Obama and Congress
The Senate Finance Mark-Up: Pharma 1, You 0
Published September 24, 2009 @ 09:56PM PT
As the Senate Finance Committee plunges ahead with the pageantry of its mark-up on a comprehensive health reform bill -- the last congressional committee to do so -- there’s a subplot to watch. Keep your eyes peeled for who benefits by the 564 proposed amendments: the various health care industries already making money off the system or the American people desperate for reform? Today was a textbook example of an amendment that directly pitted the interests of Big Pharma against you, the American taxpayer. In short, you didn’t do so well.
To give credit to the Baucus Bill, there is a provision wherein Medicare beneficiaries would get some relief from the “doughnut hole.” In Part D, beneficiaries’ prescription drugs are only covered for their first $2,700 per year. Once they reach that threshold, they have to pay for their drugs out of pocket until their total costs reach $6,154, at which point “catastrophic coverage” picks up for the remainder of their drugs. Being stuck in between those dollar figures is being stuck in the doughnut hole, and about 1/4 of the seniors on Medicare hit it each year. Making the elderly pay as much as $3,543 out of pocket on prescription drugs before their coverage kicks in again is obviously a huge problem. So Sen. Max Baucus negotiated a deal with the White House and with Big Pharma. The drug companies would kick in a rebate of up to $80 billion per year which would specifically be used for those stuck in the doughnut hole. Those in the hole would get drugs at half-price, which would be a huge relief for millions of seniors.
With that rebate came Big Pharma’s pledge to support reform, rather than fight it tooth and nail. They’ve been good on their word, running expensive but fairly milquetoast ads in support of a general notion of reform. But it came at a high cost -- an assurance that Pharma wouldn’t be asked to give up any more of their profits. The backroom deal was the exact opposite of what President Obama said would happen when he campaigned on health care, yet here we are.
Cut to today’s most notable moment in the mark-up: the amendment by Sen. Bill Nelson (of Florida, natch) which would have closed the doughnut hole entirely. Not only that, but the move would actually have saved more money than the current proposal. It also wouldn’t have been a radical move so much as re-establishing what had been the norm as recently as 6 years ago. It had broad Democratic support. And yet it failed to pass anyway.
Here’s the crux of Nelson’s amendment: about 8 million disabled Americans are simultaneously on Medicare and Medicaid, largely because of disability. They’re called “dual eligibles.” Overall, they tend to be low-income, unable to work because of their condition, and in the poorest level of health. They’re covered under Medicare, and use their eligibility for Medicaid to pay for their Medicare premiums for Part B. Now, before the Bush prescription drug bill in 2003, these folks’ prescription drugs were covered by Medicaid. Pharma got paid at Medicaid rates. As part of the Medicare Part D bill, however, Big Pharma got a raise – dual eligibles would be covered under Medicare. Pharma would get paid much higher rates and Uncle Sam would pick up the tab, minus a $1-$3 co-pay. How much higher were the rates? List price – or, if you prefer, “name your price.” Nelson’s amendment would simply return dual eligibles to being covered for prescription drugs under Medicaid, saving Uncle Sam a lot of money. How much? Enough to close the entire doughnut hole and still have $50 billion left over in savings.
Yeah, that’s your tax dollars we’re talking about.
You would expect the Republicans on the committee to vote against the amendment. After all, many of them had helped give Pharma that raise just a few years ago. But the amendment failed when three Democrats -- Tom Carper, Robert Menendez, and Max Baucus himself -- voted against it as well. All three of them cited the once top-secret deal as the reason for their vote.
“We don't represent their stockholders, we represent our stockholders, which are the taxpayers,” said Sen. Charles Schumer, who voted for the amendment. Apparently 10 Republicans and 3 Democrats weren’t so sure. And neither am I.
(Photo credit: http://www.flickr.com/photos/tomsaint/ / CC BY 2.0)
The Individual Mandate: "Stunning Assault on Liberty" or "Ultimate Conservative Idea"?
Published September 23, 2009 @ 12:26PM PT
"A foolish consistency is the hobgoblin of little minds," Ralph Waldo Emerson once wrote. A foolish inconsistency, however, is somewhat the norm in congressional committee-room debates. Thus it is that the hyperbolic rhetoric against elements of health reform is flowing like a mighty stream within the Senate Finance Committee mark-up. Some of the toughest language we're hearing from Republicans focuses on the individual mandate -- the requirement that adults must purchase health insurance or pay a fine if they opt not to. It's a potent political talking point: who likes to be required to do anything? But it's also poetic justice for a policy once hailed as "the ultimate conservative idea."
The policy seems more controversial than it is. You may remember throughout 2007 and 2008 that the individual mandate was the most contentious policy in the health care reform debate between Barack Obama and Hillary Clinton. Clinton's plan had a mandate. Obama's didn't. That somehow yielded twenty debates' worth of beating the hell out of each other... enough that I'm getting flashbacks just typing this post. But that too was more about politics than policy. After all, President Obama now advocates a mandate. There's also one in the House bill, the Senate Health, Education, Labor and Pensions Bill, and various other health care bills (including the bipartisan Wyden-Bennett Act, which 5 Republican Senators have signed onto). An individual mandate is the number one principle of America's Health Insurance Plans own manifesto for reform (natch). Back when Ted Kennedy had his closed-door sessions with representatives from the health care industry, it was the one element everyone agreed on. Economists, including the liberal Paul Krugman, point out that any plan without a mandate "would also face the problem of healthy people who decide to take their chances or don't sign up until they develop medical problems, thereby raising premiums for everyone else."
What's funny to me while listening to Jon Kyl thunder that the individual mandate is a "stunning assault on liberty" or Chuck Grassley proclaim "Individuals should maintain their freedom to chose health-care coverage, or not," isn't that this represents a flip-flop for both gentlemen. Kyl was in the room with all the other Republican Senate Finance Committee members months ago when Max Baucus publicly asked if anyone disagreed with the notion that individuals who can afford insurance should be required to buy it (Sen. Kyl's hand remained down). Grassley was defending the mandate a month ago by saying, "That's individual responsibility, and even Republicans believe in individual responsibility." But you know, I kind of expect that level of about-face politics.
No, what tickles my funnybone about this political theater is that the individual mandate was sold in Massachusetts just a few years ago as "the ultimate conservative idea, which is that people have responsibility for their own care, and they don't look to government to take of them if they can afford to take care of themselves." The man pitching that argument was then-Governor, presidential aspirant, and czar of lookin' good Mitt Romney. Not only did Gov. Romney embrace the individual mandate, he made it a pre-requisite for his assent to the Massachusetts health care plan. Feast your eyes on these stirring words and tell me (in the words of another famous Romney speech, his 2008 RNC keynote) whether this idea is liberal or conservative:
No more "free riding," if you will, where an individual says: "I'm not going to pay, even though I can afford it. I'm not going to get insurance, even though I can afford it. I'm instead going to just show up and make the taxpayers pay for me."
From "ultimate conservative idea" to a "stunning assault on liberty" in just four years. Not even Mitt Romney could have predicted that flip flop.
(Photo credit: http://www.flickr.com/photos/28016916@N08/ / CC BY 2.0)
What Does Reform Do to Your Member of Congress’s Plan?
Published September 22, 2009 @ 05:41PM PT
It’s one of the weirder pieces of snark or vitriol you'll here among those skeptical of the health reform plans moving through Congress. “If this health reform plan is so good,” someone will snarl, “then why do members of Congress make an exception for themselves so they don’t have to participate?” The question is mystifying. For one thing, it’s drop-dead wrong -- the Federal Employee Health Benefits Plan would be affected by health care reform the same way any big employers’ benefits plan would. No exceptions for your Senator. For another, the question misses the larger point -- we’re talking about a reform plan that would actually make your insurance options look more like what your Senator already enjoys.
NPR has a good Q&A on how the FEHBP works, but here are the essentials. Every federal employee, be they a postal worker, a paper-pusher, a Cabinet Secretary, or a Senator, is given a menu of insurance plans based on where they live. Some of the plans are national, some of them are regional, but all of them are transparent -- you can compare like to like on coverage. Every plan meets a minimum level of coverage, including primary care and prevention, and no one can be turned away on the basis of pre-existing conditions. The federal government, as your employer, picks up a big chunk of the premiums -- 72% on average, which is equivalent to the average for all private employers who supply benefits. As an extra bonus, most of the standard plans have a cap on your out-of-pocket spending on medical care in terms of co-pays, deductibles, etc.: $5,000 per family for in-network providers and $7,000 overall. The coverage is pretty great, and the costs are relatively low -- the kind of rates you get when you happen to have 8 million members in your plan.
It’s a pretty good array of options. Uncle Sam turns out to be a generous boss. It’s also pretty egalitarian -- every full-time worker and qualified retiree gets basically the same deal. By the way, this is really going to bake your noodle: unionized employees, like postal workers, have actually used the collective bargaining process to negotiate for the federal government to pick up even more of the share of the premiums. So that means your letter carrier may actually have a better deal than your Senator. Now ain’t that America?
If this plan sounds familiar, it should. It’s the same basic principles as the Health Exchange. Array of private insurance options at affordable rates? Check. Regulations against exclusion on the basis of pre-existing conditions or age? Check. Coverage for primary care and prevention? Check. A cap on out-of-pocket expenses? Check. Putting the choice in your hands to choose what’s best for you and your family? Double check. The idea of giving uninsured Americans the option of enrolling in the FEHBP itself or an FEHBP-like set of options (the Health Exchange) has been at the heart of Democrats’ health care reform proposals since John Kerry ran for president. It’s the controlling idea for the plans offered by Wyden, Edwards, Clinton, Obama and more. Now the Exchange isn’t an identical twin to the FEHBP -- the FEHBP has better cost-sharing, while the Exchange has the public option, which could significantly reduce costs for all the plans in the Echange through competition -- but it’s at least fraternal.
One last bit, now that this idea is taking legislative shape. What about eventually requiring employers outside the Exchange to match the plans in the Exchange in terms of coverage, cost and regulations, as the House bill does? Ah, here’s the crux of the matter. The federal government would eventually have to match those plans in the Exchange, like any big employer would. However, Uncle Sam is going to have a much easier time. Why? The plans in the Exchange are based on the plans in the FEHBP already! If the excise tax on high-cost insurance plans in the Baucus bill goes through, the FEHBP right now would be subject to that. If the FEHBP opts not to cover an eligible full-time employee, Uncle Sam is on the hook for the employer mandate, like any employer would. Same-same. The main difference is you're now talking about a pool of some 30 million people instead of 8 million -- imagine what those rates will look like.
So it’s less that the United States Senate is working on a plan that they won’t be bound by themselves. It’s that they’re working on a plan to give you what they already have.
(Photo credit: http://www.flickr.com/photos/nostri-imago/ / CC BY 2.0)
Do We Dare Hope for a Senate Finance Committee Deal?
Published September 21, 2009 @ 05:16PM PT
The opening statements haven’t yet been read. The first amendment hasn’t been voted on. The spinning and posturing has regrettably only just begun. But for all that, might the Senate Finance Committee only be days away from completing their work and passing a bill out of committee?
I didn’t think so last week, but am beginning to be persuaded upon perusing the amendments to the Baucus bill. Yes, the total is now up to a staggering 564 proposed amendments. You’d think that would translate to weeks of work, especially given the theater of the Senate Health, Education, Labor and Pensions Committee mark-up, where Republicans requested -- and received! -- votes on amendments that the Democrats were willing to accept by unanimous consent. And granted, the glut of Republican amendments foredoomed to failure, either because they would dramatically weaken the ability of Americans to purchase high-quality, affordable insurance or because, well, they’re just silly (Sen. Hatch’s “letter U” amendment, or the request to change every instance of the word “fee” into the word “tax”) makes it seem like we have a long way to go. But there are some intriguing amendments from Republicans among the dreck – and the dreck can’t last forever.
The real reasons for optimism come from the either side of the committee room -- not just with Democrats but with Sen. Olympia Snowe. Looking at what these senators wish to change, we honestly don’t have that far to go to find a compromise that will net 12 or 13 votes, enough to pass out of committee. And that’s the key for momentum. We don’t necessarily need a deal that can pass the Senate or both Houses of Congress out of the next week or two. We just need a deal that can be passed out of committee. We need to keep the ball rolling.
Ezra Klein summarizes the differences as being about affordability, financing and the public option. Sen. Max Baucus himself opened the door to the affordability question, with his own amendment to increase subsidies by some $28 billion. We’ll see what that translates to in terms of a detailed proposal, but clearly he’s not feeling bound to the skimpy affordability provisions he negotiated with Republicans Grassley and Enzi during the “gang of six” meetings -- particularly since neither gentleman seems inclined to vote for the package they helped negotiate. Sen. Olympia Snowe’s set of amendments would also dramatically help increase affordability and access to the plans in the Health Exchange. There’s every reason for optimism. There’s a real deal to be had here.
Financing is, of course, more difficult. That excise tax on the most expensive health insurance plans is likely to stick around, at least through a Senate Finance Committee mark-up. But, counter-intuitively, that’s not a bad thing. Sen. Carper is the only Democrat to propose a new financing scheme, and it’s one that most members of the committee have already rejected. Sen. Rockefeller’s slight modification -- adding a cap itemized deductions for the wealthy at 35% (instead of 39%) -- may just provide the wiggle-room to make the excise tax less onerous; Baucus already seems inclined to make it happen. Barring a left-field crazy idea, there's a compromise to be had here, as well.
That leaves us with what this health reform fight always seems to boil down to: the public option. That will generate a hell of a lot of fireworks. But the fate of the public option won’t be sealed in the Senate Finance mark-up. There’s still merging the Finance and the HELP bill (which contains a public option), and then merging the Senate bill with the House bill (which also contains a public option). But we need a bill out of Senate Finance before we can even begin that mud-wrestling.
So two out of three controversial issues may actually be solved relatively easily -- at least enough for a bill to pass out of committee. Or it could be an epic legislative train-wreck. But on this eve before the politicking begins again in earnest, at least, there is cause for hope.
(Photo is in the public domain.)
Michelle Obama Enters the Health Reform Debate: The Best of the Weekend
Published September 20, 2009 @ 11:33PM PT
Every weekend, I showcase the three videos or articles that best enhanced my own understanding of the health care reform debate. After all, when you’re talking about a topic that touches each of our lives and intersects policy, politics, medicine, taxes, the legal system, our economy and budgets ranging from a blue-collar family in Pennsylvania to the federal government of the United States -- well, a fellah sometimes need a little help understanding it all!
Although I don’t normally lead off with a political story, this one is well worth it:
1.) Health Reform Watch: “Because She Said So: Michelle Obama Wants Women to Stand Up for Health Care Reform”
Fellow Change.org blogger Jen Nedau posted the First Lady’s speech on the Women’s Rights blog. During the campaign, the president had often referred to Michelle as “the closer” -- the one whose impassioned “from the heart” speeches could close the deal. The White House has determined the only way to escalate the cause of health reform over and above an address to both houses of Congress is to have the First Lady also make the issue her own. It’s not a moment too soon, writes blogger and law professor Pooja Awatramani:
One of the biggest issues Michelle Obama seemed to have with the current system was gender rating; it continues to force women to pay much higher premiums than men in private insurance plans. The actuarial argument, that women’s health care needs require regular preventive care (which in reality, women and men alike should be getting) is significantly undermined by the research which shows the ultimate cost benefits of preventive care–for both women and men. It seems both ironic and counter-productive that this justification is used to punish with higher premiums those who embark upon the proactive health maintenance which so many agree is both the key to ultimate health care cost control and one of the primary goals of health care reform. Hopefully, Obama’s optimism that such gender rating will be removed through the current reform process will prove true.
With so many challenges aligned against women, it is apparent that, as stated by the Congressional Joint Economic Committee, “The status-quo health insurance system is serving women poorly.” Perhaps this is why the Obama administration, in its drive to convince Americans that the issue of health care can no longer be pushed aside, is turning to women. A smart choice, whichever way you look at it, since women as a whole are one of the groups most strongly supporting health care reform.
Read the full analysis on the Health Reform Watch blog.
2.) Washington Post, “You Have No Idea What Health Costs”
Blogger Ezra Klein has an article in this Sunday’s paper spotlighting why it’s so hard to make those of us with employer-based benefits sit up and take notice of escalating costs. Since our employer picks up the lion’s share and the rest is usually deducted from our payroll, it’s difficult for us to realize just how unsustainably premiums are rising each year. If we did, Ezra writes, we’d be more forcefully supporting reform.
The average health-care coverage for the average family now costs $13,375, according to Kaiser. Over the past decade, premiums have increased by 138 percent. And if the trend continues, by 2019 the average family plan will cost $30,083.
Three years of slightly above-average health insurance will cost a solid six figures.
Those are numbers to marvel at. Those are numbers to fear. But they are not the numbers that loom in the minds of most Americans. And therein lies the problem for health-care reform.
Read the full article on WashingtonPost.com
3.) Movin’ Meat, “Feeling Wonkish”
When I'm not quite sure of how proposed policy changes look to someone “in the trenches” of our medical system, I often turn to this blog written by Shadowfax, an Emergency Medicine Doctor who writes eminently readable snap-analyses of health care reform. And for Shadowfax, a lazy weekend at home apparently turned into analyzing the proposed amendments for the Senate Finance Committee from the perspective of an ER doctor.
The other thing that I gained from reading this is a real appreciation of how tricky lawmaking really is. This bill, after modification to some greater or lesser degree in committee, will need to be merged with the HELP committee bill and then (one hopes) with the House bill. That's a real challenge! Sure, there will be the big partisan battles, but all the little line items are the hard parts, I think. When you come to a provision like, say the Stabenow amendments, which have no clear partisan bias and a marginal effect on cost -- and bear in mind that there may be hundreds and hundreds of these in each bill -- how do you decide which are worthy of keeping, and which get tossed? Presumably you can't keep them all, and many are probably in direct conflict. Unless the advocate for a particular bill is at the conference table, it's gotta become a little arbitrary.
Orrin Hatch Has the Best Amendment for the Baucus Bill
Published September 20, 2009 @ 07:04PM PT
Over the next few weeks, members of the Senate Finance Committee will have a chance to, in the words of the Beatles, “take a sad song and make it better.” Beginning Tuesday, the committee will have full, public hearings in which they will “mark up” or amend the sketch of health care reform legislation delivered by Sen. Baucus. Guess what happens when negotiations happen for months in secret and don’t involve the overwhelming majority of committee members? You get 543 amendments submitted, that’s what. A quick glance of them should be sufficient to begin to decipher who’s advocating for you in that committee room -- and, more importantly, who’s not.
I’m focusing on the financing amendments. Why? Because even more so than whether there’s a public option or not (Schumer and Rockefeller), whether the Exchange is open to more or fewer people (Wyden), or whether the level of coverage for the Exchange will be cut even more (any Republican Senator not from Maine), the real controversy of health care reform is how are you going to pay for it. I’ve already written that Baucus’ financing scheme of a 35% excise tax on the most expensive insurance plans combined with fees on the industry is barely tolerable, albeit lame, and hitting an ever-increasing percentage of the middle class each year. But who out there is submitting a better idea?
Well, let’s just say there aren’t many profiles in courage here. For the amendments on financing, any proposal needs to have an offset. The most common offset for Democrats is, “closing corporate tax loopholes” -- one of those nebulous ideas that most people are in favor of, but whose lack of specificity make its application sketchy. That’s still better than the most common Republican offset, which is “proportionate reduction as needed in spending in the Chairman’s Mark,” which basically translates to “just cut everything else in the bill by a percentage.” Negative kudos go to Sen. Chuck Grassley, who mainly wants to cut any fee or fundraising off health insurance companies, big pharma, medical device companies and what not and replace that money with cuts to money for the stimulus bill that hasn’t yet been spent. Uh, sorry buddy, that ship has sailed. “Worst idea in the world” goes to Sen. Kyl, who also wants to protect the insurance companies, pharma, the medical device companies and others, and pay for it by refusing a tax credit for anyone trying to purchase anything but the most basic coverage plan in the Exchange. Apparently wanting to get dental coverage for your kid is less important that protecting the profits of the health care industry.
The Baucus Health Care Plan: Here Be Accounting Tricks
Published September 17, 2009 @ 05:10PM PT
The long-awaited and much-derided Sen. Max Baucus Chairman’s Mark intended to serve as the foundation for the Senate Finance Committee bill has, shall we say, a very limited audience. For once, I agree with Sen. Mitch McConnell when he writes, “The only thing bipartisan is the opposition.” But even if the proposal that took months to hammer out has zero Republican votes and progressive Democrats openly frustrated, there is one constituent who is quite impressed -- the Congressional Budget Office, which gave the Baucus bill inarguably the most impressive score of any health care proposal for cost reduction. But the reasons why Baucus’ plan appeals to the CBO are the very same reasons it is being vilified everywhere else... and why it's unlikely to become more popular the more people study it.
For starters, it’s not a surprise that the CBO looked upon the bill so favorably. After all, CBO Director Doug Elmendorf was photographed being in the room while “the gang of six” bipartisan negotiators were hammering out a deal. (In fact, there are more pictures of Elmendorf with the gang of six than there were pictures of gang of six participant Sen. Jeff Bingaman!) It’s also certainly the case that CBO’s rules for giving good scores on health care reform should be easy to predict by now. After all, HR 3200 yielded a very good score, as did the Wyden-Bennett plan. HR 3200, however, is also a textbook example on how to get, essentially, rogered by the CBO’s strict rules process. The House had fixed the Medicare Sustainable Growth Rate in its Paygo bill, netting a surplus of $265 billion. House leaders presumed that, since it was health care-related, that surplus should apply to HR 3200. The CBO did not agree, and when it proclaimed that HR 3200 would yield a $249 deficit, opponents of the bill had a new talking point –- even though the House health care reform effort creates a $16 billion surplus!
The point was clear to the gang of six: play by the CBO’s rules if you want your proposal to live. However, my Spidey-sense began to tingle yesterday when Sen. Kent Conrad requested CBO also score the Baucus bill in a 20 year-window. It’s an unusual move. But much like a lawyer only asks a question in front of a jury that s/he knows the answer to, Conrad knew what was coming. A $774 billion price tag over 10 years (even better than what Baucus himself reported), and a $49 billion surplus within the first 10 years. In short, the Baucus bill not only wouldn’t add to the deficit, it would reduce it. Extended out to a 20-year window, and the health bill would save hundreds of billions of dollars for the federal government.
Unfortunately, how it achieves those jaw-dropping savings is likely to be a ticking political time bomb.
