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Hullabaloo


Wednesday, July 29, 2009

 
Half A Loaf

by dday

Here comes the part of the health care debate where people start to talk themselves into half a loaf instead of fighting for a full one.

There are many themes in the sad and frustrating history of health-care reform. But one of the central ones is that there were many points when Democrats could have accepted a compromise and did not. Richard Nixon, for instance, proposed a plan that could have passed Congress but that liberals thought comically inadequate. It was more comprehensive than anything we will get this year. George H.W. Bush also offered a pretty good proposal but got no support among Democrats.

Opportunities at health-care reform do not happen frequently. The average between major attempts is 19.5 years. That's 19.5 years in which the uninsured stay uninsured and their ranks grow. Where a situation that is already bad gets a lot worse. This year, Barack Obama is popular, and there are 60 Democrats in the Senate and huge majorities in the House. There is no reason to believe that Democrats will be in a stronger position anytime soon. It is not like when a weakened Nixon, or a fading Bush, offered a compromise.

If reformers cannot pass a strong health-care reform bill now, there is no reason to believe they will be able to do it later. The question is whether the knowledge that the system will not let you solve this problem should prevent you from doing what you can to improve it. Put more sharply, the question should be whether this bill is better or worse than another 19.5 years of the deteriorating status quo.


Ezra Klein is not an activist. He's a health care policy wonk. And he knows that we have a very broken political system and a media that gives wide latitude to out and out lies from conservatives. So he reasons that health insurance reform that gives access to coverage to 40 million Americans who don't have it will be a major improvement for many Americans, and even if that's seen as a loss in the political world, it's worth achieving. Heck, if we get community rating, forcing insurers to cover everyone with the same coverage at the same basic rate, even a jury-rigged system can be universal.

This hardly solves every problem. In particular, it doesn't do much to rein in costs. But if you combine (a) Medicare, (b) our current employer-based insurance regime, and (c) community rating along with subsidies for low-income families, you've essentially institutionalized universal healthcare insurance. Not everyone will take advantage of it — there will always be a few people who go without coverage even if it's affordable — and you still a need a few other things like out-of-pocket caps. Still, it's basically a statement that everyone in the country can and should be covered. And once that becomes a cultural norm, it will never go away.


If we end up with health insurance reform, where you have to be covered, cannot be dropped, and must pay the same rate regardless of prior conditions, and you have an exchange to buy insurance instead of being forced into a regional monopoly, people in the individual market will see the difference. Of course, problems will remain. Employers, without a mandate, will still drop coverage. The costs will continue to soar, especially without a public option that can gain a big enough following to force competition in that individual marketplace, particularly on price. The smaller tweaks of health IT and prevention and comparative effectiveness are important but may end up compromised. And without getting the real savings from stakeholders necessary to drive down costs, people may still see their premiums rise. Not to mention the fact that we're going to need millions more doctors.

The reason that liberals want to enshrine a public option, not the weak co-op alternative, is that the history of the few victories in health care and the social safety net in this country started with an incomplete toehold that gets expanded over time. Medicare wasn't perfect at the start. Or SCHIP. Or Social Security. They needed to be tweaked and improved and made useful for all. I don't think it's possible for co-ops to scale up in this way. We've seen the history of them taking decades to have any measurable effect.

But Democratic leaders appear to want to give in on this one.

"We think the public option is very important," said House Majority Leader Steny Hoyer, D-Md., but "we have to see what the Senate does on co-ops, and see how it's formulated, to see whether or not it would have a similar effect."

"It's really premature for me to lay out what should be in this bill," said Senate Majority Leader Harry Reid, D-Nev., when he was asked about the public option [...]

Liberals shudder at the idea of removing a public option.

"There are rumors that the leadership is getting squishy" on the public option, said Rep. Eliot Engel, D-N.Y., a member of the House Energy and Commerce Committee, which also is trying to write a version of health care legislation.

"Some of us have pushed back hard and said we will not support a bill if it doesn't have a public option," he warned. "There comes a point where some of us will say getting a bill out at any cost is not a panacea if it's a bad bill."


When Harry Reid comes out and says what can get 60 votes beats what I want, you understand that he's laying the groundwork. This is why health insurance stocks shot up yesterday. The insurers are on the verge of getting a forced market, lowering their administrative costs (no rescission department) and adding tens of millions to the rolls.

At some point, the President needs to weigh in and pick a side. He sounded OK on this yesterday.

And the other thing that we do want to do -- now, this is controversial, and I understand some people are worried about this -- we do think that it makes sense to have a public option alongside the private option. So you could still choose a private insurer, but we'd also have a public plan that you could choose from that would be non-for-profit, wouldn't have, hopefully, some of the same high administrative costs, and would be potentially more responsive to your needs at a lower cost. I think that helps keep the insurance companies honest because now they have somebody to compete with.

And I have to say, the reason this has been controversial is a lot of people have heard this phrase "socialized medicine" and they say, we don't want government-run health care; we don't want a Canadian-style plan. Nobody is talking about that. We're saying, let's give you a choice. You can choose the private marketplace, or this other approach.

And I got a letter the other day from a woman; she said, I don't want government-run health care, I don't want socialized medicine, and don't touch my Medicare. (Laughter.) And I wanted to say, well, I mean, that's what Medicare is, is it's a government-run health care plan that people are very happy with. But I think that we've been so accustomed to hearing those phrases that sometimes we can't sort out the myth from the reality.


Nothing abut co-ops, but the move, one assumes, would be to sell co-ops as the public plan. Obama's stated strategy has been to get to conference and make the necessary adjustments at that time.

We'll see if that results in a toehold for transforming the health care system, or an insurance industry bailout.


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