Senate Finance Committee Rejects Government-run Health Insurance Plan

The Senate Finance Committee continues to refine its health care reform legislation. Today it broke ranks with other Congressional committees with jurisdiction over health care reform by defeating amendments to create a government-run health plan. The debate was passionate, but ultimately enough Democrats joined with Republican Senators to defeat two attempts by the panel’s more liberal members to insert public option language into the bill.

Keeping the public option out of the bill was a major victory for Senator Max Baucus, chair of the Finance Committee. While acknowledging that a public option would “hold insurance companies’ feet to the fire,” his opposition was based on the goal of enacting health care reform this year. According to ABC News Senator Baucus believes health care reform including a government-run program cannot pass the Senate.

Senator Jay Rockefeller insisted, however, that a public health insurance plan was absolutely essential to meaningful reform. Failure to to create a public, non-profit plan to compete with private carriers, the Associated Press reports the West Virginia Democrat as saying, “was a virtual invitation to insurance companies to continue placing profits over people, and he predicted they would raise their premiums substantially once the legislation went into effect.”

Senator Baucus countered that the legislation being developed by the Senate Finance Committee includes numerous consumer protections, including a provision to prevent insurance companies denying coverage based on pre-existing conditions. None of the lawmakers on either side of the aisle spent much effort in defending the behavior of private insurance companies. Senator Baucus said he agreed with the intent of the Rockefeller Amendment to “hold the insurance industry’s feet to the fire,” according to the Washington Post. The Associated Press quotes Senator Jim Bunning as observing that “the private sector is not doing exactly what it should do with medical services.”

Republican members of the committee were unanimous in their opposition to public options. The Washington Post quotes the ranking GOP member of the panel, Senator Charles Grassley, as warning that a government plan “will ultimately force private insurers out of business” and that “The government is not a fair competitor. It’s a predator.”

The first public option amendment, offered by Senator Rockefeller, would have permitted the government-run plan to set reimbursements to medical providers at levels paid by Medicare for the first two years. (After that period, I believe the Senators proposal would have permitted the public medical plan to, like Medicare, impose rates on providers). It should be noted, Medicare often pays doctors and hospitals less than the cost they incur providing services. The five Democrats joining with Republican committee members to defeat this amendment were Senators Baucus, Thomas Carper, Kent Conrad, Blanche Lincoln, and Bill Nelson.

Senator Charles Schumer then proposed an amendment that would have required the public plan to negotiate reimbursement rates with providers, much as private carriers do today. Three Democrats – Senators Baucus, Conrad and Lincoln – voted against accepting this amendment.

I’ve maintained for some time that a government-run health plan was unlikely to be part the health care reform plan passed by Congress. The Senate Finance Committee’s rejection of this provision increases the likelihood of this outcome, but the debate will continue. Senator Schumer, for one, pledged to continue the fight. 

"’The present system is broken’" the Washington Post reports him as saying. “He said he was pushing for a public option not for ideological or symbolic reasons but because ‘costs are going through the roof.’ And he expressed confidence that, ‘with some work and some compromise,’  proponents of the provision eventually could get 60 votes on the Senate floor. ‘We are going to get at this, and at this, and at this, until we succeed, because we believe in it so strongly.’"

With polls showing 65 percent of the public support a government-run health plan operating like Medicare to compete with private health insurance plans, President Barack Obama continuing to argue for a public option, and Speaker Nancy Pelosi claiming the House was unlikely the House would pass health care reform that did not include a public option, this debate is far from over. Assuming the Senate Finance Committee moves forward a reform package this week, the next step will be for it to be integrated into the bill passed by the Senate Health, Education and Pensions Committee – legislation that does include a public option.

Getting health care reform is a long hike. Today’s vote in the Senate Finance Committee is a step along the way – albeit a very significant step indeed.

History Will Ignore Much of Today’s Health Care Reform Headlines

Living through historical moments can seem far less grandiose than reading about it. In the day-to-day grind of making history the big picture can get lost. Little issues take on huge proportions while overarching themes are hidden in the maelstrom. Historians get to step back, find the threads that build tension, create a narrative, and set-up the pay-off.

So it is – and will be – with health care reform. There have been a lot of distractions. For instance, critics of the Obama Administration have been pounding away at HR 3200, the House version of health care reform legislation. That legislation makes great fodder for 24-hour news channels and partisans across the spectrum. The bill offers something for everyone to demagogue. The fact that, in the end, HR 3200 – America’s Affordable Health Choices Act of 2009 – won’t have served as anything more than a lightening rod hardly matters.

The same can be said of the Senate Health, Education, Labor and Pensions Committee’s proposal. The Senate HELP Committee’s and the House health care plans gave liberals something to cheer about and conservatives something to attack. My guess is history will show that was its greatest contribution to the debate. Yes, elements of these bills will be included in the legislation that will be signed into law by President Barack Obama later this year. But that’s because there’s always been a broad consensus concerning health care reform. It’s the 25 percent or so of the issue on which there is disagreement that is causing all the ruckus. And at the end of the day, I’ve longed believed it will be moderates who resolve the contentious health care reform issues.

And those moderates are almost ready to make their positions known. Senate Finance Committee Chair Max Baucus has promised to unveil a formal proposal Tuesday or Wednesday. While it’s not certain that any Republican Senators will sign-on to the proposal, what Senator Baucus will propose will be far more moderate than the current alternatives. According to the Associated Press, Senator Baucus and the other five Senators negotiating a bi-partisan bill have made progress on several controversial items, “including health insurance for the poor, restrictions on federal funding for abortions, a verification system to prevent illegal immigrants from getting benefits, and ways to encourage alternatives to malpractice law suits.”

If compromises have been reached on these issues, HR 3200 and the Senate HELP Committee’s proposal will have played an important role. By being the most extreme bill available to critics during August it flushed out their attacks. This, in turn, made it easier for moderates to indentify the hot buttons they needed to address. A Washington Post story describing some of the solutions being developed by the Senate Finance Committee’s so-called “Gang of Six” underscores this. (The Gang of Six are Democratic Senators Baucus, Jeff Bingaman, and Kent Conrad along with Republicans Mike Enzi, Charles Grassley and Olympia Snowe). For example, illegal immigrants will be specifically prevented from obtaining any benefits from the insurance exchanges being contemplated. A government-run health plan – the means leading to a government takeover of health care according to critics – will not be missing from the proposal.

For the past few weeks, Republicans have associated President Obama with HR 3200 and the liberal Senate HELP Committee proposal. Yet he has embraced neither. Instead, he is has set the stage for circling the wagons around whatever moderate proposal emerges from the Senate Finance Committee. And Senator Baucus and the others are working hard to make that possible. For example, President Obama embraced a Bush Administration proposal to permit states to test approaches to medical malpractice reform. According to the Washington Post article, such a provision will be in the Senate Finance Committee’s bill.

Liberal critics of President Obama will accuse him of capitulating to conservatives on many of these issues, especially abandonment of a public option. Conservatives will say he’s proven himself to be a liberal tax-and-spender and government-expander (the proposal is expected to cost around $880 billion over 10 years). In the short term there will be much sound and fury over such issues by both sides. If the compromise health care reform solution put forward by Senator Baucus and his colleagues becomes law, however, history will little note nor long remember such histrionics. (Which, for those paying attention to the clichés in this paragraph would tend to prove that Abraham Lincoln trumps William Shakespeare).

So long as the outcome meets President Obama’s general principles for the health care reform the White House will declare victory. History will relegate talk of death panels, cries of socialism, and demands that government get out of Medicare (along with other government-sponsored programs) to footnotes, if that.

As with any major reforms, history will also likely show that the historic health care bill to come will accomplish less than its critics fear or than its advocates claim while at the same time bringing forward unintended consequences of significant proportion. But those problems will be a challenge for a future Congress and Administration. History, after all, is made one step at a time.

Outlines of Senate Finance Committee Health Care Reform Plan Emerges

Senator Max Baucus of the Senate Finance Committee is circulating a draft health care reform proposal that could form the basis for whatever reform package emerges from Congress. If there is going to be bipartisan health care reform legislation, this is it.

The draft reflects ideas from six members of the Congressional panel who have spent months trying to find common ground – Democratic Senators Baucus (Montana), Jeff Bingaman (New Mexico) Kent Conrad (North Dakota) and Republicans Mike Enzi (Wyoming), Charles Grassley (Iowa), and Olympia Snowe (Maine). The group, often referred to as the Gang of Six, has been working under tremendous pressure. Democrats have been pushing for action and liberals are concerned about giving up on, among others, provisions for a government-run health plan. Republicans have been equally vociferous on their three colleagues, some arguing that the GOP should seek to defeat any health care reform plan in order to deliver a political blow to President Barack Obama and others opposed to specific elements such as how to pay for insuring the uninsured. Rumors of the gang’s failure have been constant and consistent fodder for bloggers, talk shows and news programs, yet they keep on moving forward. The draft proposal is the most concrete evidence yet that these rumors are unfounded.

As reported by the Associated Press, the plan circulated by Senator Baucus includes a fee on insurance companies to help fund coverage for the uninsured, enabling non-profit co-operatives to compete with carriers, authority for health insurance exchanges (note: there would be more than one) to help individuals and small business purchase coverage, expansion of Medicaid, tax credits to help low- and middle income Americans buy private coverage, and a requirement for insurers to disclose their administrative costs and profits.

The Wall Street Journal describes Senator Baucus’ plan as requiring “most Americans to carry health insurance” and, in addition to a fee imposed on all insurers, would include a tax on “insurance companies when they offer particularly generous health insurance plans.”  The Journal describes the exchanges as providing “standardized information on insurance plans and pricing." The article also makes explicit what is generally assumed to be a part of any health care reform plan: carriers will no longer be able to exclude coverage for pre-existing conditions; drop insureds who become ill; and will cap out-of-pocket medical expenses.

Bloomberg reports that Senator Baucus’ proposal “works to reduce Medicare costs by rewarding doctors based on the quality of care provided, not the number of treatments or tests administered.”

The cost of the proposal is estimated to be $900 billion over ten years. The Senator is emphasizing that what he is circulating is only a draft and subject to change. However, he warned Senate Finance Committee members that they would need to suggest ways to pay for any provisions they suggest that increases the cost.

So what does all this mean? Well let’s get the obvious elements out of the way: the devil is in the details; it’s unclear how well the proposal goes after medical cost containment because the media tends to focus on what’s easier to understand (insurance reform) – the good news is there are indications reducing health costs is significant part of the package.

It’s also clear the proposal will be unacceptable to both liberals and conservatives. No problem, the more ideological on both ends of the political spectrum would be unhappy with any reform Congress is capable of passing. Liberals will complain because it doesn’t give government enough control over the nation’s health care system; conservatives because it gives government too much control over the nation’s health care system.

However, ideologues don’t pass much legislation, moderates do. And the Senate Finance Committee’s is apparently getting ready to pass legislation far more moderate than what has already been approved by the Senate Health Education Labor and Pensions Committee or by the three House Committees with jurisdiction.

Which means if the Senate Finance Committee actually moves forward something along the lines of the package being circulated by Senator Baucus, for better or for worse, what passes for moderate health care reform legislation is more likely to become a reality sooner rather than later.

Vacations Almost Over – It’s Time to Get Real

The August vacation is almost over and not a moment too soon. Vacations are supposed to be a time of relaxation, recharging, maybe even contemplation. It’s a break from the norm; a chance to get a new perspective on things.

Sometimes.  Then again there’s the vacation from hell where everything goes wrong and you can’t wait to get back home. The hotel that looked pretty in pictures turns out to make the Bates Motel look hospitable. And let’s not even get into the crowded airports and late flights. Such vacations are not about rest, their about survival.

When it comes to health care reform, August was more of the vacation as disaster variety. A month of demonization (fitting, somehow, for a vacation from hell), dark fantasies, and an ever increasing lack of civility. Instead of an opportunity for all sides to present their differing perspectives and to present persuasive arguments for their point-of-view we witnessed the Outrage of 2009. Sincere people whipped into a frenzy by those who profit from conflict and fear. It was not only a bad month, it was a sad one.

But that will soon be behind us. Labor Day marks the end of summer (at least psychologically if not astronomically). It will soon be time to get serious. Here’s my take on what we have to look forward in September. Some of these items are well publicized, others guesses, and still others the result of wishful thinking. As a whole, however, I expect this list identifies much of what is to come now that we’re done “relaxing.”

  • President Barack Obama will describe ObamaCare.
    According to the Associated Press, the White House is “considering a speech to spell out more details of his goals for overhauling health care ….” My guess is he’ll have to go beyond detailing goals and dive into specific on legislation. To date the President has been content to outline a broad definition of meaningful reform. There were advantages to this approach, but the downside is rapidly overwhelming those benefits. The Administration’s vagueness kept its options open, but allowed Congressional Committees to define the President’s health care plan in the public’s mind. The bills attacked during the various town hall meetings are Congressional proposals, not President Obama’s. The Administration needs to define “acceptable compromise.”  Otherwise opponents of change will continue to savage the process of reform, killing the purpose of reform without having to engage in a debate on policy.
  • The Senate Finance Committee will meet its September 15th deadline for issuing a bi-partisan proposal, or on September 16th we’ll see a Democratic proposal emerge from the committee.
    Senator Max Baucus, Chair of the Finance Committee, and his colleagues are to be commended for seeking health care reform that can gain the support of moderates in both parties. They have spent months working through both broad policies and minute details – hard work on easy issues, a herculean task when it comes to something as complex and controversial as health care reform. The time has come, however, to move on. They have created expectations that the fruits of their labor will be made public by September 15th. That expectation needs to become a reality. To date, President Obama has given them political cover by continuing to speak of principals as opposed to specific provisions. As noted above, however, that position is too tenuous to continue. If the Senate Finance Committee fails to bring forward a compromise plan before the President begins staking out firm political and policy positions their compromise won’t matter. If the Finance Committee acts first, however, the President can elevate their approach to the first proposal among equals. The most potent ordering of things is for the Senate Finance Committee to get specific first with President Obama following suit shortly thereafter. If handled correctly it would create a strong middle ground upon which moderates could take a firm stand.
  • The political attacks will continue and become more vicious …
    The Keith Olbermanns and Glenn Becks of the world have found a ratings magnet: vilify the opposition while rejecting any possibility that opponents might have a reasonable, albeit different, position. Demonizing opponents sells to those already on your side. As cable news blabbers have no need to make policy they are free to paint the world in deepest blacks and whites and “find their audience.” At the same time partisans on both sides are reveling in the fundraising bonus blind anger generates while, at the same time, proving their bona fides to core constituencies for future political efforts. As the August press coverage demonstrates, hate, slander, lies and fear sell. And there are plenty of politicians and media outlets willing to take advantage of this ugly reality.
  • … and the political attacks will become more subtle.
    At the same time the extremists will get even more viscous, lawmakers, who operate in shades of gray, will begin to prod opponents into compromises with stilettos as well as reasoned arguments. An example: Senior White House adviser David Axelrod’s claim that Republican Senators Charles Grassley and Mike Enzi have not acted in good faith during their discussions with Senator Max Baucus and other Senate Finance Democrats to produce a bi-partisan health care reform bill. The attack by Mr. Axelrod is both a means of assuring liberals that the White House is capable of playing hardball as it is of prodding the GOP Senators to continue negotiations.
  • The Status Quo is in for a beating.
    The only way to enact substantial change is to convince people the status quo is untenable. This is good news for reformers as the health care system’s status quo is untenable. Medical costs must be constrained or state governments and private businesses alike will be bankrupt. Families cannot live in fear of facing a choice between financial and health security. The medical infrastructure of emergency rooms and pro bono care cannot continue to handle their ever increasing burden. Advocates of reform will make this case repeatedly and in the harshest of terms. The resulting cacophony will be painful in many senses of the word, but it’s an inevitable part of the process.
  • Many issues will be in play, only a few will be discussed.
    Change will come, either thoughtfully and not. All Americans will benefit from a thoughtful approach.Such thoughtful reform includes tackling medical cost containment. Health insurance premiums, after all, reflect the cost of health care. Those premiums have doubled in the past 10 years, an unsustainable rate of increase. If we’re going to “bend the cost curve” as President Obama puts it, tough decisions will be required. Making those decisions is especially difficult in an environment when consultations on living wills is construed as creating death panels, but making them is essential nonetheless. Politically, however, lawmakers need a bad guy. So the public debate will focus on market reforms (Exchanges and public plans, pre-existing conditions and mandates to buy coverage) which permit the vilification of insurance companies while, hopefully, quieter arguments focus on cost containment. Hopefully, because if health care reform is to have any long term meaning, it needs to control costs.

By the end of the year President Obama will sign into law health care reform legislation. That final package may not look much like the legislation discussed at the town hall meetings in August, but it will dramatically change America’s health care system nonetheless. And when the raucous debates, political warfare and mongering of fear is over, when the reforms are signed into law but before the long process of making them work begins, hopefully there will be time for a real vacation.

Progressives Will Face Tough Health Care Reform Choice

Just looking at the broad facts, liberals should be riding high. President Barack Obama occupies the White House. Democrats hold a 60-40 super-majority in the U.S. Senate and a commanding 256-178 majority in the House (with one more on the way after a special election in California later this year). Republicans are on an electoral losing streak of epic proportions and have yet to find a unified voice. It doesn’t get much better than this.

Except appearances can be deceiving and liberals will soon need to decide whether they are willing to vote for a bill that, in their view, improves America’s health care system but does not go nearly far enough or should they leave the system the way it is.

Note: This post was updated on July 30th to provide more details concerning the House Energy & Commerce Committee compromise and liberals reaction to it. Additions are presented in italics.

The evolution of health care reform legislation as it moves through Congress must frustrate progressives. It started off to their liking. Senator Edward Kennedy’s Health, Education, Labor and Pensions Committee pushed forward a bill that satisfied much of the liberal wish list. Good times continued when the House Ways & Means and the Education & Labor Committees passed equally progressive bills. That the affirmative votes on all three committee came exclusively from Democrats was not of great concern to supporters. Health care reform was coming whether Republicans wanted to join the parade or not.

Liberals were on a role, but then their moderate and conservative colleagues began to make their presence felt. And there are more of them than is generally acknowledged. While conservative talk show hosts like to brand the Democrats as a monolithic subsidiary of Mao-spouting communists, the reality is far different (actually, reality is usually different than that described by conservative talk show hosts, but that’s a topic for another day).  A party does not capture 60 percent of the Senate and 59 percent of the House by running cookie cutter candidates all pledged to the same ideology. The country is too diverse. The brilliance of Rahm Emanuel, then head of the Democratic Congressional Campaign Committee and now White House Chief of Staff, was that he discarded virtually the entire Democratic litmus test in his search for candidates. The only significant requirement he demanded of the candidates he recruited was that, once elected, they would vote for a Democrat for Speaker of the House. Meanwhile, the GOP who hewed closely to the beliefs and principles of their base. Moderates were scorned and labeled RINOs (Republicans in Name Only). They succeeded in recruiting ideologues who had no chance of winning outside the reddest of red districts.

Consequently, the Democratic caucus is chock full of moderates and even conservatives.  Which all but guarantees that liberals will be disappointed. There are simply not enough liberals in Congress to pass a bill without support from moderates.

So it should not have been a surprise when problems developed as the progressive juggernaut moved beyond some of the most liberal committees in Congress. The Blue Dog Coalition, a group of moderate Democrats in the House, objected to a host of provisions in the Ways & Means and Education & Labor bills. While they lacked the votes to hold up the legislation in those committees, they did such leverage in the the House Energy & Commerce Committee. The Blue Dog Democrats had an agenda for health care reform that differed in many respects from that of their more liberal colleagues.

Meanwhile, in the Senate, Democrats and Republicans on the Senate Finance Committee were working tirelessly to hash out a health care reform package that could garner bi-partisan support. To get there, Senator Max Baucus, Chair of the committee, was willing to jettison some of the more treasured elements of the liberal health care reform agenda.

Both the Blue Dog Democrats and the moderates on the Senate Finance Committee are making substantial progress. House Energy & Commerce Committee Chair Henry Waxman and Representative Mike Ross, speaking on behalf of the Blue Dogs, announced an agreement that will allow the full committee to begin marking up health care reform legislation. The specific changes to the bill from the versions passed by the Ways & Means and Education & Labor Committees are not yet public. But there are four major elements according to wire stories:

  • Keeping the 10-hear cost below $1 trillion by agreeing to $100 billion in cuts
  • Preventing a public plan from simply imposing Medicaid rates by allowing physiicans and other medical providers to negoiate rates with the government plan
  • Exempting businesses with payrolls below $500,000 (86 percent of all small businesses)  from any government mandates requiring them to provide health insurance to their employees
  • Postponing a full House vote on health care reform until after September 8th

At the same time, Senator Baucus and the ranking minority member of the committee, Senator Chuck Grassley, are making it known they are close to unveiling the Senate Finance Committee’s compromise. Their proposal is unlikely to include a government-run health plan. It may not include all the mandates and subsidies liberals seek. In short, they will reform the health care system, but leave much of what exists in place. Which puts progressives in an uncomfortable position.

Moderates and conservatives seem willing to defeat any health care reform legislation rather than vote for the kind of reforms liberals seek. Will liberals refuse to support legislation that does not go as far as they demand? As of now they are threatening to do just that. The Progressive Caucus is circulating a letter seeking 50 signatures (enough to defeat any bill) pledging to kill any legislation failing to contain a strong public plan.

That’s not yet known. That the compromise proposals will be attacked from both the left and the right is to be expected. And liberals are already expressing outrage at having their wishes denied. For example, the Associated Press quotes Representative Lynn Woolsey  as saying “They can’t possibly be taking us seriously if they’re going to bring this [compromise legislation] forward.”

But will liberals insist on getting their way even if it means letting the status quo stand?

Ideology and pragmatism are often hard to reconcile, but my prediction is that liberals will vote for moderate health care reform. The reason: Senator Kennedy and President Obama will eventually accept a compromise. Throughout his career Senator Kennedy has demonstrated the political wisdom of taking half a loaf now and continuing the fight for the rest another day. And, according to the Associated Press story cited above, the White House is already making clear the Administration is willing to settle for a more moderate bill.

With Senator Kennedy and President Obama’s urging, enough liberals will accept that even modest reform is preferable to the status quo. They won’t be happy with what it contains, or more accurately, what it doesn’t contain, but they will be among those applauding when President Obama signs the bill into law this Fall.

Added 9:05 pm July 29, 2009: As noted above, liberals are upset over any compromise that does not include a public health insurance plan. In a post on Politico.com, Glenn Thrush reports that “Two months ago, most of the 80-plus members of the Congressional Progressive Caucus signed a pledge that they would oppose any health care bill that didn’t contain a bona fide public option that would compete with private insurers. On Wednesday, they seemed willing to stick to their promise.”  He goes on to quote Representative Barney Frank as saying liberals might reject the House leadership’s  request to support a weakened public option. “I don’t think it would pass the House — I wouldn’t vote for it,'” the post quotes Rep. Frank as saying.  No one would cheer louder than Republicans to see health care reform fail because moderate and liberal Democrats fail to come together. Which is, to repeat my prediction from above, why I think liberals will eventually take a deep breath, vote for a moderate bill, and come back in 2010 fighting for more.

Health Care Reform: A Historic Milestone

History was made today. The Senate Health, Education, Labor and Pensions Committee approved comprehensive health care reform legislation, the first Congressional committee to do so in decades. Never mind that the bill is well to the left of the emerging consensus concerning health care reform. Never mind that it passed on a party line 13-10 vote. What is meaningful is that a congressional committee moved comprehensive health care reform forward. Significantly, three House committees are likely to follow suit within the next three-to-four weeks.

The legislation approved by the Senate HELP Committee, which carriers a $600 billion price tag, would require individuals to obtain coverage, employers to help their workers pay for it, and carriers to accept all applicants regardless of their health conditions. Individuals and families earning up to 400 percent of the Federal Poverty Level ($88,000 for a family of four) would be eligible for subsidies. The Associated Press provides additional information and reaction to the Committees vote, but in my mind, the details are secondary. The vote itself is what is significant. Remember, the Clinton Administration health care reform proposal was never voted upon by any Congressional Committee.

The Senate HELP Committee’s action testifies to the tenaciousness of the Committee’s chair, Senator Edward Kennedy, the political skill of Senator Christopher Dodd (who is leading the Committee while Senator Kennedy battles cancer), the political standing of President Barack Obama, and the widely recognized need for meaningful health care reform. Given that Senator Kennedy has been advocating for universal coverage since the 1960s it is fitting that his Committee was the first to act

No doubt there will be some elements of the Senate HELP Committee’s proposal in whatever legislation, if any, eventually emerges from Congress. However, as noted previously here, the Committee’s version of reform is to a large degree a negotiating position for liberals in the Senate. The proposal being written in the House of Representatives will be even more liberal. It is the Senate Finance Committee, where its Chair, Senator Max Baucus and ranking Republican member, Senator Charles Grassley, are seeking to draft legislation that will earn at least some Republican votes, that the outlines of the ultimate health care reform package is taking place.

There are still numerous contentious issues to work through, any of which could derail health care reform altogether. However, there is a surprising amount of common ground coming into view. The  Robert Wood Johnson Foundation recently released a study, Emerging Common Ground? An Analysis of Health Reform Positions, that describes (perhaps overly optimistically) several of these areas of general agreement. Among them:

  1. the nature of private insurance market reforms;
  2. the need for, and the structure of, a health insurance exchange;
  3. whether and how a government-sponsored “public plan” should be created;
  4. how best to leverage Medicaid and/or public programs to expand access;
  5. whether an individual mandate is needed;
  6. the scope and authority of government involvement in comparative effectiveness research;
  7. sequencing and scope of payment reform; and
  8. whether to limit the tax exclusion on employer-based coverage as a reform financing mechanism.

I’m not sure I agree that all of these are settled issues, but the study is worth reading nonetheless.

As I’ve written before, I believe health care reform is coming, but that’s no reason to panic. The status quo, while comforting in its familiarity, is unsustainable. History is the story of change. Health care reform history was made today. But in context it’s only a milestone — a significant milestone, but solely a milestone. Consider it one big step in a long journey toward something truly historic.

Health Care Reform Is Coming. Don’t Panic.

The legislative process is like Kabuki Theater. Very stylized. Clear-cut characters. Starts off slow, proceeds through several acts, ends fast and furious. The Congressional tussle over health care reform is no exception. We have the champions of the left and right pounding across the stage, striking poses, shouting out their predictable lines, scaring the bejeebies (whatever they are) out of the audience (otherwise known as constituents) and generally creating high drama. This is important work as it gives the 24 hour news stations something to talk about and this, in turn, keeps the commercials from running together in an endless loop of paid messages for help fighting the IRS, encouragement to ask your doctor about the benefits of an unhealthy number of medications, easy ways to get low cost loans and willing buyers of your excess gold jewelry.

At the same time we have numerous audience members who are quickly losing whatever bejeebies they might possess. If you are among the 470,000 Americans employed by the health insurance industry, for instance or among the tens of thousands of health insurance brokers in this country, you might feel like people are out to get you. Good catch because people are out to get you. Don’t feel too bad, though, you’re not alone. They’re also out to get doctors, hospitals, pharmaceutical companies and a host of others. 

Every health care reform idea on the table is scary to someone. Government-run plans, exchanges, mandates to sell coverage, mandates to buy coverage, taxes, cost containment. The list of proposals go on endlessly. Everybody with a stake in health care (which is everybody) has something to lose from some these reforms and someone is out there working hard to make sure these stakeholders lose it. In the health care reform everyone is an archer and everyone is a target.

So as someone with a stake in the system, but who has also spent more time than sane people should involved in politics and the legislative process, I would like to offer some simple advice to my fellow targets:

         Don’t Panic.

Don’t get comfortable, but don’t panic.

The good news is the health care reform most likely to emerge from Congress will be far more moderate than the proposals whipping around the Capital hallways today imply. This is theater — and it’s politics. Everyone in Washington is busy staking out negotiating positions, trying to score points, and auditioning for an appearance on CNN, Fox or MSNBC. Which means what they say matters, but not as much as they’d like to think it does.

In negotiations you expect to compromise so you start off asking for more than you expect to get. Every eight year old discussing bed time knows this. So do politicians. What we’re seeing at this point is primarily Democrats and Republicans anchoring their positions. In Kabuki Theater, actors will strike stances that identify their role in the story. In Congressional theater, this role is played by lawmakers. 

Which leads us to the effort of scoring points. Nothing revs up the base like lambasting opponents. The number of people who make a living by keeping a significant portion of the American population seething is significant and appalling. These people (and I use the term loosely) paint the world in terms of good and evil, black and white, us and them. Anyone who disagrees with “us” is a traitor, a fool, a liar or all of the above. They care less about moving the country forward than in adding to their power or their bank account. (Have you ever noticed how often their diatribes are followed by an appeal for cash or an advertisement?) These blowhards replace bombast for thought. They have honed the cheap shot and the stiletto implication into art forms. Fortunately there’s a cozy spot in Hell reserved for them where they’ll have to listen to themselves blather for eternity. Until then, we’re the ones stuck in their noisy hurricanes of malicious hot air. 

The subset of these sub-humans who hold public office will be especially prominent during this portion of the legislative process. Ignore them. Like the extreme positions taken by negotiators, the extreme rhetoric spouting from these Katrinas of politics are designed to rile you up, get your money and generate news clippings, not educate or move the debate forward.

The real action on health care reform is taking place in the nooks and crannies of Washington where moderates dwell. For example, keep your eye on the Senate Finance Committee. They seem to be trying to find solutions the nation can afford and that might actually work. Track the movements of moderates in the Senate, too. Senators Olympia Snow and Susan Collins are the two trendsetters on the amazing-shrinking-group of GOP moderates. On the Democratic side of the Senate moderates gather weekly in a self-described  Working Group. (Insert your own snide comment here).

The fact is, in Washington moderates win. The system is designed this way. It may not seem like it, but that’s the way it usually goes. This is the point articulately made by Jay Cost in his HorseRaceBlog over at RealClearPolitics.com. In two postings (Part 1 and Part 2) he lays out the pivot points in the legislative process and applies them specifically to the current health care reform debate. (My thanks to John Nelson for sending these my way). What he shows is that the true partisans are merely the fodder necessary to get to the number of votes needed to turn legislation into law. These pivot points vary depending on the political context.

Need to overcome a filibuster? The most powerful Senator is not the true believers who immediately vote yes or no, but the Senator who represents the 60th vote for cloture. Only that Senator can move the bill forward. The rest simply set the stage. When it comes to health care reform, watch the moderates. They are the key actors in this play because it is from among their group, along with critical  negotiators like Senators Max Baucus and Charles Grassley, from which the decisive votes will come. 

With 17 votes (maybe 18 now that Senator Arlen Specter is a Democrat) the moderate Democrats in the Senate will determine the final shape of healthcare reform. They are the ones the partisans on both sides are already seeking to persuade or, failing that, threaten (good news for television and radio stations in their states looking to sell advertising time). If these partisans are serious about passing something, however, that something will need to earn the votes of these moderates. Keep in mind, Democrats have a large majority in both chambers of Congress, but they got it by appealing broadly to the electorate. Democrats rarely are genetically incapable of group thought even when there’s just a few of them. Put 60 into one room (say, the floor of the Senate) and the chances of agreement on anything controversial is reduced to a theoretical nil.

What all this means is that the partisan posturing of the current debate is simply sound and fury signifying the hopes and aspirations of sincere partisans and cynical pot stirrers (which is which is sometimes hard to tell, but there is a difference — only the latter are despicable). Eventually the play will reach its final act. At this point the moderates take center stage and with their arrival the odds of disappointed extremists on both sides  increases(disappointing extremists is, after all, what moderates d0).

This doesn’t mean they will come up with the perfect health care reform plan. If you care about the issue you need to make your voice heard. Moderates are capable of making bad policy — and whether the truck that runs you over is driven by a true partisan or a moderate doesn’t really matter, it still hurts. Moderates are more likely, however to produce reforms that are closer to something reasonable than might seem possible appear today.

In the meantime, let the loud and boisterous actors strike their poses. It’s all part of the play.

More Health Care Reform Proposals Added to the Mix

So many health care reform proposals are flying around the nation’s capital it’s nearly time to bring in the air traffic controllers. There are draft bills, option papers, proposals, outlines, and about any other kind of document you can name whirling around like jets over O’Hare.

Michael Johnson of Blue Shield of California and I gave a presentation on health care reform Wednesday to a group of health insurance brokers. We were reading up on one of the latest ideas issued a few hours earlier literally minutes before the panel got underway. It’s only going to get worse as some stake out (somewhat extreme) negotiating positions while others offer up potential compromises.

Here’s some of the more recent health care reform proposals to be launched — or about to be:

  1.  The web site The Hill is reporting that moderates in the House of Representatives from both sides of the aisle are meeting in private to fashioning a compromise package. Among those meeting are part of the GOP’s “Tuesday Group,” the New Democratic Coalition and the Democratic Blue Dog Coalition. Fearing retribution from party leaders, neither side is offering the names of participants. The meetings are significant not just because they are likely to produce yet another health care reform package. The negotiations also underscore the reality that while the media tends to portray both Democrats and Republicans as monolithic parties of extreme ideologies, there are a significant number of lawmakers who eschew the hardline ideology of their colleagues and search for pragmatic solutions.
  2. Former Senate majority leaders unveiled a health care reform plan they hope will provide a middle ground in debate. The plan was developed by Republican former Senators Howard Baker and Bob Dole along with Democratic former Senators Tom Daschle and George Michell. (Former Senator Mitchell is credited by the Boston Globe with having contributed to the document, although it is signed by only Senators Baker, Daschle and Dole). It weaves around the middle on a number of issues, although it does lean to the left. For example, while the proposal does not call for a creation of a federal government-run health plan it would permit states to create them. It also calls for taxing the value of health plans an employee receives to the extent it exceeds the cost of coverage provided to members of Congress. According to the Boston Globe this would amount about $5,000 for an individual and $13, 000 for a family.
  3. The House Republican leadership unveiled their health care reform plan on Wednesday, too. Among other features it would allow states, small businesses and other group to come together into “pools” to offer low cost health plans that, at a minimum, is provided in a majoirty of states. It also would offer lower-income Americans refundable tax credits they could use to purchase coverage and would make individual health insurance premiums tax deductible. It does not require consumers to buy coverage, but the GOP plan would encourage states “to create a Universal Access Program by establishing and/or reforming existing programs to guarantee all Americans, regardless of pre-existing conditions or past illnesses … access to affordable coverage.” Development of the GOP plan was led by Representative Roy Blunt.
  4. Last week the Chairs of the three House committees with jurisdiction on health care reform released a framework for reform. The Tri-Committee Health Reform Draft Proposal, put forward by House of Representative Chairs Charles Rangel of the Ways and Means Committee, Henry Waxman of the Energy and Commerce Committee, and George Miller of the Education and Labor Committee outlines the key provisions of a unified Democratic reform package. The framework calls for creation of a government-run health plan to compete with private carriers, requires all Americans to obtain coverage (with exemptions in cases of financial hardship), requires most employers to either provide coverage or pay a fee, and provides subsidies for Americans households with incomes up to 400 percent of the federal poverty level.

There will be many more proposals coming soon. As it is relatively early in the legislative process, most will stake out relatively pure ideological positions. Neither party has an incentive to offer compromise solutions yet. So House Democrats, along with Senator Edward Kennedy and his Health, Education, Labor and Pensions Committee, will anchor the left and the GOP Leadership and conservative Senators will anchor the right. As in most negotiations, the goal is to establish a starting position so far to one extreme or the other that the middle shifts in their direction.  

There will be some pragmatic proposals put forward as well. The most anticipated is that expected to be coming soon from the Senate Finance Committee. It’s Chair, Max Baucus, and its Ranking Member, Charles Grassley, seem to be sincere in their efforts to put forward a bi-partisan solution. In the meantime, President Barack Obama will keep up a drumbeat in support of getting comprehensive health care reform legislation through Congress before the end of the year. Although the White House continues to let Congress take the lead in fashioning the final reform package, the Obama Administration is beginning to get more engaged in the legislative process.

What the final health care reform legislation will look like is, as yet, unknown. It may resemble one of the ideas already put forward. Or perhaps something new to the mix will gain momentum. I’m betting that something will pass this year. The process of getting to one bill will be messy, but eventually, a consensus will form.

Not yet, but eventually.

Senator Conrad’s Public Health Plan Compromise

For many Democrats, the benefits of a government-run health plan competing with private carriers in the individual and small group health insurance markets is simple: provide more choice to consumers and keep health insurance companies honest. Republicans and some moderate Democrats see the idea as the first giant step toward a government takeover of health care coverage fearing that a public plan would have an unfair advantage that would soon drive private carriers out of business. Both sides are gearing up for a tough and bruising battle over the issue. There will be many differences that will be hard to bridge during the health care reform debate. Whether the government should participate in the health insurance marketplace is, for now at least, the leading candidate to derail comprehensive reform.

Senate Kent Conrad, a Democrat from North Dakota, is seeking to prevent that from happening. According to the Associated Press, Senator Conrad is floating a compromise that would allow residents and small businesses in an area to crate non-profit health care cooperatives to offer health insurance. The idea is designed to appeal to Democrats based on the assumption that the co-ops would increase consumer choice and keep carriers honest. Because the co-ops would need to be self-supporting (the only government funding would be seed money designed to get them up and running) they would not have the unfair advantage against private health plans Republicans (and the insurance industry) fear.

The idea is getting a warm reception on Capital Hill. Senator Max Baucus, Chair of the Senate Finance Committee, said “the idea could be key to a bipartisan health bill,” according to the Associated Press. The AP quoted the ranking Republican on the Senate Finance Committee, Senator Charles Grassley, as saying “It’s got possibilities.”

Details concerning Senator Conrad’s compromise still need to be worked out. As those details emerge the proposal may serve as common ground for lawmakers working toward a bipartisan reform package. But those details have to satisfy some wary legislators. Reuters, for example, notes Senator Grassley’s insistence that “”any federal money used to set up what likely would be state and regional health cooperatives would have to be in the form of loans and that the government should have no role in their operation.” Meanwhile CNN describes the initial concern of Democratic Senator Charles Schumer that “co-ops might struggle to compete with big health-insurance companies and therefore would not help drive down costs.” However, Senator Schumer also said “he would see if they could craft a workable plan.”

Similar cooperatives have been set up to provide electrical services in rural areas. Would the concept would nationally for health insurance? That’s uncertain. Would health insurance co-ops serve the needs of Democrats without fulfilling the fears of Republicans?  Also uncertain.

In getting both sides to consider a middle way, however, Senator Conrad has made an important contribution to the health care reform effort.

Health Care Reform is Coming, But it Won’t Be Easy

Personally, I think health care reform is inevitable. The need for change is simply too great. Too many people go without coverage, too many are insecure about the coverage they have. Controlling medical costs is a critical part of fixing the economy: businesses and state and local governments need relief. Political pressure for a solution — from across the ideological spectrum — has reached critical mass.

The reform process is well underway. President Barack Obama held a health care summit at the White House earlier this month. Several proposals are making the rounds. Senate Finance Committee Chair Max Baucus has one.  Senate Health, Education, Labor and Pensions Committee Chair Ted Kennedy and his staff have been actively meeting with stakeholders. Democratic Senator Ron Wyden and Republican Senator Bob Bennett have introduced the Health Americans Act, which is supported by several colleagues from both sides of the aisle. There’s the proposal put forward by President Obama during the campaign and embellished somewhat since his inauguration. Republicans have their plans and think tanks have theirs.

We’ve seen this before. In 1993 it looked like President Bill Clinton’s spent enormous political capital seeking health care reform. He failed. A recent Newsweek article by Katie Connolly outlined several reasons why the health care reform debate now is likely to be much different than the battles in 1993. The Clinton Administration failed in large part because their efforts were politically inept and inflexible. President Obama’s approach is much more open, inclusive and savvy.

Of course, at this stage we’re still dealing with generalities. The specifics, which is where the devil receives his mail, have yet to emerge.  When they do the hard part of the process begins. And that could be any week now.   The Washington Post’s Lori Montgomery and Ceci Connolly reported today that “House Democrats, in consultation with the White House, will give Republican lawmakers until September to reach a compromise on president Obama’s signature health-care initiative ….”  Currently, several committees in both houses of Congress are holding hearings on health care reform. These, however, are more educational in nature, allowing interested parties to provide input and begin staking out positions. With little legislation before them the hard negotiations have yet to begin. Those discussions will have to start sooner than later if Congress is to meet the House Leadership’s September deadline. Given the complexity of health care reform it will require months of negotiations to find common ground. 

Finding that common ground won’t be easy. Already Republican Leaders are identifying deal killers. A National Association of Health Underwriters’ newsletter quotes Senator Chuck Grassley, the ranking Republican on the Senate Finance Committee as identifying the Obama Administration’s call for a national health coverage exchange to compete with the private market as extremely problematic. The GOP won’t accept such a program, according to Senator Grassley, and Democrats are likely to insist on one. There may be a way to create an exchange that satisfies both parties, but that requires a lot more specifics than have emerged yet. 

(Note added 3/20/09 at 7:45 pm: the rift between Senator Grassley’s position and those favoring a government insurance plan is growing wider — and nastier. Carrie Budoff Brown, writing in Politico today, reports on “a four-day ad buy aimed at Iowa Sen. Charles Grassley, the ranking Republican on the Senate Finance Committee who is increasingly vocal in his opposition to the government insurance option.” Health Care for America Now is leading the charge against Senator Grassley. At the White House Forum on Health Care the ranking Republican on the Senate Finance Committee told President Obama that such exchanges were “‘an unfair competitor’ and could run private insurers out of business,” according to the Politico story. The article also notes that Senator Wyden found no Republican Senators willing support his bipartisan legislation if it included a government run health plan. “From a raw political standpoint, having talked to a lot of senators, I wouldn’t have any Republicans on the Health Americans Act as cosponsors if we had a public option,” he told Politico.)

There is a way for Democrats to pass health care reform without Republican votes. If a compromise fails to emerge by September, the House Leadership is pushing for a legislative process that would allow passage with simple majorities in both chambers. This would be accomplished through a process called “budget reconciliation.” Under the reconciliation rules, filibusters are not permitted enabling the Senate to move legislation forward with a simple majority of 51 votes instead of the 60 needed to end a filibuster. Democrats currently hold 58 seats in the Senate (including those of two independents who caucus with them) with one more likely to arrive from Minnesota. (Filibusters don’t exist in the House, making passage by majority vote the norm in that chamber).

But Democrats may have a tough time pulling together even 51 votes in the Senate. Senator Evan Bayh announced on MSNBC on Wednesdaythat 16 moderates in the Senate (15 Democrats and one independent who caucuses with the party) have come together to provide a united, centrist voice to issues such as health care reform. As noted in the press release announcing the group’s formation, their goal is “to pursue pragmatic, fiscally sustainable policies across a range of issues, such as deficit containment, health care reform …” and others. With 16 members, this caucus, currently dubbed the “Moderate Dems Working Group” represents more than a quarter of the Democrats serving in the Senate. If even 10 0f these centrists stick together they’ll need to be a part of any deal struck on health care reform.  (A list of the 16 Senators in the group is below).

At the same time there are liberals in Congress who would just assume have government take over the health insurance industry and create a single payer system similar to that in place in Canada and many Western European countries. At the very least they look to a greater role for the government in providing health care coverage to middle class Americans (the government is already the primary insurer for older and low income citizens).  They won’t go quietly along with a solution they feel fails to assure universal and comprehensive  coverage.

What this means is that while health care reform is coming, getting there won’t be easy. But there is a way. President Obama has long talked of the need to focus on core principles and the desired outcome instead of on how we get there. He has even said that his campaign proposal for a federal health insurance exchange (the deal breaker identified by Senator Grassley) is negotiable. As noted in the Newsweek article, the president said at  the White House summit, “If all Americans could be insured at ‘an affordable rate and have choice of doctor, have flexibility in terms of their plans, and do that entirely through market, I’d be happy to do it that way.'”

This is the approach all lawmakers and interest groups — whether liberal, moderate and conservative — need to bring to the table. The health care reform debate will be heated, passionate and difficult. But if all participants focus on the goals, the means of getting there can be found.  Given the need, it better be.

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The 16 members of the Moderate Dems Working Group (who, hopefully, will work on coming up with a better name) are:

  • Evan Bayh (Indiana) – co-chair
  • Mark Begich (Alaska)
  • Michael Bennet (Colorado)
  • Tom Carper (Delaware) – co-chiar and a member of the Senate Finance Committee*
  • Kay Hagan (North Carolina) — a member of the Senate H.E.L.P. Committee*
  • Herb Kohl (Wisconsin)
  • Mary Landrieu (Louisiana)
  • Joe Lieberman (Connecticut)
  • Blanche Lincoln (Arkansas) – co-chair and a member of the Senate Finance Committee*
  • Clare McCaskill (Missouri)
  • Ben Nelson (Nebraska)
  • Bill Nelson (Florida) — a member of the Senate Finance Committee*
  • Mark Pryor (Arkansas)
  • Jeanne Shaheen (New Hampshire)
  • Mark Udall (Colorado)
  • Mark Warner (Virginia)

* The Senate Finance Committee and the Senate Health, Education, Labor, and Pensions (H.E.L.P.) Committee have primary jurisdiction over health care reform legislation.