Health Care Reform Summit May Be Substantive

Will the February 25th health care reform summit merely be political theater? Or will it serve as an inflection point that leads to passage of health care reform legislation? I haven’t seen any polls on the matter, but a quick search on the topic certainly creates the impression that many believe the summit will be six hours of politics with nothing substantive emerging.

I respectfully disagree.

Yes, the bipartisan health care reform summit President Barack Obama is convening will have more than its fair share of politics. That’s inevitable when that many politicians are in the same room. And given that it is in the electoral interest of Democrats to produce health care reform and in the electoral interest of Republicans to deny Democrats this victory, that politics will pervade the proceedings is to be expected. Nor should the political facets of the summit be criticized or denigrated. America’s legislative system is political. Unlike other country’s in which the ruling party is expected to rule (thus Prime Ministers are the leaders of the legislative majority), in America we set up a system that would inevitably be adversarial.

Of course, one could argue (and I do) that this adversarial relationship has gone too far. Today’s political climate is poisoned by an unwillingness or inability by one side to recognize anything of value put forward by the other. Opponents are not simply wrong, they are evil. It’s as if the prevailing logic has become: “Reasonable people cannot disagree because anyone who was reasonable would agree with me. Ergo, people who disagree with me are unreasonable.” That this is a both foolish and unhealthy, both for the individuals involved and the Republic, doesn’t seem to matter. That radio talk shows and cable news channels (especially during prime time) pour fuel on this fire – usually embellished with misunderstood or downright erroneous facts – only makes the matter worse.

Which is a long way of saying that those who claim the bipartisan health care reform summit will fail to rise above political gamesmanship have the odds in their favor. But at the risk of being naive, I think it will lead to something more substantive. Here’s some reasons why:

  • It’s hard to be political for six hours straight (even with an hour off for lunch). The participants know they’re engaged in a bit of Kabuki theater. But staying in character that long is tough. These folks do have sincerely held beliefs. Even those who stifle those beliefs in favor of scoring political points are likely to let a ray of substance shine through during the course of the day.
  • And each side has an incentive to seize that ray of sunshine (to butcher the metaphor) and ratchet it up a bit.
  • For Democrats, the incentive is to get on record the specific provisions Republicans demand to see in a health care reform bill and identify the ones they can live with. By expanding the Obama health care reform proposal to include as many GOP ideas as possible, the Democrats assume a no-lose situation. If including those provisions gain Republican support for a bill, they win by passing health care reform legislation. If Republicans remain united against a bill that includes ideas they profess to support, the Democrats get to paint the Republicans as obstructionist.
  • For Republicans, they need to re-position themselves as something other than the Party of No. Not that their base wants them to do anything other than oppose whatever bill the Democrats put forward. But Republicans won’t win elections this November just appealing to their base. It’s independent voters who decide elections. In Virginia in 2008 those independent voters helped send a Democrat to the White House. Those same independents last year put a Republican in the Governor’s mansion. By offering substantive proposals Republicans in Congress can demonstrate they’re serious about solving problems. They can then claim to withhold their support for whatever legislation the President puts forward on the grounds that they cannot support rate regulation, or Medicare cuts, or new taxes or something. But they need to show they care about fixing America’s health care system. And that means putting ideas on the table that reduce costs and expand coverage.
  • Which leads me to believe President Obama’s health care reform plan will be modified subsequent to the summit. And because it will likely incorporate ideas from a broader spectrum than participated in the drafting of the current plan, the result is likely to be a better proposal.
  • At the very least, the summit will allow Democrats and Republicans to explain to the American people the “why” behind their positions. Which will liberate Democrats to move forward with legislation regardless of whether Republicans support it or not.
    • If the Republicans have used the summit to seize the high ground, the resulting legislation will be much more moderate than what the President is proposing today.
    • If Republicans fail to put forward meaningful ideas, the proposal will be poorer for it, but will move forward nonetheless.

    At the end of the day, I believe both chambers of Congress will vote on a comprehensive health care reform bill – something that has not happened in recent memory despite decades of effort. If Republican Senators filibuster the President’s health care reform bill, Democrats will turn to the reconciliation process (which allows them to pass legislation with a simple majority, not the super-majority overcoming a filibuster requires.) They’ll claim they gave bipartisanship a try and that they are playing by the rules (which permit circumventing filibusters in certain circumstances) and by American principals (what’s more American than “the majority rules?”)

    That’s my educated guess. What’s hazier to me are two additional and critical questions.

    1. Will the legislation voted on by Congress be health insurance reform or will it be real health care reform that tackles the need to control costs?
    2. Will they be able to put forward a single bill capable of obtaining majorities in both the House and Senate?

    But first things first. And first is the summit. Will either size, neither or both engage in a substantive debate? I think so. And even those who are skeptical of this result should hope so.

    A Critical Week for Health Care Reform

    The long strange trip that has been health care reform will take a few new twists and turns this week as President Barack Obama and Congressional Leaders will meet for a televised summit. No matter what actually happens at Blair House the event will be substantial for several reasons. Among them:

    • We finally get to see what ObamaCare really looks like. In the past the Administration has voiced support for various elements of legislation “owned” by Congress. While Senate Majority Leader Harry Reid and Speaker Nancy Pelosi struggle to fashion a unified bill Democrats in both of their caucuses can support, President Obama will unveil his own version of health care reform. While it will no doubt be based on the two bills passed, respectively, by the Senate and the House, it will not be the official Democratic bill: it will be the White House bill.
    • We finally get to see if either party can rise above the politics of health care reform to actually address the policy of health care reform. Senate Republicans bowed to the inevitable and agreed to participate in the summit agreeing to participate “in good faith” according to the Los Angeles Times. While House Republicans have yet to say whether they’ll attend the summit, they would be foolish not to. The GOP is fighting hard to be known as something other than the Party of No. Not attending would set this positioning effort way back. Besides, the summit provides Republicans with the opportunity to clearly lay out their alternatives and to eviscerate the Democratic approach to health care reform. Yes the meeting gives Democrats the same opportunity. The key for each party, however, will be how they balance the two tactics: pushing forward their own policies; and tearing down the other side’s ideas. If they focus on the benefits of their own approach there’s a real opportunity to find common ground. If they choose to turn the Blair House into a political Thunderdome then politics will trump policy.
    • Health care reform will move forward after Thursday’s health care reform summit. But we’ll learn whether what moves forward represents compromise or a Democrats-only version of reform. If Republicans put forward serious ideas (and I assume they will) it will be hard for the Administration to push reforms through the Senate with a simple majority – even though an increasing number of Democrats in the Senate seem willing to use reconciliation to pass a health care reform bill. (Reconciliation allows the Senate to vote on budget related issues without providing the minority the ability to filibuster. A filibuster allows the minority to force the majority to pass legislation with a super-majority of 60 votes in the Senate. Filibusters are not allowed in the House which operates on a simple majority basis). Instead, President Obama would be likely to put forward legislation that incorporates much of what the GOP offers – and then dare Republicans to defeat such a bill. Whether Republicans would – or could – hold out for a bill in which they give up nothing and insist on a pure GOP version of health care reform would be interesting to see.
    • If no common ground emerges – whether because Democrats refuse to listen to Republicans or the GOP refuses to truly negotiate – the majority party is likely to move forward on their own. Whether liberals in the Democratic caucus have learned the lesson of the past year would be interesting to watch. That lesson, that it is Democrats who have a majority in Congress, not liberals and that the two are not the same, is a major reason Democrats are in danger of losing the opportunity to pass health care reform in the first place. If the Administration and Democratic leaders had focused on a moderate bill that could gain the support of their more conservative caucus members from the beginning, they would have passed a bill long before they lost their 60th vote. By hewing to the left, they delayed the inevitable: whatever health care reform bill, if any, emerges from Congress will disappoint true believers among progressives.

    The ramp-up to Thursday will be interesting. President Obama will unveil his reform plan. The House GOP leaders will agree to attend the summit. The pundits will pontificate. And on Thursday, we learn the future of health care reform. Stay tuned.

    Republican Health Care Reform: An Overview

    Once Senator-elect Scott Brown from Massachusetts is sworn into office, Republicans will have an unstoppable filibuster machine in place (assuming they remain united). It takes 60 Senators to shut down a filibuster. With a caucus of 41, Senate GOPs can kill most any bill on the table. (Budget related items can be moved forward through the reconciliation process with only 51 votes).

    Which means when it comes to health care reform, Republicans have a choice: they can kill most any bill or they can help pass reform legislation that includes some of their pet provisions. For much of the health are reform debate it was unclear what was the Republican health care reform proposal. There were plenty of ideas thrown around by various groups of GOP lawmakers, but there was no one generally agreed to set of reforms. To be fair, it wasn’t clear what reform provisions were part of the official Democratic recipe either: liberals had their ingredients; moderate Democrats had ideas of their own.

    For Democrats it’s fair to say that somewhere between the bill passed by the Senate and the one passed by the House lies their health care reform proposal. Republicans have their own legislation, the “Common Sense Health Care Reform and Affordability Act.”. While this legislation has never been considered by a Congressional committee (that I’m aware of) based on the the Republican response to President Barack Obama’s State of the Union address by Virginia Governor Bob McDonnell, it appears to be the “official” GOP plan. What Governor McConnel said is that “many of (the Republican’s health care reform) proposals are available online at solutions.gop.gov.” As Governor McDonnell was speaking on behalf of the Republican Party, and since the web site he referred to an official Republican Party site, I assume it’s fair to consider the legislation and the web site as the official GOP position on health care reform.

    So what kind of health care reforms would Republicans say “yes” to?

    • Require states to operate “qualified” state reinsurance programs and high risk pools to enable individuals with pre-existing conditions to obtain coverage so long as they are “citizens and nationals of the United States.” Aliens legally in the United States would apparently not be eligible.
    • $25 billion would be allocated to the help fund these programs.
    • Premiums could be no higher than 150% of the state’s average individual health insurance premium
  • Eliminating annual and lifetime spending caps on health insurance coverage
  • Preventing carriers from imposing pre-existing conditions on consumers if they maintain continuous coverage.
    • In describing this provision, Republican staff of the Ways & Means Committee describe this provision as extending “existing HIPAA guaranteed availability protections.” Among the extensions is eliminating the requirement that individuals exhaust their COBRA coverage before becoming eligible for insurance under HIPAA.
  • Prohibiting rescissions except in cases of fraud and even then consumers can appeal the decision to an independent appeals panel.
  • Offering states incentives for:
    • reducing “the average per capita premium for health insurance coverage” in the individual and the small group markets.
    • reducing the number of uninsured in the state by specified percentages
  • Permitting states to “contract with a private entity to develop and operate a plan finder website” to provide information on individual coverage available to consumers in that state. These state plan finders are explicitly prohibited from directly enrolling individuals in health insurance plans.
  • Allows small business to come together in Association Health Plans that operate across state lines.
  • Allows individuals to purchase coverage from any health plan licensed in any state. Insurance from a health plan licensed in another state will “still be subject to the consumer protections and fraud and and abuse laws of the policy holder’s state of residence” according to the Ways & Means Committee GOP staff.
    • The rationale for this provision, as stated by those Republican staffers, is that “differences in state regulation of health insurance have resulted in significant variance in health insurance cost from state to state. Americans residing in a state with expensive health insurance plans are locked into those plans and do not currently have an opportunity to choose a lower cost option.”
  • Encourages use of Health Savings Account by allowing them to be used to pay for health insurance premiums, enabling those receiving a nonrefundable tax credit to contribute to an HSA and the like.
  • Capping malpractice awards for noneconomic damages to $250,000 and other medical liability reforms.
  • Eliminates a current comparative effectiveness research initiative aimed at identifying the effectiveness of various medical procedures
  • Providing incentives for prevention and wellness programs
  • These are the primary provisions. There are others aimed at combating fraud and abuse in government health programs, preventing federal dollars to be used for abortions and the like, but these are the core elements related to access and affordability.

    Some of the Republican health care reform bill is relatively non-controversial. Who opposes encouraging prevention and wellness programs? The Republican health care reform proposal’s impact on the uninsured would be minimal, according to the independent Congressional Budget Office. However, the CBO also found that the GOP reform plan would “reduce average private health insurance premiums per enrollee in the United Sates, relative to what they would be under current law- by 7 percent to 10 percent in the small group market, by 5 percent to 8 percent for individually purchased insurance, and by zero to 3 percent in the large group market.”

    My point in describing the Republican health care reform proposal is not to applaud or criticize it (that’ll happen in future posts). Nor is it to imply that this legislation has any chance of being enacted.

    But on the off-chance that both President Obama and the GOP are serious about negotiating over health care reform legislation, it’s useful to know the parameters of the discussion. The Senate bill, with the expected modifications as reported in this blog and elsewhere over the past few weeks, represents the starting point for Democrats. The Common Sense Health Care Reform and Affordability Act represents the starting point for Republicans.

    Let the negotiations begin.

    Health Insurance Brokers to the GOP: “Et Tu?”

    Health insurance brokers are appropriately worried about the impact health care reform will have on their livelihood. That’s human nature. Politics is about the management of self-interest. When it comes to health care reform, the list of concerned onlookers is long. Patients, doctors, hospitals, carriers, government bureaucrats, health insurance agents, employers, lawyers, dentists, chiropractors, pharmaceuticalfirms and, well, you get the idea.  Anymeaningful change is going to require sacrifice by most all of these stakeholders. 

    When it comes to balancing all these competing interests, the partisan nature of American politics usually comes into play. Public policy flowing from the Democratic party tends to benefit some at the expense of others. The same holds true with the Republican party.

    Health insurance brokers, for example, tend to rely on the GOP to promote policies supportive of their profession. One reason for this connection is political. I’ve no empirical data, but long experience in working with health insurance brokers leads me to believe that the majority vote Republican. Another reason, however, is ideological. Republicans tend to support market-based health care reform solutions  and brokers are integral to making the market work. Brokers take competing health plans and interpret them to their prospects and clients. One method they use is to take the different explanations of benefits used by different competitors and put them into a consistent template. They serve as consumer’s advisers and, when needed, their advocates to assure they get full value from their health plans.

    As President Barack Obama’s Administration works with the Democratic majority in Congress to fashion health care reform, many brokers are relying on Republicans in Congress to stand firm against a public plan (which most brokers believe would eventually drive private plans out of existence — and take brokers down the drain with them). And they are trusting Republicans will make the case for the value brokers add to the system.

    This trust may be misplaced.

    Last week four leading Republicans put forward “The Patients’ Choice Act.” The Act is their call to action for fixing what they refer to as America’s broken health care system while at the same time seeking to preserve much of the current market driven arrangement. The authors of the proposal, Senators Tom Coburn and Richard Burr and by Congressmen Paul Ryan and Devin Nunes, are leading voices within their party on health care reform. It’s not clear whether the Patients’ Choice Act is the official position of the Republican caucuses in Congress, but no other proposal has been forth by the GOP. And the media is certainly treating it as the “Republican health care reform plan.”

    Not suprisingly, the GOP lawmakers explicitly reject a public health program. Indeed, while acknowledging other factors leading to runaway costs (new technology, an aging population) their document proclaims the primary reason America’s health care system fails so many patients is “government intervention.”

    Nonetheless, there are several elements of the Patients’ Choice Act which occupy common ground with Democrats (more on these in a future post). Some of what’s in The Patients’ Choice Act summary is, suprising and even amusing. For example, Republicans have taken to accusing Democrats of seeking to move America to “European-style socialism.” Yet, in justifying some of their ideas the sponsors of the Act turn to similar programs working in — wait for it — Europe.

    Some elements of the reform package are just foolish. For example, under the Patients’ Choice Act carriers to accept all applicants regardless of their health condition (often referred to as “guarantee issue”). However, explicitly reject requiring individuals to obtain coverage stating that “if individuals do not want health insurance, they will not be forced to have it.” In fact, they go so far as to suggest that individuals be able to purchase coverage at any time “through places of employment, emergency rooms, the DMV, etc.”

    In taking this position it appears the the Republicans have adopted the greatest flaw in then candidate-Obama’s health care reform plan — and made it worse. Why would anyone purchase coverage before they need it? Any reasonable person would wait until they’re on their way to the doctor, stop by the DMV and purchase coverage. In case of an accident, all they would need to do is go to the emergency room (the most expensive place to receive care), sign up at the receiving desk and enter the facility as a fully insured patient. As soon as they’ve recovered, it would be safe to drop the coverage.

    (I find it hard to believe the Republicans are taking such a naive view of insurance. And, to be fair, the Patients’ Choice Act is somewhat lacking in details. However, what I’ve described comes from the Republican lawmakers’ own document. If they are creating safeguards to prevent such gaming of the system, there’s no evidence of it yet.)

    As with any health care reform proposal, there’s elements to like and to dislike in the the Patients’ Choice Act. What will be most troubling for brokers, however, is the GOP’s call for creating state-based exchanges. The benefits of such exchanges includes a “one-stop marketplace for health insurance. Individuals would get a hassle-free opportunity to choose the plan that best meets their needs through an Exchange.” Most brokers believe that’s their role in the current system. To have Republicans propose a state agency to take on this responsibility is disconcerting at best; a betrayal at worst.

    Then there’s the “auto-enrollment” feature touted by the Republicans allowing individuals to obtain health insurance at the DMV and other locations. Apparently the GOP sees little value in having consumers work with licensed, regulated agents and brokers, not when there’s a clerk at the DMV available.

    To be fair, the Republicans are not explicitly excluding brokers from their version of a new health care system. In fact, they are expected to remain a part of the system. In the GOP’s “Patients’ Choice Act Q&As they write, “Whether an individual uses an insurance broker, an internet [sic] comparison page, or calls a toll free number, individuals are provided the information needed to choose a plan tailored to their individuals [sic] needs.” This basically equates the knowledge, skills and expertise of  independent brokers to what can be delivered by an Internet site or a customer service rep at the state Exchange. How comforting.  Perhaps they are relying on the Exchange to standardize health insurance so much that professional guidance is no longer required. Although if coverage is that standardized, then perhaps calling their proposal the Patients’ Choice Act might be somewhat misleading.

    The National Association of Health Underwriters, the primary professional organization for health insurance brokers, is working hard to educate lawmakers concerning the value independent brokers add to the system — value which should be preserved in whatever reform package emerges from Washington.  To the extent the Patients’ Choice Act represents Republican thinking on health care reform, relying on the GOP as an ally in this effort could be a painful path to disappointment.