issue: Health Care

Left-Right Convergence?

Posted on by The Progressive Policy Institute

The latest intra-progressive dustup over health care reform displays a couple of pretty important potential fault lines within the American center-left. One has to do with political strategy, and the role of the Democratic Party and the presidency in promoting progressive policy goals and social movements. I’ll be writing about that subject extensively in the coming days.

But the other potential fault line is ideological, and is sometimes hard to discern because it extends across a variety of issues. To put it simply, and perhaps over-simply, on a variety of fronts (most notably financial restructuring and health care reform, but arguably on climate change as well), the Obama administration has chosen the strategy of deploying regulated and subsidized private sector entities to achieve progressive policy results. This approach was a hallmark of the so-called Clintonian, “New Democrat” movement, and the broader international movement sometimes referred to as “the Third Way,” which often defended the use of private means for public ends. (It’s also arguably central to the American liberal tradition going back to Woodrow Wilson, and is even evident in parts of the New Deal and Great Society initiatives alongside elements of the “social democratic” tradition, which is characterized by support for publicly operated programs in key areas.)

To be clear, this is not the same as the conservative “privatization” strategy, which simply devolves public responsibilities to private entities without much in the way of regulation. In education policy, to cite one example, New Democrats (and the Obama administration) have championed charter public schools, which are highly regulated but privately operated schools that receive public funds in exchange for successful performance of publicly-defined tasks. Conservatives have typically called for private-school vouchers, which simply shift public funds to private schools more or less unconditionally, on the theory that they know best how to educate children.

Now clear as this distinction seems to “New Democrats,” there are a considerable number of progressives who think it’s largely a distinction without a difference, in education policy and elsewhere. And we are seeing that fundamental divergence on opinion on other, more prominent issues right now. On the financial front, the Obama administration reflexively pursued a strategy of regulation and subsidies for the financial sector, without modifying the fundamental nature of financial institutions, even as critics on the left argued for nationalization (at least temporarily) of key financial functions. At the more popular level, critics of TARP from the left joined critics of TARP from the right in deploring “bailouts” of failed financial institutions, even though the two groups of critics held vastly different views of the right alternative course of action.

Similarly in the health care reform debate, the Obama administration pursued legislation that utilized regulated and subsidized private for-profit health insurers to achieve universal health coverage. This approach was inherently flawed to “single-payer” advocates on the left, who strongly believe that private for-profit health insurers are the main problem in the U.S. health care system. The difference was for a long time papered over by the cleverly devised “public option,” which was acceptable to many New Democrat types as a way of ensuring robust competition among private insurers, and which became crucial to single-payer advocates who viewed it as a way to gradually introduce a superior, publicly-operated form of health insurance to those not covered by existing public programs like Medicare and Medicaid. (That’s why the effort to substitute a Medicare buy-in for the public option, which Joe Lieberman killed this week, received such a strong positive response from many progressives whose ultimate goal is an expansion of Medicare-style coverage to all Americans).

Now that the public option compromise is apparently no longer on the table, and there’s no Medicare buy-in to offer single-payer advocates an alternative path to the kind of system they favor, it’s hardly surprising that some progressives have gone into open opposition, and are using the kind of outraged and categorical language deployed by Marcy Wheeler yesterday. As with the financial issue, there’s now a tactical alliance between conservative critics of “ObamaCare,” who view the regulation and subsidization of private health insurers as “socialism,” and progressive critics of the legislation who view the same features as representing “neo-feudalism.”

To put it more bluntly, on a widening range of issues, Obama’s critics to the right say he’s engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector. They can’t both be right, of course, and these critics would take the country in completely different directions if given a chance. But the tactical convergence is there if they choose to pursue it.

For those of us whose primary interest is progressive unity and political success for the Democratic Party, it’s very tempting to downplay or even ignore this potential fault-line and the left-right convergence it makes possible. It’s also easy to dismiss critics-from-the-left of Obama as people primarily interested in long-range movement-building rather than short-term political success; that’s true for some of them. But sorting out these differences in ideology and perspective is, in my opinion, essential to the progressive political project. And with a rejuvenated and increasingly radical right’s hounds baying and sniffing at the doors of the Capitol, we don’t have the time or energy to spare in dialogues of the deaf wherein we call each other names while getting ready for the elections of 2010 and 2012.

This item is cross-posted at The Democratic Strategist.

More on the Public Option as Symbol

Posted on by The Progressive Policy Institute

Over at The Democratic Strategist, PPI Senior Fellow Ed Kilgore responds to my post on the public option. The impetus for my piece was the blogger Digby’s claim that the public option has “long since gone way beyond a policy to become a symbol.”

Ed notes that my post missed something important: that Digby is treating the public option as a symbol largely because that is what its opponents have done. Even in its weakened state, the foes of a public option have kept bashing away, transforming it into “a matter of pure power politics” that progressives like Digby believe the left must engage. From there, Ed argues that there is, in fact, less dividing progressives on the issue, that “if and when it’s sacrificed, it will be a matter of relative indifference to some of the ‘robust’ PO’s strongest supporters.”

I hope he’s right. For my part, my concern regarding the politics of the public option springs not from the fight over it but from what comes after passage. After acquiring such outsized status on the left, the absence of a public option — or the presence of a version barely recognizable to its supporters — in the final bill could well send progressives into despair over the administration and its achievement.

And that would be a shame. As Ezra Klein notes today:

It might have been a necessary thing from an activism point of view, but convincing liberals that this bill was worthless in the absence of the public option was a terrible decision, wrong on the merits and unfair to the base. The achievement of this bill is $900 billion to help people purchase health-care coverage, a new market that begins to equalize the conditions of the unemployed and the employed, and a regulatory structure in which this country can build, for the first time, a universal health-care system. Thousands and thousands of lives will be saved by this bill. Bankruptcies will be averted. Rescission letters won’t be sent. Parents won’t have to fret because they can’t take their child, or themselves, to the emergency room. This bill will, without doubt, do more good than any single piece of legislation passed during my (admittedly brief) lifetime. If it passes, the party that fought for it for decades deserves to feel a sense of accomplishment.

Mike Lux at Open Left also touches on this in a post today, posing the crucial question: “The deal on health care is about to get done: will progressives come out of it feeling like we got the first major progressive policy since the 1960s passed, or feeling like they got sold down the river?” If the public option becomes the standard by which health reform is judged, and there is a weak one or none at all in the final bill, then the latter seems likely. It would be nothing less than a tragedy if the progressive backlash against Obama and this Congress were to come on the heels of the passage of the most consequential progressive legislation this country has seen in decades.

The Public Option as Symbol

Posted on by The Progressive Policy Institute

In recent days, there seems to have been a shift in the progressive community over the question of whether the public option, in its current state, is still worth fighting for. Some on the militantly pro-public-option left aren’t responding well to the weakening front.

Over at Hullabaloo, the influential Digby gives the game away. She cites Ezra Klein, who wrote today:

Having something called a public option is not, in the end analysis, as important as achieving the goals of the public option, and at this point, the policy itself is getting so watered down that it might be worth attempting to achieve its goals in a more straightforward fashion.

But Digby is having none of that:

Ezra believes that if the votes aren’t there for a decent public option then the horse trading should be around getting something good in return for giving up the public option rather than negotiating the terms of the public option. That would make sense if the public option were just another feature of the health care bill. But it is not. It is the central demand of the liberal base of the Democratic Party in this rube goldberg health care plan and has long since gone way beyond a policy to become a symbol.

Perhaps that is wrong on policy grounds. People will argue about that forever. But that doesn’t change the fact that it is no longer a matter of policy but rather a matter of political power. And to that extent it cannot be “bargained away” for something like better subsidies, even if it made sense. “Bargaining away” the Public Option is also the bargaining away of liberal influence and strength.

[…]

Again, as a matter of policy I don’t know that the public option actually means much anymore. But as a matter of politics, it’s very important.

Let the boldness – and the destructiveness – of that declaration sink in. On the most important progressive policy achievement in a generation, Digby says forget the policy – it’s the symbolism that matters.

Digby argues that the implications of the public option extend far beyond health care, that “powerful people” are “desperate that the liberals are not seen to win this battle.” Funny, because I thought the way that progressives win this battle is by making health care accessible and affordable to millions of Americans who currently don’t have it. According to some very smart people, the public option is playing a steadily diminishing role in achieving that goal. But don’t tell that to Digby, whose position now boils down to: Why bother with policy advances when we can have symbolic victories (or, heck, defeats)?

From the start, PPI has argued that the fixation on the public option has been distracting us from the more important conversation we could be having about making the exchanges more robust. Paul Starr, in an op-ed for the New York Times on Monday, said as much in a column titled “Fighting the Wrong Health Care Battle”:

[G]iving the exchanges the necessary authority to regulate private insurers could solve many of the problems that motivated the public option in the first place. Strengthening that authority and accelerating the timetable for reform are what liberals in Congress should be looking for in a deal.

But Starr is, of course, commenting on policy. For Digby, that’s no longer what the health care debate is about.

RIP Compassionate Conservatism

Posted on by The Progressive Policy Institute

The Republican message on extending health care coverage can be summed up in two words: “Bah, humbug.”

In taking a purely obstructionist stance, the GOP has evinced scant empathy for tens of millions of fellow Americans who lack basic protection against illness or injury. So much for compassionate conservatism.

On Saturday, not a single Republican voted to allow the Senate to even consider a bill to expand coverage and reform health insurance markets. When the House passed its version of health reform, just one Republican voted aye. He is Rep. Joseph Cao, a freshman from normally Democratic New Orleans.

Republicans, of course, are under no moral or political compunction to support Democratic proposals for health reform. But since they haven’t offered any credible alternatives of their own, it’s reasonable to conclude that they don’t care all that much about fixing America’s broken health care system.

Sure, House Republicans proffered their version of “reform” earlier this month. It would spend just $61 billion over 10 years and leave the percentage of uninsured Americans in 10 years exactly where it is today – at 83 percent. Thanks to population growth, there would actually be more uninsured people than today.

In opposing serious efforts to expand coverage, Republicans say they are trying to protect Americans against runaway deficits, not to mention death panels, publicly financed abortions and other confected horrors. They rail against President Obama and the Democrats for proposing to pile a costly new health care entitlement atop others we don’t know how we’ll pay for.

That’s actually a valid concern, one that progressives should take more seriously. But the GOP’s newfound fiscal piety would be more convincing if President Bush and party leaders had not muscled through Congress a massive new Medicare drug entitlement just six years ago.

Showing their customary solicitude for America’s haves – Medicare offers all seniors the basic health coverage the uninsured lack – Republicans insisted on creating a universal entitlement, rather than targeting help for truly needy seniors. At first projected to cost $534 billion over 10 years, revised estimates in 2005 put the bill’s price tag at $1.2 trillion. That’s several hundred billion dollars more than the bill passed this weekend by Senate Democrats. David Walker, former U.S. comptroller general, called the 2003 prescription drug bill “probably the most fiscally irresponsible piece of legislation since the 1960s.”

In contrast, the Senate Democrats’ bill is paid for. In fact, the Congressional Budget Office estimates that it would cut the federal deficit by $130 billion in the first decade and by more than $500 billion in the second decade.

But there’s a hitch, and it’s a big one. Cutting future deficits refers only to the public costs of expanding medical coverage and reforming U.S. health care markets. That’s not at all the same thing as “bending the curve” of health care cost growth. Slowing the unsustainable pace at which medical costs in America are growing requires confronting the perverse incentives and inefficiencies that plague health care delivery. It also means rebalancing the big entitlement programs, as retiring baby boomers swell the number of people receiving Medicare benefits.

This is the big piece of unfinished business facing both health care reformers and President Obama. The Senate bill expands coverage and cuts the federal deficit. According to some leading budget analysts, however, it doesn’t do enough to slow down the rising health costs that plague the vast majority of U.S. workers and that handicap many U.S. firms in global competition.

They deserve some compassion, too.

Dispatches from the Republican Self-Immolation, Vol. 2

Posted on by The Progressive Policy Institute

Another week, another dozen reminders of the insanity that has engulfed the Republican Party.

First is this absolutely astounding poll from Public Policy Polling:

PPP’s newest national survey finds that a 52% majority of GOP voters nationally think that ACORN stole the Presidential election for Barack Obama last year, with only 27% granting that he won it legitimately.

Wow. The mind reels.

Then there was this gem from House Minority Leader John Boehner (R-OH) from yesterday, responding to the release of the Senate health reform bill: “What is even more alarming is that a monthly abortion premium will be charged of all enrollees in the government-run health plan.” That’s right – Boehner’s claiming that everyone in the public plan will be charged a monthly fee for abortions.

If that’s sounds a little fishy, that’s because it is. There is no such fee. In fact, the Senate bill requires insurance plans that offer abortion coverage to segregate their funds so tax money isn’t used to fund that coverage. The bill also states that every state’s health exchange must also offer one plan that doesn’t cover abortion. No consumer would be forced to fund abortions with their premiums. Not that the facts stop congressional Republicans these days.

And finally there was the bow heard round the world. Earlier this week, all conservatives could talk about was President Obama’s shocking bow to the Japanese emperor. Sean Linnane at Frum Forum, applying his expertise on bowing protocol, concluded that Obama “went WAY too low; it is only one step above a kow tow.” He added, “Compare Obama’s bow with how he conducted himself in the company of the Queen of England, and then contrast this with the way he leaned forward to bow and scrape before the King of Saudi Arabia; this certainly leaves a lot of room to wonder about which direction this man’s sentiments lie.”

That’s what conservatives have been reduced to: close textual readings of trivial moments. (And remember – this is from a conservative blog that’s supposed to be more moderate.) As if the right needed reminding of how out of step they are, a Fox News poll found that 67 percent of Americans approved of Obama’s bow — not that we needed a poll to underscore how inane the conservative obsession with the Obama bow is.

These reminders of the freak show on the right should remind progressives of what’s at stake. To put it simply: we are the only grown-ups in the room. We may be a fractious coalition, but the prospect of the other side coming back to power should be impetus enough to get us all to pull in the same direction.

Is Reid Wobbling on the “Cadillac Plan” Tax?

Posted on by The Progressive Policy Institute

A New York Times editorial today threw its support behind a health reform provision that we’ve backed in the past: an excise tax on so-called Cadillac plans. But the Times‘ endorsement came on a weekend when prospects for the tax seemed to dim.

On Thursday, it was reported that Senate Majority Leader Harry Reid (NV) was considering raising the Medicare payroll tax on workers earning $250,000 or more to help pay for health care reform. According to one report, the idea being floated is a half-percent increase in the tax, to raise some $40 billion to $50 billion over 10 years. Another idea is to extend the payroll tax to capital gains and dividends from high-income earners.

Why the decision to tap into a new funding source for the reform package? One reason could be an effort to hike the Senate’s stingier (compared to the House bill’s) subsidies for low-income people. But a likelier reason could be, as the Times reported, an effort by Reid to cut back, if not outright eliminate, one of the Senate’s main financing sources, the excise tax.

If the payroll tax hike ends up replacing the excise tax, it would be an unfortunate development for reform. For months now, some powerful Democratic constituencies have been putting pressure on lawmakers to drop the idea. HCAN, a progressive health reform advocacy group, has come out swinging against it; the AFL-CIO has been running ads like this to scare the public and Congress.

But far from a tax that unfairly targets the middle class, the excise tax on high-cost health plans would actually be progressive. According to the Center for Budget and Policy Priorities, the “thresholds for the proposed excise tax are sufficiently high that most health insurance plans would not be affected.” Moreover, such a tax would go some way toward bending the proverbial cost curve:

The proposed excise tax would make a major contribution to slowing the growth of health care costs by discouraging insurers from offering, and firms from purchasing, extremely generous health insurance coverage that can encourage excess health care utilization. That, in turn, would reduce incentives for excessive health care spending.

As employers seek out cheaper, more efficient health plans, the savings then get converted into higher wages for employees. Indeed, according to the Joint Committee on Taxation, of the $201 billion in increased revenue the excise tax would bring, only $38 billion would come from the excise tax itself — the rest would come from increased payroll and income taxes from the higher wages and salaries that employees would be paid.

While an increase or expansion of the payroll tax for high-income earners might yield some new and badly needed funds for reform, it would not be a sustainable source, what with health cost inflation growing at a far faster rate than payrolls and the taxes levied on them. The fact is that the excise tax on high-cost health plans simply produces too many good outcomes — revenue generation, cost reduction, wage increases — for progressives to pass up, let alone oppose.

Reform and Its Discontents

Posted on by The Progressive Policy Institute

It has become fashionable among some progressives to lambast the administration and congressional Democrats for the slow pace and incremental approach they have taken in trying to pass health reform legislation. (For a nice sampling, check out some of the posts and comments at Open Left.)

Ezra Klein highlights one emblematic strain among progressive critics, pointing to a piece by Marcia Angell, an M.D. and senior lecturer at Harvard Medical School, in the Huffington Post. Angell, a single-payer supporter, writes, “Is the House bill better than nothing? I don’t think so…. I would rather see us do nothing now, and have a better chance of trying again later and then doing it right.”

Klein offers a sensible counter-argument:

The idea that a high-profile failure in a moment where a liberal Democrat occupies the White House and Democrats hold 60 seats in the Senate for the first time since the 1970s will encourage a more ambitious success later does not track with the history of this issue, nor with the political incentives that future actors are likely to face. If even Obama’s modest effort proves too ambitious for the political system, the result is likely to be a retreat towards even more modest efforts in the future, as has happened in the past.

Among some progressives, there is a kind of denial about the nature of American reform. They fail to grasp that change, when it has come, has happened incrementally and evolutionarily. The New Republic’s John Judis touched on this yesterday when he pointed out that Social Security, that progressive landmark, was in fact less imposing an edifice when initially constructed in 1935:

That act, when it passed, was a bare shell of what it became in the 1950s after amendment. Benefits were nugatory. And most important, coverage was denied to wide swaths of the workforce, including farm laborers.

Why farm laborers? Well, because Franklin Roosevelt and liberal Democrats needed the vote of racist Southern Democrats who wanted to deny benefits to blacks, most of whom were farm laborers.

To believe that failure on reform today would only lead to a more progressive reform effort tomorrow is delusional, plain and simple. As TNR’s Jon Cohn argues, “You could plausibly claim that the reforms on the table today are more or less what moderate Republicans were proposing under Clinton, just as the Clinton reforms were not that far removed from what Nixon himself wanted in the early 70s.”

And yet for far too many progressives, a failure to perfect health reform now would constitute a defeat of epic proportions. This is why when Rep. Dennis Kucinich (D-OH), a single-payer advocate, voted “No” on the House health bill, he received hardly any reproofs from the netroots (Angell praised him), even as they went after other dissenting Dems. (One blogger for Open Left, Mike Lux, did lambast Kucinich – and was then promptly pushed around in his post’s comments section.)

After 70 years of trying to achieve universal health care, progressives are as close as they’ve ever been to that goal. It’s not perfect. It’s not pretty. But let’s not let the perverse allure of being sanctimonious in defeat – an addiction that plagues too many on our side – derail the best shot we have at improving the lives of millions of Americans.

On Health Reform, Cost Containment Remains the Missing Piece

Posted on by The Progressive Policy Institute

President Obama’s push for health care reform has provoked so many political sideshows that it’s easy to lose track of the main plot. The most important debate – how to slow the inexorable growth of health care costs – has scarcely begun.

Instead, Democrats spent months wrangling over the public option, which is basically a proxy for the endless debate over the proper size and role of government. Now they are tussling over abortion, that hardy perennial of the culture wars. And the Senate may add immigration to the already combustible mix.

These are, of course, large and important issues in their own right. But they distract progressives from what health reform is really supposed to accomplish. What most Americans want is relief from constantly rising health care costs and the nagging fear that they could lose coverage altogether if they get sick or lose their job. The public also wants a system that leaves no one out, though polls show mounting worry about the cost of guaranteeing universal coverage.

The House bill passed last weekend passes the coverage test. Through a mix of insurance market reforms, public subsidies and a mandate on individuals to buy insurance, it extends coverage to 39 million Americans. That’s as close to universal coverage as we are likely to get, and by itself a major progressive achievement.

But it comes at a stiff price: $1.2 trillion over the next decade. At a time when the federal deficit has tripled in just a year, many Americans think that’s a lot of money to spend. According to the Congressional Budget Office, the House bill includes enough offsetting savings to pay for health reform without adding to deficits. To his credit, President Obama has vowed to veto a bill that isn’t deficit-neutral.

But if it doesn’t aggravate America’s short-term fiscal woes, the House bill fails to deal seriously with the long-term challenge of reducing the unsustainable pace at which health care costs grow each year. That is what drives premiums up for working Americans, helps to price U.S. businesses out of global competition, and escalates spending on Medicare and Medicaid.

Today’s New York Times reports on a “growing revolt” among some Democrats and prominent health care experts over the lack of strong cost controls in the House bill or others under consideration. “My assessment at this point is that the legislation is heavy on health and light on reform,” the Times quotes Sen. Ron Wyden (D-Ore) as saying. He’s exactly right.

As the action now shifts to the Senate, Wyden and pragmatic progressives need to insist on adding credible measures for “bending down” the health cost curve. The menu of plausible options includes a Medicare Commission with real powers to reduce payments for low-quality or ineffective health care, and strict limits on the federal government’s open-ended tax subsidy for employer paid health plans.

It goes without saying that real cost containment will meet resistance from powerful interests, from doctors to organized labor. Against that, Democrats must weigh the dismal prospect of a health care “reform” that merely makes a deeply flawed system bigger and more expensive, without changing the incentives and behaviors that lead to runaway medical inflation.

On a Good Night, A Discordant Note

Posted on by The Progressive Policy Institute

Some on the left have been going hard against Democrats for caving on the Stupak amendment in the health care reform bill the House passed on Saturday. The amendment, sponsored by Rep. Bart Stupak (D-MI), prohibits federal funds from going to insurance companies that cover abortions in the health exchanges. Never mind that the House health bill, if it becomes law, would improve the lives of millions of Americans – the Stupak amendment is a stain that can never be erased, according to some in the blogosphere.

Digby, one of the left’s preeminent bloggers, saw the failure extending all the way to “the president himself [who], like many of his elite male cohort, often gives the impression that women’s rights are just another annoying special interest.”

In an earlier post, Digby waxed even more indignant about the Stupak amendment:

I suspect that the leadership decided that abortion was the least important thing they could throw to the slavering Blue Dogs to take home as a victory over the liberals in this debate. And they had to find a hippie to punch to make the thing acceptable to the villagers, so they decided to punch the desperate pregnant girl. She’s used to it.

Since the Republicans have made themselves irrelevant with their obstructionism the Democrats have decided that in order to further the president’s edict to change the tone and further bipartisanship they will just have to compromise with themselves.

Democrats everywhere will now be able to brag about furthering the Godly cause of forced pregnancy, while having also voted to pass health care.

Look, the Stupak amendment was an unfortunate concession to the pro-life faction in the Democratic caucus. I certainly don’t like it. But what would Digby have the Democratic leadership do? Refuse Stupak a vote and risk passage of the final bill? The leadership certainly didn’t think that that was worth the risk – Rep. Jim Cooper (D-TN) said today that reform “would’ve failed” without the compromise — and I don’t blame them.

Or perhaps Digby would rather that those Dems who voted for the Stupak amendment be expunged from the party. That would certainly cut down on the number of Democrats with whom Digby disagrees. It would also be a fast track to shrinking the Democratic tent – a tent that, thanks to the self-destruction of the GOP, now encompasses left and center. Digby has been an astute observer of a Republican Party that’s hell-bent on purifying itself into obscurity, and yet she sees no contradiction in her own views toward the Democratic coalition.

Would Digby prefer that progressives cast out all pro-lifers from our ranks? According to Gallup’s most recent poll on abortion attitudes, 47 percent of the public identify themselves as pro-life, while 46 percent identify themselves as pro-choice. A May 2009 Pew survey found that 46 percent said that abortion should be legal in all or most cases – the lowest figure since 1995 – and 44 percent said it should be illegal in all or most cases – the highest since 2001. Because Democrats now occupy the center as well as the left, many Americans who count themselves as pro-life now might consider themselves Democratic or at least lean that way because of other issues. Are we really prepared to tell half of the electorate that they’re not welcome because of that one issue alone?

The irony is that the blogosphere’s prescription of denying the existence of pro-lifers within the Democratic ranks probably contributed to the success of the Stupak amendment. Amy Sullivan, writing in Time’s Swampland blog, argues:

But it also seems clear that the Democratic leadership and White House dropped the ball on finding a compromise with pro-life Democrats. The deal reached late last night/early this morning in the Speaker’s office is not a compromise; it is in fact more than the Catholic bishops and Stupak himself asked for as late as mid-summer. The Speaker didn’t get rolled by crafty or stubborn members of her party, though. This was a predictable consequence of a high-handed approach to dealing with pro-life members of the Democratic caucus.

Despite the fact that anyone who has followed U.S. politics over the last thirty years could have told you that abortion would be a controversial aspect of health reform, no one tried to preemptively address the concerns of pro-life Democrats by sitting down with them early in the process. The White House didn’t reach out to some of the more good-faith players on the pro-life side until early September. And Pelosi didn’t sit down with Stupak until September 29. This despite the fact that 19 Democratic members sent her a letter in June expressing their concerns with abortion coverage in health reform.

In other words, you can ignore those who disagree with you, but it doesn’t make them disappear. In this case, it may even have come back to bite the leadership.

Make no mistake: progressives should stand for a woman’s right to choose, and Democrats should do all they can to kill the odious amendment in conference without endangering the end goal of reform. But to reduce the complicated work of politics into a with-us-or-against-us game is neither normatively nor politically desirable. The progressive rank-and-file have to realize that you make laws with the public you have, not the public you wish you had. Some in that public will have different, deeply held beliefs that might differ from yours and mine. With progressives now ascendant, we have to take into consideration the views of moderates, independents, and centrists in governing this often-unwieldy polity.

Some progressives like to believe that there is no such thing as the moderate middle — that a projection of brute liberal force will disabuse moderates of their milquetoast views and they’ll come to see the light. Forget the condescension inherent in that view. Try getting 218 votes with that attitude. If Speaker Pelosi had taken that approach on Saturday, I doubt these same bloggers would be congratulating her for losing health reform but at least standing her ground on a woman’s right to choose.

The House Health Reform Vote

Posted on by The Progressive Policy Institute

Amidst general pleasure over the House´s passage of health reform legislation Saturday night, there´s also progressive angst over two issues: the narrowness of the vote, which leaves little or no margin for error when the conference committee report comes up, and the passage of the Stupak Amendment, which goes much further than previous House or Senate bills in restricting the ability of consumers to purchase abortion coverage in the new exchanges.

The first concern is probably overwrought. Speaker Pelosi clearly whipped her vote, and gave a free pass to vulnerable Democrats to vote “no.” Since the final version is likely to be less subject to conservative attack than the House bill, Pelosi should be able to hold all 219 Democrats and perhaps add a few.

The Stupak Amendment is more problematic, since 64 Democrats voted for it. But given the arcane nature of the differences between Stupak and earlier anti-abortion provisions, it’s unclear that any Democrats who voted for the House bill would vote against the conference report with a slightly less obnixious anti-abortion provision.

In any event, we should take a deep breath right now and appreciate the historic nature of the House vote, which didn’t look that secure until right before it occurred. Aside from its substantive importance, the vote should prove helpful in diverting the news media from ludicrous overinterpretation of the NJ and VA gubernatorial results.

More Election Day Thoughts

Posted on by The Progressive Policy Institute

After a second day of analysis and reflection, key implications of Tuesday’s elections seem clearer.

The election was a referendum, all right, but on the state of the U.S. economy, not President Obama. In exit polls, most voters (over 80 percent) said the economy was their top concern. Those who professed to be “very worried” backed the Republican candidates for governor in Virginia and New Jersey by wide margins. If high unemployment persists well into next year, as White House economists forecast, it will spell serious trouble for Congressional Democrats.

Republicans were more motivated to vote Tuesday. Democrats suffered a big drop-off of voting by the young and minorities compared to 2008. But the pivotal factor was the dramatic swing of independents, whom Obama won last year. This time, independents voted 2-1 for Republican candidates.

There was an ideological subtext to the independents’ defection. In addition to worries about jobs and the economy, many of them seem fixated on the nexus of “big government,” spending and debt. There’s no doubt that growing distrust of government is complicating President Obama’s ability to forge majorities in Congress for his big, and costly, initiatives, especially health reform.

Many progressives worry that the election results will send moderate Democrats running for the tall grass. Certainly, the outcome should concentrate the minds of Congressional negotiators who are struggling to get 60 votes in the Senate for health reform. Too much time has been wasted on the public option, which already has been watered down and which in any case isn’t worth jeopardizing prospects for an historic breakthrough on universal coverage.

The way for Democrats to hold their moderates in line is to 1) make sure the bill’s cost doesn’t balloon, and that it meets Obama’s demand to add “not one penny” to the federal deficit; and, 2) take tougher steps to reduce medical cost inflation.

The election also may fuel Congressional demands to put on hold President Obama’s other ambitious goals – regulatory reform, a carbon cap-and-trade scheme, immigration reform – so that lawmakers can concentrate instead on the economy. That may make sense, if they can find practical ways to relieve economic distress without aggravating public anxiety about government overreach and profligacy.

But one thing Tuesday didn’t produce was evidence of an electorate turning hard right. The only movement conservative running – Doug Hoffman – lost his race for Congress in upstate New York, flipping a traditionally Republican seat to the Democrats. Will the Palin-Beck wing nevertheless continue their crusade to drive moderates out of the Republican Party? We can only hope.

The GOP’s Failed Stab at Health Reform

Posted on by The Progressive Policy Institute

The Congressional Budget Office has now weighed in on the House Republicans’ proposed substitute to the House health reform legislation. The results aren’t pretty.

According to the CBO, the GOP plan does little to expand coverage: 52 million Americans would remain uninsured by 2019, up from 50 million in 2010. Nor does the plan do anything to end insurers’ practice of denying health coverage because of pre-existing conditions. And forget about subsidies to help working-class Americans afford health insurance.

Ezra Klein sums up the CBO’s findings nicely:

CBO begins with the baseline estimate that 17 percent of legal, non-elderly residents won’t have health-care insurance in 2010. In 2019, after 10 years of the Republican plan, CBO estimates that …17 percent of legal, non-elderly residents won’t have health-care insurance….

But maybe, you say, the Republican bill does a really good job cutting costs. According to CBO, the GOP’s alternative will shave $68 billion off the deficit in the next 10 years. The Democrats, CBO says, will slice $104 billion off the deficit.

The Democratic bill, in other words, covers 12 times as many people and saves $36 billion more than the Republican plan.

But the plan does lower premiums, which is no surprise since sick people who need heath coverage the most will be left out of the system. So Republicans have that going for them.

Health Reform Differences Narrow

Posted on by The Progressive Policy Institute

At the beginning of this week on the health care front, one thing clear is that the differences between what the House and Senate are likely to vote on are not as large as everyone expected a few weeks ago. Harry Reid’s advancing a public option bill with (it appears) a state opt-out, and the House is going with a public option that will negotiate rates instead of pegging payments to Medicare. Had the Senate gone with a weak trigger or something like co-ops, or the House had insisted on the Medicare peg, it could have caused some very serious problems down the road.

However you happen to feel about the substance of these nuances, anything that steadily narrows the gaps between Senate and House Democrats is a step towards enactment of health reform this year. Or at least that’s how it looks to me from an internet cafe a very long way from Washington.

This item is cross-posted at The Democratic Strategist.

The Good Health Reform Idea That Everyone’s Ignoring

Posted on by The Progressive Policy Institute

Writing in The Hill’s Congress Blog, Joseph Minarik of the business group Committee for Economic Development brings up an idea that unfortunately has been largely passed over in the health care debate:

Short of starting over with a fundamentally different bill, CED believes that the most constructive change to the current legislation would be the “Free Choice” amendment of Senator Ron Wyden (D-OR).

The CED letter urges Congress to address the underlying problems in the healthcare system: the absence of choice and competition.  Today, 77 percent of private-sector employees with coverage have no choice of insurance carrier. The Finance Committee bill protects this monopoly, leaving 200 million Americans with no choice of health plan.  This system, without competition and without portable coverage for employees, would have the same fundamental problems that we have today.  The legislation in Congress therefore merely expands the status quo and makes its exploding costs even worse.

The disappearance of the Sen. Wyden’s Free Choice Act in the legislative wrangling over health care remains one of the more unfortunate turns in the whole process. The idea had bipartisan support, was well-liked by many progressives, and was genuinely transformative.

The Wyden amendment seeks to add that key element in the act’s title – choice – into the current legislation. Under the plan, employers are required to offer their employees a choice of either participating in the employer’s health benefits plan, or a voucher equal to the value of the employer plan that the worker can then use to purchase coverage in the health insurance exchange. Even better, if the employee can find a cheaper alternative on the exchange, she can keep the change from the voucher.

In the long run, this will have the effect of expanding the pool of enrollees in the health exchanges, maximizing efficiencies of scale, and slowly moving us away from the regressive, taxpayer-subsidized employer-based health system. Perhaps most obviously, it strengthens the consumer’s hand by giving her the freedom to decide what kind of plan she’d like, instead of having to go along with her employer’s plan (which – it should be made clear – she would still have the option of taking).

It might be too much to hope, but progressives in Congress should take another look at Wyden’s idea. Who knew expanding choice could be such a tough sell?

Labor and the Excise Tax on Insurers

Posted on by The Progressive Policy Institute

From today’s The Hill comes word that the AFL-CIO has fired another volley across the bow of Senate Democrats on the issue of the excise tax for high-cost health plans:

AFL-CIO President Richard Trumka warned Senate Democratic leaders not to include a tax on high-cost healthcare plans in a bill that is expected to reach the floor in coming days.

Trumka dismissed the notion that Democratic leaders could placate the powerful union by raising the threshold on plans that would be subject to the tax. Under the Senate Finance Committee’s bill, plans costing more than $8,000 for individuals and $21,000 for families would be hit with a 40 percent excise tax.

As others have pointed out, the tax-free status of employer-provided health benefits is a regressive relic that, in an ideal world, we would be jettisoning. Hardly an assault on that system, the Senate Finance Committee’s bill takes modest steps to chip away at it by levying an excise tax on insurers for so-called “Cadillac” plans. The tax would bring in about $200 billion through 2019, making it a vital source of funding for health care.

But labor remains unmoved. Trumka’s statement is only the latest salvo from the unions. In September, AFSCME President Gerald McEntee took to the pages of USA Today to argue against taxing high-cost insurance plans. The unions claim that any tax on such plans would harm middle-class families. Their concerns aren’t entirely unfounded. Middle-class workers in high-risk jobs or high-cost areas might meet the Finance Committee’s $21,000 threshold, making them subject to the tax. (The tax would be levied on insurers, but everyone acknowledges that it would get passed on to employees.) In addition, older workers are likelier to have high-cost plans, making them prone as well.

But a closer look at the Finance Committee’s bill shows that labor’s concerns are overblown. The legislation is studded with exceptions that aim to soften the blow to middle-class workers. For one thing, it sets the thresholds 20 percent higher in the most expensive third of states. In addition, workers in high-risk jobs or 55 and older have a higher cap.

Despite these exemptions, labor isn’t budging — and they have made their influence felt. Earlier this month, 154 House Democrats sent a letter to House Speaker Nancy Pelosi (CA) urging her “to reject proposals to enact an excise tax on high-cost insurance plans that could be potentially passed on to middle-class families.”

One of the striking things about the administration’s approach to policy has been its effort to include all the stakeholders on a given issue, and to urge them to make concessions for the sake of national interest. By making a stand on the excise tax, labor has shown a disappointing unwillingness to make sacrifices for the greater good. It would be a tragedy if reform floundered now because of the unions’ insistence on defending a regressive and unfair feature of our health care system.

The Best Hour You’ll Ever Spend on Insurance

Posted on by The Progressive Policy Institute

 

 

The radio show This American Life is a staple in every progressive’s listening schedule, and I’m no different. While occasionally there’s a show that I end up fast-forwarding through, more often than not it’s better to just pop some popcorn and listen.

This past week’s episode was the second of a two-part series the show put together on the insurance industry — apropos as Congress and the administration look at the chronic problems of health insurance in this country. The first part was informative, but not riveting. This second part, however, taught me that:

  • Insurance companies have a billing code for injuries from spacecraft
  • 20-25% of all doctor’s bills are spent on taking care of billing issues with insurance companies
  • Co-pay coupons for pills make them more expensive
  • There’s pet health insurance and hedgehog cancer
  • And the solution to our insurance woes could lie in…Maryland

One of the drivers of insurance cost growth is the fact that rates for procedures are negotiated between insurers and hospitals. That cost can see some big variance depending on who has the upper hand. A procedure can be 10 times more expensive in an area where a hospital is dominant than in another area where the insurance carrier is dominant. That’s where Maryland’s approach comes in: the state has a Maryland Insurance Administration that sets statewide rates for procedures.

But the bottom line of the episode is summed up in the anecdote of how — by ruling that companies can take a tax deduction for providing healthcare — an unknown bureaucrat in the 1950s IRS gave us the health care system we have today. No matter the outcome of negotiations on the Hill as they overhaul the industry, it’s these incentives that will drive how our health care industry will work.