Thoughts on the President's Health Insurance Reform Speech

The President can give one hell of a speech. No denying it, he's incredibly talented. The soaring oratory can sometimes crowd out the analysis, and a couple days on, distance can provide clarity.

1. The President did a good job sounding bipartisan. Now, given the current make up of the Senate and House, it's very unlikely that many, if any Republicans will sign on to whatever legislation makes it out of committee, so when I say he did a good job, I don't mean that it will actually make the bill BIPARTISAN. Like Ezra Klein has said, there is a new era of bipartisanship, one in which bipartisanship is mostly about posturing, and that's because the audience isn't in the Congress, it's the public. To maintain a winning coalition you must satisfy the need of the 'independents' for bipartisanship. That's hard considering the Republican caucus has decided that obstruction is their best political opportunity at present (and that's likely because all the 'accomidationists' lost to Democrats in the 2006 and 2008 election cycles). Sounding bipartisan is being bipartisan, and the President did a good job sounding bipartisan.

2. Still wondering why the public option isn't just, hey, anyone can buy into Medicare. People who have Medicare like it, a lot. So much so that they have convinced themselves that 'government' has nothing to do with it. Sure, you'd be called a 'socialist' but that's what you're called anyway. I've been trying to figure out if it would have made this process harder or easier, and I have no idea.

3. Why $900 Billion? Senator Baucus seemed to arbitrarily choose this to make his 'Gang of Six' work. That seems to have worked itself out as well as it could (it makes the President at least sound bipartisan, which, for the moment is all bipartisan can mean), so why stick to it. It was arbitrary in the first place. I mean that's what 'moderates' seem to be all about, arbitrarily cutting the price by 10%. Why does it matter if a DEFICIT NEUTRAL program is $1 trillion or $900 billion? Isn't what matters the effectiveness of the program?

4. The President offered up a concession to Republicans in the form a pilot program on tort reform limits. Limiting damages in law suits does not reduce health-care costs. Texas, not surprisingly, instituted the harshest limits in the US some years ago (2003 or 2004) and they are still leading the nation in health-care costs. There is no evidence that tort reform reduces health care costs.

5. I am curious about what kind of savings there would be through simply introducing a universal mandate and a highly regulated exchange system. Even instituting price controls, like defined benefit packages at a defined cost, maybe even a non-profit base level health insurance system supplemented by a for-profit additional benefit system (I think this is, more or less, how the Swiss do it). Could this bend the curve at all? Would it depend on how many people sign up for a basic plan (I imagine many would)? Of course, this would only affect 30 million folks who will enter the exchanges, the rest of us have our employer's purchasing power to use as leverage to lower insurance premiums.

More later...

Best Take-down of the Year?

Definitely the best post of the week, Kevin Drum takes down Mr. David 'strange amnesia' Brooks.

Do-Over??? or Redo???

So the Republicans are calling for obstruction and a re-start on health insurance reform. I also heard Moynihan acolyte Larry O'Donnell on Left, Right and Center warn Democrats against a Dems-only approach to reform (I assume he means reconciliation), saying that the late Senator Kennedy advised Clinton to do a Dems-only bill and we all know how that ended. Side point: why do Republicans get do go with reconciliation (see Medicare post) but not Democrats?

These calls for a do-over/re-start and threats to obstruct and delay are part of a long-standing strategy by the GOP to kill health insurance reform and to re-animate their own political future, and according to the polls it might be working. We're seeing slipping numbers for Democrats up and down the ticket for 2010. And, I'm guessing Republicans are walking with a spring-in-their-collective-step hoping to turn 2010 into a 1994 redo.

Truth is no one sees 2010 getting as bloody for Dems as 1994 (when they lost 54 seats), however, many a prognosticator has gleaned an upcoming route by Republicans from their chicken bones and tarot cards. Republicans have found their rallying cry, and you can hear the bellowing begin.

What is important to remember is that in 1994 you had low turnout (as you might expect from a mid-term election), but an energized right (fighting the illegitimate Clinton Administration) and a scared geriatric crowd (Hillarycare and all that) voted in large numbers while a demoralized Left/Center-Left stayed home, depressed by President Clinton's NAFTA policy and his failure to reform health care. To quote a previous entry...

First, let's get one thing straight, 1994 was not a revolution. The midterm elections saw a paltry 38.8% nationwide turnout, and the Republicans only received 19% of the eligible vote. The number of Dems voting declined across much of the nation, while Republican turnout increased. The nation saw a 21% drop in the reported participation rates of those with incomes of $15,000 and lower, while there was a 33% increase in the share of the vote cast by those whose incomes were $50,000 and over. African Americans turnout saw a decline of 2 percentage points and turnout among young people declined to 14.5% of eligible voters. And men only slightly increased their share of the electorate (disproving the "angry white guy" myth). The 54 seat pickup for Republicans in the House and 8 seat pickup in the Senate has been seen as the culmination of a decades long realignment in the states of the old Confederacy. Even as Democrats had a significant registration advantage (37.8% to 22.4%) the region had been voting for Republican Presidential candidates since Nixon. This "realignment" has often been cast as a revolt at the base of the Democratic Party because of the "race issue," i.e. the Democratic support of the 1964 Civil Rights Act and the 1965 Voting Rights Act which essentially destroyed much of the legal infrastructure of Jim Crow. This "southern strategy" mythology has been widely discredited, in fact there was little or no significant shift at the bottom rungs of the socio-economic ladder from support for the Dems to the GOP. Once again, the myth of the disaffected, poor, angry white man was true in anecdote only. The real "realignment" happened much further up the economic ladder. Which makes it not much of a realignment since Americans with upper incomes typically vote Republican. The depressed turnout among Democratic loyalists (the poor, the young, and black folks) accounts for the 1994 turnout.

That said, there is a lesson to be learned here, but it's not what David Brooks or Sen. Mitch McConnell says it is, the real danger is not in promoting a government take over of health care, the real danger is in NOT PASSING REAL REFORM. The right is energized, grandma and grandpa are scared, this was always going to happen. The Right, as Kevin Drum wrote today, authorized a 'scorched earth counterattack to Obama's entire agenda.' They lied. And, as the Wire reminds us, the bigger the lie the more they believe it. The real test for President Obama is whether he'll be able to stand up and energize the Left by actually passing reform, and whether he can win back Independents by not giving in to the craziness of either side and pass reform that doesn't smell of ideology or capitulation. He won't have much help from the grassroots. The grassroots has had a hard time getting energized, because the President has been so far removed from the process, because the process is complicated (five bills, each of which is hundreds of pages) and because we have a mainstream media that reports process and conflict, not substance and nuance (see the WaPo Ombudsman's column from this Sunday) resulting in a population that just doesn't understand the legislation. In retrospect, The grassroots should have been energized for a single payer option by the unions and MoveOn.org, which would have created a pressure from the Left that would have made the 'public option' the sensible compromise that it is, and not the baby in the bathwater for the Left.

The point is, the Right doesn't want a do-over they want a redo, a redo of 1994. If all those Democratic Congressmen want to win, they need to pass health insurance reform. Energize the Left for once. It's time to dance with the one that brought you and pass reform. Do it like you mean it, Mr. President, and maybe the Left won't stay home in 2010. And show some leadership by standing firm to both sides and maybe some of those independents will remember what they liked about you in the first place.

Scaling back

So a lot of folks are talking about breaking the health-insurance bills in half and passing them as parts, and now, with the death of Senator Kennedy, folks are discussing a scaled down bill and promoting a gradual move to universal coverage and cost-cutting.

Part of it is trust. Do you really trust that a scaled down bill will ever be 'scaled up'? Do you think that we'll ever gradually increase the coverage of the uninsured? Maybe some of this is about the victory of the Right in destroying our faith and trust in government, their reactionary extremism has polarized this nation and undermined even a base-level belief in the efficacy of government.

Part of it is that these reforms must happen together to create a winning coalition. The 'individual mandate' means a boon for insurance companies. To get progressives to agree to the mandate you have to truly reform the private sector insurance market. These must happen together. They must also include an employer mandate to keep employers from dropping millions of employees into the private insurance market, and to pay for the increased cost in covering everyone. These reforms are tied up together to create a reform package that actually accomplishes reform.

The Other Side

So, here is a link to The Agenda's argument against the public option. It's probably the most concisely argued view from the other side that I've read.

Basically what Salam is arguing is that there are three paths...

* Public Plan with Medicare Payment Rates. This path includes a public health insurance plan that pays providers at Medicare rates and is offered alongside private plans within a national health insurance exchange.
* Public Plan with Intermediate Payment Rates. This path includes a public insurance plan that pays providers at rates set midway between current Medicare and private plan rates and is offered alongside private plans in a national health insurance exchange—and subject to the same market rules as they are.
* Private Plans. This path does not include a public plan option; it includes only private plans offered to employers and individuals through a national health insurance exchange.

All three offer savings. Over ten years they save, respectively, $3B, $2B, and $1B.

If one or two happens then providers (doctors, hospitals, etc.) will engage in cost-shifting, where they make up for the lack of cash from the public option by charging more money to the private insurers. This will lead to higher co-pays, deductibles, etc. and will lead to a single-payer system, and that's just bad (doesn't say why, but medical innovation and wait times will probably top the list).

Salam does end on a slightly anemic note, but does say that we can save money by creating more efficient provider networks. Which is true. Places like Mayo and Cleveland have a much more efficient system, and that's partly because they don't engage in fee-for-service pricing. Which is why the reform package pushes for 'bundling' payments!

'Depressing in its innanity'

Krugman gets the tone just write...

'The debate over the public option has, as I said, been depressing in its inanity. Opponents of the option — not just Republicans, but Democrats like Senator Kent Conrad and Senator Ben Nelson — have offered no coherent arguments against it.'

And that's a great point. There haven't been any coherent arguments against the public option, just that it's politically unfeasible, and that it might be popular and successful.

He also makes a subsequent point about financial regulation...

There’s a lot to be said about the financial disaster of the last two years, but the short version is simple: politicians in the thrall of Reaganite ideology dismantled the New Deal regulations that had prevented banking crises for half a century, believing that financial markets could take care of themselves. The effect was to make the financial system vulnerable to a 1930s-style crisis — and the crisis came....

Efforts to strengthen bank regulation appear to be losing steam, as opponents of reform declare that more regulation would lead to less financial innovation — this just months after the wonders of innovation brought our financial system to the edge of collapse, a collapse that was averted only with huge infusions of taxpayer funds.

Krugman suggests that it's the money talking on both health-insurance and financial reforms...

Part of the answer is that there’s a lot of money behind them. “It is difficult to get a man to understand something,” said Upton Sinclair, “when his salary” — or, I would add, his campaign contributions — “depend upon his not understanding it.”

Where is the 'I feel your pain' moment???

President Obama has recently been called our 'economist-in-chief' (by Ezra Klein) and our 'professor-in-chief' (by Paul Krugman). When one of our biggest health-care policy wonks and a professor of economics describe you in such terms you know you have a problem.

President Obama can describe the problem and analyze the different options and forces influencing the process, but can he make you feel the moral imperative of health-care reform? He should be able to, theoretically. His mother died of cancer while trying to negotiate her way into coverage.

I know that feeling. The same thing happened to my mother. It can be too hard to talk about. It's a matter of compartmentalization. It's how we survive with great loss. Don't know if that means much. It's not gonna help pass health-care reform, not unless he can use his experience to make us feel that moral imperative.

What exactly are they opposing???

Matt Yglesias and Ezra Klein both make excellent points today. First, Matt Yglesias argues that Sen. Baucus is primarily to blame for the slow pace of progress on health reform...

There’s a reason, after all, why the President wanted the process to be much further along at this point. And I think a big part of that reason is that it’d be much easier to get people engaged and mobilized if there was a thing “the health care bill” that people were supposed to be getting engaged and mobilized about. By contrast, those most full of passionate intensity on the other side are basically prepared to oppose reform sight unseen. But without knowing much about what the content of “reform” is or who it is who’s backing “reform” it’s hard to know what to say about it. At the moment, progressives are simultaneously trying to impact the shape of “reform” (reasonable public option, reasonably generous subsidies and minimum benefits packages) while also trying to push for “reform” to win out against the opponents of “reform.” If the various congressional leaders ever work out what “reform” is, then no matter how disappointed folks may be with some aspects of it, I’m pretty sure just about everyone will find themselves pushing for it.

But by dragging out the process of defining what the proposal is this long, congress in general—but mostly Baucus in particular—have guaranteed a sort of asymmetrical summer.

Ezra Klein shows that according to a Wall Street Journal/NBC News poll the specifics of the health reform are generally popular while the administration's plan isn't. Pretty normal considering that poll after poll shows that progressive policies are often very popular with the public, while the names of those policies (welfare, universal health-care, even single-payer) are not. The right cannot play the game fairly, so they turn to demonizing, lying, and just plain shouting to win.

But what both posts reminded me of, is that there isn't A BILL TO OPPOSE. The fascistic tea-bagging, fear-mongering hooligans who are shouting down elected representatives are opposing what exactly? There isn't a bill to oppose. Which is bad precisely because the big unknown feeds into that old paranoid style of American politics. What they are opposing isn't health reform, cause they don't know a thing about it. So, what are they opposing?

Liberals always claim that folks are opposing the 'changes' happening. The decline of our social connectedness, the rapid growth of minority populations, increasing social equality, the decline of the stable two-parent family, global competition for jobs, the rise of foreign powers, the decline of the industrial state, the rise of the consumer-service oriented economy, stagnating wages, etc. Liberals argue these 'game changers' are pushing people toward xenophobic paranoia, religious revivalism, and political/religious extremism. So, a liberal would argue, that many of these oh so angry and paranoid folks are really opposing these changes when they talk of immigration, health reform, taxes, welfare, etc. Which might explain why the states that are 'suffering' the most at the hands of these changes are the politically conservative communities where racism, xenophobia, religious revivalism, and reactionary politics thrives.

I wonder what a conservative would say? Maybe that 'the people' (never trust anyone who uses the phrase 'the people') love free markets and hate government. Or, maybe that's too simplistic. Maybe I should watch Fox News and report back. It seems like most of the conservative talking points on the blogosphere are just fabrications and prevarications.

Good Ideas in Health-Care Reform

Some of the best ideas in the debate:

1. Loan forgiveness for primary care physicians. We need 'em, there aren't enough of them, and they aren't paid very much, especially in comparison with specialists. Pushing more MD students into primary care will have an effect on all of our health-care experiences. In addition, Medicare and Medicaid (which supplies 40% of all the health-care dollars spent in the US) could increase their payments. Some proposals suggest 5-10%.

2. F*CK the Blue Dogs. One of the 'concessions' demanded by the Chien de Azure was to force the public option to negotiate without the purchasing power of Medicare, thus giving lie to their purported goal of cutting costs. Now, they say that it's unfair to force private insurers to compete with an insurance plan that gets to negotiate with the power of Medicare. That's kind of true. It's also true that it's unfair for Americans to think they have insurance only to face rescission at the hands of some faceless corporate cost-saving algorithm or, what's worse, a cubicle-dwelling person who has to live with the knowledge that their job is to look for ways to dis-insure their fellow human beings.

3. The Employer Mandate. Gotta have one, without it you'll have (by some estimates) 40 million Americans losing their insurance to enter the exchange system where they'll have to buy their own insurance individually, which is incredibly inefficient. Where the line gets drawn is important. Small businesses will have to be excluded or brought in gradually to make it politically palatable. Those that don't offer coverage will be taxed, which will help subsidize the cost of the government covering them in the public plan.

4. Get rid of Medicare Advantage. So, President Bush thought it would be a good idea to subsidize private insurers offering Medicare, only problem, they aren't as efficient as Medicare. So, Bush decided to simply pay more for it, 13% more. That's just dumb.

5. Keep the Public Option! So, the idea behind the public option is that it will offer insurance plans that benefit from lower overhead costs (money isn't spent to subsidize huge bureaucracies to decide who not to cover and there isn't any profit) and the possibility of access to the purchasing power of Medicare.

6. Tax the high-end 'gold-platted' insurance policies. The revenue can help fund the costs associated with covering more people (many through the Public Option). Besides, these policies help promote over-treatment.

7. End rescission based on 'pre-existing conditions'. One extremely important regulation, so important, along with the public option, will likely mean that the health-insurance industry succeeds in pushing and individual mandate.

8. End the fee-for-service system. The worst part of the system could arguably be the fee-for-service, it promotes over-treatment and waste. There are various ideas out there. Doctors could work in teams and get lump-sum payments, this is how the Mayo and Cleveland Clinics works.

9. Expand Medicare from 65 to 55. No one is seriously talking about it, but it's the best non-idea out there. It's politically impossible (akin to arguing for Medicare-for-all), so that's that. Ezra Klein describes here.

10. Robust health-care exchange. Ezra Klein calls it the most important part of health-care reform. In fact, I'll let him take it from here.

11. Disclose the value of employer health-care plans, it's a form of compensation after all.

And, finally...

Paying for it all...

1. Carbon Tax. For the dreamer in all of us.

2. Super-wealth surcharge tax. Why should people who make $25 million a year pay the same rate as someone who makes $250,000? Half of $25 million is still $12.5 million, that's enough, seriously. Besides, using the wealth of the uber-wealthy to make INVESTMENTS is what we are all about (Americans I mean, not socialists--well, us too).

3. Tax the gold-plated health plans. It might discourage over-treatment, and besides it's a form of compensation.

4. Close the loop-holes, all of 'em. I heard that Goldman Sachs paid less than one percent of their revenue in taxes, I mean, come on! At least pretend this shit is fair!