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Reports

Health Care Reform: Easier Than It Looks

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Posted on Jan 10, 2010

By E.J. Dionne, Jr.

Reaching agreement on a health care bill is harder in theory than it will be in practice.

Between now and the day the measure goes to President Barack Obama’s desk, there will be many crisis points, much posturing and dire warnings of impending failure. There are real differences between the bills passed by the House and the Senate. The last few votes are always the most difficult to get.

But more than negotiators can afford to acknowledge openly, there is broad agreement on the kinds of concessions the Senate can make to the House and still preserve the 60 votes needed for passage. Indeed, some of those concessions will be eagerly sought by progressive Democratic senators.

Over the last week, I’ve been talking with key figures in the House, Senate and White House, and the outlines of a deal are becoming reasonably clear. The public option is, alas, dead. But the idea of setting up a national insurance exchange—alongside state exchanges—where the uninsured can purchase coverage is very much alive. The House is demanding this as the price for giving up on the public plan, and a national exchange would provide for much more consumer-friendly regulation of health insurance policies.

Almost everyone in both houses wants to find ways of making insurance more affordable. Steps in this direction would include more generous subsidies for the purchase of insurance than those in the Senate bill, and expanding on its Medicaid provisions. The bill’s overall price tag will grow from the Senate’s $871 billion over a decade, probably to somewhere in the range of $930 billion to $950 billion.

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The tax on so-called Cadillac insurance plans, opposed by both organized labor and the insurance industry, is likely to be scaled back but not eliminated. Currently, the Senate bill includes a 40 percent excise tax on group health insurance plans worth $23,000 for families and $8,500 for individuals.

Many opponents would settle for raising that ceiling to $28,000 for families, with a comparable rise for individuals. That would reduce the number of policyholders covered by the levy. But because of fierce resistance to the tax from a large group of House Democrats, this could prove to be one of the most vexing issues in the negotiations.

In the meantime, negotiators are looking to extend to all states a version of the special deal that saved Sen. Ben Nelson’s home state of Nebraska from the bill’s increased Medicaid costs. Nelson himself is pushing for this change, which would cost $25 billion to $30 billion over 10 years. One solution: somewhat more modest across-the-board Medicaid relief to all states.

This negotiation will be unusual because almost everything the House and Senate agree to will be subject to the consent, or at least acquiescence, of Nelson and Joe Lieberman, the last two senators to commit to vote for the bill last month.

On the other hand, the death of the public option, insisted upon by Lieberman, is likely to strengthen the House’s bargaining position on other issues. The House, for example, is seeking to take away the health insurance industry’s exemption from antitrust laws, and wants stronger requirements that insurance companies spend most of the premiums they take in on the actual delivery of health services.

The bargaining could open the way for unusual coalitions. For example, both the insurance companies and many progressive groups want to hold providers to the public promises they made at the White House last year to cut the increase in annual health care costs by 1.5 percent a year over the next decade. This would amount to $2 trillion in savings.

One compromise might involve the insurance companies agreeing to a national insurance exchange and, possibly, antitrust changes if the final bill also includes a legal requirement that the providers live up to their cost-containment promises.

Compromise happens when negotiators are desperate for an agreement, and what’s not in doubt is that Democrats in both houses want to pass a bill by early next month. They know that the sooner a contorted and seemingly endless legislative process comes to a close, the quicker they will be able to sell the contents of their reform to a skeptical public and move to the economic issues that will dominate this election year. They will succeed because the only alternative is catastrophe.

E.J. Dionne’s e-mail address is ejdionne(at)washpost.com.
   
© 2009, Washington Post Writers Group


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Trailing Begonia's avatar

By Trailing Begonia, January 13, 2010 at 5:50 am Link to this comment

Health care bill or health care sell out?

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By FRTothus, January 12, 2010 at 8:09 am Link to this comment

No Public Option, no Single-Payer?  NO SALE!

“U.S. health expenditures are by far the highest of any country in the world at 15 percent of GDP. No other country spends even 11 percent of GDP. The U.S. also spends much more in absolute dollars. U.S. citizens pay $5,440 on average for health coverage while Canadians, the fourth biggest spenders, shell out $2,927.
In the U.S., 75 million are without insurance at some point every two years while in Canada, government spending provides health coverage for everyone.
According to the International Journal of Health Services, “the average ranking for the United States on 16 health indicators in a 1998 comparative study of 13 countries by Starfield was 12th, second from the bottom.
Insurance companies, for-profit hospitals, pharmaceutical companies, and doctors-the historical linchpin of corporate medicine-oppose universal health insurance. They are powerful political players. According to Acumen Journal, “since late 1999 [U.S.] health care lobbying spending has consistently passed that of any other industry. In 2002, that amounted to expenditures of $264 million…the health care industry as a whole accounted for 15 percent of the $1.8 billion in lobbying spending for 2002.”
(Yves Engler)

“To discredit the single-payer idea, insurers, HMOs, for-profit hospitals and other private interests play on Americans’ long-standing fears of Big Government. In truth, it is the private market that has created a massive bureaucracy, one that dwarfs the size and costs of Medicare, the most efficiently run health insurance program in the U.S. in terms of administrative costs. Medicare’s overhead averages about 2% a year.”
(Donald Barlett and James Steele)

“We are the only advanced nation without a national system of subsidized health care.”
(Elliott Currie, Crime and Punishment in America)

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By Bud, January 12, 2010 at 6:21 am Link to this comment
(Unregistered commenter)

As a staunch democrat for over fifty years,I and the rest of my family WILL NOT vote for any democrat,republican,or any other snake oil salesman running for office in any election.I hav had it with all of the corrupt lying bastards in Washington D.C.!

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By DaveZx3, January 11, 2010 at 3:09 pm Link to this comment

“Reaching agreement on a health care bill is harder in theory than it will be in practice.”

Easy to say Dionne, when you realize that it is not about giving the American public anything of value. 

The hard part would be to actually put some proposals out there that the public could get behind and support, and then find a cost effective way to pay for it.

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By wildflower, January 11, 2010 at 11:17 am Link to this comment

Re Dionne: “. . . the death of the public option, insisted upon by Lieberman”

Yes, yes, Lieberman. The warmonger from Connecticut who steals from our poor and neglects our sick so that he might have more to line the pockets of foreign countries – even when their Finance Minister says they don’t need the money. 

“US envoy George Mitchell said this week the US could withhold loan guarantees to extract concessions from Israel. . .

Finance Minister Yuval Steinitz reacted by saying the Israeli economy was doing well. “We don’t need to use these guarantees,” he was quoted by Israeli media as saying. “We are doing just fine.”

http://news.bbc.co.uk/2/hi/middle_east/8450715.stm

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johnnyfarout's avatar

By johnnyfarout, January 11, 2010 at 10:24 am Link to this comment

This article, which I scanned quickly through because it had me fuming, is an apology for what has gone on in Congress…right? I don’t want this apology. This is like a big middle finger up in our faces. “Here’s your reworded insurance policy, dumbass, now don’t bitch to us that you can’t understand it anymore than you could all the other bullshit we created for you to be confused over and slave away in the salt mines of your stupid life while we transcend to the heights of Olympus and live like Gods off your travails.” Is this it? All this crap for just more crap? So when the IRS comes to get you because you didn’t pay an insurance giant (who cannot be legislated to care about you) 8% of your income…I mean get real…shoving it down my throat and up my ass I get because it’s “business as usual” in America. “You can’t handle real health care!” Is that what they are telling us? “You are free when you pay the most out of the little you got.” Almost like Marat Sade is writing this script for us to perform, almost…I hate it!

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By markmarks, January 11, 2010 at 9:57 am Link to this comment
(Unregistered commenter)

I am starting to thing we are never going to get over this administrations blunders, Whether you’re for or against…fact is there’s got to be a problem if we can’t stop talking about the dreaded “Health Bill”.    I found this interesting though…take a look http://ketiva.com/Politics_and_Government/health_care_bill_extend_coverage_to_millions_while_costs_rocket.html

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By Jimmy1920, January 11, 2010 at 8:41 am Link to this comment
(Unregistered commenter)

Taxing benefits is a bad idea. 

Not just because it targets working people, but because it doesn’t target anyone with any real control over medical costs.

But in the spirit of compromise, I want to offer a new idea.  It may not be the best suggestion for financing health care reform, but it builds on at least one stated goal of the tax my benefits people – containing costs.

Instead of penalizing people whose only control over costs is to use fewer services, my idea targets the folks who actually have some impact on the health care market – the insurance companies.

Impose an excise tax on the folks who actually negotiate with providers and whose pitch to employee benefit professionals like me is that they can manage costs.

Impose the excise tax on premiums above some agreed upon base year and incent them to actually do what they say they are doing.

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By rudyspeaks, January 11, 2010 at 7:32 am Link to this comment
(Unregistered commenter)

Further proof (as ‘tho that’s needed) that Big Money controls our political system
and that they have enough left over to pay their shills (E. J. Dionne, Ruth Marcus
and the rest) to sell it to us. Remember “Squealer”, the pig in “Animal Farm” who
shifted back and forth as he lied to the other animals? When commercial real
estate crashes in about 2 months this same crew will be back, telling us that
another bail out of the wealthy, although distasteful, is something we’ve just got
to do. TINA! (there is no alternative). And in November it’ll be “You’ve got to vote
Democrat! Look at the Repub’s!” Within the system of reference presented by
columnists like this there is no change, ever.

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By bozhidar balkas, vancouver, January 11, 2010 at 6:09 am Link to this comment
(Unregistered commenter)

Health reform in US cannot ever be just-fair as long as US does not reform the structure of society from an extremely valued group of people to a less and less valued groups of people to a society with human face or a society in which gap in classes wldtn’t be so wide.

In a so sharply divided society as in so many lands, the top class largely or solely run a country. To simplify,in US [and other feudal societies]90+% of its pop wld remain w.o. representation in congress, judiciary, cia, army echelons.

Thus the best a fisher, miner can expect from congress is patching; which, of course, wld be labeled “reform”.
And the word “reform” is just another namecall;probably chosen with loving care as have been “audacity of change”, “war on terror”,  or “defence of US interests”. tnx

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By idarad, January 11, 2010 at 4:59 am Link to this comment

As Obama’s man in the trenches, the head of Organization for America said in an interview with Laura Falnders last week, this is a “great step for health insurance reform”.  Unfortunately for the American people, it is health care that needs to be provided, not health insurance.  This bill is another way to pacify folks for another 20 of 40 years, then congress will work on health bill collecting reform.

Anyone falling for this load of double speak will get what they asked for, horse droppings!

E.J. does it again, the barker for the snake oil of the oligarchy. Way to go E.J.

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By glider, January 11, 2010 at 2:19 am Link to this comment

So much for the word of the 60 Progressive Reps who promised not to vote yes without a Public Option.

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By rollzone, January 10, 2010 at 11:16 pm Link to this comment

hello. it is compromise time. a compromise on something the majority of people do not want. compromise on the excise tax. it will bankrupt working people. compromise on interstate competition amongst insurance companies by establishing a national option. compromise on tort reform by restricting overall costs from rising by 2%. compromise on gouging by administrators, double billing, and pharmacological favoritism by establishing death panels. compromise on reform by taking Senators into private chambers and telling them to bend over while you insert your agenda. when do we get to read this revenuer lie? moments before passage? where is my medical voucher?

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