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Just when people were getting ready to write-off the Baucus bipartisan approach to a health bill the debate has swung back to the middle on a number of critical issues.
For a longtime I have been telling you two things:
- The final health bill will be more moderate than liberal—for example, no Medicare-like public plan, only a soft individual mandate, but including insurance exchanges and underwriting reform.
- A health care bill will go nowhere without a politically viable way to pay for it and no one has yet to put that on the table.
The Democratic caucus from the three House Committees working on a health care bill just released their outline.
It is clear that the House Blue Dog Democrats and
other moderates have had a big impact upon it. Those who thought the
House would come up with an unrealistically liberal proposal need to
think again.
First, there is a public plan proposal. But it is the neutered variety—“The public health insurance option is self-sustaining and competes on ‘level field’ with private insurers.” This is a clear response to the Blue Dogs and other moderates saying “no way” to the Medicare-like public plan.
The House version of the insurance exchange idea only applies to the individual and small group market.
There would be a “pay or play” employer mandate
accompanied by benefit standards—something I continue to believe will
not survive to the finals out of opposition by the employer community
to taking their ERISA plan design flexibility away. The individual mandate is the soft version–applying only to those who can truly afford it.
But on the spending side, it doesn’t look like the fiscal conservatives have had a lot of impact. The House bill also promises to subsidize individuals and families with incomes up to 400% of poverty. For physicians, it promises to get rid of the Sustainable Growth Rate formula and give primary care physicians a raise. It also promises to improve low-income Medicare subsidies, and eliminate cost sharing for all preventive Medicare services.
These are all good things—but they are also very expensive. This is where it gets a lot more problematic. Spending
money for all of these things could well take this bill to a cost well
north of $1.5 trillion depending upon the details.
The House bill puts no new revenue ideas on the table—they don’t even begin to talk about how to pay for it in any detail.
Because
of the influence of the moderate and conservative Democrats the House
outline is not so far away from the kind of bipartisan compromise that
can be had—in terms of a plan outline.
But
on the cost of the bill, and how it will be paid for, there is little
to make us believe the “Blue Dogs” have had much influence.
This
pushes my health care reform meter past $1.5 trillion on the cost side
for this particular bill with still only about $300 billion in the tank.
Word on just whose hide the money will come out of has to come out soon. The Blue Dogs will be successful in continuing to demand full pay-fors.
That is when the “fun” will begin.
Robert Laszweski has been a fixture in Washington health policy
circles for the better part of three decades. He currently serves as
the president of Health Policy and Strategy Associates of Alexandria,
Virginia. Before forming HPSA in 1992, Robert served as the COO, Group
Markets, for the Liberty Mutual Insurance Company. You can read more of
his thoughtful analysis of healthcare industry trends at The Health
Policy and Marketplace Blog, where this post first appeared.
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anyone who thinks that a blue dog genuinely cares about reducing spending — if that spending is on a Medicare provider in his distric — hasn’t met a lot of blue dogs.
That’s what we’re already doing, what Uwe advocated. Healthcare got a big dollop of stimulus spending, even though it is the only sector of the economy still adding jobs.
Health IT spending is going to grow rapidly, as is medical research, sectors of healthcare that have many high wage jobs, particularly at the top. Health spending is going to increase to 18% of GDP, and much of the additional money is going to be borrowed (to pay for increased Medicaid and Medicare spending). Is this where the highest payoff is for restarting the economy?
It seems to me that the Blue Dogs have three demands, which together are impossible to meet: a reform/universal health care bill should (1) be fully paid for, (2) not raise taxes in any significant way and (3) not involve large provider pay cuts. That is, these demands are contradictory if the goal is to get (almost) everyone covered.
So how are Blue Dogs helping this debate, and this legislation?
Why don’t we try to push, as Uwe Reinhardt has said, that more health care spending would initially serve as a stimulus to the economy.
Once we get everybody covered–and cut back on medical bankruptcies and the like–we can talk about cutting costs.
It’s all academic if they cannot find the money. And things are getting interesting here. Note this week the first Ben Bernanke warning on controlling the deficit. He’s obviously trying to calm down the bond and currency markets that have tanked, canceling out a lot of his stimulus efforts.
If mortgage interest rates continue backing up, housing prices don’t stabilize and there’s a ton of additional bad mortgages. If Bernanke is getting worried about the real cost of the ARRA and the financial system bailout (e.g. the loss of confidence in our debt and currency) AND losing his leverage to deal with it, we’ve got far bigger issues than whether we can finance health reform.
People have been distracted by the rising stock market, but there is ZERO sign of renewed economic growth out there (the green shoots are tendrils of mold). We are a long way from out of the woods on this recession, whatever they are telling you on CNBC. When investors go crazy that we ONLY lost 350,000 jobs last month, it makes you more than a little queasy.
SO, the President has affirmed that Congress should reinstate pay as you go budget rules, further increasing pressure on the Health Reform legislative drafters to find real money to pay for this. Even with an additional $300 billion in Medicare “savings” on top of what’s already in the FY10 budget, which would cut deep into hospital and physician incomes (and engender huge pushback from the industry), you’ve still got to find between $700b and a trillion real tax dollars to pay for this.
SO FAR, he cannot count a dime that Congress seems willing to spend. The tax package, if there is one, will happen at the last minute. And since Obama promised no tax increases for anyone but the “rich” to pay for this, he’s kind of boxed in advocating for those increases, putting all the onus and political costs on Congress. If bonds and currency continue to slide, he may need the tax increases to cut the deficit, which is already 50% of projected spending for this year!!
The mountain is looking a lot steeper and more treacherous as you near the summit. Hope they brought a lot of oxygen and some body bags. It is shaping up to be a real mess. . .
Single payer systems usually have doctor choice. What “free choice” are you afraid of loosing, Cheech? The choice of getting an MRI for tingling in the little toe? the choice of sitting in marble tiled hospital lobbies with player pianos?
MD as hell, I agree with you – we should not borrow to finance our current level of absurd medical overutilization.
This health care issue is atrocious. I can’t believe we haven’t figured this all out yet.
A Gov’t controled,single payer system would rob us who PAY taxes of free choice.Any PLAN the Dems will come up with will involve a massive tax hike and huge cuts in national defense.If this goes through,expect another 9/11.Except there will be no response.Pelosi is a RED.Obama is turning into another Jimmy Carter.Wake up,Barrack!
This country cannot borrow to pay for healthcare and leave the mess and the debt for unborn Americans to pay for and clean up. What unrivaled arrogance to think borrowing from the unborn to keep our sorry souls wallowing in entitlement slop is justified. Get real.