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East Room Promises

Wednesday, June 23rd, 2010

baracksigningI was invited to attend an event at the White House yesterday to commemorate the 90th day since President Obama signed health care reform into law, and it was a powerful event that underscored how much the law matters to American families.

Following a private meeting with insurance executives, the President walked into the East Room and was introduced by Amy Wilhite from Ohio.  Amy’s daughter, Taylor, was diagnosed with Acute Myeloid Leukemia (AML), a cancer of the blood and bone marrow, for which Taylor received three rounds of chemotherapy and a bone marrow transplant that produced multiple side effects. Taylor’s father’s insurance plan has a $1 million lifetime limit, and as Taylor approached the limit, the family requested a $500,000 extension.  It was granted.  But Amy said that they still have to pick and choose which tests and follow-ups to go through with, because they don’t want to exceed the cap.  She was very grateful that the Affordable Care Act (ACA) banned lifetime caps and thanked the President for his leadership on the law.  Amy was articulate and her family’s story a powerful one, which moved all of us in the room.

After Amy,  President Obama spoke for about 25 minutes on abusive insurance practices that hurt families, and recent exorbitant rate increases that have captured headlines and prompted state action (such as Massachusetts’ prohibition of rate increases within the Connector).  But acknowledging that the cooperation of insurers is critical to making health reform a go, the President also suggested that he was ready to work with the industry to make the bill work.

The President went on to challenge politicians who are running on a platform of repealing the law–who want to go back to the system we had before. “Would you want to go back to discriminating against children with preexisting conditions?” he asked us. “Would you want to go back to dropping coverage for people when they get sick?”  Would you want to reinstate lifetime limits on benefits so that mothers like Amy have to worry?” The room was quiet.

“We’re not going back,” he said.  “I refuse to go back.”

–Rob Restuccia, executive director

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Posted in Repeal Watch, children's health, national health reform, private insurance | No Comments »

The Insider: Repeal vs. reality, PLUS the health reform deciders

Monday, April 5th, 2010

Are the worms turning?
While cries of repeal are still echoing in some quarters, doubt about the enterprise is beginning to seep through. Senator Bob Corker (R-TN) has publicly argued that repeal is not realistic (later clarifying he meant as long as Obama is in office), and the Chamber of Commerce, one of the interest groups most active in opposing reform, has also said it will turn its attention from repeal to influencing the regulations and pushing amendments. The Chamber is also planning to spend tens of millions of dollars to elect candidates friendly to their positions (which generally means not those who voted for health reform), but there’s little doubt that they would do that with or without passage.

More about the walk backs here and here and here.

Essentially, repeal is a nonstarter unless Republicans control both the White House and 60 Senate seats (or are close enough to 60 to make a deal with conservative Democrats). Threatening to “defund health care reform” if they take control of Congress is similarly hollow (Wonk Room says why.)

As we said last week, repeal isn’t in the interest of most of the health care industry (they’re helping to back Enroll America) or that of the employers (who doth protest too much.) Repeal is, at bottom, the rallying cry of  ideological extremists and their financial backers who oppose a set of policies embraced by many Republicans in the 1990s at Mitt Romney just a few years back-–policies well to the right of Richard Nixon. (For the record, it gave me the CREEPS to write that.)

Although the repeal caucus is becoming more marginal, the walk back from repeal doesn’t in any way mean smooth sailing for reform. (Speaking of sailing, watch our video valentine to health reform advocates.) Along with the Chamber, insurers are suiting up for the implementation game. The industry sent over 1,500 representatives to a recent meeting of the National Association of Insurance Commissioners (who number 50). The NAIC will have a major role in structuring the Exchange and the law’s insurance reform provisions.

And big employers are already squawking about the fact that the law closes a loophole in the Medicare Part D statute that allowed them previously to deduct from their taxable earnings the portion of retiree health benefits cost subsidized by the federal government.

This is the brave new world of our next four years: powerful special interests focusing their fire on specific provisions that they find objectionable, while repeal remains “red meat” to rile up the far-right voters. Better get used to it and dig in for a long fight.

A closer look at public opinion post-reform: Is there a bump from this Baby?
(Maybe, but it’s not really showing yet.)

On his recent trip to Maine, President Obama chided the media for their obsessive focus on the popularity of health reform, saying the new law must be given time to work.

But, if anything, the importance of public opinion is growing post-passage. During the legislative cycle that just finished, public opinion mattered, but was only one among many factors that influenced the outcome. The real decision makers were Congressmembers, who are influenced not only by voters, but by donors, advisors, party leaders and other folks who want stuff.

In the election (spin) cycle we are entering, voters are the decision makers. And what they think about health reform in 2010 and 2012 will, in part, determine who is in a position to make the key decisions about implementation. Right now, voters are pretty evenly split on the question of whether passage was a good thing for the country. On balance, they believe that reform will help someone other than themselves and are worried that that help will come at their expense.

The public also holds internally inconsistent views about the role of government in health care, with majorities simultaneously believing that there is too much government involvement in health care, that health care reform didn’t do enough to check the power and potential abuses of insurers, and that there should be a public insurance option available.

One factor in public opinion that could have big mid-term consequences is the age divide. The majority of younger voters support reform, but older voters, who tend to be a relatively larger fraction of the mid-term electorate, are more negative on reform.    And while younger voters are more likely to care about other things (e.g. unemployment), health care is a more pressing issue for older voters.

These older voters’ critical role in midterms helps explain why one of the first things out of the box is help for seniors facing high prescription drug costs. Starting this year, Medicare beneficiaries who enter the “doughnut hole” coverage gap in Medicare Part D will receive a $250 rebate—giving seniors a tangible benefit to weigh against the fear of future change that has been stoked by opponents throughout the debate. (Remember the death panels?)

Although it is still a long way from election day, right now it looks likely that Republicans will make big gains in the midterms in both houses, though still fall short of wresting control of either chamber away from the Democrats. With narrower margins to work with at best, we can expect future [positive] tweaks to reform to come via the budget reconciliation process.

Deconstructing the kids pre-existing condition brouhaha
In the run up to reform, Democrats touted the elimination of pre-existing condition exclusions for children as one of immediate benefits of reform. Then, shortly after passage, there was a brief argument about what the provision actually meant: Did it mean that insurers could no longer refuse to cover a family based on a child’s pre-existing condition? Or did it only mean that if they covered a child, they could not impose an exclusion? (Prior to passage, there was quiet concern about the ambiguity of the provision, but it did not reach the media). After a stern letter from HHS Secretary Sebelius, insurers—who had briefly asserted the more narrow interpretation—quickly folded their tents and agreed to the more expansive view.

Why? Was the law clearly on the side of the administration, or was something else at play? (If you guessed the latter, give yourself a star.)

First, staging a fight to defend their right to deny coverage to sick kids is a bad PR move for the insurers. Second, insurers don’t really oppose reform overall (Enroll America, remember?)

Third, and most importantly, insurers retain the ability until 2014 to vary premiums based on the “experience,” or expected cost, of enrollees with significant illnesses. Until then, the immediate win for kids with pre-existing conditions is less meaningful than it first appears. So score it as a PR win for the administration and insurers, and a small step forward for children with pre-existing conditions.

No Fooling
Has Senator Tom Coburn (R-OK)been spending too much time with Congresswoman Michelle Bachman (R-MN)? Last week, Sen. Coburn admitted to being paranoid. “This may be a little paranoid, but I think they know it’s going to fail,” Coburn said. “Then we’ll go to a single payer system like Western Europe.”

(Upon hearing Coburn’s comments, Dennis Kucinich is rumored to have said, “From his mouth to God’s ear.”)

–Michael Miller, director of strategic policy

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Health Reform Insider Goes to the Toast and Polls

Tuesday, March 30th, 2010

President Obama signed the final piece of the health reform package today. So before we do anything else and get caught up in the next round of debate, here’s a toast to all those who have worked so hard over the past year to get us this far.

And what goes better with toast than a bill summary?

(We couldn’t think of anything, either.)

So now what?
Congress’s work on health reform is complete (at least for now) but with barely a pause for breath, the hissy fit against reform has continued, merely shifting venue to the states and the upcoming fall elections. Public outreach is still needed, both because a number of provisions take effect very quickly (here they are), and the ongoing smear campaign against reform.

Thirty something
As we mentioned last week, legislators in over 30 states have filed legislative proposals or constitutional amendments regarding health reform. Although there are a few variations on the theme, the main claim is that Congress does not have the authority to impose a tax penalty on people who do not have qualifying health insurance.

And a dozen or so Attorneys General have filed suit against the federal government, claiming, among other things, that it does not have the authority to condition federal Medicaid matching funds on states meeting federal eligibility criteria, because to do so would impose costs on the states. (This is a strange argument, since the federal government has been doing exactly that since the beginning of the Medicaid program.)

Analysts have concluded that the proposed challenges lack legal merit. See:

But merits shmerits. Remember, the goal here isn’t to build sound legal cases but to gin up fervor to elect anti-reform members to Congress (or in the case of the AGs often to get themselves elected to higher office) and create a screen of apparent public opposition to reform for state officials intent on foot-dragging to hide behind.

They may also be trying to force the administration to make a potentially damaging public admission that the individual mandate constitutes a tax—thus violating an Obama campaign pledge.

A dead end strategy?
Given some truly awful recent Supreme Court decisions, no one can afford to laugh at the prospects of litigation, even though most nonpartisan analysts have concluded that they are without merit.

Still, challenges aside, there is reason to be optimistic about the future of reform.

First, the status quo is unsustainable—and more and more civic leaders are recognizing that. Reform opponents have no meaningful alternative that will address the rising costs and rising numbers of uninsured that are undermining the system.

Second, reform does a number of popular things (insurance reforms and subsidies, say) that will be not only be difficult to undo, but also difficult to separate from some of the less-popular aspects.

Third, reform creates more winners than losers among interest groups. There are not that many stakeholders who have a vested interest in repealing (not to be mistaken for amending) key parts of reform. Hospitals, doctors and drug companies can all find provisions they do not like but on balance, the extension of coverage to more than 30 million people will be good for the health care industry. States have concerns about the cost of the Medicaid expansion, but the expansion is 100 percent federally-financed in the short run, and provisions like increasing the Medicaid drug rebate rate will reduce state costs.

What about businesses? Although some may have concerns about the “free rider” provisions, only a very small percentage of employers will actually be subject to any penalties (The Congressional Research Service estimates only about 5 percent).

So too with the individual mandate. Most people already have private or public insurance or would voluntarily purchase coverage once a subsidy is available. The mandate is a tool to ensure the broadest possible risk pool and to prevent people from churning off and on health insurance on an as-I-need-it basis.

But if Massachusetts is any guide, the mandate will (notwithstanding the political furor of the moment) be, in practice, fairly acceptable to the general public.

Even the insurance industry, which spent millions to defeat reform, may think twice before getting behind a repeal effort. Especially since if the effort is only partly successful, it could be left with new requirements to cover high-risk and high-cost individuals without the guarantee of a bigger and on average healthier subscriber base.

And it looks, early on anyways, that public opinion is swinging toward reform.

This may be the case in part because broadstroke polling has always overstated the opposition—polls and stories before reform passed often failed to break out the anti-reformers from those who were unhappy with the current bills because they wanted reform to go further.

But new post-reform polls (check out this Five-Thirty-Eight post) that have gone deeper show an upward trend of support for reform.

Those, for instance, who say the law is a step in the right direction are unlikely to see repeal as anything but two steps back.

The question becomes: How much of the public can be made to believe things that are not true about health care reform—and for how long—now that it is law?

And here, there’s some cause for concern that goes beyond the persistent misunderstandings of what is in the law. A recent Harris poll shows 23 percent of adults in the US (41 percent of Republicans) think that President Obama wants to use an economic collapse or terrorist attack to assume dictatorial powers, and 24 percent of Republicans think President Obama may be the anti-Christ. We may surmise that these folks are unlikely to be persuaded on health care no matter what advocates (or anyone else) says or does.

On the other hand, as Nate Silver noted in the above link, public support seems to be going toward reform, though it is too soon to say whether this is a long-term trend.

The best thing advocates can do is go out and explain what reform really does (and what it doesn’t do). The more public understands reform, the less support there will be for a rejectionist agenda. Reaching out to constituencies that will benefit from early improvements (again, check out our Quick Win fact sheet)—including seniors, small businesses and children and adults with pre-existing conditions—are a good place to begin.

Seniors have generally been more opposed to reform than most age groups, and opponents have consistently claimed that reform is bad for Medicare. The first changes that seniors will see is the beginning of a phase out of the doughnut hole and new preventive care benefits in Medicare.

Many small businesses are probably unaware that they are exempt from “free rider penalties” or that the new law includes an immediate tax credit for small, low-wage businesses that offer health insurance.

For children and adults with major or chronic conditions, the bill has provisions to, immediately eliminate pre-existing conditions for children (pending HHS regulation), allow young adults to remain on their parents’ plan, eliminate lifetime benefit caps and create (or enhance) a high risk pool, and will provide immediate benefits for children and young adults with special health care needs.

Implementation: a three-piece puzzle

Going forward the keys to successful implementation include:

-An aggressive effort to build public support for reform

-Engagement at the state and federal level around the state laws and state and federal regulations that will govern the details of implementation

-Maintaining and strengthening the Medicaid program during the interim period when the states’ fiscal crisis is still squeezing the program and new federal coverage rules have not yet kicked in.

We’ll look at the way these three interlocking pieces fit together and developments in the weeks ahead.

–Michael Miller, director of strategic policy

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How sweet it is

Monday, March 22nd, 2010

The U.S. House of Representatives passed the most comprehensive health care bill since Medicare last night–a bill that provides health care coverage to 32 million more Americans, ends decades of unjust health insurance practices that discriminate against those who get sick, and curbs runaway health care costs.

The President is expected to sign the bill tomorrow, and the Senate will begin debate then on a series of fixes to the bill. There is–as always–more work to be done.

But today we thank the Representatives who crafted the bill, who stood in support of reform and took the votes, all their “punk staffers” who have worked without weekends and sleep for the better part of a year (and some for much longer), and all of the reform advocates for their tremendous, sometimes Atlas-like work in helping to pass this bill.

(Here is Community Catalyst’s official statement, and what you need to know about reform right now. And if you don’t follow the Hub on Twitter yet, get on board before the Senate debate begins.)

When it comes to reflecting on What This Means — in history, yes, but also in plain English — there are few who said it better than Michigan Rep. John Dingell, who’s father, John Dingell Sr., gaveled in Medicare in 1965 (and who lent that historic gavel to Speaker Pelosi for the vote last night.) Here’s what he said after the vote last night:

I gotta tell you, the air has been redolent with falsehoods and deceit. And Madame Speaker persisted clear through this, and my colleagues stuck. And nobody ran when the heat got high.

And I want you to know I am very proud of this leadership and of my colleagues, and of a lot of new members who made some very hard and difficult votes,  for which they can be proud, and for which they will be rewarded with re-election, because they showed courage and wisdom. And they did something that was very important.

But dear friends, there’s something else. Now when Americans lose their jobs, now when Americans go to bed, they won’t have to worry when they get up the next morning: Are they going to have health insurance?

We have established a basic principle now–finally–in a bill that is going to the President to be signed–that says  health, and good health, and health insurance, and health care, are not a matter of privilege for the privileged few, but rather they should  be for everyone.

And the government has finally decided we’re going to take care of that.

–Kate Petersen, Health Policy Hub

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One year on

Friday, March 5th, 2010

A year ago today, President Obama gathered Congressional leaders, providers, advocates and industry leaders at the White House to start the conversation about health care reform. “The status quo is the one option that is not on the table,” he said then.

And a year later, it’s still not. Millions can’t afford coverage and millions more can’t afford to get sick on the coverage they have. An industry that has profited by exploiting health circumstances that are often beyond people’s control is flaunting 40 percent rate hikes, reminding us that the only people it answers to today are shareholders.  So the status quo is—well—the same.

But we aren’t where we started. In a year of extensive committee hearings, votes and record hours spent working and reworking bills, Congress has crafted a reform that offers coverage to more than 30 million uninsured, allows more people to buy into the private insurance market, and provides help to those who can’t afford it, a reform that prevents companies from denying coverage or sending families into debt spirals after costly procedures, a reform that improves the way we deliver and pay for care in this country – and that pays for itself completely and sustainably. Both chambers have passed such a bill. We are this close.

There are other things that are different a year on. Since the first convening last March and the summer’s glimmer of bipartisan negotiation, Republicans have made a political calculation that though the bills pay for themselves and would offer much-needed help to many people in their districts, they plan to vote against any and all efforts to pass comprehensive health reform.

And after deliberately standing aside to allow Congress to drive and shape reform – (”I just want to make sure that I don’t get in the way of all of you moving aggressively and rapidly,” President Obama said last March) – the President made it clear Wednesday he’s not standing aside anymore.

“Both during and after last week’s summit, Republicans in Congress insisted that the only acceptable course on health care reform is to start over. But given these honest and substantial differences between the parties about the need to regulate the insurance industry and the need to help millions of middle-class families get insurance, I do not see how another year of negotiations would help. Moreover, the insurance companies aren’t starting over. They are continuing to raise premiums and deny coverage as we speak. For us to start over now could simply lead to delay that could last for another decade or even more. The American people, and the U.S. economy, just can’t wait that long.

“So, no matter which approach you favor, I believe the United States Congress owes the American people a final vote on health care reform….and from now until then, I will do everything in my power to make the case for reform.”

Transcript’s end, he stepped away from the mic and said into the applause:  “Let’s get this done.”

–Kate Petersen, Health Policy Hub

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Insider Update: Summing up the Summit

Friday, February 26th, 2010

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

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

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

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

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

Anyone? Anyone?

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

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

Moving Right Along

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

Keep fighting the good fight

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

-Michael Miller, director of strategic policy

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Reaching the Summit

Wednesday, February 24th, 2010

Must-see TV

If you’re not already planning to tune in to the President’s health care summit tomorrow, maybe it’s time to reconsider. It will be streamed live here, from 10 AM-4 PM Eastern. Forget Lindsey Vonn and The Office baby special: This is must-see TV.

And if you can’t convince your boss that six hours of C-SPAN is equivalent to 30 minutes for lunch, you can follow the Hub’s twitter feed right from your desktop for a live analysis of what’s going down at Blair House (and maybe a little reform haiku thrown in, too.)

Reaching the Summit

With the release of his plan—really a series of amendments to the Senate-passed Patient Protection and Affordable Care Act (PPACA)—President Obama  is ready to embark on the last leg of the health reform journey. Key changes in the proposal include:

•    Improvements in affordability for low- and moderate-income families in the Exchange. Relative to the Senate bill, most families will either pay less and/or get better benefits.

•    Stronger oversight of health insurance premiums. The proposal would give the HHS Secretary the power to deny or modify excessive premium increases as well as strengthen the ability of state insurance regulators to oversee rates.

•    Phasing out of the coverage gap known as the “doughnut hole” in Medicare Part D, making prescription drugs more affordable for seniors.

•    Increased Medicaid funding for all states (and territories), while eliminating the special funding deal for Nebraska.

•    Equalizing the treatment of union and nonunion health benefits with regard to the excise tax on high-cost plans and also adjusting for age, occupation and gender of workers so that firms with an older and sicker workforce would not be hit as hard.

The President also proposed a series of payment integrity and anti-fraud measures to reduce payment errors in Medicare and Medicaid, drawn largely from Republican proposals. (Full summary of the proposal is available here).

Democratic leaders in the House and Senate have reacted positively to the President’s proposal and seem poised to move forward with reform post-summit, with or without a bipartisan agreement that no one is expecting.

Interestingly, not all of the President’s proposals seem to fit neatly into the rules of budget reconciliation. This suggests that some ideas, such as increasing federal authority over insurance rates, will have to get 60 votes in the Senate in order to survive. However, this is likely a win-win for the Democrats: either the rate regulation provision stays in, or Republicans will have to go on record as siding with insurers against consumers on insurance rates.

Summit Watching Guide

The President has continued to sound the theme of bipartisanship by posting on a website all of the Republican-backed ideas already included in PPACA, and offering to post a Republican proposal or statement of principles side-by-side with the President’s plan.    Republican Congressional leaders, however, aren’t having any of it.

The continued trash-talking of the summit obscures the dirty little not-so-secret that the difference between the Republican and Democratic proposals is not about different means to reach the same end, but entirely different ends.

First, Congressional Republicans by and large reject the premise that all Americans should have guaranteed access to secure affordable health insurance and health care. Secondly, they reject the idea that a stronger public-interest watchdog and a new set of rules is needed to correct fundamental weaknesses in the current health insurance market.These are the central premises of the plans put forward by the President and Congressional Democrats and they are beliefs strongly held by the majority of Americans, notwithstanding their skittishness and disillusionment with the process. (Read Real Reform, Community Catalyst’s analysis of the differences between the approaches put forward by the President and the Republicans here.)

At least one prominent Republican, California Governor Arnold Schwarzenegger, has been willing to call out his party on their stance—calling the demand that the summit start with a blank piece of paper “bogus.” (Now that’s a maverick.)

Because the divide between the two parties is so fundamental, at the summit itself we can expect neither a real attempt to reach bipartisan agreement, nor even a real debate over the merits of various policies.

Instead this will be a battle of competing narratives. The President and Congressional Democrats will to try to focus the discussion on the problems with the status quo and substantive ideas for addressing those problems, while the Republican will try to reinforce their anti-government mantra. (If watching 4 to 6 hours of this kind of sparring is not your idea of fun, you can liven it up by taking a drink every time a Republican says “job-killing big government takeover.”)

Look for a special post-summit Insider Friday!

–Michael Miller, director of strategic policy

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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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Of Doughnuts and Dragons: The Health Reform Insider

Wednesday, January 6th, 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


–Michael Miller, director of strategic policy

photo courtesy  of austinevan at flickr creative commons

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

Monday, December 28th, 2009

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

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

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

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

Gross and Net Spending: House vs Senate

Gross Spending
(in billions)

Room for improvement under $900 billion cap

Net Spending (in billions)

Room for improvement under $900 billion cap
House

$1,052

-$152 billion

$891

$9 billion
Senate

$871

$29 billion

$614

$286 billion

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

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

- Michael Miller, director of strategic policy

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