Public Health Plan Key to Health Care Reform Compromise

President Barack Obama came to Washington promising a new era of politics where pragmatism trumped partisanship and the search for common ground was more than a prelude to a political rumble. Health care reform will be his opportunity to deliver. Specifically, it will be interesting to see if the Administration is willing to accept meaningful health care reform that does not include the creation of a public health plan to make government sponsored health care coverage available to all Americans.

Whether there should be a government-run health plan to compete with private carriers, even if only in the individual and small group market segments, is shaping up to be the most controversial element of the health care reform debate. Many Democrats and progressives see it as a critical tool for controllingcosts and for maintaining a balance of power between consumers and insurance giants. Many Republicans and conservatives see it as the first step toward a single-payer system. Each side has made clear that they are implacable on this issue.

Except for the Obama Administration. Maybe. It has already indicated a willingness to negotiate how such a public health plan would operate. However, there’s been no sign the President would negotiate away his campaign promise to make available to all Americans health insurance at least as good as members of Congress receive through a government program if that’s what it would take to pass an overall reform package.

Part of the problem is that the President is trying to have it both ways: introduce a government-run health care plan while preserving the private, employer-based system. Today, government-run health plans shift costs to private carriers. No one seriously denies this reality. By setting Medicare and Medicaid reimbursements rates low (sometimes lower than providers actual costs) doctors and hospitals are forced to increase their charges to privately insured patients. This results in higher private insurance premiums. A government-offered alternative to private coverage for all Americans would, in theory, work the same way. As more costs shifted to the private carriers the price differential would increase resulting in more consumers moving to the public plan. Eventually, the public plan would be the only viable alternative in the market.

In suggesting the Administration was open to a compromise on how the public health plan would operate, the Associated Press reported Director of the White House Office on Health Reform, Nancy-Ann DeParle, as suggesting that “the public plan pays hospitals and doctors rates similar to what private insurers pay. That would address fears that government would use its muscle to pay rock-bottom prices for medical services, allowing the public plan to charge discounted premiums that private insurers couldn’t compete with”.

But if they are going to have a cost structure comparable to the private market, why bother? If a goal is to control medical costs, how can a public plan not use it’s clout to negotiate lower charges from providers? Is a government official going to go before the press and say “We could bring down the cost of health care, but we choose not to?” 

If the public health plan is setting reimbursement plans at the same level as private carriers it’s not contributing to cost containment, which is the most powerful rationale for creating a public health plan in the first place. Yet if it creates a public health plan that does impose lower costs, it will eventually drive private carriers out of the market.

It’s too early in the process for President Obama to negotiate away creation of a public health plan. But it may be a compromise he’ll be forced to make, in which case the sooner he cuts the deal the more valuable the bargaining chip will be.  The reason for this calculation is that President Obama may lack the political clout to push through Congress health care reform that includes a government-run health plan competing with private carriers. The political reality is that Republicans are adamantly opposed to the idea and Democrats are not unified on the issue.

Democrats will soon have a (theoretically) filibuster-proof 60-seat majority in the Senate with Pennsylvania Senator Arelen Spector switching parties to become a Democrat, the likely seating — eventually — of Al Franken as a Senat0r from Minnesota, and with two independents caucusing with them. Yet 15 of those Democrats and one of the independents have formed a moderate caucus that has raised questions about the cost of the Administration’s health care reform package and about a government program. Senator Specter is likely to join this group. With 17 votes they would hold the balance of power on key elements of the reform package. If advocates of a public health plan try to ram the idea through Congress without any Republican votes, it may find it lacks the necessary Democratic votes as well.

Then again, they may. President Obama is an adept politician. He may be able to swing enough moderates into support of a government-run health plan. While this certainty remains, the idea of a government-run plan could be the key to achieving a compromise on the overall health care reform package. Assuming Republicans and moderate Democrats are willing to negotiate. If they’re not, the Obama Administration should simply try to get everything it’s seeking rammed through Congress, giving ground on nothing. But if all sides are truly interested in reaching a consensus, the public health plan element is among the most valuable bargaining chips President Obama holds. 

By making clear — at the right time — what he would want in exchange for leaving out the government-run plan, President Obama will be able to gauge how serious Republicans and moderate Democrats are in compromise. And learning that information, in and of itself,  is worth the offer.

Reconciliation Puts Health Care Reform on Fast Track and GOP in Bind

Democrats in Congress are going to pass a budget resolution soon and, at President Barack Obama’s request, it will include reconciliation protection for health care reform. This undermines the ability of Republicans to block provisions in whatever bill emerges and would allow Congress to send legislation to the president’s desk without any Republican support.

Reconciliation protection is not new. Republicans used it when they controlled Congress over Democratic outcries of injustice. Now that the Democrats are in the majority the script remains the same, just the roles have been exchanged. The purpose of all this is to prevent the minority party using a filibuster to block legislation.

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A quick social studies refresher: It takes 51 votes to pass legislation in the Senate. However, any Senator can mount a filibuster which prevents the Senate from voting on a measure (movie buffs may remember Jimmy Stewart mounting a one-man filibuster in Mr. Smith Goes to Washington).  It takes 60 Senators shut down a filibuster by voting for “cloture“. 

Reconciliation protection means filibusters are not allowed. Democrats (and the Independents who caucus withthem) now number 58 Senators (with a 59th, Al Franken, on the way from Minnesotta). Consequently,  Democrats need only hold on to 50 votes to pass health care reform legislation. Vice President Joe Biden would be happy to provide the 51st vote. Not a single Republican vote would be needed.

And now back to our regularly scheduled post:

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Imposing a majority vote on legislation as controversial as health care reform is not common in Washington, but it has precedent. The cable news chatterboxes and talk radio will be spewing sound and fury over the injustice of it all, but that’s mostly partisan political posturing. Politics, after all, is the art of getting things done. Exploiting (or, if you’re in favor of what’s happening, “merely invoking”) the rules to achieve a goal is very much an American tradition.

Nor does reconcilliation mean Republicans will be excluded from the health care reform debate. The culture of the Senate promotes vigorous debate.  As evidence: leading Senators are referring to the expedited process as a tool of last resort. The Los Angeles Times, for example, reports Finance Committee Chair Senator Max Baucusas expressing the hope that Democrats can work with Republicans to pass health care reform.

The reason is that Democrats like Senator Baucus want to pass long lasting reform. They recognize that pendulums swing — even political ones. Indeed, given the political environment of the past few years it’s hard to see how long Democrats can sustain their large majorities in the House and Senate. Pragmatic leaders want to find common ground so the new health care system they create can withstand changes in the political tide.  “If we don’t use reconciliation, we are going to have a much more sustainable result,” the LA Times reports Senator Baucus as saying. “When we jam something down someone’s throat, it’s not sustainable.”

Republicans aren’t buying it. They claim reconciliation means health care reform will not be subject to vigorous debate. That’s not likely. The Democrats are simply not unified enough to ram something this controversial through the Senate. Instead, a group of 16 moderate Democrats in the Senate will assure that multiple perspectives are heard. And like many Republicans they’ve expressed concern about the cost of reform and the expanded government role in health care coverage being sought by many Democrats. Without the support of at least half this group, the Senate Leadership can’t move a bill forward even on a majority vote. 

Reconciliation will prevent a filibuster, not debate. That debate will be loud and vigorous. It also, however, greatly increases the likelihood that there will be a vote on health care reform, most likely by the Fall. Which puts the GOP in a bit of a dilemma.

Republicans can remain on the sidelines of the debate leaving Democrats to shape the reform legislation and inherit the blame (or credit) of whatever is signed into law. Either way, however, the GOP is marginalized and their brand as the party of “No” is solidified. Not a politically pleasant outcome.

Instead, Republicans can engage in the debate, put forward alternatives and work hard to find common ground with moderate Democrats to force some of their provisions into the final legislative packkage. Compromise, however, means they’d need to accept some provisions they strongly dislike. Further, Democrats will get the lion share of the credit for finally addressing health care reform.

Worse for Republicans, accepting any significant compromise could put them at odds with their base — and the Rush Limbaugh’s of their world who speak for that base and who apparently cannot be opposed. It’s not clear the substantive gains Republican Senators could obtain by working with moderate Democrats is worth the resulting political pain.

Unless the moderate Democrats prevent it, healthcare reform is coming, probably in the Fall. Reconciliation protection will see to that. The loss of a filibuster does not, in and of itself, mean there will be no debate. Nor does it make Republicans irrelevent to fashioning comprehensive reform.

Reconiliation cannot make Republicans irrelevant. Only Republicans can make Republicans irrelevent.