Any day now the Supreme Court will issue its opinion on the constitutionality of the Accountable Care Act, which even the White House now calls Obamacare.
Most high-court observers think it will strike down the individual mandate in the Act that requires almost everyone to buy health insurance, as violating the Commerce Clause of the Constitution — but will leave the rest of the new healthcare law intact.
But the individual mandate is so essential to spreading the risk and cost of health care over the whole population, including younger and healthier people, that some analysts believe a Court decision that nixes the mandate will effectively spell the end of the Act anyway.
Yet it could have exactly the opposite effect. If the Court strikes down the individual mandate, health insurance company lobbyists and executives will swarm Capitol Hill seeking to have the Act amended to remove the requirement that they insure people with pre-existing medical conditions.They’ll argue that without the mandate they can’t afford to cover pre-existing conditions.
But the requirement to cover pre-existing conditions has proven to be so popular with the public that Congress will be reluctant to scrap it.
This opens the way to a political bargain. Insurers might be let off the hook, for example, only if they support allowing every American, including those with pre-existing conditions, to choose Medicare, or something very much like Medicare. In effect, what was known during the debate over the bill as the “public option.”
While it’s comforting to just blame the GOP for the unhappiness with health reform threatening the president’s re-election, the truth is that Barack Obama repeatedly botched, bungled and bobbled the health reform message. There were three big mistakes:
The Passionless Play
While Candidate Obama proclaimed a passionate moral commitment to fix American health care, President Obama delved into legislative details.
When a Baptist minister at a nationally televised town hall asked in mid-2009 whether reform would cause his benefits to be taxed due to “government taking over health care,” Candidate Obama might have replied that 22,000 of the minister’s neighbors die each year because they lack any benefits at all. Instead, President Obama’s three-part reply recapped his plans for tax code fairness.
While Republicans railed about mythical “death panels,” and angry Tea Party demonstrators held signs showing Obama with a Hitler moustache, the president opted to leave emotion to his opponents. The former grassroots organizer who inspired a million people of all ages and ethnicities to flock to Washington for his inauguration never once tried to mobilize ordinary Americans to demand a basic right available in all other industrialized nations. In fact, he hasn’t even mobilized the nearly 50 million uninsured, who have no more favorable opinion about the new law than those with health insurance!
Democrat Roland Burris, the sudden senator who replaced Barack Obama in that august body, has now joined those who are pledging to filibuster any bill that does not have a “public option” – joining of course those, like Connecticut’s infigurable Joe Lieberman who will filibuster if it does have a “public option.” But the compromise that is brewing may turn all such pledges inside out. The compromise would allow 55 to 65-year-olds to buy into Medicare, while letting under-55s without insurance into the Federal Employee Health Benefits Plan, along with mandates to buy in, and subsidies for those who can’t afford it. If this does indeed emerge, liberal Democrats in both houses may have some trouble defining what they mean by the “public option” they are so strongly demangin. Is it a “public option” for 55-and-overs if they can buy into Medicare? Sure sounds like it – a government-run plan that people can buy into, in competition with private plans. Is it a “public option” if the federal Office of Personnel Management runs an exchange called the Federal Employee Health Benefits Plan (FEHBP) setting the rules and transparency for private plans, with subsidies and tax credits for those 54 and under who can’t afford a health plan?Sounds close, but not quite. Close enough for confusion, at least.
So maybe the two parties are coming together on health reform after all. Last night we learned that after days of “secret talks” among the “gang of ten” the Democrats have reached agreement to restructure their health care proposal. The changes are significant:
– ditch the already-watered-down public option plan;
– create a new insurance exchange “option” for individuals and small groups consisting of a nonprofit plan as negotiated by the Office of Personnel Management;
– expand Medicare eligibility to cover uninsured individuals aged 55-64.
What does the Democrats’ “public option ultralight” compromise have in common with Republicans’ alternative universe? Well, consider the latter’s proposal to open interstate competition for all health insurers–a move they promise will immediately lower health care costs. Besides being shameless attempts to offer simple solutions to complex problems, the two proposals are guilty of the same fundamental misunderstanding of health insurance. Simply put, they both ignore a critical economic truth of health insurance today: insurers require a provider network of hospitals and doctors or must have market leverage in order to negotiate for lower provider prices and for controls on excessive volume.
Paul Starr and I have been agreeing a lot lately. Not that Paul knows or cares what I think or say, but a while back we both expressed fear that private health plans will end up channeling bad risks into the public option. That time I beat him to the punch (but I happen to know his piece was on the way before I hit “publish” on mine).
This time he was out first. Last Saturday he reminded Democrats that the big deal is not what happens with the public option, but instead what matters is how aggressive and effective Federal regulation of insurance (via the exchanges) will be.
For these reforms to succeed, there needs to be effective regulatory authority to prevent insurers from engaging in abusive practices and subverting the new rules. The bill passed by the House would provide for that authority and lodges it in the federal government, though states could take over the exchanges if they met federal requirements. The Senate bill would leave most of the enforcement as well as the running of the exchanges to the states. Yet many states have a poor record of regulating health insurance, and some would resist passing legislation to conform with the new federal law.
Of course Paul was a major author/player of the Clinton plan in 1993–4, which had it been enacted would have been way more extensive and impactful than the current legislation—and in a good way. I fear that this time his influence will be equally lacking in terms of the end result. Which is a big pity.
I've had this sitting in my inbox a while, but I thought that with the Senate bill out it was time to have a bit of weekend fun with it. The topic is the fear that a public option/government-run health plan/Hitler-ization of America (delete where applicable) will of necessity put all those worthy private health plans out of business. And worse because it will impose government's lower pay rates on providers, it'll also put them out of business, or at least into a position equivalent to that of Ukrainian peasants working on a collectivized farm.
Everywhere you go in the hospital world you hear complaints that Medicare pays less than private payers, and that the private insurance business is the only thing keeping providers alive.
Everywhere but Orark mountains of southwest Missouri and Northeast Arkansas.
Paul Taylor is the CEO of a tiny hospital system there called Ozarks Community Hospital. It's basically a safety net hospital and it only gets about 5% of its business from the leading commercial insurer, Blues of Missouri–part of Wellpoint. And does Wellpoint pay more for its patients than Medicare?
In fact this chart shows that it pays less than half in many cases. I thoroughly recommend you read Pauls blog piece on the topic from which I lifted that chart. It's an entertaining, detailed and sensible read.
But what he's saying is that a public option will be better for hospitals serving lower-income populations than a simple expansion of private insurance.
After a spy plane confirmed the Soviet Union was building launch platforms for first-strike ballistic missiles in Cuba in October, 1962, President John F. Kennedy convened his Joint Chiefs of Staff and cabinet members to help him decide how to respond.
Kennedy managed the diverse input he received, including surreal, saber-rattling rants from Air Force General Curtis Lemay, and eventually resolved the crisis. It was the closest we ever came to nuclear war.
But the consensus-based, inclusive leadership style JFK used to resolve the Cuban Missile Crisis doesn’t seem to be working as well for President Obama as his Health Reform Express barrels towards an unknown final destination.
Take the latest cockamamie plans for the public option, for example. As the House and Senate struggle to cobble together some semblance of a bill, we hear that the end result is likely to contain a public option along with a rider that allows states to opt out of it if they so choose.This ridiculous compromise is the byproduct President Obama’s decision to let Congressional group-think generate a legislative package that (a)could pass Congress and (b)he could sign. In making this decision, Obama sacrificed his principles before the altar of political success.
As Senate and House Committee versions of health reform move toward unified legislation and floor votes, the most complex political challenge is how to resolve the “public option” controversy. While one would have thought weightier issues such as the shape of Medicare reform, the taxation required to support coverage subsidies, or the presence or absence of mandates would have been pivotal in this debate, the seemingly peripheral issue of a Medicare-like “public option” might be the hill on which health reform dies.
The reasons are almost completely political. The Democratic base wants to end private health insurance. Single payer advocates view the public option as a down payment on an entirely public health financing system. Public option advocates believe that the plan’s bargaining power will drive private insurers out of business. (I’ve argued in a previous blog posting that, without fully understanding what they are doing, these single payer advocates are probably right.)Continue reading…
Here’s a pop quiz on health reform: Which prominent Republican said the following:
And if you don’t [oppose this health care legislation] and if I don’t do it, one of these days you and I are going to spend our sunset years telling our children, and our children’s children, what it once was like in America when men were free.
OK, it’s a trick question: the answer is Ronald Reagan, paid spokesman for the American Medical Association’s Women’s Auxiliary, speaking in 1961 against the bill that ultimately emerged as Medicare. (A recording of his “coffee klatch” talk, “Ronald Reagan Speaks Out Against Socialized Medicine,” is here.
Although what political scientist Jonathan Oberlander has termed “a politics of consensus” lasted for some thirty years after Medicare’s enactment, bipartisanship broke down in 1995 when Newt Gingrich targeted Medicare for cuts of 30% and urged privatization using managed care. By the lights of conservative Republicans, severe cuts in traditional Medicare would encourage flight to managed care alternatives, so that, in the famous phrase of Newt Gingrich, Medicare would “wither on the vine.” (1 St. Louis U.J. Health L. & Pol’y 5-43 (2007), Abstract). Although President Clinton used the Republicans’ Medicare reform to his own benefit (polls showed that his defense of Medicare helped him secure re-election), ultimately much of the Republicans’ agenda for reform was adopted in 2003. Since then Republicans have not relented in their criticism of the program– with some in leadership positions even questioning the government’s role in health care for seniors. (See Rachel Maddow’s cable television show featuring a parade of video clips of Republicans bashing Medicare, including former Speaker DeLay –echoed by Representative Roy Blunt–asserting that “Medicare shouldn’t be a government program”).
The green-eyeshade meanies in the Congressional Budget Office took another whack at the public plan today, at least the one contained in the health reform bill passed by the Senate Health Education Labor and Pensions committee last June. Responding to queries from ranking member Michael Enzi (R-WY), CBO chief Doug Elmendorf noted on his blog that “premiums for the public plan would typically be comparable to the average premiums of private plans offered in the insurance exchanges.”
The reason given was the HELP bill emasculated the public plan’s ability to piggyback on the administrative efficiencies of Medicare and required it to be “financially self-sufficient.”Continue reading…