Friday, June 19, 2009

Health Care

Yglesias: The Popularity of the Public Plan

There’s something very frustrating about the way public opinion polling plays into the legislative process. If you talk about the idea of increasing the gas tax, then you hear that even though that’s a good idea it can’t be done because it’s unpopular. But if you talk about health care reform and the inclusion of a strong public plan, suddenly public opinion becomes irrelevant. Ezra Klein pulled this number out of an NBC/WSJ poll:


And not only is the idea of a public option popular in the abstract, the inclusion of a robust public option would save a lot of money and thus allow the congress to minimize its reliance on unpopular measures like tax increases. But suddenly here public opinion becomes irrelevant. You never hear a Blue Dog say “my seat is so vulnerable that I can’t afford not to back a super-popular public plan.” Ben Nelson’s not talking about how if Democrats want to stay viable in red states they need to robustly back a 70-20 issue like the public plan. The WSJ doesn’t run a headline saying “Opposition to Public Option Spells Political Trouble for Republicans.” Public opinion, in other words, can be a reason to eschew sound progressive policy but never a reason to enact it.

C&L: Senate Finance Committee: We're Going to Make You Buy Insurance With No Public Option

This is just pathetic:

  • Lower the medicaid coverage rate from 150% to 100% of the fFderal poverty line, 133% for kids and pregnant women (once you have the baby, too bad for you)
  • Subsidies stop at 300% of the poverty line (was 400%)
  • No Public Option mentioned
  • Insurance exchanges at the State level
  • Must buy insurance unless it costs more than 15% of your income
  • A fine if you don't buy insurance unless you're below the Federal poverty line

For the most part, as Walker discusses, this is about the same as or worse than the plan put forward by America's Health Insurance Plans (AHIP). Yes, worse than the insurance industry's plan. Remarkable. Baucus is really earning his campaign donations these days.

Of course, this is only one proposal, and in principle others from the House and other Senate committees could be better, and the better ones could be enacted. Obama has said he wants a public option, and he may whip for it.

But, if something like this is what comes out as the eventual "reform" it is worse than nothing. Being forced to buy bad insurance, with huge co-pays without a public option to keep prices in check has as its primary value that it is a subsidy for the insurance companies and that it reduces catastrophic healthcare costs for hospitals, because due to forced purchases of bad plans, some of the folks who used to come in at the last minute, after having not gotten care, and then costing the hospital hundreds of thousands of dollars in emergency care, will be partially paid for. They'll still come in last minute and not have been properly cared for since the deductibles will mean they didn't get help, but 70% or 80% of their final death-rattle costs will be paid for.

The problem with this plan is that it won't control costs. Without a public option, the insurance companies will have no check on their prices, let alone pressure to actually reduce them. Because people will be forced to buy bad insurance, they'll hate the plan, and because "reform" has been passed, we'll have to wait another 10 or 12 years for another shot.

Obama desperately wants to pass health care "reform". The fear is that he may take the easy road, and pass any bill that is "better than nothing", and that progressives will once again accept the logic that it's better to get something rather than fight for an actual good bill.

But because Obama does desperately want to pass something, if progressives stand firm in the House or the Senate, and refuse as a bloc to pass anything without a good public option, nothing can pass unless Republicans cross the aisle, which is rather unlikely.

So the answer is to stop being taken for granted. Stand up for and demand a public option, and refuse to accept a bill which does less. Don't let Obama have a cheap victory; a cheap "medicare reform". If he wants it, make him whip for a real bill, a good bill, with a public option. He whipped for money to bail out banks in Eastern Europe. He whipped for TARP. He can whip for a good healthcare bill. And it won't even cost 700 billion.

Anonymous Liberal: Giving Away Your Bargaining Chips

I'm starting to get very pessimistic about the prospect of meaningful health care reform ever happening. We have a popular Democratic President who was elected less than a year ago with a mandate to reform health care and a very clear plan for doing so. We have large Democratic majorities in both houses, including a soon-to-be 60 seat majority in the Senate. The public is massively in favor of comprehensive health care reform. And yet, the Democrats seem to lack the will to even get a meaningful bill out of committee. Ezra Klein reports that the Senate Finance Committee has now dropped the public option from its bill and scaled back the bill significantly. The new plan is relies on government-seeded health care "co-ops" to provide more options to consumers. Remarkably, the plan still contains a mandate to buy coverage (along with subsidies for those who can't afford the cost).

Ezra concludes that while the new bill is far less than he would have hoped for, it would still incrementally improve the overall health care landscape in this country.

I'm sure that's true, but there's a massive opportunity cost to doing health care reform this way. First, from a political perspective, there will never be a more favorable climate for passing health care reform. The stars are aligned right now. The Democrats control all branches of government and have significant popular support. And with wide scale unemployment and lack of job security, many people are either uninsured or desperate for a system in which they don't have to constantly worry about losing their health care coverage. As time goes by and the next election nears, it will only get harder to pass meaningful reform.

Second, when you try to do health care reform piecemeal, you end up sacrificing the bargaining chips you need to get everyone on board. To take the most obvious example, the public option is incredibly unpopular with insurance companies. They know that the existence of a public option will eat into their profits and force them to be more competitive. Indeed, that's the entire point. On the other hand, insurance companies love the idea of an individual mandate. If everyone has to buy insurance, that means more customers for them, and a bigger risk pool.

By including a mandate but not a public option, the Finance Committee is essentially giving away our biggest bargaining chip with insurance companies. Once a mandate is in place, the insurance companies will have what they want and will simply devote all their lobbying efforts to killing any future attempts to create a public option. It's just bad strategy.

And frankly, it's bad politics as well. Mandates will be easy to demagogue. People don't like being told they have to buy something, even if there are lots of exceptions and subsidies. If the law is ever passed, Republicans will run ads highlighting the fines and penalties in the law for those who don't buy insurance. These attacks will be much easier to defend against if the bill also gives people an inexpensive, reliable public option. People like choices, and a great many of them would prefer the option of being insured by the government, knowing that the government won't deny them coverage because of a pre-existing condition or rescind their policy without warning based on some trivial omission in their application.

Moreover, if you have a mandate without a public option, it means that 100% of the subsidies the government is paying out to help people buy coverage go directly to the insurance companies. This amounts to a massive give-away of taxpayer money. Again, the insurance companies get to have their cake and eat it too. They get a whole bunch of new paying customers and no new competition to keep them honest and control costs.

I really think the Obama administration is being too cautious on this. They need to take the helm and really, forcefully make the case for the inclusion of a public option. If the public option doesn't happen now, it's not going to happen.

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