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And now, the moment you’ve all been waiting for

Tuesday, March 9th, 2010

For months, various parties have been calling on the President to clarify exactly what he was for and, following the loss of a 60-vote majority in the Senate, how he thought that could be accomplished. Starting with the run-up to the Feb. 25 summit, President Obama did just that, laying out a package of amendments to the Patient Protection and Affordable Care Act passed by the Senate and calling last Wednesday for an up-or-down vote on health care within the next few weeks.

The President’s proposal would improve on the Senate bill by toughening oversight of the insurance industry, improving benefits and affordability provisions and closing the Medicare part D doughnut hole. He also added several Republican ideas from the summit such as new proposals to reduce payment errors in Medicare and Medicaid.

In a surprise to many, the RNC called on Groucho Marx to deliver their response.

OK, just kidding. What was striking about the real response from Congressional Republicans was the way they resorted to invective. Away from the Blair House setting—where they could be directly challenged for “having their own facts”—they reverted to much harsher language than they used in the largely civil exchange during the summit. “Job-killing“(Independent analysts say health reform will promote job growth), “budget-busting” (the CBO says that reform will reduce the budget deficit by about $100 billion over 10 years and by $1 trillion over 20 years) “government takeover” (people get a choice of private insurance plans) were some of the greatest hits from the last week in sound bytes. Oh, and of course the ubiquitous “jam” that Jon Stewart spoofed last week (video at 2:20).

Despite the fact that the Senate bill that is remarkably similar to the one that Republican moderates were advancing in the 1990s, today’s Republicans have made it clear (through this RNC fundraising presentation, among other things ) that polarization and fear-mongering are central to their campaign strategy. No wonder no bipartisan health care compromise has been possible.

This fact-resistant extremism could be a factor that helps clear the way for final passage. Another other is a series of highly visible double-digit premium increases that are being proposed across the country, especially in the non-group market. The lack of any insurer accountability has been a stark and timely reminder of the need for change.

Here to there: the New new timetable
Deadlines have come and gone more than once while the health reform debate has dragged on. We now have another schedule for action, albeit a tentative one. The administration is hoping to have a reform vote in the House by March 18, just 11 days from now, and hopes that Senate action will begin prior to the spring Congressional recess, which starts March 29.

The first vote is the hardest
Although the challenges of using budget reconciliation have drawn the most attention from commentators, the hardest step in the process from here on out is the first vote in the House. Although subsequent action will address many of the problems House members have with the Senate bill, the path forward requires the House to vote first for the Senate bill as-is and then vote to fix it—something that many House members have expressed reluctance to do.

Abortion contortion
Probably the House leadership’s biggest stumbling block to assembling a majority is dealing with the abortion issue. In the initial debate in the House, Democrats who opposed choice were joined by Republicans to put in very restrictive language, authored by Congressman Bart Stupak, that many feel will eliminate abortion coverage within the Exchange and may undermine private coverage for abortions in employer-based plans.

According to an analysis by Faith in Public Life,  the language in the Senate already precludes federal funding of abortion.

However, Congressman Stupak has argued that the Senate language is not strong enough, and has declared his intention to vote against the Senate bill, claiming that about 10 other Democrats will join him. Given the very narrow margin of victory in the House, every Democrat beyond Stupak who switches from yes to no because they don’t like the Senate abortion language (or for any other reason) must be offset by switching the vote of someone who voted no the first time to yes the second time.

Facts not worth a hill of beans?
Although it seems his vote is pretty fact-resistant, it appears that Congressman Stupak is misreading the Senate language.2352670827_dc9563c0c3_m

The Senate bill, as best as I can tell, does not allow federal funding of abortions—despite Rep. Stupak’s insistence that it does. And we don’t have to take either Speaker Pelosi’s or the pro-choice community’s word for it. If the Senate allowed federal funding of abortion, then presumably the matter could be addressed in an amendment that would pass through budget reconciliation—an amendment Rep. Stupak would undoubtedly bring.

But there is no such amendment on the table. Why? Because amendments through budget reconciliation must impact the budget, and there is no budgetary implication in the difference between the Nelson and Stupak abortion language. Although there is no public document available, this appears to be the view of CBO.

Remember: the CBO is neither pro nor anti-choice in this debate. They are simply the bean counters. And if they say there are no beans on the table to count that should count for something–if not to Congressman Stupak, then at least to other Congress members who oppose abortion rights as a matter of conscience or religious conviction.

Smooth sailing?
Once a bill does clear the House, the road to reform becomes smoother (not quite seat-belt sign off, but smoother). Although Republicans have threatened to delay the vote in the Senate by filing endless amendments and launching parliamentary challenges, this is as much a psychological game as anything else.

Senate Republicans are trying convince some members on the House side not to take that first vote, playing on the fears of House members who worry that the improvements they’ve agreed to won’t happen and the House will be stuck with the unamended Senate bill. But once the House does vote, the dynamics change. Then the choice is no longer health reform, yes or no, it is health reform as passed by the Senate or health reform with the proposed amendments.

By opposing the amendments to improve the Senate bill, Senate Republicans risk exposing themselves as flip-floppers, voting for policies they previously opposed (such as the special Medicaid funding for Nebraska, and the special excise tax provisions that apply to union-negotiated health benefits) in an attempt to score political points. [I talked about this here last week.]

–Michael Miller, director of strategic policy

photo credit: base10 on flickr

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Insider Update: Summing up the Summit

Friday, February 26th, 2010

After seven hours of debate, parties agree to disagree on whether they are close to agreement

As expected, no new consensus emerged yesterday from the seven plus hours of debate between top Congressional Democrats and Republicans and the President about what was wrong with the nation’s health care system and how to fix it. Despite the Democratic mantra that “we’re not that far apart,” what did emerge was greater clarity about exactly where the differences lie and why they cannot be bridged.

First, there is a fundamental difference between the parties on the issue of how to address problems in the health insurance industry. The proposal being advanced by President Obama and Congressional Democrats contains a strong program of insurance reform including:

  1. Eliminating pre-existing condition exclusions
  2. Setting minimum standards for coverage
  3. Requiring insurers to spend at least 80% of the premium dollars they collect on health benefits
  4. Prohibiting insurers from charging people more because they are sick (or because they are female) and limiting variation based on age
  5. Increasing the ability of state and federal regulators to block excessive and unjustified rate increases

In stark contrast, the proposals advanced by Congressional Republicans would give insurers increased ability to create pools of healthier enrollees, which would lower costs for some but would result in higher premiums for people who are older or sicker.

Anyone? Anyone?

The second major difference is on coverage. According to the Congressional Budget Office, the president’s plan would reduce the number of uninsured by more than 30 million people while the ideas offered by Republicans would insure only around three million (Community Catalyst’s latest paper explores these issues). The President might as well have been the teacher in “Ferris Bueller’s Day Off” given the deafening silence that followed when he asked if there was any way the Republicans could see themselves moving beyond the minimal coverage expansion in their plan.

At the close of the summit, President Obama offered to continue the dialog with Republicans but with the precondition that they rethink their position on these two key issues. House and Senate Republican leaders were quick to decline the invitation, leaving only one path to real reform: Democrats in Congress have to come together to pass a bill by majority vote; the sooner the better.

Moving Right Along

Over the next few days House and Senate leaders will need to consult with their members and with each other to lay out the parliamentary path forward. This “inside baseball” will have to get worked out by the House and Senate leadership and the White House. What matters most is not the sequence, but the outcome.

Keep fighting the good fight

Advocates need to continue to make the case for comprehensive reform. You can help by signing this online petition that is being sponsored by the American Cancer Society/ Cancer Action Network, Community Catalyst, and many other national organizations:
www.healthcarepetition.org/10707_communitycatalyst

-Michael Miller, director of strategic policy

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Smokeout at Blair House (but will they serve BBQ?)

Tuesday, February 16th, 2010

841489012_4d7efe9230_mMore Summit Surprises
After surprising the political establishment by announcing a bipartisan health reform summit, the Obama administration continued to shape the debate with another surprise announcement late last week: In the summit invite, the administration announced it will  bring its own legislation to the table addressing four key topics—ending insurance company abuses, extending coverage to millions of uninsured Americans, controlling skyrocketing premiums and out-of-pocket costs and reducing the deficit.

Over the weekend many observers suggested that this indicates either that the House and Senate have reached agreement on a compromise measure, or that the administration is hoping to give them a deadline for reaching an agreement.

Other sources tell us that the administration is working on its own synthesis of the House and Senate bills that Congressional leaders have not yet seen—probably based on the negotiations that were nearly completed prior to the election of Scott Brown in Massachusetts. The administration has also challenged the Republicans to share their own proposals publicly, putting the Republicans in something of a bind.

Smoking Out the Opposition
There’s an old trial lawyers’ maxim that goes, “If you have the facts on your side pound the facts, if you have the law on your side, pound the law, if you have neither on your side, pound the table.”

Republicans seem to be doing a lot of table-pounding in the run up to the summit—claiming that it is not really bipartisan, not inclusive enough, should start with a blank piece of paper, etc.  Pounding the table like this takes attention away from the uncomfortable bind in which they find themselves.

The President wants to focus the summit specifically on ideas to deal with the four problems mentioned above, but Republicans either don’t have much in the way of answers (for example, the House Republican reform package was estimated to cover only 3 million people, compared to over 30 million for the House and Senate Democratic bills) or the answers they have are ones the American people don’t like (such as reducing the deficit by turning Medicare into a voucher program as ranking budget committee member Paul Ryan has proposed ). Refusing to participate would just make them look obstructionist and give the Democrats a chance to showcase their reform plans without rebuttal (In other words, it really is a trap–just like Jon Stewart said. )

Just because you’re paranoid doesn’t mean they’re not out to get you

So to avoid having to actually reveal their position (or lack thereof)to the American people, the Rs strategy is to de-legitimize the summit as much as possible in advance. All this negativity leading up to the summit does not auger well for the chances of a bipartisan breakthrough, but in truth the political leg room has always been fairly limited. Obama is probably sincere about wanting a bipartisan deal, but the actual opportunity to get one is pretty minimal given dynamics in Congress.

On the Republican side, there is no indication of any real interest in moving away from the current strategy of blocking reform, especially since the party feels they have momentum going into the elections. If a strategy is working, why change it? Even in the Senate, where a few Republicans have expressed interest in reform in the past—e.g. Bennett, Snowe, Gregg—it’s hard to imagine anyone breaking ranks at this point. If they did, it is doubtful that anything they would agree to could clear the House, given its  antipathy to the existing Senate bill.

Although the administration has signaled a willingness to consider Republican proposals in areas such as malpractice reform, even this hint is drawing opposition for Democratic-leaning interest groups, which could make its inclusion politically problematic (Not to mention there is little reason to think it would result in substantial cost containment.)

Just because there is really very little opportunity for a new bipartisan synthesis, does not make the summit a waste of time. It gives Democrats a chance to clarify just what is really in their proposals—and why—as well as the opportunity  to disavow certain pieces that have undermined public support (e.g. the special Medicaid deal for Nebraska) and change the narrative with a public that has become increasingly conflicted about reform.

The Divided Self: In which the public disagrees with itself
In a way that earlier debate has not, the summit gives each party a chance to explicate its ideas about reform to the public, much like a presidential debate. And this is good, since the public seems muddled on the issue.

On the one hand, there is less than majority support for the legislation the House and Senate passed. On the other hand, the public continues to support most of the major components in those bills. Inasmuch as the public wants to see a bill, they say they want to see bipartisan legislation. But it’s hard to find major public support for the few Republican health reform idea floating out there, with the exception of malpractice reform.

Most of the public does not believe that major reform will pass, nor believes we can afford to fix the system now. Additionally, trust in government is nearing an historic low, and people are far more likely to list jobs and the economy as the top problem facing the country over health care.

BUT, a substantial majority wants Congress to keep trying. Gotta love group cognitive dissonance.

Further complicating the picture, the partisan divide on whether and how to fix health care is greater than on any other issue.

Democrats remain as committed as ever to health care reform, and are much more likely than Republicans or Independents to say that covering the uninsured is important. Most of the decline in support for reform has come from Republican and Independent voters. For Republicans, this means that the risk of alienating their base outweighs any potential benefits of compromising on health care. And for Democrats, there is no upside to not passing reform but a potentially large price to pay among core supporters for failure.

Given all this, Democrats have every reason to embrace—and Republicans to fear—a major effort to talk about the real issues in the reform debate.

Insurers make the case for reform (well…not intentionally)
Democrats may be looking to the summit to help reestablish a rapport with the public on health care, but meanwhile, they’ve been getting some help from an unexpected quarter. Although insurers have spent more than $20 million trying to kill reform, a spate of recent insurance industry news is helping remind the public why reform is necessary.

By far the biggest story has been a proposed 39 percent increase in non-group rates proposed by Anthem Blue Cross of California. According to the company, the reason has not been health care inflation, but an erosion of the health status of the risk pool. In a down economy, healthier people are making the choice to drop insurance, leaving a sicker pool behind.

This type of death spiral and rate shock is precisely what the health insurance reform is designed to prevent. Under immense political pressure, the company has announced a delay in the rate increase, but the damage has already been done. And while the Anthem story has grabbed the headlines, it is far from an isolated phenomenon. Many other companies are raising rates in the non-group market by double digits.

At the same time that the number of enrollees shrinks, insurers are reporting record profits (Here’s the report.) Taken together, the price shocks and enrollment declines accompanied by record profits make about as clear a case for reform as anyone could ask for.

Health reform countdown (T minus 6 weeks and counting)
By now, it’s clear that the debate on health care reform seems to be following Parkinson’s Law (work expands to fill the time available to do it). Congress seems determined to run the clock down to the last possible second.

The clearest indication of a possible timeline going forward has come from Speaker Pelosi’s office. The Speaker has consistently been pushing the need to advance reform via a two-step process that includes passing the Senate bill and adding amendments via reconciliation. Pelosi’s office has also clarified that the House would initiate a reconciliation bill, though the exact order of business after that remains unclear, and that the goal would be to complete, or nearly complete the entire process by the Easter recess. Basically, this gives Congress four weeks after the summit to wrap up work on health care reform–and advocates the same period to rally the public and Congress for reform.


–Michael Miller, director of strategic policy

photo credit: quaelin at flickr

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Health Care Surprise (but keep your eye on the prize)

Monday, February 8th, 2010

Yesterday, in a surprise move to many (though apparently not to Majority Leader Reid or Speaker Pelosi, who immediately issued statements of support) President Obama invited Congressional leaders from both parties to a televised half-day health care reform summit on February 25.

The summit appears to be a major effort by the administration to redirect the debate over reform.  With the main health reform storyline focusing on the food fight between the House and Senate over who doesn’t trust whom and who needs to Go First,  it’s no wonder Congressional leadership embraced the new direction.  A summit several weeks in the future gives them more time to work through their differences free from the daily white smoke watch.

The summit will also gives the administration an opportunity to highlight the many positive aspects of reform and to point out weaknesses and inconsistencies in Republican arguments.  (For example, how can Republicans attack health reform for reducing Medicare spending when their own proposal includes a far more draconian cut?) We saw versions of this dialogue when Obama engaged in a give and take at the Congressional Republican retreat a few weeks back.  Obama and Congressional Democrats can repudiate certain controversial provisions, such as the special Medicaid subsidy for Nebraska. The setting–live TV–directly answers the public’s concern about secret negotiations with a much more open and transparent discussion.

As was true at the Republican Congressional retreat, there is very little chance of substantive changes in position from either side.  Republicans believe they are winning the debate on health reform and so have little reason to shift gears as the election approaches.  And even if the Republicans were willing and the administration were tempted to cut a deal, it seems likely that any significant shift to the right would cost the administration more in Democrats’ support than it could ever pick up from Republicans, especially in the House.

The main downside risk is that the summit delays the timetable for enacting reform by several weeks, and possibly longer, if discussion continues beyond the initial meeting.  Getting a fix-it bill through reconciliation is not a fast or simple procedure, and budget rules make it harder as time goes on.  As the days of the Congressional session slip away and elections approach, a crowded Congressional calendar and an aversion to taking tough votes right before facing the voters will add to the difficulty of getting reform done. But with health reform failing to command majority support from the public,  who lacks understanding of the bill and has concerns about the process, what’s there to lose?

Eyes on the prize

In the midst of all the political calculations and positioning, it is more important than ever to reassert how crucial covering the uninsured, slowing the growth of health care costs, improving the quality of care and ending abusive insurance industry practices is to our nation’s health and financial well-being.

Ultimately, this is not about Democrats or Republicans.  It’s not about achieving electoral advantage.  It’s about finally tackling one of the toughest social problems that confronts our country–one whose resolution has eluded policymakers for too many years.  It’s time to get reform done.

–Michael Miller, director of strategic policy

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The Health Reform Insider

Tuesday, February 2nd, 2010

“Health reform is on life support unfortunately”—Sen. Mary Landrieu

“The lady doth protest too much, methinks”—Gertrude in Hamlet

“Reports of my demise are greatly exaggerated”—Mark Twain

A lot of ink has been spilled over repeated pronouncements of those declaring health care reform dead, or nearly so. The fact that they have to assert it over and over suggests a) that they would like it to be true and b) that it’s not.

In mulling the new Congressional math coming out of the surprising victory of Massachusetts State Senator Scott Brown in the special election to replace Ted Kennedy, it’s useful to remember that the votes of neither the conservative Senate Democrats nor the ultra-conservative House Republicans who dominate the doom and gloom set are expected or needed for final passage.

Passing the Senate-approved bill in the House alongside a reconciliation bill containing the key amendments negotiated by Congressional leaders and the Obama administration prior to the Brown election offers a clear opportunity to enact almost the same bill that would have been enacted before the election. Indeed, it’s the only opportunity to pass a comprehensive bill in the near future. There are signs that both the House and Senate leadership are pursuing this path and that the votes are there in each chamber, at least in theory.

This can be done. There is no insurmountable obstacle to moving forward and there’s a compelling case to be made, both politically and policy-wise, for doing so. After a period of uncertainty, leaders in both branches and the administration (for the most part) appear to have reached that same conclusion.

That said, there is still no guarantee of success, and there are several significant hurdles to clear before a signing ceremony.

Hurdle one: Policy and politics
The first obstacle is getting agreement on the elements that could pass as part of a reconciliation bill to accompany the Senate language. Key provisions of the agreement negotiated just before the Brown election included removing special treatment for the Nebraska Medicaid program, increasing affordability protections for low- and moderate-income families, closing the Medicare Part D “doughnut hole,” making changes to the Senate plan to impose an excise tax on high-cost health insurance and increasing federal oversight of health insurance Exchanges.

Most of these elements could be included in a reconciliation bill, though it’s unclear whether or to what extent changes in the Exchanges would pass muster, since any provision passed via reconciliation must have more than an incidental effect on the federal budget. There is also a push to reopen the negotiations to revisit yet again the excise tax on high-cost health plans and the public option.

The excise tax: Once more, with feeling
Taxing high-cost health plans has been one of the most contentious issues throughout the debate. Although some significant changes were negotiated in the Senate plan that won labor backing, many in the House are calling for that deal to be reopened and for the tax to be dropped altogether. Some fear that one of the changes, a special temporary exemption for plans negotiated through collective bargaining, will look like one more special interest deal. House members raise a number of both policy and political concerns, so here is a review of the issues at stake.

Pro
The current tax exemption of employer-sponsored health benefits provides a disproportionate benefit to the wealthiest households and nothing for the predominantly low-wage workers who lack health insurance. The excise tax, which would be levied on insurers that sell the most expensive plans, is scored by the CBO as reducing health care spending over the long run and it is one of the few sources of financing on which the Senate has been able to agree. Without that money, Congress may be forced to make reductions in the affordability protections which would, in turn, strike at the core architecture of the bill—and Community Catalyst’s top priority in national health care reform. Without adequate subsidies and cost-sharing protections, the individual mandate becomes unworkable.

Con
“Overinsurance” is not a very convincing explanation for high U.S. health spending, and the tax will give insurers and employers an incentive to reduce the cost of the plans they offer. There are a number of ways to do this. Insurers could work to improve care delivery or they could reduce provider payments, but the path of least resistance is likely to be to skinny down coverage. This is exactly the opposite of what the American people want to happen.

People are looking for lower cost-sharing, not higher, regardless of whether health economists argue the tax will reduce aggregate spending—a goal that does not mean much to the average person. The excise tax not only consistently polls badly, but is also strongly opposed by organized labor which provides a disproportionate share of voters and dollars for Democratic candidates.

Further complicating the issue is that the policy itself is not well-drafted and, in the face of opposition, the response until recently had been simply to make the tax smaller rather than to make it better. The tax, as drafted by the Senate, did not adequately address the fact that plans may be high-cost—not because they have unusually rich benefits, but because of the age, gender, health status, occupation or geography of enrollees. The most recent changes have attempted to address some (but not all) of these problems.

Public option
Some progressives, both in and out of Congress, are calling for the return of the public option. They point out that since a reconciliation bill only needs 51 votes, the objections of conservative Senate Democrats who helped to toss the public option overboard is less important. Polling also shows that the American people still support the public option (though it is not the most important issue to them).

There are two problems with this argument. The first, as discussed below, is that working out an acceptable public option takes time, which is in short supply if we are going to get health care reform done.

The second problem lies more with the supposedly more liberal House than with the Senate. House leaders are still in search of 218 votes. While Speaker Pelosi has said the votes are there, there is still work to do. Several House members who provided the margin for victory the first time around are expected to vote no because of the Senate bill’s abortion provisions. Getting to 218 therefore means flipping first-round no votes to yes among Blue Dogs and other conservative Democrats—the same House Democrats who have been least supportive of the public option.

Hurdle two: “No, please, after you,” aka the trust deficit
The cooperation among committees of jurisdiction in the House and the Senate and commitment of all the key players to move forward this past year represents a stark difference from the reform attempt in the 1990s. But a problem has emerged that didn’t come up last time because a bill never got this far: The lack of trust between the branches. The adage, attributed to former House Democratic Speaker Sam Rayburn, that “the Republicans are our opponents, but the Senate is our enemy” captures the spirit of the current atmosphere, and this lack of trust and cooperation between the branches is one of the biggest obstacles to moving forward.

The House is afraid that if they pass the Senate bill first, the Senate won’t take up and pass the agreed on amendments through reconciliation. They want the Senate to move first, which greatly complicates the process because of the rules that govern the reconciliation process. For its part, the Senate thinks the House is making unreasonable demands in order to make the Senate look bad and blameworthy if health care reform doesn’t pass. These issues can be worked out, but it will take time, which brings us to the final hurdle….

Hurdle three: Time is not on our side
With popular support for health care reform below 50 percent—even if that’s based on a lack of understanding of what is actually in the bill—Democrats are eager to shift their focus. Top on their list is job creation and banking regulation.

But while a short breather might be helpful in nailing down the details of path and content for health care reform, time is running out. The closer it gets to the election, the harder it will be for some members of Congress to take what many consider to be a tough vote. And for various reasons, the parliamentary path that health care has to travel now becomes more difficult the longer we wait.

The bottom line is that a comprehensive bill still has a good shot at passage, but the opportunity is time-limited. We all have to make a strong all-out push in the next few weeks.

As the Super Bowl approaches, we go to the football analogy file. We’re just a few yards from the goal line, but it’s late in the fourth quarter. We just used our last time out and the game clock is ticking. Let’s carry it across.

–Michael Miller, director of strategic policy

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Insider Baseball: The Curse of the Bambino?

Monday, January 25th, 2010

In Massachusetts, baseball and politics are both blood sports. On Tuesday, as the election results came in on who would fill the seat of the late Senator Kennedy, Red Sox fans who are also health reformers got that old unpleasant feeling they had back to 1986 when the ball went through the legs of Sox first baseman Bill Buckner to give the New York Mets a victory in Game 6 and, ultimately, the World Series.

The latest twist in the health reform saga is so improbable that if you submitted the plotline of to-date as a work of fiction, it would be dismissed as too unbelievable.

After the passage of groundbreaking health care reform legislation in Massachusetts helps spark a renewed drive for national reform, the Senator who championed the cause of health care for all throughout is career is struck with terminal cancer. He is temporarily replaced by a friend and former staffer, who gives the Senate Democrats a crucial 60th vote to advance reform, while a longer-term replacement is selected in a special election –a process pursuant to a law that was passed in 2004 to prevent a then-Republican governor from appointing a Republican to replace the other Senator from Massachusetts, who was then running for President.  Starting to sound familiar? But, then, a virtually unknown Republican state senator (who voted for Massachusetts reform) triumphs in the special election process created to safeguard the seat for Democrats, giving Republicans a 41st vote in the Senate and potentially undermining passage of the very reform his predecessor fought for.

Really, you can’t make stuff like this up.

The question now is whether the upset victory of State Senator Scott Brown over Massachusetts Attorney General Martha Coakley (whose name has become, in some quarters, as unpronounceable as Lord Voldemort) will cause health reform to go the way of the 1986 Red Sox, or the 2004 team, with reformers playing the band of rag-tag Sox that saw an 0-3 record as just four wins short of the Pennant. (And were right.)

Were we there yet?
To understand what the Brown election does and doesn’t mean for the chances of passing health reform, it is useful to pause to assess where the political process stood on the eve of Tuesday’s election.

Last week, House and Senate leaders and the Obama administration had nearly concluded negotiations over merging the two chambers’ bills. Although not all the details of that agreement are available, most observers believe that in addition to a publicly reported compromise on the tax-treatment of health benefits, the proposal would also close the Medicare Part D prescription drug “doughnut hole,” improve premium and cost-sharing subsidies for low- and moderate-income people, provide stricter federal oversight of insurance Exchanges, and alter the special Medicaid deal given to the state of Nebraska.

The content of this deal had not yet been presented to members of either chamber and one issue that remained problematic was the language prohibiting federal funding from being used to pay for abortions. Anywhere from 3 to 15 House members who had voted yes on the original House bill were expected to vote no on the House-Senate merger because they did not accept the Senate language on segregating federal funds. This meant that the House leadership needed to turn as many as a dozen votes that had been no the first time into yes on the final bill.

What the election meant (and didn’t mean)
Many pundits and politicians are spinning the Massachusetts election as a referendum on national health care reform, but that greatly oversimplifies what is a complex and not-at-all clear correlation. While it is true that Scott Brown won and that a majority of Massachusetts voters have a negative view of national reform, it does not follow that Brown won because of health care reform.

First, health care reform closely in line with the federal bills is already up and running in Massachusetts, so the benefits of passing federal reform were less clear to Massachusetts voters. Indeed, Sen. Brown voted for health reform in Massachusetts in 2006 and did not repudiate his support during the election. Why would he?: Mass health reform enjoys public approval of more than 70 percent.

Instead, he attacked the taxes and health spending cuts that finance federal reform, asking why Massachusetts voters should pay more taxes to finance the cost of covering health insurance for people in other states. Brown ignored, and Coakley failed to make the case,  that national reform would actually help Massachusetts (a case I made to Jon Cohn at The Treatment last week.)

To listen to the talking heads, you’d think voters picked Brown as an anti-health-reform message. But, in fact, the opposite is true: Polls show that the majority of Massachusetts voters who care about health care cast their ballot for Attorney General Coakley.

Obstacle course
Although the legislative path must be altered, the Brown victory does not prevent Congress from concluding its work along the lines that were negotiated by leadership just prior to election.  Instead of the House amending the Senate bill and sending it back for concurrence, the House can simply pass the Senate bill as is and then send over a package of amendments that can be incorporated via budget reconciliation, a process that requires only a simple majority in the Senate, rather than 60 votes.

That being the case, why have so many—including some prominent House progressives—suggested that the Brown election heralds the death of comprehensive health reform?

The short answer is: the elections’ psychological impact. The Democrats, having recently lost two governorships and with a number of prominent lawmakers facing uncertain electoral prospects in 2010 and now losing what was expected to be an easy race for them, are spooked. To get over the finish line, House leaders must reassure nervous members of their caucus, hold defections to a minimum and still move as many as a dozen members from the No to the Yes column. At the same time, the House and Senate need to finalize agreement on a package of reforms that can meet the technical requirements of a budget reconciliation bill.

Reversing the Curse
While all of this is difficult, it is by no means impossible. And failing to pass major reform legislation (as Five Thirty-Eight and The Treatment have pointed out) is unlikely to improve the electoral prospects of Democrats. Failure also means the continuation of the status quo in health care, with rising premiums forcing more people to go without care or lose coverage entirely, higher rates of medical debt and personal bankruptcy, unchecked increases in federal health spending and an eroding base of paying customers for doctors, hospitals and drug makers (not to mention health insurers who nonetheless continue to oppose reform).

In fact, the only way to blunt political attacks on health care is to actually pass and implement the best possible reform so that voters can see for themselves that the attacks on the bill are baseless and begin to recognize the benefits.

In addition, the alternatives that have been floated—passing an entire bill through budget reconciliation or starting over in negotiation with Republicans—are, as ideas go, also rans for two reasons: Both are time-consuming propositions at a moment when most members are anxious to move on to other issues, and they offer no certainty of either substantive or political success.  With this in mind, a strong grassroots movement to shore up support for reform has helped to stem the initial post-election panic that seemed to first take hold.

While it’s too early to say for certain that the House and Senate will be able to conclude their negotiations with a package that will win the support of 218 House members, it is far too early to count reform out.  Remember, “the curse” was ultimately reversed.

–Michael Miller, director of strategic policy


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All eyes on Massachusetts

Tuesday, January 19th, 2010

1107806152_4182248e16_mIn what could be a strange and cruel irony, today’s special election to fill the late Senator Kennedy’s seat may deal a damaging blow to the prospects of passing a the bill that would culminate Kennedy’s life’s work in the Senate.  A surging Republican State Senator Scott Brown has pulled even (or in some polls slightly ahead) of state Attorney General Martha Coakley.  Brown would provide the 41st vote against reform and prevent an amended bill from being taken up in the Senate.

Procedurally, a Brown victory gives Congressional leaders several options to get across the finish line: Pass the Senate bill without amendment in the House, get a compromise done before Brown is seated, or go back and do a new bill via budget reconciliation.  Each of these paths is possible, but has some pitfalls.

In the first scenario: It’s unclear that the House can drum up 218 votes for the Senate bill, with possible defections coming from both the right and left of the Democratic caucus. (more on House vote count below). A  variation on this theme that could be more palatable to House members would be to pass both the Senate bill and a reconciliation package amending that bill at almost the same time.  The reconciliation package would reflect many of the agreements currently being negotiated between the House and the Senate (though some could potentially be beyond the scope of what is permissible through the reconciliation process).

Assuming they can conclude a deal and get a CBO score in time, passing a House-Senate compromise would be possible, but rushing the bill through ahead of Brown’s seating could be politically controversial.  Will Senators such as Nelson, Lieberman and Lincoln, who have been hardest to win over to supporting reform, remain supportive if Brown wins?  A variation on this theme might termed the ‘Franken scenario.’ If the race ends in a photo finish, a recount and possible subsequent legal action could take weeks or even months, giving Congress more than enough time to complete its work.

The least likely scenario appears to be starting over with reconciliation. This would require a substantial rewrite of the bill, taking time that Congress is eager to devote to other issues.

Counting noses in the House

With all roads to victory requiring another vote in the House, securing 218 votes in that chamber has become a critical task for House leadership and the White House, and should be the number one priority for grassroots supporters of reform.

When the House passed its version of reform in August, the victory margin was a mere three votes. Now, with one vacant Democratic seat and one Republican who is unlikely to provide the margin of victory, passage in the House requires persuading all of the anti-abortion Democrats to vote yes on a bill that contains the Nelson rather than the Stupak language on abortion, or persuading some members who voted no the first time to vote yes. This task could be made more difficult if a Brown upset in Massachusetts scares off more conservative members of the caucus—even perhaps some who voted yes the first time.

Progress on getting to Yes

Against an uncertain political backdrop, House and Senate negotiators appear to be making major progress on reaching agreement on a final bill.  They struck a deal early Friday morning on the tax treatment of health benefits that would raise the threshold at which the tax kicks in, make adjustments for plans that are high cost for reasons other than the scope of benefits, and provide additional temporary protection for plans negotiated through collective bargaining.

The revised provision is projected to bring in $60 billion less revenue, a hole that negotiators are trying to fill, in part, by taking a tougher line on cost containment from health industry groups. This tactic is yielding mixed results – the biotech industry in Massachusetts, for instance, is threatening to endorse Brown for Senate if protections for it in the bill are watered down.  While making adjustments to the health insurance tax was a key priority for House negotiators as well as unions and other progressives, the lost revenue will complicate efforts to make progress on another key issue—improving the affordability provisions in the Senate bill.

Although details haven’t emerged yet, the debate over whether Exchanges should be run from Washington with a state option or from the states, with a national fallback appears to be resolving productively. Reports indicate that the bill may still give states the right of first refusal over whether to run an Exchange, but establish more clear and uniform requirements for those that do.

Still to come: How to finance the elimination of the Part D doughnut hole, and a significant dispute over the extent to which immigrants will be discriminated against in reform.  There, the two issues in play are whether states would receive federal funding for covering legal immigrants under Medicaid, and whether undocumented immigrants would be barred from the Exchange even if they pay entirely with their own money.

Most of the other big issues—such as what employers would required to contribute, and how the abortion language will be structured—are expected to more closely track the Senate bill.  Whether the individual mandate will track the stricter House version or the more porous model included in the Senate bill, should depend on whether real affordability improvements are made in the bill.  A worst-of-both-worlds resolution would be a tough mandate and significant penalties coupled with inadequate affordability protections.

–Michael Miller, director of strategic policy

photo courtesy of croatry at flickr creative commons

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Health Reform and the Education of David Stockman

Monday, January 11th, 2010

You have to be of a certain age to remember David Stockman (fame being fleeting and all).  Back in 1980, Stockman was a young conservative Congressman from Michigan, a true believer in supply side economics, who became Ronald Reagan’s first OMB Director.  Stockman thought that he could shrink the federal budget by “curtailing weak claims instead of weak clients,” a phrase he coined at the time to allay fears that he would trim the budget on the backs of the poor.

But powerful entrenched special interests repeatedly thwarted his efforts to cut down on their federal gravy train, eliminating even the appearance of balance to the cuts the Reagan administration made to on federal assistance to the poor.  “The Education of David Stockman,” a candid 1981 portrait of his efforts and growing disillusionment that ran in The Atlantic Monthly, kicked up a political firestorm and landed Stockman in the Reagan doghouse. In the end, Stockman found out it was much easier to curtail weak clients after all.

Enter health reform.  In an effort to keep the cost of reform down, keep powerful special interests at the table and unable to agree on sufficient revenue sources anyway, Congress has deferred the start of most of the coverage provisions in health reform for three to four years. Mindful that this is a weakness in the proposal, both Congress and the Obama administration have been working to identify provisions that could begin to make a difference for people in the short-run without running up the price tag of the bill.  Most of what they’ve come up with is improvements aimed at helping those who are un- or under-insured as a result of a major medical condition.  Admirable as these provisions are, they’re no answer to the tens of millions of Americans who lack coverage not because of their health status, but because they simply can’t afford the premiums.

One exception is a little remarked-on provision that would require non-profit hospitals—recipients in billions of dollars in federal tax advantages—to be more transparent in their provision of charity care and set some modest limits on what hospitals can charge the uninsured (for instance, non-profit hospitals would be banned from charging the uninsured more than they charge the insured – a common practice now).  The provision, added by the Senate Finance Committee, has been non-controversial until now, but recently the powerful American Hospital Association has launched an effort to kill it.

In polling conducted by Lake Associates in November 2008, Community Catalyst found that an overwhelming majority of the American public support requiring non-profit hospitals to provide charity care to those who can’t afford it, be held to price regulations, and to communicate transparently with their communities about their policies–all provisions included in the Senate health reform bill. These are small measures with big impact, since charity care often means the difference between getting treated or going without for uninsured people with serious illnesses and conditions. The Institute of Medicine and other researchers have found that 20,000-40,000 people die every year from lack of coverage while millions more suffer from unnecessary illness and financial distress—facts cited on the floor by Congressional leaders to support reform.

And yet, the uninsured are still standing at the back of the line when it comes to reform. These mostly low-wage American workers are the very definition of a politically weak client group, but one with a powerful moral claim.  Will what little short-term protection that remains on the table for them survive the legislative sausage-making process, or will the lessons David Stockman learned once again hold sway?

–Michael Miller, director of strategic policy

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Of Doughnuts and Dragons: The Health Reform Insider

Wednesday, January 6th, 2010

Though a series of critical votes happened in the last month, not to mention the holidays, the issues that define negotiations between the House and Senate remain largely the same (check out our list if you need a refresher). Here’s an update on a few of those, and the process ahead.

The Overall Process
Reports that the House and Senate will bypass a formal conference committee and informally negotiate a bill instead have been circulating for over a month but, in one of those mysteries of the news cycle, the plan has recently become a hot topic.

The other important process piece (though also not really news) is that the Senate bill is expected to be the starting point for negotiations, and the House will likely have to wage a limited number of battles to make changes.  Defining what that list will include is The Task for House Democratic leaders now as they seek to hold together their own fractious caucus.  One item almost certain to make the list is closing the Medicare Part D “doughnut hole.”  Indeed, Senate leaders have already stated publicly their intention to close the Part D coverage gap—though how to pay for it remains a matter of intense debate, with House members arguing that funding should come from the drug industry, and the Senate perhaps less keen to go that route (as the specter of its summer deal with PhRMA looms.)

Financing
As we reported in December (and said many times before that), in the coverage debate, financing is the key.  Most observers believe that the excise tax on high-cost health benefits in the Senate bill will be further scaled back in negotiations with the House.  A critical and related issue—probably the most important one you never hear talked about–is one we flagged just before Christmas: How the price tag of reform gets calculated.

By our reckoning (see last week’s post), the Senate bill provides only a little over $600 billion in assistance to make coverage affordable for low- and moderate-income families, while the House comes in at around $900 billion.  Those extra $300 billion in assistance translate into a year’s worth of coverage (at the front) and more financial protection to low- and moderate-income uninsured people.

So the big financing questions left are: Will the House accounting prevail? And what, if anything, replaces the money lost from the excise tax? The answers to those questions determine whether there is any possibility of doing better than the Senate on critical affordability measures or by accelerating the implementation timetable.

Exchange Exchange
It looks now like the House is going to make a major push to swap out the Senate proposal for state-based insurance Exchanges in favor of a national Exchange as in the House bill.   (States could still opt to run their own if they met federal standards.)  With that in mind, here’s a brief overview of the pros and cons of state and federal Exchanges.

A national Exchange benefits from uniformity and is likely to have lower administrative costs than 50 state Exchanges would. A national Exchange also reduces the problems that could stem from state governments being unable or unwilling to take on the new responsibilities envisioned in the Senate bill. It’s also possible that a national Exchange would have somewhat better negotiating leverage with national insurance plans, at least in small states.

But the price tag difference between a national Exchange and state Exchanges is likely less than many proponents of a national Exchange who tout a federal model’s savings believe.  The bulk of health care costs are determined by underlying local conditions, and a national Exchange will have little influence over those factors.  In addition, while it’s likely that states will vary in how well they rise to the new challenge, at least some are likely to do an excellent job.  If a future federal administration were to be hostile to health reform, the entire Exchange for the whole country could be undermined; recall that this was a problem for many executive agencies in the previous administration.

Finally, a national Exchange is no more a safeguard against the influence of the health care industry than are state Exchanges.  In fact, the geographic remoteness of Washington from most of the country poses no real obstacle to special interests seeking to influence decisions, but does limit the ability of consumers to engage directly in the decision-making process or hold decision-makers accountable.

In the end, state versus national Exchange is of less importance than are the rules under which any Exchanges must operate and the underlying structure of insurance regulation.  So for example, a bill should ensure that there is no conflict of interest in Exchange governance and that business is conducted subject to open meeting laws, as well as provide for consumer representation in Exchange governance.

It is also important not to carve insurance markets up into distinct pieces: for instance, not to split up non-group and small-group insurance, or allow separate risk pools to operate both within and outside the Exchange. The bill should also empower the Exchange to exclude insurers if it is determined that they do not meet standards for providing good value.

On many of these issues, the House does in fact do better than the Senate, as well as on matters  of insurance regulation such as limiting rate variation based on age and clearly eliminating annual and lifetime limits on coverage.

Bottom line? If the House wants to fight about Exchanges, they should focus on the issues that matter most.

Immigrant access
Discrimination against immigrants remains a problematic aspect of reform, but the Senate seemed to make progress as reports indicate that leadership agreed to eliminate the ban on federal Medicaid matching funds for immigrants who have been in the country for less than five years.

We hope that, in negotiations,  the House will match the Senate’s willingness to remove the “5-year bar,” but won’t trade this progress for legal immigrants for its rightful opposition to the Senate proposal to bar undocumented immigrants from the Exchange, even when paying entirely with their own money—a provision supported by the Obama administration.

It’s also unclear just how many states would take advantage of the new matching funds option when, by doing nothing, they can leave the entire cost of covering low-income recent immigrants to the federal government.  The only fair alternative would be to give legal immigrants equal access to Medicaid, but state-based opposition to this fix has proved insurmountable thus far.

Next Dragon in the RoadDragon
Though negotiations between the House and Senate are far from finalized, reform opponents are already gearing up for a multi-pronged attack on the legislation, including legal challenges, state constitutional amendments and ballot initiatives.

Those who argue that these challenges have little legal merit are missing a larger point.  This strategy is first a political one, and only secondarily aims to change the course of the short-run health care debate.

First, given the pace of implementation, the Presidential election of 2012 becomes pivotal.  A change of administration that year would likely cripple implementation, perhaps fatally.  Campaigns being developed now are largely geared toward building a base of activists for 2012.

Even if they are unable to unseat Obama, Republicans see health reform as a wedge issue they can use to regain control of Congress.  Failing that, by defeating some vulnerable and prominent supporters of reform, opponents hope to create a chilling effect that will dampen the willingness in Congress to pursue further reform.

What this means for reform supporters is that—far from final negotiations curtaining the show—a new act in the saga of U.S. health care reform  is about to begin.


–Michael Miller, director of strategic policy

photo courtesy  of austinevan at flickr creative commons

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$900 Billion is $900 Billion–or is it?

Monday, December 28th, 2009

In his speech on September 9th, President Obama surprised listeners by declaring that health reform would not cost more than $900 billion. The President also committed to ensuring that the reform was fully paid for and would not add to the deficit. Prior to this speech, many independent analysts estimated the cost of reform at $1.2 trillion or higher. It was not clear then, nor is it clear now, how the administration arrived at the $900 billion figure. Nonetheless, it quickly became the spending ceiling for both the House and Senate as they worked to craft legislation.

Now as passage of Senate legislation approaches, differences in how the House and Senate calculate that $900 billion loom large and could have a dramatic affect on how much financial protection a final bill provides to low- and moderate-income families. The House calculated $900 billion as the “net cost” of the coverage provisions, while the Senate calculated $900 billion as the “gross cost.” The gross cost is the total cost of Medicaid and CHIP expansions, subsidies for individuals, and small business tax credits. Subtracting revenue inherent in reform (i.e. the revenue generated by the employer and individual responsibility payments) produces the net cost.

To illustrate the difference between net and gross, imagine that you are shopping for a jacket and you have decided it cannot cost more than $100. You go to the store and see a jacket that has a price tag of $120 (gross cost). There is also an in-store coupon for $20 off. According to the Senate, you could not buy the jacket because its price exceeds your $100 limit. According to the House, you could buy the jacket because with the coupon you would not spend more than $100 (net cost).

Why does it matter?
Bringing it back to health reform, according to the Congressional Budget Office, measured on a net basis the House bill provides $891 billion in coverage expansion while the Senate bill provides only $614 billion. On a gross basis the House bill costs $1,052 billion while the Senate bill costs $871 billion. In more human terms, the House bill provides greater premium assistance, especially for low-wage workers who make up the bulk of the uninsured; better benefits for nearly everyone who is eligible for a subsidy; and starts expanding coverage a full year earlier than the Senate bill. If it is agreed that $900 billion refers to the net cost of the bill, there is plenty of room under the $900 billion ceiling to improve the affordability provisions offered in the Senate (see table). But, if $900 billion refers to the gross cost as in the Senate version, then there is very little room for additional improvements even though many in the Senate agree that improvements are needed.

Gross and Net Spending: House vs Senate

Gross Spending
(in billions)

Room for improvement under $900 billion cap

Net Spending (in billions)

Room for improvement under $900 billion cap
House

$1,052

-$152 billion

$891

$9 billion
Senate

$871

$29 billion

$614

$286 billion

Who can resolve the difference?
Only President Obama knows for sure what he meant when he laid out the number $900 billion. His endorsement of the House legislation appears to suggest that he finds the House approach acceptable, but whether that approach prevails in conference remains to be seen. Low- and moderate-income families have a lot riding on the outcome.

p.s. The Health Reform Insider is taking a much-needed break this week. We’ll be back next Monday with post-Senate passage/House-Senate merger news and analysis. Happy New Year!

- Michael Miller, director of strategic policy

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