Whaddya know, Joe?

As the weeks pass and tension in the House and Senate increase, more key players are stepping up with their stance on passing a health care reform bill.  We've heard from Senate Majority Leader Harry Reid, Speaker of the House Nancy Pelosi, Senator Max Baucus, Senator Olympia Snowe, the Blue Dog Dems and now Senator Joe Lieberman.  Of course we knew as we got closer to a bill being voted on in the House and Senate people were going to come out of the wood works and make their case known, that's what public policy is all about.  Every time an issue gets to a certain point in potentially passing, it has somewhat of a snowball effect and it really is about each and ever last vote, not just the few who drafted the bill behind closed doors.  Will that last vote be Joe Lieberman?  Will it be Olympia Snow?  We will find out.  In the meantime, there's never a dull moment as these voices do emerge.  The issue that's top of mind in both the House and the Senate is the public option, specifically how it can be written so that it will eventually pass and become federal law. 

Before we dive into those specifics, let's first refresh the parts of the bill that are likely leaning one way or the other.  First, employer mandate.  Will employers be required to provide insurance coverage plans to all employees?  Short answer; no.  Long answer; for companies employing more than 50 people that do not provide coverage and as a result employees need government subsidies to get affordable care, they will incur hefty fines - upwards of $750 per employee.  Will insurance providers face strict regulations preventing them from denying coverages to those will pre-existing conditions? Yes. Will "cadillac plans" be taxed, therefore providing incentive to companies to shop around for lower cost programs and thus resulting in more market competition?  Likely not.  All of these issues have, for the most part, been ironed out.  And now in the 11th hour, we're finally at the meat of the debate, which is that of a public option. 

In previous posts I have provided perspective on how each type of program will affect American's, but now it's time to roll up our sleeves and take a look at the different terms of the public option, as proposed and rejected by groups of constituents.  As they say, the devil is in the details.  What we're seeing from Senate Majority Leader Harry Reid (with the support of Sen. Baucus and Sen. Dodd) is a proposal for the public option to have an opt-out provision for states that wish to not participate.  He is including this in his bill that's up for vote in the Senate, and reaching out to conservative Democrats to be on board until it reaches the floor and is open to debate.  This move is a risky one, but one deemed necessary because 60 votes are needed to prevent a GOP filibuster, however once passed and on the floor, it only needs 51 votes to pass. Enter Joe Lieberman.  Our favorite Independent Democrat from Connecticut is stepping on his soap box to say that he will not be voting in favor of the public option.  However, reports say that Lieberman is in favor of getting the bill on the floor, but once open for debate he will side with Republicans to prevent the bill from passing.  Amidst increasing pressure from his caucus to vote for the bill (after nearly being booted from his party for supporting John McCain in the 2008 presidential election), Lieberman claims to "hate to" be the one that stops health reform in it's tracks, but one has to wonder if the insurance industry concentration in his home state Connecticut has something to do with it.  Lieberman also made clear that he would not support a trigger of the public option, as proposed by Senator Olympia Snow (R-Maine), as a compromise on the issue.

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While I let the mental image of Joe Lieberman filibustering resonate in your mind, let's discuss what's happening with Nancy Pelosi in the House.  Pelosi has proposed that as part of the public option, rates must be negotiated with providers in an effort to contain costs.  Her opponents in the House are of a more progressive idea and want to hold the public option to a Medicare + 5% rate.  The Medicare +5 won't likely make it into the bill, but what's most interesting about the negotiated rate is that it will cost tax payers an additional $85 billion and it is supported by Blue Dogs and other conservative Democrats whose reputation is being fiscally conservative.  Reading between the lines on the Blue Dogs who claim to really be looking out for business interests, we see that the negotiated rate means higher payments for providers (hospitals, doctors, drug companies), and less competition for insurance companies.

As I mentioned a few weeks back, President Obama has been strangely silent about his opinions on the proposed bills and has only released recent statements about the public option that leave a lot of room for discussion.  Obama has recently said that he supports the trigger plan for public option as proposed by Olympia Snow, which many believe to be because he is adamant about the bill having bipartisan support.  He worries that the proposal for the public plan with the state opt-out clause will put the bill in a position to not gain a single Republican vote, which Obama fears will lead to hesitation and eventually a vote against the final bill from conservative democrats who are weary of it being bipartisan.  Obama has warned that Sen. Reid's proposal with the public option is a risky one because if it is up for a filibuster due to not gaining 60 votes and ultimately fails, our opportunity for health reform will be lost.  That being said, Obama has said in the past that he acknowledges that the only way to fundamentally reform health care is to provide a public option and create a government run system to create competition in the market.  However, now after seeing the resistance from Republicans and making motions to appease insurance companies, Obama is being cautious and supporting the trigger.  It should also be noted that the trigger option has long been associated with White House Chief of Staff Rahm Emanuel, who is sure to play a key role in the final bill.

So now, the march goes on and we will continue to watch the events as they unfold.  Nancy Pelosi is said to reveal the latest proposal tomorrow morning, which will provide more detail on the plant to negotiate rates.  Look forward to more key players stepping up and speaking out on each proposed variation of the public option, as I'm sure Sen. Lieberman won't be the last.  In next week's post I'll address the rather large elephant in the room:  cost containment, how the current political landscape could affect the success of health reform, and how decades past prove that even the most major reforms at the time have not have long term affects on containing costs and what needs to be different this time around. 

Much Ado About Public Option

Politicians and special interest groups on all sides of the ideological spectrum are revving their engines about the importance of the public option - having it, or not.  It's a topic that's been on the board for our entire discussion and dissection of health care reform bills, but now more than ever people are starting to get more vocal, and frankly, kind of nervous, about what's likely to be put into law.  Let's me be very clear on this next point: a public option is not the back door to a single payer system, which is what many of it's proponent - liberal Dems- really want.  Furthermore, in response to it's critics - the entire Republican party sans Olympia Snowe - having a public option will not lead to a nationalized system and thus lead to the end of private insurance.  The public option is meant to increase market competition and lower the cost of insurance.  I've discussed how the insurance companies and their lobbying efforts have already had a monumental impact on the shaping of the reform bill, so today I'm going to focus on the argument of the single payer system and why the system has been brought into the public option debate. 

A Single Payer system is one that delivers near-universal public health care to all citizens in a given population.  It collects all medical fees and pays for services through a single government source.  Medicare is an example of a single payer system in the United States, except that it only serves a section of the population.  Single payer systems function in such nations as the United Kingdom and Taiwan.  With these systems, quality is at par with that of the U.S., but the costs are much lower.  The average cost of health care for an individual in the UK is $4,000 and staying steady while the average cost for an American is nearly $5,000 and growing at an alarming rate.  To provide some perspective on how wide ranging health care programs are across the globe, let's consider the case of Singapore.  They have a complex scheme of mandatory medical savings accounts compulsory savings based on income - a conservative's dream!  They also have catastrophic insurance, provided by the government on a single payer basis, paid for my taxes.  In total, their health care ranks in the top 10 in the world (with the US coming in down in the 30-range), and makes up less than 5% of their GDP.  Pretty amazing. 

What we're seeing happen in congress is that many of the bill's supporters think the only way to successfully have reform is through the single payer system, and knowing that is not a reality in the face of extreme opposition from the right, would settle for a public option and that's what they're putting their ammo into.  However, at the root the system, public option is not about coverage.  Public option  is about competition and lowering costs of insurance.  And even if a public option plan were to pass and be made into law, its not a building block for the single payer system.  President Obama has been very transparent in his intentions with health care reform:  we will tinker and tweak what we've already got, but we will not rebuild a brand new system.  All of the bills that will be debated in congress have the same fundamental elements:

• Universal guaranteed issue (no denials in coverage)
• Universal community ratings (no penalties for pre-existing conditions)
• Increased insurance company regulation
• Increased Medicaid and SCHIP (children's health care)
• Subsidies for lower income families to buy coverage
• Insurance exchange for those buying in the individual market
• Out of pocket caps - maximum you can ever pay

That being said, there is still a lot of good that will be done with these proposed changes.   For all of the attention put on the public option, the ultimate issue of cost containment and paying for the overhaul will be most important.  As I was saying in my last post, what we're getting so far is increased coverage, we haven't heard much about what plans are in place to make sure it's affordable for citizens and what will help save the government money.  The issue of taxing costly health care plans is one that's split down the middle in congress.  The intent of the tax is to pat down medical spending that over a decade would generate nearly $200 billion, which is a fourth of what the proposed legislation would cost.  The proposed tax is one of the few remaining proposals that could directly lead to a reduction in health care spending over the long term.  The tax would be imposed in 2013 on employer sponsored health care plans that exceed a certain threshold, $8,000 for individuals, $21,000 for families, regardless of whether the plans are completely paid for by employers, partially, or not at all.  The tax would be imposed on insurers and it will likely then be passed on to the customers.  The idea here is that employers, when shopping for health care for their employees, will consider these high costs and bargain hunt and attempt to avoid the tax, which will put pressure on insurance companies to provide cheaper coverage, and thus, slow the costs of medical coverage for everyone.  Critics say that employers will likely just pass the expense on to the employee as an out-of-pocket expense, raising costs for individuals and families, hitting the middle income population for which the tax is intending to protect.  Obama has embraces the idea of the tax, but it still stands to be seen if it will remain in the bill and further speak to the commitment of his party to slow the rise in medical expenses.

Before I sign off on this post, I must make mention of a key player in the issue - Olympia Snowe.  After the vote from the Senate Finance Committee for which she is a part of and voted as the sole republican in favor of the proposed bill, her name and face is likely one that you've seen on e-newspapers and magazines over the past few weeks.  While Snowe has made it clear that this bill has a long way to go and her vote for it last week does not represent a vote for it in the future, she is going to be a key figure in this legislation.  Democrats will likely spend a lot of time and energy to keep her on board, because without her, passing this bill will be very hard.  Not only may she bring along other Republicans to support the bill, she provides the bipartisan cover that is politically necessary for gaining the support of more conservative Democrats.  As more debates develop in congress we will also want to watch Rahm Emanueal, Obama's Chief of Staff, who will be taking a break from focusing on the war in Afghanistan to focus on health care deliberations.  He will be a central figure in crafting any Senate approved measure and the final bill.  Stay tuned for more next week.

It's all Politics, After All

Now that the Senate Finance Committee's Health Care Reform Bill is up for vote, all we can do is wait to find out what happens next, and do our best to wrap our head around what this all means - for the Democratic Congress, for the legitimacy of Obama's presidency, and oh yeah, health care in the United States.  I feel as though until recently I've been somewhat narrow minded when thinking about health care reform, having lofty hopes and expectations of what positive changes will come from this proposed $830 billion plan, but I'm realizing that the weight in each congressional vote is so much more than just the issue at hand, it's about politics.  Each vote cast for or against the proposed bill is just as much about the arms race for power in congress and breaking or building up the reputation and legitimacy of Obama's Administration.  Republicans are fighting this bill with their ideological reasons (against individual mandate as a violation of human rights, for example) but they are few and far between, they're focused on a larger agenda:  the undermining of Obama's presidency.   If they stop Obama from passing a health care reform bill, they are planning to use it as his Waterloo, to break him and destroy his presidency.  The Republican party is shrinking and is left with a group dominated by white male conservatives, bordering on radical, and lacking real leadership.  And as you might have noticed, the gap in leadership has opened up the arena for outrageous right-wing media personalities such as Glenn Beck.  They want their power back, and they're focusing on this health care bill to be their ticket to victory.  Obama stepped up to the plate under daunting circumstances after Bush's presidency and has charged forward with a goal in mind.   What we're seeing now as we wait for the Senate Finance Committee's bill to pass is that in an effort to make sure this bill passes at all costs, every major component of the bill is in a constant state of being watered down.  A comprehensive successful pan must include proposed solutions to the following issues - access, cost containment, and quality.  What we're likely to see pass is just the first part of this equation, access.

To satisfy constituents, Obama has made deals with nearly all of the major stakeholders involved in health care - insurance, pharma, hospitals.  The deals were made early in the summer which already set limits to how radical the reform bill could be.  Couple that with the extreme political pressure to get something (anything!) passed, and what we're left with is a watered down plan that will provide access to all citizens through and expansion of government programs, but not much more.  Though some in congress are still fighting hard for a public plan, there's a very narrow chance anything of the sort will end up on the bill.  Through tens of millions of dollars in lobbying by the insurance industry fearing that a public option will create too much competition and eventually drive them out of business, the public option idea has been essentially thrown to the wayside.  I think it's a little extreme and quite frankly ridiculous to claim to say that adding a government run plan to market competition with drive insurers out of business.  Public and private entities exist in many other industries that make up large portions of our gdp and I don't foresee the private sector going out of business any time soon.  Let's take social security for example.  Social security is the largest government program in the world and the single greatest federal expenditure, and it coexists with 401(k)'s in our open market.  The financial industry providing 401(k)'s contribute billions of dollar's to the United State's GDP, while social security provides insurance gathered from payroll taxes on worker's wages (that distributed over $500 billion in 2004),  and neither seem to be disappearing as a result of the others competition.

It's a shame that as a result of all the politics and lobbying, the public option is discounted even though it may be exactly what the country needs to be able to provide insurance coverage for the 47 million uninsured Americans.  Even with the proposed expansion of Medicaid and government subsidies, it is projected that over 10+ million people will still be left uninsured after the reform bill passes. With the individual mandate for insurance in place, and insurance prices being decided based on solidarity principle, or membership of a group with shared costs across high risk and low risk participants, Americans are given the access to health care, but without and restrictions and regulations on how costs will be contained and what quality of care you're getting.  Sure, you've got access to health care, but if you can't afford to buy insurance and there's no incentive to provide quality care, we're stuck in the mud.  I would think creating a plan for providing better quality would be at the core of reform, then figuring out how to make high quality care affordable, then lastly making the affordable high quality care scalable to all Americans would be the logical process.  Unfortunately, the political strong arming in congress and the lobbying influences can't be ignored, and the push for some sort of reform to pass to give a political win the Dems and Obama is the reason we're getting this reform bill that's short of what really needs to be in place to be sustainable and successful. There's nothing in the bill that addresses how costs will be contained to stop the steady rise of costs that we've been seeing over the last few decades.

To provide an example of how backward the plan is, there was a proposed public option "trigger," meaning after a set period of time if private insurance companies cannot meet certain success metrics for coverage (lower premiums, higher quality), a public plan would be triggered into place.  In order to placate the private insurers, this idea was suggested as an alternative to including public option in the bill right now.  Can't we determine if insurance companies aren't providing coverage based on metrics right now, at this current moment in time, rather than giving them time to "shape up"?  I think most experts would argue that there is something seriously wrong with the way coverage is provided right now, which is why reform is necessary, so giving insurance companies more time to see what changes than can muster up seems counterintuitive.  Put the public option on the reform bill now, and avoid wasting more years on a system that we already know is broken. 

At the end of the day though, it all comes back to politics.  It's nice to think that the reform proposed in the bill that eventually passes is 100% based on what's best for America in repairing health care, but unfortunately it's not the case.  Republicans are doing everything they can to break Obama.  Thinking of every other major bill that has gone through congress over the years, there have always been votes from both parties in the majority, but out of sheer political determination to undermine Obama in any way possible to show that he cannot pass a big policy bill, Republicans aren't focused on the content of the bill, they've got their eyes on a larger prize.  It means Obama will be counting on every Democratic Senator and member of Congress to vote for reform, which is why the "Blue Dog Democrats" have been put in the spotlight.  Ordinarily moderate to conservative Democrats weren't the biggest concern to earn the votes of but with the guarantee that not a single Republic will vote for the bill, they need to be able to count on every single vote available.  But like I said, all we can go is sit and wait.  Waiting for the vote can lead to head spinning discussions that lead to frustration and at times disappointment and anger, but there needs to be at least a glimmer of hope to keep us going and supporting the cause.  The fight is tougher than some have been in the past (consider how easily bail out bills from Bush  passed), it means much more than just health care reform, and I suppose we have to understand and respect that.  After all, it is all politics.

More on the topic of insurance companies... 

In case you haven't already seen this video, I recommend you checking out the link below.   It's spot on.

Will Ferrell Stands up for the Real Health Care Victims