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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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Posted in Health Reform Insider, national health reform | No Comments »

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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Posted in Health Reform Insider, national health reform | 1 Comment »

The New Nattering Nabobs of Negativity

Thursday, December 17th, 2009

So Howard Dean has joined the ranks of liberals piling on health reform and encouraging lawmakers to toss in the towel. (See Kos and Firedoglake for more reform-flogging from the left.)

Health reform does not succeed or fail by the public option, despite what Dean and others seem to suggest. This is not to say that the public option wasn’t important—at least as it was originally imagined (see Michael’s post here.) But we and others like Jonathan Cohn have pointed out the success of reform ultimately depends on strong subsidies, insurance reform and improvements in care delivery—things that are still in the bill.

Perhaps it’s because they hitched their wagons so closely to the Obama’s Technicolor campaign and the ’08 election that Dean, Kos and Co. feel such betrayal in the real-world policy give and take happening in the final stretch of health care reform.  And I’ll admit, it’s easy to see how eight years under the Bush administration could lead one to believe that everything is a black-white issue.

But that kind of thinking—a rugby-like mentality in which health reform is a game with a scoreboard—fails both the spirit of reform and the work that’s been done.  By dismissing health reform with such invective, Dean, Kos and the choir of liberals singing their tune haven fallen to the very same faulty syllogistic thinking they shun the “teabaggers” for: Giving any ground is akin to surrender and defeat, and the yield of such defeat must therefore be waste.

But it’s not.  It’s important to see how far health reform has come, within a year of an administration for whom reform was nearly always a dirty word. If, under the Bush Administration, we could have gotten any one of the things that are in the reform packages now – federal matching funds for all low-income people, say, or a ban on pre-existing conditions exclusions – the champagne would have flowed on the Left bank.  But now, the public option is out and folks are headed for the hills.

Far from the “so-called reform” Kos rolls his eyes at, the improvements this bill will make are real: Expanded coverage to hundreds of thousands of people who now go uninsured, critical insurance reforms that will protect American families from losing coverage and medical debt, subsidies to help people buy coverage who can’t afford to now, and innovations in the way the systems delivers and assesses care. Yes, it’s flawed. It doesn’t give low-wage workers help and health security fast enough, for instance. But it gets people help, and binning the whole thing and starting over leaves those people stranded.

Health care reform may have been a presidential campaign promise of Obama’s, but it wasn’t by bashing insurers that the candidates won support for health reform – it was because they were offering to help people who desperately need it.  Health care, despite what some of the news networks insist, is not a Democratic or Republican issue. It’s about helping people. It is about starting to mend a really broken system, and beginning to re-imagine how a country takes care of it’s sick and frail. To try things out and see what works. And it’s sure not a panacea. But when was it ever going to be?

All victories are partial. The Voting Rights Act was a victory by any standard, but it didn’t stop racial discrimination in the U.S. – it made way for a succession of other, smaller victories that helped turn back systemic racism. Passing Medicare was a victory – but not all at once. Coverage for the disabled, and the drug benefit, came later, and this bill continues those efforts to make the program work better. Despite the suggestions of these critics, it’s near impossible to get a project as complex and all-encompassing as reform right on the first try. But we need to make a first try, and the Congress recognizes that.

The flaws and compromises in the health reform proposals are not reason to dismiss them but to instead commit to the process of reform and the act of helping people. We should enact the best bill possible, then start working to make it better. Those bent on merely measuring the gap between Perfect Health Reform and what the Congress is working on now are selling their country short.

–Kate Petersen, Health Policy Hub

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Posted in national health reform, prescription drugs | 1 Comment »

Public Option Post-Mortem

Monday, December 14th, 2009

public optionThe Huffington Post declared the public option’s time of death as 11:12 on 12/10/09–the time of a press conference in which Nancy Pelosi signaled her willingness to entertain a bill without the provision.   If that was the technical time of death, what was the cause?

Basically, the fate of the public option has always been bound up with the rules of the Senate and the willingness of the Senate to pursue a path that did not require 60 votes.  While there are 60 votes in the Democratic caucus, several members have staked unalterable opposition to a bill that includes a government-run insurance plan—in any form.

That means that to pass a bill with a public option Democrats had to either go the route of “budget reconciliation,” which requires only a simple majority, or take the “nuclear option” and change the rules of the Senate to bypass a filibuster. (You may remember that Republicans threatened the “nuclear option” when they controlled the Senate and Democrats were blocking a number of Bush nominees to the federal court, but there’s been no real discussion of amending Senate rules to make it possible to pass health care reform.)

While reconciliation remains a technical possibility, and has all along, the clock really ran out on it during health reform’s slow walk through the Senate.  When a bill finally cleared Finance, Majority Leader Reid had, in theory, a last chance to combine the HELP and Finance bills in a way that would move via budget reconciliation.

But major technical challenges, a lengthy process, and the perceived political liabilities to doing reform with a narrower base of political support closed the door on reconciliation, and with it, any real chance that the public option would make it through the process in any recognizable form (notwithstanding the compromise version included in the bill Reid brought to the Senate floor.)

Well before a group of conservative and liberal Democrats started meeting to discuss alternatives, and a bevy of liberal bloggers began to toll its death knells, the public option had been significantly compromised from the original vision.  That vision contained two key elements: Universal availability, and Medicare-based networks, pricing and administration.

Universal availability went first, with the public option restricted to those who would purchase coverage through the exchange.  Medicare-based pricing fell in the House when many members from rural districts opposed using Medicare as basis for payment.

What survived would have had, in the short run, a modest impact on health insurance, an impact that  with potential to grow over time. Without 60 votes in the Senate or an alternative path, the question has always been more when than if it would get removed.

What’s the alternative?
With the public option out, the question remains: What will take its place?  The Senate is remaining very close-mouthed about the details of the negotiated alternative pending a CBO score later this week.

Elements of the alternative appear to include creating a national network of not-for-profit health plans overseen by the Office of Personnel Management (The same office that oversees the federal employee health plan), funding for CHIP through 2015 (instead of the current 2013), stricter regulation of private insurance, e.g. requiring 90 cents of every dollar to be spent on health benefits, and reducing the Medicare eligibility age to allow younger people to buy in, perhaps starting at age 55.  A proposal to also expand Medicaid to 150 percent FPL, as the House bill does, was discussed but rejected.

Several House progressives signaled that they would be prepared to entertain a Medicare expansion as an alternative to the public option, where the idea has long been popular.

But even before the deal has become available for public inspection it has taken fire from hospitals and doctors.  One Dem and an increasingly infamous Independent who negotiated the deal have started backing away from it, leaving its fate very much in doubt.  (Ironically, the only thing that could possibly resurrect the public option is if the conservative Democrats become too intransigent, forcing Senate leadership to reconsider budget reconciliation despite its difficulties.)

The Road, and November baseball
Little time remains to close a deal if the Senate intends, as it says, to complete their work before Santa’s circumnavigation.  Senate rules require a certain amount of time to elapse before the motion to halt debate can be acted on, so unless we see both the public option compromise and the Senate “Manager’s amendment” this week, it’s likely that the Christmas deadline will slip.  Once the Senate does act, there will be enormous pressure to seal a deal with the House, and fast.

There has been a lot of speculation this past week over whether Congress will bypass the conference committee process altogether, instead having the two chambers informally negotiate a small number of amendments that the House would pass and send back to the Senate for concurrence.  Failing that, leadership is seeking a very compressed conference process—Speaker Pelosi has said she thought they could do it in 48 hours.

While the pressure to wrap up is undeniable, the significant gulf between the House and Senate on financing, affordability, abortion, employer responsibility, and access for immigrants will make reaching a quick conclusion difficult.  (See our rundown of the issue gaps in last week’s Insider.)

President Obama wants health reform done before the State of the Union address and he may push the address into February to make that possible. Kind of like November baseball, but less hats.

–Michael Miller, director of strategic policy

photo courtesy of aflcio2008 on flickr

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Posted in Health Reform Insider, national health reform | No Comments »

Harry Reid’s Flying Circus

Monday, December 7th, 2009

Oops! Read the Public Option Post-Mortem and Dec. 14 Health Reform Insider here.

And now for something completely different, Senator McCain proclaims himself a defender of Medicare

The first week of Senate debate has seemed, at times, more like Monty Python satire than serious debate. Like when Sen. John McCain took the Senate floor to decry proposed Medicare savings in the bill. Apparently, McCain forgot his own proposal as a presidential candidate to make much deeper cuts. The Medicare debate highlights the extent to which the reform debate has become much less about health care and much more about partisan positioning. The main purpose of the McCain amendment appears to have been to afford Sen. McCain the opportunity to record a “robo-call” message casting Democratic politically vulnerable Senators as opponents of Medicare.

Perhaps as a sign of the significance Politico attaches to the floor proceedings, the Capitol Hill online news rag’s weekend health reform coverage focused more on President Obama’s meeting with the Democratic caucus and whether Sen. Baucus did something inappropriate by recommending his girlfriend for a job as a U.S. Attorney than on anything happening on the Senate floor.

Health Reform Punching Bag
It’s a good thing Democratic Majority Leader Harry Reid is a former boxer. He’s going to need everything he learned in the ring to keep health reform from becoming a giant punching bag for opponents while he works to corral 60 votes. The Republican strategy seems to be to throw everything but the kitchen sink up against health reform and hope some of it sticks.

The Democrats’ counterstrategy is to file and debate their own “message amendments” meant to shape the news coverage and allow members, especially those facing difficult reelection fights, to champion popular causes. Examples include an amendment sponsored by Sen. Michael Bennet (D-CO) to ensure that there would be no cuts to Medicare benefits (passed 100-0), and an amendment by Sen. Blanche Lincoln (D-AR) to cap the tax deductibility of pay for insurance company executives (which fell short of passage by four votes, 56-42).

About those 60 votes
We’ll see a short break from these posturing and “message amendments” today as the Senate tackles abortion, one of the two main issues that appears to be hampering its ability to lock down 60 votes for reform (the other being the public option). Senator Ben Nelson (D-NE) has said that he would not support reform legislation unless it included language restricting abortion similar to the language inserted in the House by Michigan Congressman Bart Stupak. But the Senate does not seem likely to approve an amendment that mirrors the House provision.

If Reid loses Nelson’s vote, he will need to rely on the pro-choice but anti-public option Republican Senators from Maine in order to get the 60 votes he needs. In the process, he could possibly pick up the vote of Sen. Lieberman, who has said he would support a filibuster if the public option was included in the Senate bill, but Reid risks losing support from progressives who feel that the “state opt-out” provision in the Reid bill is already too weak. A new public option proposal could emerge from negotiations between liberal supporters, conservative opponents and the White House sometime this week.

Two issues that divide the Democratic caucus but are not likely to get resolved in the Manager’s Amendment are: How far to push the drug industry for savings, and how best to structure health coverage for children.

On the drug issue, many Democrats believe that the deal Senate Finance Chair Max Baucus and the White House struck with PhRMA lets the industry off too easily. They want to wring additional savings from the drug companies and use the money to close the Medicare Part D “donut hole.” Other Democrats fear, though, that if they push the drug industry too hard, the major investment the industry has been making in supporting reform will flip to opposition and could sink the bill. Even if the Senate decides to continue the kid-glove treatment for the drug companies, they will have to wrestle with the issue again because the House takes a more aggressive approach.

The children’s issue mirrors the long-running debate on affordability in that it is not so much about principle as about cash. Both Senators Casey and Rockefeller plan to file amendments aimed at making sure that kids don’t lose benefits they have now. While the Senate supports enhancing coverage for children, the amendments have not yet been scored by CBO, and it is unclear if they are budget neutral or will require an additional revenue source.

As soon as Reid gets 60 votes worth of support on these two issues, watch for a rapid increase in the pace of Senate debate, with many of the Senate Democrats’ main concerns getting wrapped into a final Manager’s Amendment.

Assuming all goes according to plan…
The Senate will conclude their debate prior to Christmas, leaving the House, Senate and White House to work through the many differences in the respective versions. Here are the key ones to watch:

Financing
The House relies largely on progressive income taxes to finance health reform, while the Senate proposal taxes health benefits. Interestingly, this chasm may be the hardest one to bridge, though it hasn’t attracted nearly the press coverage of other tough issues.

Affordability
The House does much better for low-income people, while the Senate, at least on premiums, does better for moderate-income folks—though in general, the House provides better benefits. The obvious solution is to take the best of both worlds, but the challenge goes back to the financing debate: Where will the money come from?

Exchanges and Insurance Regulation
In most ways, the House bill establishes tighter oversight and more consumer-friendly regulation of the insurance industry, including less scope for discrimination against older subscribers, or opportunities for the back-door reintroduction of the practice of charging people more when they are sick. The House also gives the exchange more power to negotiate with insurers and exclude plans from the exchange if they do not offer good value.

Abortion
As of this writing, we don’t know the outcome of the Senate debate, but odds are against the Senate adopting the House language. The question for conferees is whether there is anything in the middle that both sides can live with.

Public Option
After the Senate gets through wrangling over the public option, members will have to take the matter up again in the House, where support for a public plan runs much deeper. A number of  progressive members of Congress are on record saying they won’t vote for a bill without a public option, and advocates are working to hold them to their word.

Employer Responsibility
The House includes a “pay or play” provision, while the Senate charges employers penalties only if their employees actually access subsidized coverage.

Undocumented immigrants
Though relatively few undocumented immigrants could actually afford to pay the full cost of an insurance policy, the Senate bill prohibits them from buying insurance through the exchange, even with their own funds. During the House debate, members of the Congressional Hispanic Caucus told Speaker Pelosi that they would not vote for a bill that contained such a restriction. If the same holds true for a conference report, the Senate may have to back down.

–Michael Miller, director of strategic policy

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Posted in Health Reform Insider, national health reform | 2 Comments »

Immigration, Choice, and the Cost Containment Condundrum

Monday, November 16th, 2009

3882780399_b1fc48da7e_mThroughout the reform debate, a constellation of key issues—financing, affordability and the inclusion and design of a public insurance option—have been key focal points of discussion.  Now, as reform inches closer to the finish line, another set of issues that have always been present but have received less attention are taking new prominence.  Reproductive rights and immigration, two issues that the Obama administration and Congressional leadership were hoping to keep off the table during the health reform debate, are now at the heart of the discussion.

Concerns that the bills as written do not do enough to “bend the cost curve” are being voiced more strongly, but aggressive cost containment action risks upsetting the fragile support for reform among health-industry stakeholders.  In other corners, advocates are raising concerns that reform does not do enough to improve coverage for children, and may actually leave some children worse off.  This issue of the Insider gives an overview of each of these difficult issues, and where the debate seems to be heading.

Choice: Getting Beyond Getting to No
As the House was taking a historic vote last week to pass a major health care overhaul, a long-simmering conflict over abortion burst into the open and now complicates further action.  In order to secure a narrow victory in the House, leadership agreed to allow a vote on the Stupak amendment, which went beyond the compromise that had previously been approved by the House Energy and Commerce Committee and the Senate Finance Committee.  The Stupak amendment, named after Rep. Bart Stupak (D-MI), precludes coverage of abortions in the public insurance plan and also in any plan sold through the Exchange that receives subsidy dollars.  After intense lobbying by the U.S. Conference of Catholic Bishops and conservative Protestant groups, the amendment passed, and though pro-choice members of the House voted against it, they were left with a choice of voting for a health reform bill with Stupak, or rejecting health reform entirely.

As we know, they voted to keep health reform legislation moving forward. But as many as 40 House members have indicated that they will not vote in favor of the legislation if the same restrictive language comes back from a House-Senate conference committee.  At the same time, Rep. Stupak has warned that tinkering with the language could result in defeat of reform in the House, and Sen. Ben Nelson has announced that he wants to see similar language in the Senate bill, which is likely to complicate Majority Leader Reid’s efforts to secure 60 votes there.

But the anti-choice camp does not hold all the cards.  There is no guarantee that including Stupak-like language in the Senate wouldn’t cost as many votes as it would gain.  And if abortion foes overplay their hand and block a Senate compromise, it could force a bill to go to budget reconciliation, in which case language like Stupak’s would certainly be stricken as being non-germane (a major criteria for the budget reconciliation process).  Whether that would then lead to ultimate defeat in House or whether a bill rewritten for reconciliation would find some other way to thread the needle is a purely hypothetical question at this time, but it’s pretty clear that Stupak does not and cannot represent the last word on abortion coverage in health reform.

Bottom line: Expect a lot of conflict and an eventual, new compromise on abortion coverage to emerge from the Senate process.

The Cost Containment Conundrum
A growing chorus is emphasizing that “bending the cost curve,” not only for the public sector but for the private sector, as well, should be a central element of reform. (Notably absent from the choir is the general public, who is much more concerned about how much they have to pay out-of-pocket for premiums and co-payments than with the global cost of reform.) Two new reports cast a spotlight on this issue.

A report last week from the Business Roundtable (BRT) emphasized the potential for cost containment and held out a tantalizing carrot: major business backing for reform, which could be an important counterweight to opposition from groups such as the Chamber of Commerce and National Federation of Independent Businesses.

The politics of cost containment remain tricky. Much of the agenda advanced by the BRT, including malpractice reform and cautions about over-reliance on public sector spending cuts that could lead to cost being shifted to private payers, is likely to be warmly embraced by the health care industry.

But many proposals, such as increasing reliance on “value-based benefit design” (insurance benefits that include financial incentives not to use services considered to have little value or to not be cost-effective) and financial incentives for providers to adhere to best practice guidelines could touch off another round of controversy about “government rationing” similar to the “death panel” flap this past summer.  The report embraces the use of wellness incentives in employer health plans, but these provisions have raised concerns from many consumer advocates who worry that they are just a back door way to charge sick people more once such practices are supposedly eliminated by the proposed insurance reforms.  BRT also advocates for broader adoption of payment reductions for hospitals for preventable complications and readmissions, a recommendation the hospital industry is likely to resist.

At the same time, a new report by the CMS Office of the Actuary finds that the House legislation is unlikely to have a substantial impact on the overall growth of health spending (either positive or negative), and raises doubts about the ability of Congress to go through with proposed long term Medicare spending reductions.  The CMS Actuary’s report is already providing talking points for reform opponents, even though such opponents are also likely to fight changes that would drive costs down.

We should note that both bills out of the Senate made bigger inroads into delivery system reform than the final House bill did, and since such reforms are the biggest source of real cost containment, we anticipate the combined Senate bill will do better at bending the curve.

Bottom line: Expect “bending the curve” to play a much more prominent role in the Senate debate than it did in the House.  Look for Senate leaders to walk the tightrope by coming up with additional cost saving strategies to coax moderates on board without scaring of support from the health care industry.

Fault Lines on Immigrant Access
Immigrant rights groups have tried to keep immigration reform separate from health reform.  But after persistent attacks on immigrants in the context of health reform, coupled with responses from the Obama administration and Democratic leaders that were less vigorous and supportive than expected, many have come to feel that a more public case for health access for immigrants needs to be made.

Advocates for immigrant equality are focused on eliminating the five-year waiting period on coverage for legal immigrants in Medicaid and Medicare, preventing discrimination against legal immigrants in “mixed status” families (where some family members are citizens or legal immigrants and one or more members may lack legal authorization to be in the country), securing coverage for children regardless of their legal status, and allowing undocumented immigrants to purchase coverage with their own funds in the health insurance Exchange.  Reform opponents are likely to introduce amendments on the Senate floor to establish a five-year waiting period on subsidies for legal immigrants and to increase verification requirements in an effort to weed out any undocumented immigrants from getting coverage.

Bottom line: Expect Senate Democrats to beat back Republican attempts to add further restrictions on immigrant access.  Lifting the five-year bar on Medicaid access is a dark horse issue, but could come into play in conference committee because it saves money and conferees will be searching for adequate revenue and savings to pay for reform.

Will kids lose ground under reform?
Support for improving children’s health care is broad both within Congress and the general public, but lawmakers are struggling to figure out how to best integrate the current structure of children’s health coverage into a reformed system in a way that preserves the current benefits that children have.  The House and the Senate are taking distinctly different approaches—each of which has pros and cons—which will set up a challenging dynamic for conference committee.

In the recently passed House bill, Medicaid is expanded 150 percent of the federal poverty line and states that have Medicaid eligibility levels above this threshold will continue to cover children under Medicaid.  Once the Exchange is up and running, CHIP is eliminated and children on CHIP are transferred to the Exchange.

In contrast, in the Senate Finance proposal, Medicaid is only expanded to 133 percent FPL, but CHIP is maintained until 2019 (though the Finance proposal does not include funding for CHIP beyond 2013).  After 2019, CHIP would presumably be eliminated and CHIP kids would be moved to the Exchange.  States would also be free to roll back Medicaid coverage to the federally specified minimum.

The upside of the House approach is that it does more to preserve and expand Medicaid, the most comprehensive coverage for low-income children. When children are moved to the Exchange, they will be able to get the same coverage as their parents, and will no longer be subjected to the waiting lists and other enrollment restrictions some state CHIP programs feature.  The downside of the House approach is that even though premiums and cost-sharing are lower in the House than in the Senate, many moderate-income families could find themselves paying more and getting less for children’s coverage.  And the lack of a phase-in period for transition from CHIP to the Exchange could create confusion and gaps in coverage in the short run.

In the Senate, the current successes of CHIP would be preserved, at least in the short run, and any transition made more gradual.  On the other hand, there is no funding for the CHIP extension, which could mean another reauthorization fight in the offing, and if children are eventually moved over to the Exchange, their premiums and cost-sharing would not be as good as that offered in the House.  Additionally, the Senate bill would mean that some Medicaid children would lose eligibility and have to rely on the less comprehensive Exchange.

Bottom line: Who the heck knows?

Waiting for Harry
Although a Senate CBO score and a bill are expected any day, it’s unlikely that substantive debate will begin in the Senate before December.  While still possible for the Senate to move health reform legislation before the end of the year, it’s virtually certain that a bill will not go to the President’s desk before 2010.

–Michael Miller, Director of Strategic Policy

Photo: courtesy of ragesoss at flickr under creative commons license.

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218, that elusive magic number

Monday, November 2nd, 2009

House prepares to bring a strong reform package to the floor
On Thursday, House leadership unveiled a strong health reform package and plans to begin debate on it late this week.  The House bill gelled in the middle of last week when leaders judged that a final push to get 218 votes for a bill that included the “robust public option”—a public insurer that would pay rates based on what Medicare pays—was going to fall short.

Instead, they put out a bill that includes a public insurance plan that would negotiate rates with providers.  The CBO projects this version would save less money, so Leadership made up for the lost savings by proposing a further expansion of Medicaid to 150 percent FPL instead of the 133 percent that cleared committee in the original bills.

Community Catalyst is strongly supportive of the House bill, which goes beyond earlier drafts in a number of respects. It includes a national insurance Exchange that also gives states the option of creating their own Exchanges, new rules that prevent insurers from denying coverage to people with pre-existing conditions or charging people more because they are sick, expands Medicaid, adds a long-term care insurance program for disabled adults, requires health plans to allow young people through age 26 to remain on their parents’ policy, and eliminates the Medicare doughnut hole by 2019, rather than 2024.

Compared to the bill taking shape in the Senate, the House bill is likely to provide better benefits, better subsidies and more progressive financing while reducing the federal deficit and still costing less than the $900 billion ceiling set by President Obama.  Compared to the Senate, the House leadership appears more willing to take on segments of the health care industry and also includes a more significant employer responsibility provision.  (As a result, it faces stiffer opposition from these interest groups, though insurers are opposing the Senate bill as well).  However, according to some analysts, the House legislation does less to reduce spending over the long run than the proposal that passed the Senate Finance Committee.

While the House bill represents a huge step toward quality affordable health care for all, it includes a couple of notable weaknesses. The bill bars most workers who have employer-sponsored insurance from receiving subsidies in the health insurance Exchange.  Instead, workers would be required to take up their employer offer of coverage unless its cost exceeds 12 percent of their income, a requirement that would be too burdensome for low-wage workers.  A better approach would be to exempt workers from the mandate requirement on a sliding scale, as Massachusetts does.

A second problem is that the House legislation assumes that coverage is “always affordable” for people whose income exceeds 400 percent of the federal poverty line.  This provision would be burdensome, especially for older adults with income just above the cut-off point for subsidies.  Although the bill limits premium variation based on age, an older person could still pay twice as much as young adult, leaving them with a very substantial premium liability. Establishing a ceiling on how much people could be required to pay for coverage, regardless of income, would remedy this problem.

The House bill also eliminates the Children’s Health Insurance Program, known as CHIP, and assumes that children who are not Medicaid eligible will get their coverage through employer plans or through the Exchange.

There a number of potential benefits to moving children off of CHIP, not least of which is moving away from a block grant program that gives states the ability to offer relatively limited coverage (flexibility that states have not generally utilized to date) and instead give children a federal guarantee of coverage.

But while under law, CHIP plans may be limited, in practice most states have provided kids with comprehensive coverage.  As a result, children transferring from CHIP to Exchange coverage could see their benefits reduced and their costs increase.   Preserving CHIIP as a program that provided additional benefits and cost-sharing protections for children in families above the income eligibility threshold for Medicaid could help ensure that children get the health care they need.

For more details on the House bill see this updated Community Catalyst summary and discussion.

218, that elusive magic number
As the House prepares for floor action as soon as this week, several hurdles to passage still stand.  Here are the three main sticking points:.

•    Abortion
A number of House Democrats, led by Michigan Representative Bart Stupak, want to have a vote on language that would preclude plans that receive federal subsidies from including abortion coverage.  The current language in the House bill separates out the cost of abortion coverage from a benefits package, and requires the value of subsidies to be calculated without it. But Stupak wants a stricter prohibition on abortion coverage and claims to have the support of 40 House Democrats, which could be enough to block reform if they do not get their requested vote.

•    Immigrant Coverage
A debate is simmering within the House about whether to adopt a provision, favored by President Obama, that would prohibit undocumented immigrants from buying insurance coverage through the Exchange, even with their own money.  Many progressives, especially members of the Congressional Hispanic Caucus, are concerned about the lack of equal treatment for legal immigrants.  Advocates and lawmakers are now contemplating whether to push for an amendment that would give states the option to receive federal matching funds to cover certain legal immigrants through Medicaid.

•    Public Option
While the House leadership believes they lack the votes for a public option tied to Medicare rates, some progressives still want a chance to vote on that amendment and may block action if they don’t get it.

All of these issues could be addressed in a “manager’s amendment” or in the rule that will govern debate in the House later this week.

Affordability woes in the Senate
In case you missed it in our Friday blog post, the Senate is still struggling with the affordability issue.

While sources on the Hill confirm that the Senate is trying to make badly-needed affordability improvements for moderate-income households, they are trying to do it while still reducing fees paid by medical device manufacturers and an excise tax on high-cost insurance plans.  As a result, the best idea the Senate appears able to come up with at this point is to reduce premiums for moderate-income households by raising them for those at the bottom (We compared this proposal with the SFC bill and House leadership plan here.)

Timetable Update
House: The House plans to start floor debate late this week and to finish no later than Thanksgiving.

Senate: A backlog of work at CBO has slowed progress on the Senate side.  Given the slower pace of debate in the Senate, and with Veteran’s Day and Thanksgiving on the holiday horizon, the Senate is unlikely finish debate this month, though there is still a good chance they will finish before Christmas.  That means though, that resolving the differences between the House and the Senate will likely extend into next year.

Shameless plug department

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–Michael Miller, Director of Strategic Policy

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Too bad they can’t vote

Monday, October 19th, 2009

A substantial and growing cadre of prominent Republicans have come out in favor of health reform recently. A partial list: former majority leaders Bob Dole, Howard Baker and Bill Frist (who this week disputed critics who claimed that Obama was promoting socialized medicine), California Governor Schwarzenegger, former HHS Secretary Tommy Thompson, and former CMS chief Mark McClellan.  Not exactly a fringe element.

Yet there’s been no sign that these endorsements will move Republicans in Congress.  Maybe it’s something in the water in Washington, or maybe it’s just an indication of the extent of ideological or simply partisan polarization that so few sitting Republicans are willing to join party elder-statesmen in moving reform forward.  Right now, the calculus in the Republican caucus seems firmly set on continuing its near-unanimous opposition to reform – and carrying it into the 2010 elections and beyond (just in case you thought this issue was going away after passage.)

The Ladies from Maine Part I: Snowe Fall
Sen. Olympia Snowe’s aye vote on the Finance Committee reform bill ended intense speculation over which way the senior Senator from Maine would go.  To many, her vote suggests that she agrees with assessments that a yes vote in Finance gives her more leverage over the process going forward than continuing to dangle the carrot of her possible future support.  Snowe is now positioned to limit the movement of the bill to the left as it’s combined with the more liberal HELP bill, to be a key decision-maker on floor amendments, and perhaps even to have a formal role in conference committee.

In the eyes of the beholder
What is it that Sen. Snowe wants as the process moves forward?  One priority is preventing the inclusion of a public option except as a fallback.  A second Snowe priority is affordability.  At the same time, she has opposed most of the options on the table advanced to make better subsidies available.

A contradiction?  Not necessarily.  Affordability in Sen. Snowe’s eyes seems to be more about slimming down the coverage people would receive rather than making subsidies better—an idea that is getting some support in Democratic quarters, as well, even though the Finance bill already offers much less generous coverage than other proposals, particularly for low-wage workers.  Common Sense Affordability Protections, a paper released today by Community Catalyst and PICO, highlights the problems for low-income people in the Finance proposal and makes recommendations for how to fix them.

The Ladies from Maine Part 2: As Snowe goes so goes Collins?
Late last week, Sen. Susan Collins (R-ME) indicated her openness to supporting reform.  This is welcome news in some quarters because of the challenge of getting 60 votes even with support from Sen. Snowe.  On the other hand, Collins’ statement triggers some alarm bells.

The concern she voiced over potential cuts to Medicare benefits (and misrepresenting what is in the bill) should be read as coded opposition to eliminating current overpayments to Medicare Advantage plans and other efforts to reduce Medicare spending  — measures that form an important part of the financing of the Senate bill.

This wouldn’t be such a problem if the Senate weren’t already having such a difficult time agreeing on revenue options.

But attacks on the current financing mix continue, especially from medical device manufacturers concerned about new fees they would have to pay, and from unions and progressives unhappy with the proposed tax on insurers who offer high-cost plans.  This tax is almost certain to be passed on to enrollees and would fall disproportionately on states with high health care costs and firms with older workers.  Senate negotiators are working to modify both of these revenue sources but the struggle will be not to lose revenue in the process.

Read the rest of the Health Reform Insider here.

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Last week, on ‘As the Public Option Turns’

Tuesday, October 13th, 2009

Insurance Industry Takes the Gloves Off
While the insurance industry has been using “guerrilla” tactics behind the scenes to undermine aspects of health reform all along – opposing strong Exchanges, a decent minimum benefit standard and eliminating discrimination based on age and health status –  a report commissioned (and heavily advertised) by the insurance industry and released late Sunday night that attacks the Senate Finance proposal is the first public shot across the bow against reform.

The report, produced by PricewaterhouseCoopers, is problematic for a several reasons—it doesn’t make an “apples to apples” comparisons, it looks only at selected parts of the bill, not the bill in total, and it makes unjustified assumptions about some of the provisions.

For example, the report ignores all of the cost-containment provisions, the positive effect on the risk pool of providing subsidies or the potential for administrative savings through benefit standardization.  And it is, to say the least, disingenuous for the industry to oppose provisions that would lead to more effective cost-containment, such as a public option or an Exchange that can negotiate actively with insurers, and then complain that cost-containment efforts do not go far enough.  Hopefully, lawmakers will see through the report’s flaws and not make concessions to the industry that has finally stopped playing nice.

Food Fight
Insurers aren’t the only interest group turning up the volume as reform lurches forward.  Watch for worried governors to further press their case for Medicaid help.  Govs got the Finance Committee to move from temporary to permanent enhanced federal matching funds for the expansion population, but many remain nervous about new costs their states would have to shoulder under reform.  Governors like Schwarzenegger, who represent a much-sought-after bipartisan voice could be particularly influential, and some Senators have already committed themselves to finding extra help for the states.  Another group turning up the heat is the hospitals, upset that SFC would leave them with a substantial uncompensated care burden while slashing federal funding to hospitals that provide that care.

What this also means is that we can expect a fierce food fight for the remaining $70 billion in “headroom” – the difference between what President Obama said he would support and the CBO score of the Senate Finance bill.  Additional affordability improvements are one way that space could be filled (if revenue or savings measures can be agreed to), but others include the above-mentioned additional help for states, or rolling back fees on health industry stakeholders that are in the SFC proposal now and that have provoked vocal opposition from Senators in both parties.

House inching closer
The House continues to grapple with divisions within the Democratic caucus, aiming to send a combined House bill to CBO this week.  The key divisions remain over the revenue provisions and the public option.  House leaders are likely to scale back the surtax on wealthy households, raising the threshold to perhaps as high as $1 million, but they have yet to agree on how they would plug the resulting revenue hole.  Don’t look for a bill to hit the House floor for another couple of weeks.

Meanwhile, join us for another installment of:

As the Public Option Turns
The ongoing debate over public options sometimes feels like soap opera – lots of drama but not much plot advancement.

Previously on As the Public Option Turns, we found the importance of the issue elevated by a White House commitment to keep cost of reform under $900 billion.  That means Congress must find ways to make reform more cost effective unless they are willing to sacrifice affordability.

We now join our hero, Public Option, in the House, where the latest whip count shows the House Democratic caucus overwhelmingly in favor of a strong public option with rates based on Medicare payments, but close doesn’t count.  They have to get to 217 votes for passage and it’s those last few that will be the hardest to lock down.

While back in the Senate…
Last week Sen. Carper offered a proposal that would allow states to opt out of the public option.  This week, Sen. Schumer is floating a counterproposal which would make inclusion of the public option the default position but allow states opt out instead of having to opt in.  Schumer is also actively working to defang the Republicans’ number one emerging attack line:  that the individual mandate non-compliance penalties constitute a tax increase on the middle class.  Schumer proposes to blunt that attack by changing the penalty from a fee paid to government to a required contribution that an individual could use to purchase insurance at a later date.

In a separate but related plot line, another public insurance plan is getting a second look.  In their search for more a more cost-effective proposal, House leaders are considering a further Medicaid expansion, up to 150 percent of the FPL.  Even if the federal government paid 100 percent of the cost, expanding Medicaid is more cost-effective than putting people in private plans.

It’s Beginning to Look a Lot Like Christmas (or later)
The goal in the Senate is to have a bill on the floor next week, but it is not certain Majority Leader Reid will be able to complete the combination of the HELP and Senate Finance bills as fast as originally thought. Sen. Reid has indicated that he would like a CBO score on the blended bill, which could also slow things down depending on how extensive changes are. (It’s worth noting that work to combine the bills started even before the SFC final vote).

Add on three weeks of floor debate (maybe even more to account for procedural delays) and, assuming House can match the generally more slow-moving Senate, bills could clear the floor by Thanksgiving.  (That assumes the Senate remains on track for a 60-vote strategy and doesn’t have to pull the bill off the floor to adjust it for Budget Reconciliation).

This leaves only a few weeks before Christmas for what promises to be a protracted and challenging conference committee and final votes in each chamber. As an example of just one of those contentious issues that will have to be resolved in conference, more than half of House Democrats have signed a letter opposing the primary financing source in the Senate proposal.  With multiple and similarly thorny issues to resolve, don’t be surprised if health reform spills over into the new year.

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The MD factor: Majority of physicians back public insurance options, study shows

Wednesday, September 16th, 2009

A study released this week in the New England journal of Medicine found that a large majority of physicians support the expansion of publicly-backed health insurance programs. The survey, funded by The Robert Wood Johnson Foundation, polled over 5000 randomly-selected physicians from a broad range of specialties, practice setting, and regions, and the findings represent the opinions of more than 2100 respondents contacted between June – Sept. 2009.

The large majority of respondents – 73 percent – supported a public option in health reform; most surveyed (62 percent) said they think health reform should include a combination of public and private options, mirroring the principles President Obama, three House committees and a Senate committee have all put forward.  A majority of American Medical Association members surveyed also supported a public option.

And in a finding that rebuffs some reform opponents’ claims that expanding or fortifying Medicare would hurt practicing doctors, there was strong, cross-specialty support for expanding Medicare to those ages 55-64.  Check out the paper’s helpful bar graph to see what we mean.

The authors acknowledge that though the American Medical Association’s stand on reform has wavered and changed during health care debates, past and present, it has most recently come out in support of a House reform proposal that includes significant coverage expansions through subsidized private insurance and a public option.   These findings demonstrate that this position is now more consistent with individual physicians’ views on health reform today.  The authors write:

Physicians’ groups have strongly influenced efforts in health care reform throughout modern U.S. history and in so doing may have often obscured the collective views of individual physicians across the spectrum of specialties, interests, and regional affiliations. Given the enormity of the current effort to reform health care and its potential effect on future generations of Americans, policymakers need to hear the views of the whole range of physicians on the key elements of reform.

Both authors, physicians at Mt. Sinai School of Medicine, are members of the National Physicians Alliance. You can hear them talk about their findings on NPR’s All Things Considered.

–Kate Petersen

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