Posts Tagged ‘Congressional Budget Office (CBO)’

The Insider: Wishful Thinking

Wednesday, January 19th, 2011

Wishful Thinking Part One: The Vanishing Voter Mandate for Repeal
After a pause to remember those who were killed or wounded in Tucson, Congress is set to resume work this week, and the first order of business is a House vote to repeal the Affordable Care Act (read Community Catalyst’s statement opposing repeal here). As they move to take up repeal, the House leadership claims a popular mandate for repeal. A closer look at public opinion reveals that this “mandate” is nothing more than a figment of their imagination.

Unfortunately, polling questions that lack nuance will yield misleading results. Simple questions about repeal tend to track overall numbers for oppose/support. For example, a recent Gallup poll reported 46 percent supporting repeal and 40 percent opposing. These numbers fail to capture the significant percentage of the population who say they are opposed because they don’t believe the new law goes far enough.

When pollsters make the effort to dig deeper into public attitudes it turns out that repeal is much less popular. According to a recent ABC News poll, only about 15 percent of the population actually supports total repeal. Similarly, a recent Marist poll, while finding a larger percentage (30 percent) favoring total repeal, found that more people support expanding the law even further (35 percent).

If lawmakers were really listening to their constituents, they would give the ACA a chance to work rather than wasting time with a symbolic vote meant as a sop to the far right.

Wishful Thinking Part Two: Public Opinion-based Budgeting
Aside from claiming a mandate that doesn’t exist, Congressional Republicans have taken the radical step of replacing the CBO with the “Congressional Polling Office,” or CPO. Instead of relying on independent fiscal analysts to evaluate whether the ACA saves money, Republicans will determine whether the legislation raises or lowers the deficit based on what people believe. Other important economic effects, such as the effect of the ACA on job creation, will also be determined by public opinion rather than analysis. Using CPO estimates instead of those pesky numbers from the CBO, which show that repeal will increase the deficit by $230 billion over the next ten years, spares the new majority the embarrassment of having to disregard their own newly enacted rules that require legislation that raises the deficit to be “paid for.”

Cost Containment: There’s a right way and a wrong way
The recent report on national health care spending issued by the CMS Office of the Actuary highlights the importance of not disconnecting efforts to contain health care costs from the mission of revamping the health care system. The report shows growth of health care spending slowed during the 2009 recession. The biggest reason was that fewer people had health insurance. Reducing the number of people who have insurance saves money, but does it the wrong way: by undermining the goals of health insurance, which are to protect people against the cost of illness and facilitate their access to care.

The ACA, in contrast, tackles the problem of cost containment in the right way. Initially, it expands coverage without increasing costs. Over the longer run, it reduces health care spending by improving quality and efficiency.

While we’re on the subject of the right and wrong ways to reduce costs, it bears repeating that the wrong way to reduce federal health care spending is to decouple it from efforts to reduce the rate of growth of health care overall and instead substitute arbitrary spending caps. This was an idea that was advanced in the Rivlin-Dominici report on deficit reduction. We can expect efforts to revive the idea in the context of the upcoming debate over lifting the debt ceiling. It is important not to lose sight of this debate because, while many activists are gearing up for a fight to protect Social Security, it is health care (Medicare, Medicaid and the ACA affordability credits) that pose a greater long-term challenge to the federal budget and are at greater risk of being undermined.

Caution: Mad Scientists at Work
States are called the laboratories of democracy, but sometimes those labs can give birth to bad ideas as well as good ones. Two bad ideas being promoted at the state level are a call to eliminate the ACA ban on reducing Medicaid eligibility (known as the “Maintenance of Effort” requirement or MoE) and legislation being introduced in several states to criminalize implementation of the ACA.

Eliminating the MoE is a “wrong way to contain costs” idea a number of Republican Governors are embracing. It would lead to further reductions in the number of people with health insurance and increase cost-shifting onto the private sector. At the same time, it would fail to do anything to improve the way our health care system operates. Also, if states go backward on eligibility now, they will face increased implementation costs in 2014, making implementation more difficult.

Criminalizing the ACA
A number of legislators have filed legislation making it a crime to enforce the provisions of the ACA . See, for example, this proposal from Maine. (While such legislation, were it to pass, would likely be found unconstitutional, its purpose, like many other state nullification efforts, is not to make policy but to rally the opposition.) An effective response requires supporters to engage on the issue of what we want our health care system to look like on our own terms. Check out Community Catalyst’s list of the top 10 things activists can do in 2011 to keep the pressure on for quality affordable health care.

– Michael Miller, Policy Director

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A Health Advocate’s Guide to the Debate on Deficit and Debt Reduction

Monday, December 13th, 2010

Recently, a blizzard of deficit and federal debt reduction plans has emerged from across the political spectrum. Many of them—especially those coming from the center/right—propose major changes in the benefits and/or financing of Medicare and Medicaid in the name of getting the nation’s “fiscal house in order” and restoring economic growth.

For different reasons and in different contexts, these public insurance programs already have been getting some rough treatment in public debate.

For Medicare, the recent context has included continuing debate over cost containment provisions in the Affordable Care Act—a debate that includes allegations of death panels, rationing, and the forcing of seniors onto “government-controlled” health care. (Note: It doesn’t have to make sense; it’s just a sound bite.)

For Medicaid, the challenge has rested mainly at the state level. Cash-strapped states have struggled to keep up with increased demand for Medicaid amidst falling revenue streams and other realities arising from the recession. Many states have filed suits to block the ACA-mandated expansion of Medicaid eligibility. Some have gone so far as to threaten withdrawal from the Medicaid program.

However, as a new political alignment prepares to take the reins in Washington, new federal level threats are aimed against Medicare and Medicaid, which form the foundation of our nation’s health care safety net, particularly for older adults, people with disabilities and children. The deliberations of the official Deficit Reduction Commission (DRC) appointed by President Obama, along with related policy proposals, such as the one released by the Bipartisan Policy Center (an organization financed by Peter G. Peterson – a long-term proponent of reduced federal spending on entitlement programs), bring these threats into focus.

Putting the Deficit Debate into Context
As Henry Aaron of the Brookings Institution observed in the New York Times, the various official and unofficial “commission” reports aim at three distinct problems: the short-term increase in the national debt, a projected shortfall in Social Security funds, and a projected long-term rise in the national debt. Let’s look at the short- and long-term issues in turn.

It’s the economy, stupid (and the wars and the Bush tax cuts)
Most economists agree that the current short-term increase in public debt is attributable almost entirely to the wars in Afghanistan and Iraq, the Bush tax cuts (mainly benefiting the wealthy) and the recession. Also, lingering effects of the recession, not health spending or the debt, pose the most immediate and serious threat to our health security and general well-being. Persistent high unemployment rates reduce the proportion of people who have employer-sponsored health insurance, and also reduce the revenue to fund Medicare, Medicaid and Social Security while driving Medicaid enrollment up. With enhanced federal support for Medicaid slated to expire in June even while states face continued significant revenue shortfalls, pressures on Medicaid will be greater than ever.

Meanwhile, the actions and words of President Obama’s financial advisors make it clear that they do not regard the possibility of a “double dip” recession as being out of the question, especially without additional fiscal stimulus. By spurring job growth, additional stimulus would support the economic recovery and restore growth, creating the conditions necessary to bring down the short-term debt. Reducing unnecessary military spending and restoring more progressivity to the tax code also would help. However, the type of stimulus that would include additional federal funds for state Medicaid programs appears to be off the table.

Medicare and Medicaid in the crosshairs
Finally, and most significantly for health care advocates, the various commission reports all addressed the issue of long-term projected increases in Medicare and Medicaid spending. The CBO has projected that the growth of federal debt long-term is attributable almost entirely to the growth of health care spending, particularly Medicare and Medicaid. Based on this, various debt-buster report recommendations to reduce health care spending in Medicare and Medicaid vary from the benign (increasing funds for fiscal oversight, reducing fraud and payment errors, and collecting the Medicaid drug rebate for all dual-eligibles) to the alarming (increasing Medicare cost-sharing, setting a global cap on federal health spending equal to GDP growth plus one percent, turning Medicare into a voucher program, and eliminating the federal commitment to matching state Medicaid spending on no less than a dollar for dollar basis).

Beware of GIGO (Garbage In Garbage Out)
Before entertaining any drastic action to cut Medicare and Medicaid, policymakers should subject the assumptions underlying the Deficit Reduction Commission and similar reports to careful scrutiny. First, although you would never know it from any of these reports, there is actually very little evidence to support any particular debt-to-GNP ratio as a target that we must adhere to or risk financial disaster. (See this and this for discussions that call into question the basic premises of the deficit commission. An opposing view is here.)

Policymakers also should closely examine underlying assumptions in the CBO forecast. Projections of explosive debt growth are very sensitive, both to assumptions and to policy change. (See, for example, the difference between the 2009 and 2010 CBO forecasts.) James Galbraith and others have pointed out that the CBO baseline assumes an unlikely combination of circumstances that includes low inflation (except in health care) and, notwithstanding that low inflation rate, significantly higher interest rates. CBO also assumes that there are no long-term cost savings effects from the ACA. While it may be prudent not to assume a continuing cost-containment effect from the ACA, it also would be prudent to give the law a chance to work before performing radical surgery on the core of our health care safety net.

Finally, neither the assumed need for debt reduction nor the use of arbitrary caps to reduce the percentage of our economy devoted to Medicare and Medicaid are helpful lenses through which to consider the question of health care cost containment. On the one hand, reduction of the debt is taken as a primary good, with benefits assumed but not demonstrated. On the other hand, discussion of the impact of proposed cuts on health programs serving older adults and others served by Medicare and Medicaid is nowhere in evidence. It is impossible to judge the reasonableness of proffered recommendations without looking at their costs, as well as any alleged benefits.

A few facts are important to keep in mind:

– Medicare already offers coverage benefits that are less generous than those typically available through employer-sponsored insurance.
– Older adults already devote a substantial share of their income to health care –well above what younger groups spend.
– Medicaid beneficiaries are both the poorest and sickest members of society. A retrenchment in Medicaid is therefore likely to create substantial hardship both for the low-income frail seniors and younger adults and children with chronic illnesses and disabilities on whom most Medicaid dollars are spent.
– The same proposals that envision reducing the value of Medicare also envision reducing Social Security benefits, creating a double whammy for all who do not participate fully in the labor force because of old age, disability or other categorical dependency.

The cost of public programs providing health coverage and services is tied to the overall growth in health care costs. Focusing only on public spending in this equation obscures this link and leads toward draconian solutions that harm vulnerable populations rather than smarter, more system-wide approaches. Arbitrary cuts in public spending for health care would be a cure worse than the disease. What we need is not an arbitrary cap on health spending, but long-term integrated approaches to reducing the rate of growth in health care costs that also improve quality and value. The Affordable Care Act plants the seeds of such a program. More could be done, but that will require less demagoguery and ideological rigidity than was on display during the debate on passage.

Is the threat real?
For now, the debt reduction juggernaut may be temporarily stalled. Even Congress might blush before recommending major cuts to popular programs immediately after voting to increase the deficit by $900 billion, as they are now considering doing. But it is not dead. When the debate turns again to debt reduction, it is critically important for advocates of quality affordable health care for all to block a stampede caused by debt-phobia that would undermine health security for millions of Americans.

– Michael Miller, Policy Director

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Big-time savings on Rx drugs: Is the end of pay-for-delay settlements in sight?

Tuesday, August 17th, 2010

A significant vote by the Senate Appropriations Committee last week has focused renewed attention on vital cost-saving reforms on prescription drugs that failed to make it into health reform. At issue is the drug industry practice of paying off generic competitors of expensive brand-name drugs to delay access to low-cost generics. Community Catalyst has opposed this practice through our advocacy and with consumer class action lawsuits through our Prescription Access Litigation project.

How serious are these multi-million dollar sweetheart deals that prevent consumer and health system savings? The Federal Trade Commission, the federal government’s consumer protection watchdog, reported in January that these agreements delay the entry of generic drugs into the market by an average of 17 months. Given that generic entry can reduce the price of branded drugs by up to 90 percent, the FTC estimates conservatively that the cost of these delays is at least $3.5 billion in lost savings per year.

Through these pay for delay deals, the brand-named drug manufacturer gets to continue to be the exclusive seller of the drug and the generic manufacturer makes money for not bringing a generic (non-patented) version of the drug to market. It is then left to consumers and the government to pay the price for the high drug costs that result from these agreements.

21 new pay-for-delay deals in 2010 may cost consumers and the health care system $9 billion

The FTC warned in recent Congressional testimony that pay-for-delay agreements are becoming more common and have reached the point of being “almost an epidemic” (see graph). Deals rose from only three in 2005 to 19 last year and 21 in the first nine months of 2010. This dramatic increase followed court decisions since 2005 by a few appellate courts that, according to FTC, “misapplied the antitrust law” to uphold these agreements as not anticompetitive.

PFDchart

Federal Trade Commission

The FTC’s preliminary analysis of the 21 agreements filed this fiscal year concludes that they cost $9 billion in lost savings. Past pay-for-delay agreements to date are estimated by FTC to cost all public and private purchasers at least $20 billion — an estimate that may rise given the current spike in agreements. FTC estimates that these settlements cost consumers and our health system at least $3.5 billion a year, while other experts suggest that the potential total savings could be closer to $12 billion a year if pay-for-delay settlements were ended.

The federal government — and health reform sustainability — would benefit greatly from banning these agreements. The Congressional Budget Office estimated the savings to the federal government alone of around $2.6 billion over the next ten years.

Legislative History

A bill to ban these agreements was included in the House’s health care reform proposal last fall. Unfortunately, though a similar measure was supported by the White House and considered by the Senate, the procedural and jurisdictional rules in the Senate kept the measure from being included in the national health reform bill enacted last March.

House leaders were undeterred by this set-back and added language banning these deals to an appropriations bill approved on July 1st. Unfortunately, the Senate went on to strike this provision from an appropriations bill they subsequently approved. But two weeks ago, the bill’s longtime advocate, Senator Herb Kohl (D-WI), along with Senator Richard Durbin, succeeded in including this provision as an amendment to the Senate’s Financial Services and General Government Appropriations Act.

On July 29th, an effort by pharma to strip this provision was narrowly defeated in the Senate Appropriations Committee. Senator Arlen Specter (D-PA) had introduced an amendment to strip the provision from the Committee bill, and when four other Democrats voted with Specter, the Associated Press reported that:

“Drug company lobbyists in the audience thought they had the vote won, provided they could win over every panel Republican. But Sen. Richard Shelby, R-Ala., voted against the drug companies, helping give Kohl and Durbin [the author of the Appropriations Bill] a surprise win.”

The successful Senate Committee vote signaled to FTC Chairman Leibowitz that “the tide may be turning,” and that “consumers are one step closer to saving billions on their prescription drugs.”   The bill’s Senate sponsor, Senator Kohl, pointed out why this decision can’t come soon enough:

“The cost of brand-named drugs rose nearly 10 percent last year. In contrast, the cost of generic drugs fell by nearly 10 percent. At this time of spiraling health care costs, we cannot turn a blind eye to these anticompetitive backroom deals that deny consumers access to affordable generic drugs.”

This recent vote is a crucial step. The potential savings to both consumers and the government is substantial and is particularly important in these turbulent financial times. A New York Times editorial this week emphasized that these potential savings “would reduce the federal deficit by $2.6 billion over the next decade, freeing up money for worthy programs that would otherwise be cut.”

Why should we allow these agreements to continue to the financial benefit of only a small subset of the U.S. population when the savings that would result from banning these agreements could benefit a far greater number of individuals? It is about time for the pay-for-delay settlement to meet its long-awaited demise.

The final vote in Congress on the Appropriations bill will likely come sometime after the election. It will take vigilance and aggressive action by supporters to combat PhRMA’s tactics again — just last week they released a new report disputing the FTC analysis. But in Pharmalot, an FTC representative states: “The pharmaceutical industry can fund as many studies as it wants, but it can’t change the facts — these pay-for-delay deals cost consumers $3.5 billion a year.”

– Emily Cutrell, legal intern
– Wells Wilkinson, Director of Prescription Access Litigation project

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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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The dam breaks, PLUS the votes are in! The Insider’s Naughty and Nice pol(e)

Monday, December 21st, 2009

By reaching a compromise with Sen. Ben Nelson (D-NE) (we’ll talk about how below), Senate Majority Leader Harry Reid has cleared the last major obstacle to historic passage of health reform in the U.S. Senate.

If all goes according to plan, the Senate will vote for passage of the Patient Protection and Affordable Care Act (PPACA) on Christmas Eve, putting the United States on the verge of enacting a major historic overhaul of health care financing and delivery and setting the stage of an intense round of negotiations between the House and the Senate over the shape of a final package.  (We’ll focus on those House-Senate negotiations next week).  The expected schedule of votes is as follows:

•    Monday 1 AM: add the “Manager’s amendment” to the underlying PPACA proposal (passed 60-40). See Community Catalyst’s reaction to the vote here.
•    Tuesday 7 AM: replace the underlying “shell bill” with the PPACA (60 votes needed)
•    Wednesday 1 PM: agree to stop talking and take a final vote (60 votes needed)
•    Thursday 7 PM: Vote on final passage (51 votes needed)

The Manager’s Amendment

The Manager’s Amendment includes a number of other improvements to the underlying bill including stronger accountability and transparency provisions for health insurers, a new approach to national plans overseen by the Office of Personnel Management (the same office that oversees the Federal Employee Health Benefits Plan) stronger cost containment provisions and improved coverage for children.  Click here for CC summary of the key changes.

An agreement was also struck with physicians to do a two month patch on Medicare physician payment rates (as an amendment to the Defense appropriations bill) that would otherwise be cut Jan. 1 with the understanding that after the recess Congress would come back and work on a longer term solution.

The key to locking down the 60th vote for heath reform in the Senate was finding language that would be acceptable to both anti-choice Sen. Ben Nelson and pro-choice Senators represented by Senators Boxer and Murray. (Sen. Casey from Pennsylvania was the other main party to the negotiation).  The main elements of the proposed abortion compromise include giving states the right to determine whether abortion coverage will be available in their state exchanges, strict segregation of federal funds, and additional support for adoption and for pregnant teens.

The agreement was struck despite the opposition of virtually all outside advocacy groups on both sides of the abortion debate.  Setting the stage for conflict down the road, both Congressman Stupak (who authored the abortion restriction in the House) and Congresswoman DeGette (who leads the House pro-choice caucus) have voiced concerns about the Senate language.

Naughty and Niceelf-list
The results of the Insider’s holiday naughty and nice poll are in.

In the naughty category, Sen. Joe Lieberman of Connecticut won by a landslide, easily eclipsing interest group leaders and other political figures. While Lieberman was not unique in his opposition to the inclusion of a public insurance option as part of reform, he angered proponents with his inability to articulate any consistent or fact-based basis for his opposition and perhaps equally for his flip-flop on a proposed Medicare buy-in that was advanced as a possible compromise.  Historically, Lieberman has been a supporter of the Medicare buy-in and appeared unable to give a coherent reason for his last-minute switch.  There was a late surge for Sen. Ben Nelson, but there’s no doubt who Insider readers regard as health reform Public Enemy Number One.

In the nice category, the winner was Hill staffers.  The vote reflects the experience of Insider readers who are mostly health reform advocates and activists.  While Senators and Congressmen get the headlines, a small group of Congressional staffers have worked countless hours to make reform happen.  They are truly the unsung heroes of health reform, and the Insider is happy to give them a shout out for their incredible dedication.

The other leader in the nice category was the late Senator Kennedy.  Though illness and untimely death kept him from exerting as much leadership in the debate as we’d come to expect from him over the years, Insider readers agreed that Kennedy remained the guiding spirit throughout the debate.  Final passage of reform will be an enduring monument to his tireless work over the decades to secure health security for all.

Jon Stewart also polled strongly in the nice category.  There have been many times when we desperately needed laughter at the inanity of the debate, and Stewart has probably done more than anyone else to highlight the frequent absurdities. (His panel discussion on death panels—should they be public or private and available to all or only through the exchange—is one of my personal favorites).  The Insider editor also gives an honorable mention in the nice category to Ezra Klein and Jonathan Cohn, two journalists whose blog coverage of the debate has been consistently excellent.  Hope Hanukah Harry was good to you guys.

The Great “Is it Worth it?” Debate or Two Cheers for Health Reform

A Health Reform Quiz:

Is the PPACA
a)    a great bill
b)    a terrible bill that is little more than a giveaway to private insurers
c)    a terrible bill that is a government takeover of the health care system that will explode the federal debt
d)    a flawed bill that nonetheless does a lot of good and must be passed

Depending on which health care “team” you play for, you’re likely to pick your answer from a-c. Senate Democratic leaders and their loyal supporters among some advocacy groups pick “a” (some of them really think the answer is “d” but aren’t allowed to say so), disappointed activists on the left pick “b”, and the (mostly Republican) opposition and certain special interest groups pick “c”.   But the truth—as best as I can determine it and as honestly as I can answer the question—is “d.”

Why isn’t the right answer “a”?  First and foremost, although the Senate bill does a lot to make coverage and care more affordable, it doesn’t do enough.  A person can drown in six feet of water or 60, and many low- and moderate-income families will still find the premiums and cost-sharing requirements in the Senate bill to be a significant financial burden that could limit their ability to access health care or threaten their ability to afford other necessities. Legislation passed in the House does a much better job of making coverage and care affordable for those most likely to need help.  And while there are many improvements in insurance oversight, there are still some troubling loopholes that could undermine the effectiveness of the new insurance exchanges as a tool for driving down costs and holding insurers accountable.

Finally, due to their inability to agree on adequate financing, the Senate bill takes too leisurely approach to reducing the number of uninsured.  It’s worth noting that when Medicare passed in 1965, benefits started the next year.  When Massachusetts enacted their groundbreaking reform in 2006, a major expansion of coverage was underway within six months.  In the Senate bill, it takes four years for the major coverage provisions to kick in.

Both Senate Finance Committee Chair Max Baucus and Senate Majority Leader Harry Reid have spoken eloquently about the toll of preventable death, not to mention the financial damage and anxiety caused by our current system.  Yet these problems will continue essentially unchecked for four long years because Senators could not agree on a more robust financing package.  In fairness, some of the responsibility for this slow motion reform must also be laid on the President’s doorstep—a result of his mysterious insistence that the “cost” of reform not exceed $900 billion over 10 years even if fully or more than fully offset with new revenue and savings. Keeping under the $900 billion threshold is part of the reason why it takes reform so long to get going.

Certain corners of  the left claim that the bill is nothing more than a giveaway to insurers or that that the proposed excise tax on high cost health insurance plans is unfair. The first criticism is an exaggeration triggered largely by the disappointment around the public plan. While removal of the public plan is a real loss, basing support for reform on this single issue ignores the substantial good the bill would do (see below). The second criticism also has some merit, but the objection should not be enough to scuttle the bill. Though there’s every reason to think that there are better ways to control health care costs than taxing benefits as an incentive for people to have less comprehensive coverage, the reform proposal is hands down fairer than the status quo, even including the benefit tax.

What about the criticism from the right?  For the most part, it has no more reality to it than the death panels of summer did.

Health care is complicated, health reform is complicated and forecasting the future is far from an exact science.  So it’s possible the Congressional Budget Office (CBO) made mistakes in assessing the impact of the bill on the federal deficit, but it is just as likely that they have underestimated as overestimated the effect.  Despite its limitations, the CBO is the best umpire we have available.  Critics who were all too happy to cite earlier CBO analyses that supported their case look hypocritical now as they reject CBO findings that show that the Senate bill will substantially reduce the federal deficit over time.

And if prohibiting insurers from rejecting people because they have a pre-existing condition or keeping them from ratcheting up premiums to force people who file claims to drop coverage, or creating some transparency and accountability in the industry constitutes a government takeover, then bring it on, I say.  Defense of the status quo is unconscionable.

Why pass reform despite its flaws?  First, as I’ve said, because the bill is simply no where near as bad as its critics on the left and right would have it.  It is imperfect but it does a lot of good, such as elimination of pre-existing condition exclusions, a prohibition on charging people more based on gender or occupation, limits on how much more they can be charged based on age and much more. Here’s our short list of the good stuff.

Not only that, but there will be time and opportunity, as well as the necessity, to correct flaws as we go along.  Consider Medicare Part D.  The program as passed was considered with substantial justification, to be a giveaway to the insurers and drug industry.  It is also overly confusing and inefficient.  Nonetheless it provides important help accessing prescription drugs for millions of Medicare beneficiaries.  Moreover, substantial improvements in the program are being contemplated now as part of reform, and there is no reason to suppose that additional improvements to PPACA cannot be made in the future.  So has it been with Medicare and Medicaid, and so will it be with PPACA.

Like we wrote last week, every victory is partial and impermanent. It must be both defended constantly and built upon.  If the history of health reform teaches us anything, it’s that while incremental progress is possible often, the chances for big change are rare, and we should take them.   If we wait for the perfect, we will wait forever.

Those who want to provide health security for all but who counsel starting over not only undervalue the improvements that reform will make, but also underestimate the difficulty of starting over and the damage that would be done to millions of people in the meantime.  As a rallying cry, “Pass this legislation despite its flaws” may not be that inspiring, but it fits the imperfect world we live in, and captures the imperative before us.

Let’s get this bill passed and then get to work making it better.

–Michael Miller, director of strategic policy

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