Health Care for the Blue Dogs

By Jacob S. Hacker
Tuesday, July 28, 2009

The fate of health-care reform hangs on what President Obama and leading Democrats do in the next few weeks. In particular, it hinges on an effective response to moderate Democrats in the House -- known as "Blue Dogs" -- who are threatening to jump ship.

The main worry expressed by the Blue Dogs is that the Congressional Budget Office has predicted that leading bills on Capitol Hill won't bring down medical inflation. The irony is that the Blue Dogs' argument -- that a new public insurance plan designed to compete with private insurers should be smaller and less powerful, and that Medicare and this new plan should pay more generous rates to rural providers -- would make reform more expensive, not less. The further irony is that the federal premium assistance that the Blue Dogs worry is too costly is the reform that would make health-care affordable for a large share of their constituents.

The Blue Dogs are right to hold Obama and Democratic leaders to their commitment to real cost control. But they are wrong to see this goal as conflicting with a new national public health insurance plan for Americans younger than 65. In fact, such a plan, empowered to work with Medicare, is Congress's single most powerful lever for reforming the way care is paid for and delivered. With appropriate authority, it can encourage private plans to develop innovations in payment and care coordination that could spread through the private sector, as have past public-sector innovations.

Increasing what doctors and hospitals are paid by the new public plan, as the Blue Dogs desire, would only raise premiums and health costs for their constituents. It would also fail to address excessive payments to hospitals and specialists that private insurers say they have lacked the leverage to bring down. Offering public plan rates at close to Medicare levels while giving doctors and hospitals the choice of accepting them -- as the House legislation does -- is a way to test the market. If providers accept the rates, as the CBO projects they will, the Blue Dogs will get what they want: lower costs. If not, the bill in the House contains provisions for adjusting the rates, including nearly $10 billion to raise rates in rural areas if an independent study determines that higher rates are needed.

Many Blue Dogs fret that a new public health insurance plan will become too large, despite the CBO's projection that the overwhelming majority of working people will have employer coverage and that the public plan will enroll less than 5 percent of the population. Their concern should be that a public plan will be too weak. A public health plan will be particularly vital for Americans in the rural areas that many Blue Dogs represent. These areas feature both limited insurance competition and shockingly large numbers of residents without adequate coverage. By providing a backup plan that competes with private insurers, the public plan will broaden coverage and encourage private plans to reduce their premiums. Perhaps that's why support for a public plan is virtually as high in generally conservative rural areas as it is nationwide, with 71 percent of voters expressing enthusiasm.

Yet the Blue Dogs have mostly ignored the huge benefits of a new public plan for their districts. They have also largely ignored the disproportionate benefits promised by new federal subsidies for low- and medium-income workers. Right now, large swaths of farmers, ranchers and self-employed workers can barely afford a policy in the individual market or are uninsured. They will benefit greatly from the premium assistance in the House legislation promised for workers whose earnings are up to 400 percent of the poverty line, from additional subsidies for small businesses to cover their workers, and from a new national purchasing pool, or "exchange," giving those employers access to low-cost group health insurance that's now out of reach.

And given that Blue Dogs are worried about the federal cost of reform, they should applaud the House bill's requirement that all but the smallest of employers make a meaningful contribution to the cost of coverage. This will not just raise much-needed revenue. By ensuring that most employers contribute to the cost of insurance, it will also reduce the incentive for employers to drop coverage and let their workers go into the pool, increasing the size of the exchange and the public plan.

Blue Dogs have the future of health-care reform in their hands. If they hold firm to their principles of fiscal responsibility and effective relief for workers and employers in their districts, what's good for Blue Dogs will also be good for America.

The writer is a political science professor at Yale University and author of "The Great Risk Shift: The New Economic Security and the Decline of the American Dream."

http://www.washingtonpost.com/wp-dyn/content/article/2009/07/27/AR2009072701906_pf.html

Health Reform: The Fateful Moment

The New York Review of Books

By Theodore R. Marmor, Jonathan Oberlander

Critical: What We Can Do About the Health-Care Crisis

by Senator Tom Daschle, with Scott S. Greenberger and Jeanne M. Lambrew

Thomas Dunne/St. Martin's, 226 pp., $23.95

Barack Obama has long emphasized the importance of reforming American medical care, both as a candidate in the 2008 election and as president. During the month of June, however, he dramatically increased his efforts to secure major reform legislation by the end of the year.

The President is using his oratorical skills to rally support for reform. In a series of speeches and town hall meetings, Obama made his case for expanding insurance coverage and controlling medical spending. Speaking before the annual meeting of the American Medical Association in Chicago on June 15, for example, he painted a familiar, distressing portrait of a health care system that costs too much, leaves too many Americans without adequate insurance, and too often provides substandard care. The President warned of the dire consequences if these problems were not promptly addressed:

Make no mistake: the cost of our health care is a threat to our economy. It's an escalating burden on our families and businesses. It's a ticking time-bomb for the federal budget. And it is unsustainable for the United States of America.

Yet as the President expands his involvement in the health care debate, health reformers have concluded that time is not on their side. Delay and the President's popularity might well ebb. Congress could become more cautious as the 2010 elections approach. The longer the health care debate drags on, the more time opponents have to mobilize against and foster public anxiety about reform. And with federal budget deficits soaring, the political opportunities to finance expanded health insurance coverage may fade.

....

The full article: Health Reform: The Fateful Moment

President Obama's news conference on health care reform.

Go to the video.

Read the full transcript.

Here's an excerpt:

If you have health insurance, the reform we're proposing will provide you with more security and more stability. It will keep government out of health care decisions, giving you the option to keep your insurance if you're happy with it. It will prevent insurance companies from dropping your coverage if you get too sick. It will give you the security of knowing that if you lose your job, if you move, or if you change your job, you'll still be able to have coverage. It will limit the amount your insurance company can force you to pay for your medical costs out of your own pocket. And it will cover preventive care like check-ups and mammograms that save lives and money.

Now, if you don't have health insurance, or you're a small business looking to cover your employees, you'll be able to choose a quality, affordable health plan through a health insurance exchange -- a marketplace that promotes choice and competition. Finally, no insurance company will be allowed to deny you coverage because of a preexisting medical condition. I've also pledged that health insurance reform will not add to our deficit over the next decade. And I mean it. In the past eight years, we saw the enactment of two tax cuts, primarily for the wealthiest Americans, and a Medicare prescription program -- none of which were paid for. And that's partly why I inherited a $1.3 trillion deficit.

....

Taxing Health Insurance Premiums and Subsidizing Health Care Providers

Dean Baker
Truthout, July 20, 2009

As a card-carrying economist, I don’t like the unlimited tax deduction for health insurance premiums. It is regressive and just plain bad policy.

Low- and moderate-income people are both less likely to have employer-provided health insurance, and benefit much less from the tax deduction if they do. Most of these families will have no income tax liability. So, if they get a $12,000 employer provided plan, their tax savings will only be on the 15.4 percent payroll tax liability, which would come to $1,850 in this case.

By contrast, if a family earns $250,000, it is in the 33 percent tax bracket. If this family gets a $25,000 policy from an employer, the government is effectively paying almost half the tab, or $12,100. In this case, the government ends up paying almost seven times as much to subsidize the health care of a high-income family as it does for a moderate-income family. That policy is hard to justify.

The full article.

Senate H.E.L.P. Committee Passes Health Reform Bill

The Daily Kos Story

Michigan bills target insurers' denial of proper claims

MASON – The state House will hold three hearings this week on legislation to punish insurance companies that wrongfully deny legitimate claims by their policyholders.

The state could fine insurance companies $1 million for denying legitimate claims by policyholders, under legislation House Democrats say will put an end to insurers cheating their customers.

The package of 12 bills also would allow courts to levy heavy fines and charge insurance executives with felonies for encouraging the delay or denial of insurance claims.

Too many consumers are denied claims for injuries or property damages to boost insurance company profits, House Democrats said at one of five press conferences planned across the state.

Rest of article at: http://freep.com/article/20090713/NEWS06/90713046/Michigan-legislation-targets-insurers--denial-of-proper-claims

BREAKING: House Bill Looks Good (So Far)

By Jonathan Cohn of The New Republic

The three House committees writing health care legislation have just released the full text of their bill. And my immediate, admittedly tentative reaction is strongly positive. Once fully implemented, this reform plan will accomplish most of the goals on my mental checklist:

• Generous subisidies, available to people making up to 400 percent of the poverty line
• Expansion of Medicaid to cover people making less than 133 percent of the poverty line
• Guarantees of solid benefits for everybody, with limits on out-of-pocket spending
  
• Strong regulation of insurers, including requirements that insurers provide insurance to people with pre-existing conditions without higher rates
• An individual mandate, so that everybody (or what passes for everybody in these discussions) gets into the system and assumes some financial responsibility
• A public plan, one that appears to be strong, although I'll reserve judgment on that until I hear from the experts
  
• Choice of public and private plan, at first just for individuals and small businesses, but later for larger businesses and--possibly--eventually for everybody
• Efforts at payment reform, if not necessarily as strong as they could be
  
• Investment in primary care and prevention, which is not sexy but potentially important for general health .

Rest of article at: http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/07/14/breaking-house-bill-good-wish-it-could-happen-quicker.aspx

Another article briefly explains major parts of bill, with links to an official press release, with links to summary sheets about each component: http://voices.washingtonpost.com/ezra-klein/2009/07/the_house_releases_its_health-.html