Healthcare Blog

Boomer Changes in Reform

Hey Boomers. Here is the latest on healthcare.

Massachusetts: The new epicenter of the health reform debate

The biggest news on health reform, of course, hasn't been what's going on in Washington, where negotiations to reconcile the House and Senate bills have quietly continued. It's what's been going on in Massachusetts.

A month ago, no one believed it could happen. A week ago, it still seemed only the slightest possibility. But Tuesday night, Republican Scott Brown won the right to be the new senator from Massachusetts – and his election will have a big impact on health reform.

Brown was elected despite the fact that Massachusetts is a reliable Democratic state (both chambers of the Legislature are Democrat-run, the congressional delegation is all Democrats and so are the state office-holders), despite the fact that he vowed to vote against health care reform (Sen. Kennedy, his popular predecessor, spent his lifetime trying to accomplish reforms like those Brown campaigned against), and despite the fact that just a little over a year ago, President Obama carried the state by 26 percentage points.

Brown beat state Attorney General Martha Coakley 52 percent to 47 in a contest that has been at the top of the national news for the last few days. As Brown said in his victory speech, the campaign started quietly, but "Air Force One made an emergency trip to Logan Airport" on Sunday so the President could try to rescue Coakley's campaign. Former President Bill Clinton stumped for her for three days in the past week. As probably everyone in the Western world knows at this point, Brown's victory gives the Republicans their 41st Senate seat, which means the Democrats no longer have a filibuster-proof majority.

That shifts the balance of power in the Capitol for lots of issues: bank reforms, cap and trade and the debate over how suspected terrorists should be tried and treated. But the immediate question is what it will do to health care reform, which has occupied Congress and the President since last summer. The House and Senate have been working on a final draft of the bill and had hoped to pass it in the next few weeks. Now that the Democrats have lost their critical 60th Senate vote, however, in a campaign that sometimes felt like a referendum on health reform, the big question is what happens to that health reform bill? And the answer is, nobody knows.

For the past few days, the Capitol has been buzzing with talk about a Plan B for passing a reform bill, in case Brown should win. Some lawmakers have advocated that the chambers finish their negotiations quickly so members can vote before Sen. Brown is seated, or for scaling back the bill and passing it through the budget reconciliation process, which would only take 51 Senate votes.

The most popular Plan B, however, has been to convince the House to pass the bill the Senate already passed – with no changes – and send it to the President to sign. That would obviate the need for the Senate to vote on the issue again.

But that plan seems increasingly unlikely. First, House members, including Speaker Nancy Pelosi, say they are adamantly opposed to some parts of the Senate bill. And now that a conservative Republican has defeated a Democrat in a blue state, some Democrats who supported the bill last time may have second thoughts about supporting it and other items on the Democratic agenda. For example, moments after Brown's win, Rep. Anthony Weiner, a liberal Democrat from New York, told CNN, "We need to internalize this…We've got to recognize we have an entirely different scenario…There's a limit to saying (the people) just don't get it – that if we just pass a bill they'll get it."

CNN political commentator David Gergen, who has served in both Democratic and Republican administrations, said Tuesday night, "I think we're seeing the obituary written tonight for universal health care in the U.S. It's very unlikely to pass in its current form."

He's looking further down the road than others seem willing to look. Speaker Pelosi and Senate Majority Leader Harry Reid were both maintaining that they will pass a reform bill. And as AHIP and Humana have said for several years, the U.S. health care system needs to be reformed.

But this election does change the landscape, and it will soon be apparent how. Will the bill's content change? Will it be scaled back? Will the timetable for passing it be delayed?

A week from now, the President will be making his State of the Union Address. Will he be talking about reform, or will he "pivot," as some in Washington are guessing, and make jobs and the economy his central theme?

Where the negotiations stand
The arguments over why Brown beat Coakley have already begun. Was Martha Coakley a terrible candidate? Did she lose because she took her victory for granted and started campaigning too late? Or were voters communicating dismay over what's going on in Washington – maybe even specifically, over what's going on with health care reform?

What isn't debatable, however, is that Brown's victory will have a big impact on the future of health reform. And here's where the negotiations stand:

Last week, talks between the House, Senate, the President and top administration officials were like a three-day marathon. From 10:30 a.m. until 6:40 p.m. last Wednesday, from Thursday morning until about 1 a.m. Friday, and then for most of Friday, Democratic leaders were at the White House trying to work out the differences in the House and Senate bills.

The meetings were described as unusual (rarely does a president spend such big blocks of time working on issues with members of Congress), intense (no BlackBerrys or cell phones were allowed), and productive (in a joint statement on Wednesday, House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid said they had made "significant progress in bridging the remaining gaps").

On Friday, the White House released this statement: "We've worked through the gamut of issues in great depth, but there are still not final agreements and no overall package. The next step in the process is to evaluate the costs and savings associated with the various proposals for each tenet of the legislation."

Therefore, some parts of the bill were sent to the Congressional Budget Office for analysis. The issues that lawmakers and the administration have been grappling with include the details of how to pay for the bill, how much Medicaid should be expanded, how generous the subsidies to help individuals buy insurance should be, and whether there should be exchanges in every state or just one, national exchange.

The details of policy provisions that have been tentatively agreed on have not been released, but some are known:

Unions and employees of state and local governments won a five-year reprieve on the tax on "Cadillac" health plans. This creates a need for $60 billion more in revenue
Pharmaceutical companies were asked to raise their financial contribution from $80 billion over 10 years to $90 billion.

Cuts to Medicare Advantage were $118 billion in the Senate bill and $170 billion in the House bill. At this point in the negotiations, the cuts reportedly stand somewhere between those numbers Republicans have been left out of all these discussions.

In addition, Sen. Ben Nelson, D-Neb., who became notorious for negotiating a special Medicaid-payment deal for his home state as a condition of his vote for reform, requested that either the deal be granted to everyone, or removed from the legislation. He insisted it always "was intended to serve as a placeholder that would be removed during the conference negotiations and replaced with a mechanism applying to all state governments."

Meanwhile, a CBS News poll released last week showed that the health reform debate is hurting the approval ratings of the President and members of Congress. Only 36 percent of Americans approve of the way President Obama is handling the issue (54 percent disapprove), and only 46 percent approve of the job he's doing overall (down from 56 percent in October). Only 1 in 5 Americans thinks the health reforms in Congress strike the right balance when it comes to expanding coverage, controlling costs and regulating insurance companies (some people think it does too much; others think it does too little).

But the news for members of Congress is worse: 57 percent of Americans disapprove of the way Democrats in Congress have dealt with the issue of health reform (in fact, only 48 percent of Democrats approve of the way Democrats have dealt with it), and 61percent of Americans disapprove of the Republicans' approach (only 43 percent of Republicans approve of the Republican approach).

---

Boomer Update on Health Care

Hello Boomers. It just gets more complicated all the time.

Big Labor, Big Favors
By Grace-Marie Turner
The Cornhusker Kick: Just when we thought the health care legislation could not possibly get any worse, any more damaging, or any more disgusting in its vote-buying kickbacks and special favors, then along comes this!

In marathon meetings at the White House, the president and congressional Democrats came up with a "big, fat wet kiss for labor unions" (New York Post) in exempting them from the tax on high cost health plans until 2018.

The deal exempts them from one of the "revenue generating" parts of the Senate health overhaul bill that exposes expensive health plans to a 40% excise tax. The tax on plans costing more than $24,000 a year for families and $8,900 for individuals would be paid by insurance companies, who would simply pass it along in even higher premiums.

And how is Congress going to make up the revenue? With another jobs-killing tax that would subject investment income to Medicare payroll taxes. This will hit small businesses and others that rely on investment income to build their businesses. Apart from the economic damage this would do, it is terrible policy to start thinking of Medicare taxes as yet another piggy bank to fund special political deals.

It is relatively clear that President Obama's economic policy is strictly one dimensional: raise taxes everywhere and anywhere you possibly can to expand the size and scope of government. And the only people who will be exempt from these crushing taxes will be political friends who have cut special deals.

This is not a democracy. This is banana republic politics. Unless you have political connections and lots of campaign cash, expect to get hit.

It's clear that the winners are the powerful labor unions who've bought a place at the table with their huge campaign contributions and election spending. That bought them the deal that exempts union members from $60 billion in taxes on health benefits.

But who are the losers? For starters, workers in states that have fewer labor unions, such as Nebraska. Is Sen. Ben Nelson going to be able to defend a deal that would tax health insurance for workers in his state, most of whom are not unionized, at a higher rate than the more highly-unionized workers in Pennsylvania? This might be called the "Cornhusker Kick."

The union payback shows the same raw politics as a deal in the Senate bill that would force construction companies with five or fewer workers to provide expensive, government-mandated health insurance to their employees. (For other industries, the mandate doesn't kick in until a firm has 50 workers.) The unions had complained that exempting the small, non-union firms from the mandate put unionized companies at a competitive disadvantage.

This is disgraceful.

Political guru Charlie Cook writes today: "Honorable and intelligent people can disagree over the substance and details of what President Obama and congressional Democrats are trying to do on health care reform and climate change. But nearly a year after Obama's inauguration, judging by where the Democrats stand today, it's clear that they have made a colossal miscalculation."


Massachusetts: And what impact is the Massachusetts special Senate election going to have on health reform?

You know the world has changed when people around the country are looking to Massachusetts to stop expansion of a liberal social agenda. One member of Congress told me his constituents are stopping him on the street to ask what they can do to send a message to Massachusetts voters, saying they are all that stands between them and passage of a health reform bill that frightens them.

Republican Scott Brown had the quote of the campaign during Monday night's Massachusetts Senate debate when moderator David Gergen asked him, "Are you willing … to say I'm going to be the person -- I'm going to sit in Teddy Kennedy's seat and I'm going to be the person that's going to block [health reform] for another 15 years?"

Brown replied, "Well, with all due respect, it's not the Kennedys' seat and it's not the Democrats' seat, it's the people's seat."


The public plan lives on, despite most claims that this central pillar of Big Labor's agenda won't be part of the final health overhaul bill.

There is a reason they are silent on this issue. Their government-run health plan just has a new name. It's now called a national health insurance exchange.

The federal government, rather than the states, would have the authority to set up the new health insurance purchasing exchange. This would be the vehicle to centralize health insurance regulation, with Washington dictating what benefits must be covered, what insurers can charge, and how health plans must operate.

The House bill calls for the national exchange to be run by the Orwellian "Health Choices Administration," vesting vast new power for health insurance regulation with the federal government and giving states, consumers, and businesses little or no say over the health "choices" available to them through the exchanges. The national exchange would quickly become a vehicle for price controls and excessive regulation of insurance markets, which have driven up costs and driven out competition in many states.

Giving the federal government power over health insurance through this new regulatory mechanism would create the foundation for a government-run public plan. Speaker Pelosi gave a preview of the power that she believes will be invested in the national exchange when she said at a recent news conference that once the legislation is passed, the insurance companies "will be crying out for a public option."

The politics of intimidation and political favors will not win support for this plan. Stay tuned. This still is not over yet.

---

Boomer Health Care Federal Update

Greetings Boomers. Congressional Democratic leaders met with the President last week while the rest of Congress remained back home, still on recess. The President pressed the Senate Majority Leader and the House Speaker to get health care reform done quickly in time for the State of the Union speech during the first week in February -- before the opposition can mount an effective grassroots campaign to scuttle the bill. To this end the Democratic leadership has agreed to bypass a formal conference, which would be fairly public, contentious and time-consuming. However, no deadline was promised, and there was some pushback from Speaker Nancy Pelosi that the House would not simply accept the Senate bill. The plan calls for the two chambers (Reid/Durbin, Dodd/Harkin and Baucus for the Senate, and Pelosi/Hoyer, Miller, Rangel and Waxman for the House) to work on a compromise, pass it first in the House and then in the Senate. Under this "ping-pong" process, the Senate will have but one vote in which 60 Senators will have to vote “Yes.” While it seems very unlikely that the public plan option (in the House bill) or the Medicare buy-in provision, already rejected by the Senate, will make the final cut, there are more than enough issues in conflict to keep negotiators busy for several weeks. They include: abortion; immigration; the House tax surcharge on the wealthy vs the Senate's Cadillac tax; the insurance company tax; changing McCarran-Ferguson (pushed by the House); and increasing subsidies to low-income Americans. The current betting is that Democrats will get a bill to the President for signing sometime in the coming weeks, but there is absolutely no margin for error.

---

Boomer Update on Health Care

Hey Boomers. The beat goes on!!!

Denny
Cincinnati

Reform will be an albatross around Democrats' necks
Belleville News-Democrat
Grace-Marie Turner
January 7, 2010

Health reform is the Holy Grail for Democrats, but it may turn out instead to be their political death march.

President Obama has told Democrats in Congress they must usher in "historic change" by courageously voting for reform, assuring them the voters will thank them later.

But "later" may be too late for many members who feel they are being forced to walk the plank and vote for a bill that becomes more unpopular by the day.

For starters, the bills cover only about half of the uninsured - missing by miles the Democrats' goal of universal coverage. The Senate bill would leave 23 million people without insurance, and the House bill, at least 18 million, while spending nearly $2.5 trillion in the first year the program is implemented.

Next, people will feel the pain well before they see the gain. The bills start collecting new and higher taxes in 2010, but people won't start seeing any subsidies to help them buy insurance until 2014. Sending collection agents out four years before benefits begin is one of the budget gimmicks that Senate Majority Leader Harry Reid, D-Nev., used to claim his bill is paid for.

But health insurers and medical suppliers who must pay the new taxes will quickly raise their prices, leading to higher health insurance costs. Because Obama repeatedly has claimed the legislation will lower health-care costs, small businesses and citizens expecting relief will feel especially betrayed.

The Congressional Budget Office says the legislation will actually make the cost problem worse. It found that families purchasing health insurance in the individual market would actually see an increase in their premiums by $2,100 in the year 2016.

That's over and above the increases they already would face. A family would pay $15,200 for health insurance in 2016 with reform, and $13,100 if Congress does nothing.

Young people get hit the hardest with reform. Most of them don't have a clue that the federal government is about to slap them with a new mandate requiring them to buy expensive health insurance. And studies show the legislation would force them to pay premiums two or three times the amount they otherwise would be charged based upon their age and expected use of health services.

And seniors already are outraged because of nearly $500 billion in cuts to Medicare and are on high alert about potential rationing.

The Democrats didn't lose Congress in 1994 because they failed to enact the Clinton health reform bill, as members of Congress are being told. They lost because they were pushing a plan that was hugely unpopular with the voters. Just like today.

The latest NBC News/Wall Street Journal poll shows that only 32 percent of the American people support ObamaCare. Democrats will face a torrential backlash if they vote for legislation that is so unpopular with their constituents.

The only Democrats may able to save themselves are those who stand up and vocally oppose passage, becoming heroes to the majority of Americans who are desperate for somebody to put on the brakes.

Democratic Sen. Ben Nelson of Nebraska had a chance to be that one vote in the Senate, but he sold out for a few million dollars in Medicaid money for his state. Now his approval ratings have dipped so low that he has been forced to respond with a costly statewide advertising campaign defending his deal-making even though he's not up for re-election until 2012.

Republicans don't have the votes in either house of Congress to stop passage. Before Congress takes a final vote on compromise legislation, the only Democrats who may find health-care to be a political gain are those who stand up and say, "Stop!"

---