated that the public option insurance plan premiums will be higher than equicalent private plans.  This is likely because of denial of care issues, insurer cherry-picking and lack of clout mean it won't be able keep reimbursement rates low relative to private insurers who have more customers and thus more pricing clout with doctors, hospitals and other providers.  If the public option costs more than equivalent private plans, it goes without saying that it will not reduce costs.

Reduces Practical Access to Abortion:  The Stupak amendment, passed Saturday evening, makes it illegal for any plan offered on the exchanges to finance abortions.  Any woman who wants abortion access, after being forced to buy insurance that doesn't include it, will have to buy it elsewhere.  The practical result of this is a reduction in access to abortions. This, of course, primarily affects young, childbearing age women though their family members, boyfriends and so on will likewise be effected.  

The Bottom Line: Who's Getting What, and Who's Paying

Ian Welsh :: Where Health Care Reform Stands Now: Who's Selling Out Whom For What

This bill does not contain a robust public option which will contain costs.  It will give guaranteed issue and force cost sharing through an individual mandate.  Older people will disproportionately benefit, and the people who will disproportionately pay are younger poorer people, and especially younger women, the poorer ones of whom will lose practical access to abortions.

For a long time I've read that the bright red line for many progressives was a robust public option.   None of the bills, including the House bill, have a robust public option.  In addition, the Stupak amendment removes practical access to abortions for many women.

It appears that the bright red line was not a robust public option.  The bright red line was, and is, guaranteed issue.  As long as a bill has guaranteed issue (in exchange for which insurance companies insist on an indvidual mandate, aka, cost sharing and forced customers) any other sacrifice is acceptable. 

This health care "reform", if passed in this form or worse, which it will be if it is passed at all, will blow apart eventually, because it will not contain costs or 'bend the cost curve" and the US economy simply cannot indefinitely afford health care costs wich rise faster than inflation or wages.  But for as long as it lasts, it will help some people at the cost of other, generally younger and poorer people.

If progressives really meant that a robust public option was their minimum requirement, when Medicare +5 failed they would have gone into opposition.  They didn't, therefore it wasn't their minimum requirement.  It remains to be seen if enough progressives really will vote against a final bill which still contains the Stupak amendment.  Given progressives failure to live up to their threats to pull support if no robust public option was in the bill, I am forced to suspect that if Stupak is in the final bill, the final bill will pass.

The last couple weeks have been very revealing as to what various people, including politicians, progressive bloggers and activists, are really willing to fight for, and what their bottom line really is.

I would suggest that if progressives ever want their threats to be taken seriously by anyone again they go into opposition against this bill until such a time as it both has a robust public option and the Stupak amendment is out.  Failure to do so will show that their threats were always hollow, that they are willing to sell out child-bearing age women, and that they prioritize the interests of older people over younger and poorer people.

In negotiation against a good negotiator, you get the minimum you are willing to settle for. Progressives have shown that their minimum is not a robust public option. It may not even be practical abortion access.  They will not get a robust public option if they will not oppose the bill over it, and if they won't oppose the final bill over the Stupak amendment, that too will most likely remain.

Obama and the Democratic leadership's bottom line is they must pass some bill called "health care reform".  Unless you threaten to take away their bottom line, they will take away anything that isn't progressives bottom line - and that includes practical abortion access, and a robust public option.


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if we ever want to be taken seriously again... (4.00 / 4)
I would suggest that if progressives ever want their threats to be taken seriously by anyone again they go into opposition against this bill until such a time as it both has a robust public option and the Stupak amendment is out.

I'm afraid that progressive threats are not going to be taken seriously until they show they can follow through and defeat the leadership -- and given our performance to this point, probably more than once.

Allowing this bill to come to the floor of the House was a grave error. We should have defeated the leadership on the rule, while the stakes were still relatively low.

Unfortunately, it seems to me that there are now few if any more opportunities to defeat the leadership and establish credibility without killing the entire HCR effort. And if we do that, starting over again next Congress from square one looks unlikely.

If the House procedure on the conference report is structured the same way as it was for this House bill, and the conference report is inadequate (weak public option, Stupak amendment) I'm guessing it would be possible to defeat the rule repeatedly, and so keep it from coming to the House floor, and hence force it back into conference for the necessary changes.

Of course I'm just guessing -- if we want to maintain any credibility, as you say, somebody who actually knows what they're talking about needs to game this out. Then somebody with credibility among progressive bloggers needs to organize among them, to create the space for/pressure on the CPC to actually follow through on the plan thus gamed out.

At this point, it's looking like a multiple bank shot.


we have ZERO credibility (4.00 / 6)
we don't have to win, but we do have to follow through on our threats. $400,000 dollars raised in support of a progressive block to vote against a bill without a 'robust' public option and 57 of those promises, by their own definition of 'robust,' should have voted against the bill.

and there were NO demands from us that they actually live up to their promises. NOTHING. no whipping, no phone calls, no blog postings calling for "no" votes. down the memory hole all it all went.

if we have ZERO credibility now with deecee and with readers, it's only because we deserve it.


[ Parent ]
Clarity (4.00 / 5)
I would add that the House bill, now passed, was exactly what I expected from the beginning. It's a textbook example of How Washington Works. The only exceptional thing about it was how open, and how transparent to an outsider the process was which brought it to passage. To some extent, this transparency was a result of the extraordinary attention focused on it from all sides, but for the most part, we were allowed to see what was going on simply because none of us could mount an opposition strong enough to make the inconvenience of keeping it secret a necessity.

Catch 22: They can do anything to you that you can't stop them from doing. Everyone who had to be paid off was paid off, no one who didn't have to be paid off got anything. The bottom line was always universal and portable coverage, with no one excluded because of pre-existing conditions. Nothing else mattered to the important people.

Such an arrangement sounds like an improvement and all, but as Ian says, its provisions protect not the new people being enrolled, who can't afford it, but the health care and insurance industries, and, of course, the government. Thanks to uniform rules, and a guarantee that everyone will pay private insurer rates, including -- when all else fails -- the government, the industry is now safe from company-destroying competition, and has access to everyone's wallets enforced by no less august a pack of bulldogs than the IRS itself. The government is protected from the kind of social chaos which it would eventually have faced if nothing whatever had been done. The people are left in almost as precarious a position as they were before the whole sad dance began.

If anyone thinks that President Obama's understanding of change ever extended any farther than this, then I'd say that he hasn't paying attention. I'd also say, echoing the more astute diarists here, that unless and until soi disant progressives acquire the power to break a few kneecaps, and actually use that power, the rest of the White House's agenda will follow a similar script. Lieberman will always be our future, not Kucinich.


[ Parent ]
How Does the Public Fit Into this Model? (4.00 / 1)
Just curious to hear how you think a pissed off public will respond? Do you think they'll vote Republican, which of course will make everything worse (because their solutions, if less taxes, will crater the economy).

When my wife and I moved back east this summer our insurance company told us we could continue for three months with insurance for a family of four for $3300/month, a years worth of premiums. My guess is that is the private insurance future. We laughed and told the agent to go to hell because New York State has decent insurance for people of modest means. But not everyone is that lucky. And they'll be pissed off royally and demand action.

If the public already supports the public option, and their rates go up, costs go up, the numbers of uninsured go up, do you think they'll keep demanding it? At some point, the DC status quo becomes overwhelmed, no matter what it wants. My guess is people won't buy the "government paid medicine doesn't work" argument when Medicare works just fine.


[ Parent ]
It's a VERY good question (4.00 / 4)
We argue that big government is a protection against the rapacity of the wealthy and powerful. We also argue that the right -- I'm not talking about wingnuts now, but the traditional right which has sponsored them -- having understood this as well as we have, has spent the past forty years taking over the government, and remaking it into a defender of privilege.

The right has argued that government is the oppressor, not the wealthy and powerful. Their problem  now is that the wingnuts they unleashed as a popular force to assist them in their usurpations has, like the fascists in the Thirties, taken over their party. Thy think that they can avoid the consequences of this unhappy rise of right-wing populism by assimilating the Democratic Party to their cause. So far, they've been successful at this, but at the cost of muddying the waters, and reducing the coherence of their message. How they'll fare in the end is still unclear.

Our problem, which is worse than theirs, in my opinion, is that right-wing populism can continue to argue that government is the problem without fear of any contradiction which will resonate beyond the small band of progressives who hang out at places like this. The kind of government which Reagan bequeathed to us, and President Obama seems hell-bent on perpetuating, is indeed the problem. To argue otherwise makes us seem like fools, or -- to the extent that we try to re-imagine the government of the New Deal, and present it as the true picture of government -- it makes us look like pedants.

Untangling the tangled mess that the last forty years have left us as a legacy is going to be a godawful task, no matter how we proceed. It's likely to take decades, and quite frankly, we may not have decades. So what's my recommendation? Ain't nothin' to it but to do it, I guess. Only God knows how it'll turn out. My only consolation is that, being an old geezer, I won't be around to find out one way or the other.


[ Parent ]
Views of Government (4.00 / 3)
My memory comes and goes (!), but I remember recently someone had an excellent articulation of the Republican view of government and an alternative. Basically, that it is not government for the powerful but government for the people. Government that respects and empowers individuals not elites and powerful corporations. Government as an extension of the needs and ambitions of individuals and taxpayers. That sort of message resonates well in this time with such obvious distortions in the economy.

The "I'll soon be dead" argument is amusing. I'm more than half way there but I feel guilty leaving this mess to my kids and their kids. I feel duty bound to fight like hell to change things. What makes me sad is that the past 30 years were the main part of my adult life and look what happened. I've never voted for someone who won office who promoted the interests of average people. Given how autocratic the government has become, with spying and all that, it surprises me we're even allowed to vote.


[ Parent ]
And, wow, (4.00 / 1)
It is a tangled mess is it not.

Two short items at Eschaton highlight the risks of not getting this tangle untangled before both you and I pass from this mortal coil.

When Paul Krugman of the NYT and James Poniewozik of Time begin to sound parallel threads of a scaffold getting ready to collapse, as described recently by Digby, I'd say we won't have the luxury of death before we get a sense of how things will turn out, William.  I cannot articulate the degree to which I am ambivalent about that.


[ Parent ]
If not Republican, they'll vote independent or not at all. (0.00 / 0)
Neither of the two corporate parties is popular with the public right now.  I don't think people will vote GOP next year in large enough numbers, but I do think they'll either vote independent or, having been denied that route, simply not bother voting at all.  Whichever option they choose, the result will be the same: Congress reverts back to the Republicans.  No one will notice the difference though, because as it stands there really isn't any significant difference between the two parties.

Single-Payer is the ONLY viable public option.

[ Parent ]
Left Wing Nuts no better than Right Wing Nuts (1.14 / 7)
Keep smoking your crack.  There is no progressive movement in the Senate and the one in the House can barely get shit done.  Stop asking for pipe dreams when we can barely pass weak change.

The majority you are looking for does not exist.

You are as bad as the wing nuts.  A long as Democrats continue to NOT listen to you our party should be ok, but until you can learn that negotiation is a REQUIREMENT of government, your voice is useless.

Regardless of whether a single payer system would be better and preferable to us progressives, it isn't going to happen any more than Obama will be impeached for being Kenyan.

So get off your high horses and come down here to reality and fight for what we might actually be able to get.

THEN when some things improve, fight for more...


[ Parent ]
Troll-rated for this odious ad hom comment (4.00 / 3)
You are as bad as the wing nuts.

This person wasn't saying single payer or nothing, nor even no compromise on the PO, just no UNNECESSARY compromise due to weakness and/or lack of principle. The need to compromise on SOME things does not mean the need to compromise on ALL things.

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton


[ Parent ]
thank you, and to add... (4.00 / 2)
...the issue I wanted to address is, now that we've made a compromise we swore in advance that we wouldn't make, how might it be possible to recover lost ground, or at least keep from losing any further ground?

[ Parent ]
This person/comment is not troll (4.00 / 1)
They are expressing the same frustration as Ian but less eloquently. Of course when they says "you" they really mean "us" and "we". You can see that shift in their next to last sentence:

"So get off your high horses and come down here to reality and fight for what we might actually be able to get. "

Jeff Wegerson


[ Parent ]
THIS is the best "we" can get? (0.00 / 1)
HAH!

Tell me why you bother to post here? Shouldn't you be at FakeLeft.com?

"Those who stand for nothing fall for anything...Mankind are forever destined to be the dupes of bold & cunning imposture" -- Alexander Hamilton


[ Parent ]
Ever see Brubaker? (0.00 / 0)
Robert Redford said it best when asked if there was any room for compromise: "on strategy, maybe, but not on principle."  Our problem is that we've been compromising on principle.

Single-Payer is the ONLY viable public option.

[ Parent ]
intended for me? (4.00 / 1)
My comment didn't mention anything about the Senate, or about single payer, or a majority of any kind.

You seem at pains to emphasize that negotiation is a requirement for government. But this is exactly what my comment is about. It's fundamental in negotiation to spell out clearly and credibly to the other party what one intends to do in response to their possible courses of action. My comment addresses the credibility aspect of this issue.

If in fact you intended your reply for me, clearly I've angered you in some way which I did not intend and do not understand. I'm sorry if the issue was that the intent of my comment was unclear.


[ Parent ]
This from a right wing nut. (0.00 / 0)
You're funny.  LOL

Single-Payer is the ONLY viable public option.

[ Parent ]
A campaign to ask the Progressive Bloc to give back our money is called for (4.00 / 2)
People who contributed can simply say that they understood that Congress critter X was going to demand a robust public option. Since none of the bills have one, they'd like their money back, unless Congress critter X votes down the final bill.

The vote was so close that we only need to flip a few of them, to do what they said they would do.

Where is the organized effort to do so? Why isn't OpenLeft organizing such a push?

435 Dem Primaries 2012
Coffee Party Usa
TheRealNews.Com


[ Parent ]
I'm sure I'll get blasted for this, (4.00 / 5)
but if this is the best PO we're going to get, then a) the measure - at least initially - is whether the public option is more or less expensive for the particular mix of consumers who buy into it. The CBO assumes that the PO will charge higher than average premiums, but that's based on the fact that it will likely cover sicker and older consumers. Will their premiums go up or down if they switch the PO?

b) The CBO bases this on the assumption that the PO will be unable to negotiate for repayment rates lower than private insurers. At the moment Jacob Hacker is saying that this is not a given - that in fact there are reasons to believe that the PO could get lower rates, and pass the savings along to consumers.

"Negotiated pricing" in the insurance industry, as I understand it (and I'm sure you understand it better), usually consists of insurers issuing price lists that providers can choose to honor - or not. If they choose not to take that pricing, they're out of the network. The PO could end up securing networks of providers at a lower cost than private insurance. After all, it's not just the size of its insured pool, or the low overhead that allows Medicare to keep its costs down - it's also the fact that they're the government, they pay on time, and they don't jerk providers around by routinely denying claims. The PO would have much of the same things going for it, and my guess is that there are quite a few providers - especially in rural areas or in areas with large uninsured populations - who would be happy to pay less for a significant increase in their customer base.

Is this a weak-as-water PO? Yes. Should we have single-payer? Yes. Did the Democrats sell us out to the greatest extent they thought possible? Yes. Will many pay more for insurance under this system than they would have otherwise? Yes. Are we guaranteed to get even this out of conference? No. But instituting a PO was going to have strategic advantages, and I think many of those advantages remain intact in this bill.

And to my understanding, the "higher rates than private providers" meme is a canard, and should not be used in serious debate without the necessary qualifiers. If I'm wrong, I'm ready to be corrected.


What Doesn't Kill You... (4.00 / 3)
I agree with your argument that some of the CBO score could be (not is) fungible, that we won't know until we see it in action. I'd also point out that we should learn from our mistakes and push in this bill and other future bills needed corrections. You know, overwhelm the conservative side by a thousand persistent changes, over and over, year after year, decade after decade. We should be rabid squirrels biting the ankles of power.

We also should (and I suspect will) use the profound greed of private insurance companies against them. Sadly, there will be many more thousands and tens of thousands of people who will die needlessly because some CEO and senior staff at some health care company needed a 5 million dollar pay day, or 10 or 20 million pay day, instead of paying for their insureds medical expenses.

The progressive movement isn't dead (yet). It is still viable. It is still backed by a strong majority (70% plus on the public option) of voters on many issues that matter. DC politicians are still extremely and obviously corrupt, trading votes for money to vote against the stated opinions and interests of their voters, cashing in as lobbyists once they leave office. All this is useful fodder for a better future, to educate voters and make change happen. We just have to dig in, never give up, and work hard to make it happen. I strongly suspect that is the future in store for us and for this country.

Right now, this is a dark pissed off moment. But it won't be that way forever. And I still love what the PA union guy said awhile back and it still makes a great slogan: Fuck 'em.


[ Parent ]
Direction of subsidies (4.00 / 2)
People who don't have insurance right now are primarily younger people or those who feel they can't afford it.  What individual mandates will do, then, is subsidize older people's insurance costs and the price of guaranteed issue, which is very costly since it forces insurers to cover people who are very likely to get sick.  The people who subsidize this are, generally speaking younger and poorer.  

Couldn't social security be characterized in much the same way?

The bottom line is that the decision to vote for or against this is strategic, not one of principle.

If you believe in snowballing, then this bill (with Stupak removed) institutes for the first time in the US the principle that everyone should have access to health care: the many people who think health care is a privilege have lost. To the extent that it doesn't work (and I think it's a very good bet that it won't bend the cost curve anywhere near as much as it needs to be bent) then it will have to be fixed, as Massachusetts is now trying to do with it's even more dysfunctional system.

If you instead believe in institutional inertia - that the problems of this bill will never be fixed - then there is a decent argument to be made that the bill should be blocked in hopes that sometime in the future as healthcare continues to get worse single payer can be passed.  


not at its inception... (4.00 / 5)
From Origins of Social Security (source):

Social Security...help[ed] decrease the poverty rate among older Americans from close to 50 percent in the mid-1930s, and roughly 35 percent in 1959, to just 9.8 percent in the year 2004, lower than the current U.S. poverty rate for all ages, 12.7 percent.

It's only because Social Security has been so successful that "younger and poorer" now go together, rather than "older and poorer."


[ Parent ]
Good point (4.00 / 2)
Massachusetts probably is the future if this form of health care gets passed through the Senate, through conference, then through the two chambers of Congress for a final vote. The question, as Timberman points out above, is whether the permanent governing class in DC is in power and will let future changes happen. Or if voters will be pissed off enough to overwhelm the interests and power of the governing class. In round one, DC is winning despite strong voter preference for a strong public option and/or some form of government intervention like single payer or extending Medicare by lowering eligibility age.

And you're also correct that, in principle, any universal health care bill that passes sets in stone the idea that health care is a right, not a privilege. That would be a critical historical win.


[ Parent ]
not massachusetts (4.00 / 2)
not massachusetts, other than the unsustainability.

the massachusetts plan is, as far as i can see and sucky as it is, also far superior to what is coming out of congress. i've been assured by my rep's office that since we already have a waiver with the HHS, we will get to keep our exchanges, including our mostly better subsidy rates and access to abortion services.

what congress is attempting to do with chips with medicaid with bilogics, etc  is proof that healthcare is not what this pr extravaganza is all about.

the po is virtually useless as a matter of policy (without being prepopulated with  10s of millions and other other issues raised again and again by actual policy experts). a small po in a weakly regulated market won't work. and with strong regulation is unnecessary. but boy did the fight over a useless po do a good job of distracting us from paying attention to the more import issues.

we need a serious re-think about how we handle both policy and political strategy. i suggest that, at the least, next time the actual policy experts as well as the actual grass roots activists  (in this case it was single payer advocates like pnhp and cna) as well as readers be included in all phases of the decision making process.

top down doesn't work. not if democratically accountable government is the goal.

unless of course, the whole goal is to continue to raise money for dems without accountability.


[ Parent ]
will people see it that way? (4.00 / 3)
so great, i now have the "right" to be obligated to pay a third to half of my disposable income for health insurance, which may or may not make a real difference in my real costs for health care.

to me, that's not a right or a privilege, it's a big pain in the ass obligation. it seems far more likely to me that future change will be in the direction of dismantling that obligation, without any attempt to fix the system or prevent the failures that will follow. the health care equivalent of Prop 13 in CA, which under the guise of relieving a real problem for some people, and a serious fear of more people (losing their home because of property taxes), actually destroyed the tax bases of local government and seriously screwed up the state government from that time on.

which Congress is it that is supposedly going to pass these incremental improvements? this one? this Senate? these Democrats? banking on something to happen in the brighter cleaner shinier future is pretty iffy.

not everything worth doing is profitable. not everything profitable is worth doing.


[ Parent ]
I Agree (4.00 / 3)
Being forced to pay for insurance is a big issue for most people, up to the 99% of Americans who are not wealthy. But that also will focus the minds of Congress. I don't plan to take that mandate lying down. I plan to protest early and often to my Representative and Senators if the subsidies are too low, or the PO is too weak, and so on. There are millions of people affected and I doubt they will accept a shitty plan. Or half-assed solutions. The question is whether progressives will be sharp enough to harness this negative energy into positive legislative action. That's the point of targeting conservative Dems and Republicans who do not represent their districts interests. A mandate is ripe fruit for Republicans who want to use populist anger to support a corporate state. But it's also an opportunity for progressives to demand fairness.

[ Parent ]
Thanks for this, Ian. (4.00 / 3)
As always, you're succinct and hit the critical points.  Your ongoing summaries of where we are now have been essential for this reader.  It's deeply appreciated.

Now's the time to kill the bill. (0.00 / 0)
Call your representatives and tell them to kill the bill.

http://clerk.house.gov/member_...



Single-Payer is the ONLY viable public option.


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