Senate Muddle

by: Mike Lux

Wed Dec 09, 2009 at 12:11

I am still in a haze over the deal struck last night on the public option, not helped by the fact that they are keeping the details close while CBO scores the bill. As anyone who has read my past blog posts knows, I think the "details" on all these deals are incredibly important, and I don't believe in rushing to judgment until we have had a chance to analyze them. Clearly, though, there is both a lot of bad news in the reports coming out so far, and some good news as well.

The worst of the news (obviously, from my perspective) is the demise of the public option. Without knowing the details, it is hard to assess just how bleak things are, but the early reports make it sound like they have come close to killing it for everyone under 55, and above 150% of the poverty line. The one thing that could still salvage something decent is the nature is the trigger language, but I'm not hearing encouraging things about how good it is. And I am not going to sugarcoat this for you: this is a bitter disappointment. The result is a deeply flawed bill that will not control costs or provide a check on insurance company power the way it could or should have. I also think the politics of this are going to be very tough for the Democratic Party in both 2010 and 2012: people mandated to buy insurance without a public option they can go to will result in a lot of heartache for Democrats with middle class voters, and the disappointment the base feels on this issue will mean it will be much tougher for Democrats to recruit volunteers, raise money online, and turn out the base vote. They have just screwed themselves politically with this deal. Joe Lieberman, the conservative Democrat who absolutely refused to compromise or bargain in good faith, has just leveled a tough blow to his entire party.

However, there is some good news in reports of the compromise (again, waiting on the details):

  • opening up Medicare to people under 65 for the first time would be an important substantive and symbolic victory, and would allow progressives a wedge to keep pushing in years to come to open it up even further.

  • forcing insurers to pay out at least 90% of their revenue out in benefits (compared to the 82% on average they pay out now) is a very big and important victory, stopping the private insurance race to the bottom in terms of providing benefits that has been plaguing us for the last couple of decades.

  • forcing insurance companies to offer more choices, similar to what federal employees get now, is actually a significant victory even though there is no public choice. Members of Congress are always going to make sure there is decent competition for themselves, and if getting a package like theirs means we get more competition for everyone, that helps.

I will be writing more on this in the coming days. The loss of a public option is a bitter pill to swallow, but there is still plenty of good in this package. As details emerge, we will know more.

Mike Lux :: Senate Muddle

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Senate Muddle | 31 comments
let's not be naive (4.00 / 5)
about that 90% rule. This compromise was hammered out by senators who have been working all along to protect insurance industry interests. Chances are there is either a loophole written into the bill to allow them to define administrative costs as providing care, or the enforcement provisions are very weak.

I believe the way forward is for the House to reject this bill. Then if Obama wants a feather in his cap, he will have to push the Senate for something better. Probably that will mean going the reconciliation route, or maybe there is a way to twist arms to get 60 votes in the Senate behind a decent public option if this falls apart.

Join the Iowa progressive community at Bleeding Heartland.

If they were interested in actually opening things up (4.00 / 2)
and streamlining the insurance companies in the abscence of a PO, they'd be talking about removing the anti-trust exemption.  

[ Parent ]
90% (4.00 / 1)
Obviously, we won't know until we see the leg language, but the people negotiating this included good progressives like Brown, Feingold, Merkeley. this is one area where I think we might have scored a real victory.

[ Parent ]
"we might have scored a real victory"? Caution, Mike! (0.00 / 0)
Pls, don't engage in premature celebrations, like Chris does. Nothing has been passed yet, and we don't even know the details. And there's more people involved, with less progressive crdentials, than Brown, Feingold and Merkeley. Don't let optimism wash your sceptical attntion away!

Not to speak of showing satisfaction now is not helpful int eh negotiations. Only signals to the other side that more can be pressed out of you. Imho the hardline stance of FDL, never showing any support for compromises, but meticulously pointing out all the crows progressives have to eat, is much more helpful for the progressive block arguing that they really can't move an additional inch, and that they fear they already went too far. Which may correct, btw.

[ Parent ]
Lieberman "has just leveled a tough blow to his entire party" (4.00 / 1)
Joe Lieberman is not a member of my party.

I agree he's hurt us badly and hope the party leaders that have played footsies with him will now realize he can be counted on only to hurt Democrats.

How much damage must he do to the party and the country before he loses his chairmanship?  We will still control the US Senate come 2011 despite probable losses and if he has any position or power it would prove our leaders suffer from the battered person syndrome.

Did they get you to trade your heroes for ghosts? Hot ashes for trees? Hot air for a cool breeze? And cold comfort for change?

C'mon. He's with us on everything except (4.00 / 8)
legislation and messaging.

[ Parent ]
He's with us on everything except (4.00 / 3)
opinion and action.

One could make a whole catalog of such truths.

[ Parent ]
correction: (4.00 / 2)
he's with us on everything except for things that will get him national attention for not being with us--namely, all close legislation.  

[ Parent ]
Think I've learned something from this re Lieberman (4.00 / 1)
He's awful, but there are several other Dems that are essentially as bad.  He basically acted as front man on this for Nelson, Lincoln, and Landrieu, who themselves may well be cover for several others.

Maybe if they had threatened him as soon as he said he would filibuster, but who knows?  I'm all for expelling him from the caucus, along with the above three.  Really, it should be a rule for anybody filibustering Dem legislation.  But I don't think it's simply a matter of "battered person syndrome."  The right wing of the party in the Senate is quite useful to a larger bloc of corporate centrists, who want them around to keep the pressure off themselves, and oppose censuring them.  This limits what Senate progressives can do to them.

The fact is that the mess we face is the fault of a larger group of people than just Obama, or Lieberman, or any of the most visible.  We need two things at the minimum:

1) Kill the filibuster
2) More progressive members of Congress, of whatever party label.

[ Parent ]
It has to be asked why Baucus and Conrads still have their chairmanships, too. (4.00 / 1)
Especially in those very important committees. Their actions have been disastrous for the progress of the healthcare bill. They should be relegated into the most unimportant committees of all, with offices somewhere in the cellar.

Btw, the Rethuglicans have reformed their rules so that thy can punish "traitors" in that way, long ago. Only the Dems are such sissies that they never hit back against those who sabotage their own party.

[ Parent ]
Why call Lieberman a "Democrat"? (0.00 / 0)
He won his seat by defeating a Democratic candidate. He's an egocentric whore and people who have pretended he is a Democrat have enabled his behavior.

Can it happen here?

[ Parent ]
I disagree... (4.00 / 1)
people mandated to buy insurance without a public option they can go to will result in a lot of heartache for Democrats with middle class voters

Most middle class voters either have insurance or want it if they can't get it 'cos of pre-existing conditions.  Considering that 85% of the country is supposedly insured, the mandate will only affect 15% of the country, with most of those affected both wanting insurance and receiving subsidies.

The mandate thing is a politically potent buzzword, but it won't really have much negative effect in the real world.  MA has a mandate and their Romneycare plan is pretty popular.

REID: Voting against us was never part of our arrangement!
SPECTER: I am altering the deal! Pray I don't alter it any further!
REID: This deal keeps getting worse all the time!

1% can be the difference between winning and losing. (0.00 / 0)
And it's prolly more than 1% who didn't want insurance yet, will be forced now to get an espensive private insurance, and voted democratic until now. And the subsidies only pay for part of it, the rest, which has to come out of their won pockets, is a lot of money for those people (one of our own commenters here, whatshisname, complained about that). Not a good idea for the Dems to disenfranchise any voters right now. Just look at the House ballot polls!

[ Parent ]
So do I (0.00 / 0)
I'm not sure about the mandate, that may upset some folks.  What I am confident about is that the existence of the public option is irrelevant to this dynamic.  No more than a handful of people would object to being forced to buy insurance from private insurers, but not mind buying it from the government.  The PO in its current weak/level playing field incarnations wouldn't even necessarily be cheaper than private insurance.  Possibly it might reduce costs down the line, but not quick enough to affect the next two elections.

I'm for the public option, just commenting on the electoral effects, which I believe will be zero in terms of swing voters.  In terms of the base, I don't know -- that's another story.

[ Parent ]
I also disagree (4.00 / 3)
Expanding Medicare is much more saleable than creating a "public option."  It's more resonant and is politically invulnerable to GOP attacks. And, the opt out public option as it stood would have done very little for affordability for most voters. We came out in a better, not worse, place.

I wonder if this was the plan all along. I think with a jobs bill, expanding Medicare and a financial rescue, we have a good platform for re-election in 2010 and beyond.

I do hope, however, that all the righteous and justifiable anger towards Nelson, Lieberman, Landrieux, Lincoln, Conrad and others is sustained and turned into action. We need to send a strong message. What Lieberman did was unforgiveable. Let's start by taking out Lincoln.  

Expanding Medicare only helps the 55+ group. (4.00 / 1)
All younger folks without employer based insurance are left in the cold now, having no choice now but to sign up for expensive private plans. Not exactly a great outcome. Oh, and btw, isn't the 55+ generation tending to vote rethuglican?

[ Parent ]
don't think many younger folks would have qualified for public option (0.00 / 0)
it was so watered down in the end. Younger folks weren't going to get covered by it unless they were in the right state and they still might get covered under other provisions in the bill. And, no, 55+ still votes Democratic as well (and saving Medicare is a nice message for them).  

[ Parent ]
Trigger (0.00 / 0)
The trigger language doesn't matter because Lieberman will have it removed, anyway.  Ezra Klein even suspects the trigger was put in just so Joe can remove it.

Any chance this could go Dutch? (4.00 / 1)
An attempt at the Sisyphean task of staying positive: is there any chance that the US could end up with something approximating the new (post-2006) Dutch system? The key points of the Dutch system are:

1) Mandated private insurance, but with flat insurance rates for all, and strong effective regulation to keep costs reasonable.
2) Long term/extraordinary health care needs funded publicly
3) Poor people assisted by the government

It takes a bit of squinting, and the correspondence is not perfect, but I guess that:
1) The 90% rule addresses point 1
2) Expansion of medicare addresses point 2 (assuming that the proportion of people with long-term health care needs increases with age).
3) Expansion of medicaid addresses point 3.

The Dutch system works fine. I'm British and love the streamlined, stress-free simplicity of the NHS (for which both of my siblings work), but I lived for 5 years in Holland too (ok, mostly under the previous system), and have to admit that the quality of care was probably better than the UK. Since true socialized health-care for all is still far, far off in the US, the Dutch system would be a fantastic alternative.

Obviously this is a case where the details matter. As far as I can see, there's still quite a gap between the proposed US system and the Dutch system. In particular, is there any chance that effective regulation can be enacted by the US government? I certainly share some of desmoinesdem's cynicism in this regard. On the other hand, perhaps this a strategy where reconciliation can be an effective tool - where  a plethora of small details could make all the difference between something effective and something disastrous.

Dutch system (0.00 / 0)
Since true socialized health-care for all is still far, far off in the US

I'm not sure how you define this, but it seems to me that the Dutch system is essentially it.  I'm an American living in Canada, and love the Canadian system, including its "stress-free simplicity" for those of us lucky enough to have good prescription drug coverage through work.  But the Dutch system would be good enough for me.  As long as everyone is guaranteed affordable, good-quality health care, I would consider the system socialized, and therefore decent.  There's still plenty of room then to argue about the details.

[ Parent ]
clarification (4.00 / 1)
By 'socialized' I meant that in British NHS, doctors, nurses etc are all employees of the government, and insurance is provided directly by the government itself. It's only one good solution to the problem of healthcare, but one way in which I think that it really shines from the perspective of the end user is that there is very little paperwork at all. You just make an appointment, turn up at the doctors and get treated. Getting prescriptions is almost as easy. There are no plans, no figuring out what category you fall in, no choices between different premiums/co-pays etc. In fact, I think most British people don't think of themselves as 'insured' for health, in the same way that most US people don't think of themselves as 'insured' for K12 education for their children. It's just a service the government provides.

But I agree with you: the Dutch system is certainly good enough. In fact it's almost certainly too much to hope for. I'm not sure, however, whether a very rough approximation of the Dutch system would be ok or a disaster.

[ Parent ]
How does #1 ensure a flat rate ? (4.00 / 1)
Seems that subsidies can be used to flatten the rate that individuals pay, but how does the 90% requirement effect premiums?

"It sounds wrong...
     ...but its right."

[ Parent ]
you're right... (0.00 / 0)
... it doesn't. I apologize for some unclear writing. What I meant was that the 90% requirement might begin to provide 'effective regulation to keep costs reasonable' - although I'm certainly not sure how effective it would be.

Flat rates are another essential part of reform (aside from the mechanism of funding). I have lost track of whether they are included in any current plans.

[ Parent ]
what is all this talk about "opening up" Medicare? (4.00 / 3)
Medicare is single-payer. If you're eligible, you're automatically in it. That's how it controls costs--because the healthy are placed in the same risk pool as the sick, and no one gets to opt-out.

Opening Medicare to voluntary buy-in would destroy its single-payer nature and create a glut of sicker people on the government rolls.

Any real "opening up" of Medicare would simply be to lower the eligibility age and autoenroll everyone say, over 55. That's the proper way to do it. Not to turn it into a dumping ground for all the sickest patients that insurers won't take. That way lies disaster.

One word: entitlement (4.00 / 1)
Once you start expanding an entitlement, it's hard to put that genie back in the bottle. Why should anyone be paying more for private insurance just because they're under 55? Or just because they can get private insurance?

It's still hard to tell how restrictive the Medicare buy-in eligibility will be. I bet part of that is that different options were sent to CBO for scoring. Part of the CBO scoring will involve projecting what it will do to Medicare's risk pool and how much the buy-in premium will cost. What the premium will be will determine how much political pressure there will be to continue expanding Medicare.

The other thing, though, is that I bet however it's written it will be written so that the buy-in Medicare option is fully paid with premiums: there's no way the conservadems will take a compromise that gets rid of a PO paid with premiums in exchange for expanding Medicare paid with tax money. So it really shouldn't affect Medicare costs for the "traditional" over 65 age bracket. What it does is extend the negotiating leverage of Medicare to some portion of the population not traditionally eligible for Medicare.

Politically, I say expanding Medicare is a much bigger win than creating yet another public insurance bureaucracy. It's easy to explain, easy to understand, and sets a definite precedent for continued expansion to address US healthcare costs.

[ Parent ]
what you describe is not an expansion of Medicare (0.00 / 0)
it's simply a public option with Medicare rates, which we already know won't pass. The only difference is that you're using the existing Medicare bureaucracy to administer it.

Just because it's called Medicare doesn't mean it's Medicare. The Congress under Bush passed something called "Medicare Part D" which gave us the infamous donut hole. Doesn't mean that that had anything to do with Medicare, as it was originally conceived.

Medicare, as I said, is single-payer. The only real way to expand it is to lower the age of eligibility and auto-enroll everyone who becomes eligible.

My main objection is that this proposal might actually break the successful and popular single-payer system that we do have. It's not clear whether it would do that; the proposals remain infuriatingly vague. But I think it's a bad idea to mess with the one single-payer system that we do have.

[ Parent ]
messaging (0.00 / 0)
I don't care what the "correct" definition of Medicare is - if this passes, any Dem who won't forcefully campaign calling it a Medicare expansion deserves to lose. That is a messaging no-brainer.

I would be very surprised if the language of the bill doesn't require that the premium be set so that it covers the additional cost of the buy-in portion of Medicare. Assuming that is how it's worded, the single-payer core of Medicare will be completely unaffected - except for gaining a bit more negotiating leverage by increasing the number of enrollees.

A final point - Medicare is unsustainable under the current trajectory of healthcare costs. At the same time, Medicare is a huge component of the healthcare system. It's hard for me to see how the healthcare system is reformed to cut cost increases without altering what Medicare is. The trick is to get reforms that will make Medicare better in the future rather than worse. A separate PO could be used as political cover to squeeze Medicare - expanding Medicare does exactly the opposite.

[ Parent ]
the way to make Medicare more sustainable (0.00 / 0)
is to expand it to everyone.

It disproportionately services the aged and disabled, a population that is sicker than average. That it still does better than private insurance is a testimony to the horrific inefficiency of private insurers.

Expanding Medicare (real Medicare) to younger, healthier people will help share the burden between sick and healthy more equitably and make the system more sustainable. That was the intention of the creators of Medicare--that ultimately, the base of classical Medicare would be expanded and everyone, not just the elderly, would be covered by the single-payer system.

There are all sorts of other problems with health care that have nothing to do with insurers: access to pharmaceuticals and technologies, the cost of training physicians, public vs. private health care providers, etc. etc. But those are separate issues. As long as we're talking about what we can do about insurance, single-payer is probably the best way to go.

I would be very surprised if the language of the bill doesn't require that the premium be set so that it covers the additional cost of the buy-in portion of Medicare. Assuming that is how it's worded, the single-payer core of Medicare will be completely unaffected - except for gaining a bit more negotiating leverage by increasing the number of enrollees.

You are making a huge assumption. Do you have any reason to believe that that's what will happen? Or don't you think the insurers see this as a chance to break Medicare? The insurers, with the help of the GOP, already successfully leveraged the Medicare brand to damage Medicare, by passing "Medicare Advantage" (i.e. a partial privatization of Medicare) and Part D. They will do it again if given the chance.

[ Parent ]
If it doesn't happen (0.00 / 0)
You are making a huge assumption. Do you have any reason to believe that that's what will happen?

If it doesn't happen, I'll be even happier. If the expansion isn't fully covered by the new premiums charged, that means it will have to be covered by taxes - i.e., socialization of the medical costs of those eligible.

We agree that expanding Medicare is a good thing. So why is a limited expansion bad?

We agree that Medicare is hugely more efficient than private insurance, allowing it to serve a sicker population more cheaply than private insurance. How can expanding that service help insurers to break Medicare?

Sure, Medicare can be thought of as single payer. Or it can be thought of as premium-based - you just prepay the premium as a portion of your income while you're young and able to work (or >65 and willing to work) so that you have the benefit when you're unable to work (or >65 and unwilling to work). If Medicare is expanded, somebody has to pay the premium - ideally you expand it to everyone and increase the Medicare tax to pay for it, but for an opt-in system charging individual premiums is "fairer", otherwise there will be people paying for a benefit they aren't getting.

There's something I'm not understanding in your fear about how this will destroy Medicare - I see this as strengthening Medicare while a new separate PO would instead have the potential to weaken Medicare.

[ Parent ]
you're not proposing to expand Medicare (4.00 / 1)
"Expand Medicare" means: lower the age of eligibility to, say, 55, and autoenroll everyone who is eligible regardless of whether they want in or not.

What you're proposing is just a public option under the aegis of Medicare, which people can voluntarily buy into. Or not, if they choose.

The mandatory nature of Medicare is what makes it sustainable. It means you don't get to opt out of the system if you don't want to buy health insurance. That's the only way you can provide care at a reasonable cost; everyone pays in and the risk is shared between healthy and sick.

If you don't require everyone to be in the government system, you get healthy people choosing not to buy insurance, and wealthy people buying private plans, and a disproportionate number of the sick will be buying Medicare. And then you'll get the same problems of cost you get with private insurers, which will force Medicare to deny care, just like private insurers do, or go out of business.

Medicare does not compete in the market. Medicare eliminates the market. That is how it survives.

[ Parent ]
What really gets me (4.00 / 2)
Is that back in August you wrote:

The Senate will find the votes to pass a convoluted, tortured, unworkable bill, not only with no public option but so messed up and compromised to be unworkable anyway. This is less certain than number one, but Democrats will probably find a way to pass something.

Which, despite arguments Chris is making re the positive steps (which I agree with)... that's exactly what this bill looks like from a policy perspective. Prescient, I guess.

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