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Tuesday, September 08, 2009

Balking At Baucus

by digby

There's a lot of talk today about the Baucus plan, and some serious sturm and drang over whether or not it actually presents an improvement in people's lives. Matt Yglesias and Marcy Wheeler take on the question and both make good points although they come to different conclusions. The details on all this are, surprisingly, just being looked at, and it's revealed that health care will still be expensive for the average, middle class person like me who has to buy insurance on the private market.

To that, I can only say, yup. And anyone over 45 who is self employed is fucked in the current system and not a whole lot better off under the proposed new one. For us, just being allowed to buy into Medicare at any price would be a dream come true since it covers everything and can't be taken away. At my age, my friends are starting to drop with cancer, heart disease etc (which I'm sure they all deserve for having eaten fried snickers bars and everything, but still ...) And my husband and I can't buy even a crappy policy with gigantic deductibles and ridiculous out of pocket expenses for less than $550.00 a month. That's a big bill, particularly for the self-employed whose income is often unpredictable. The Baucus plan isn't going to improve much of anything for me. I'm an older,self-employed middle class American and I basically have to just keep my fingers crossed that I stay very healthy for the next 13 years or I'll lose whatever sad retirement savings I have.

But we're stuck with what is, not with what works, and the fact is that there will be some material improvements for people other than me and my useless middle aged loser cohort, and that's something. The Baucus plan does provide some rather substantial help for the poor, caps out of pocket expenses (at a pretty high rate, but it's better than most private insurance which pays out a total of about $3.72 when you add up all the exclusions.) But I'm very skeptical of the plan actually bringing improvement over the long haul for reasons that have little to do with the actual policies they contain (the final mix of which we can't know yet.)

The problem is the politics. Any plan that forces the uninsured to pay their hard earned money to wealthy private insurance companies under penalty of law is a huge political risk. These are the same companies that have brought us to this place where people are routinely denied the care they were promised, lied to about what was covered, scammed into paying huge sums of money for no security and no guarantee. Health insurance companies have dealt with their customers in bad faith for years and years and now we are being told that everyone must pony up and pay them even more. For all the talk of reform, when you whittle this down, that one fact comes roaring back at you and it sticks hard in the craw of anyone who considers themselves progressive.

The Democrats simply do not understand that as much as many people mistrust the government and believe it is inept and malevolent, just as many mistrust the private sector and believe it is greedy and malevolent --- and those beliefs don't break down as neatly between right and left as one might think. What they are going to do is force the currently uninsured to write a check to a private company for a large sum of money every month, the subsidies for which will show up as some kind of "credit" on their tax returns. How do you think most people are going to mentally and emotionally process that expense? As a good deal or a bad one?

Income taxes which nobody particularly enjoys paying, are at least taken out of your paychecks before you see the money and are theoretically going to pay for things which go to the common good: defense, police, air traffic control, roads, "volcano monitoring" etc. The payroll tax goes into the pool for disability, medicare and social security --- the safety net. But the for-profit health insurance business is in business to make money for its shareholders, period. And everybody knows that you simply can't expect Wellpoint to not act like a capitalistic enterprise and try to make as much profit as they can from that transaction. We've just witnessed the Masters of the Universe thumb their noses at any call to decent human behavior even immediately after they nearly destroyed the financial system. Corporations are not designed to give a damn about anything but profits and they have the political system so wired that regulation is just another bargaining chip.

In any case, the insurance companies may be regulated under the law, but the remedy for the average person is to hire a lawyer and take them through the legal system all the way to that wholly owned industry subsidiary they call the Roberts Court. That's a rather inefficient way to ensure that costs come down and people are covered. Especially since the people who are suing are probably dead by the time they get there.

Aside from its (dubious) merits as a cost control measure (which relies on that notorious commie concept of competition!)the public plan at least ensures that the people who object to being forced by law to contribute to obscene CEO salaries could choose instead to pay their money to a highly regulated non-profit government program. That program, rather than putting profits into the pockets of executives and shareholders, would put it back into the system to pay for more health care and would be structurally in place for future improvements. Since the party took Medicare for all Americans off the table before we even got here, it's not too much to ask for at least that one paltry choice, especially since it actually solidifies the compact between the people and their government, something that Democrats should always be trying to do.

As for whether or not it's a deal breaker, well that isn't really up to me or you. It's up to Barack Obama. I'm afraid that as much as we like to think we can "hold the progressives' feet to the fire" on health care reform, it's always been highly unlikely that at the end of the day progressive Democrats would vote against their new president on his signature piece of domestic legislation (which also happens to have been the Liberal Holy Grail for the past 60 years) no matter how much we might scream and yell and issue threats. Health care is not going to be the issue on which the left defies Barack Obama and bands together with Republicans to defeat him. If Obama wants to pass a Health Care reform bill that opens up Medicaid to more poor people, ostensibly regulates the insurance industry and provides some modest subsidies to the uninsured middle class, even if its a rube Goldberg set-up that is unlikely to be sustained, progressives are not going to be the ones to stop it. I'm sorry, they just aren't. Obama himself must be persuaded that the public option is in his own and the country's best interest for it to pass. And even then it might fail at the hands of the "centrist" corporate shills for whom this paltry effort goes too far.

The price that's paid for a compromised Obama plan with meager subsidies and big mandates which line the pockets of insurance companies is likely to be very high indeed for the Democratic Party and its relationship to the middle class. Maybe they think they can finesse it, but the economy is likely to be in distress for some long time to come, more and more people are going to be thrown into the private insurance market and what they find is going to be far less than promised.

The riskiest thing Obama can do is to put in place a plan from which a majority of people will not see the benefit and many will see something worse. The beauty of social security was that every citizen had a stake in it. On health care, the only people anyone refers to as "stakeholders" are members of the medical industry. I think that tells you exactly where things went wrong.

Update: Here's a nice headline:

Fines proposed for going without health insurance

AP - Tuesday, September 08, 2009 6:04:53 AM By RICARDO ALONSO-ZALDIVAR

Americans who don't get health insurance once the system is overhauled would be fined up to $3,800 under a proposal that circulated in Congress on Tuesday as Democratic leaders cast doubt on prospects for creating a government-run insurance plan.

Update II: Via dday below, I see that Baucus has provided for state level ombudsmen, which presumably would have to be accessed before any lawsuit could commence. So I feel pretty confident that they will work out the kinks in the regulatory scheme by 2109.

Update III: Belay that opinion that Baucus will be an improvement for the poor. Some working poor are likely to be worse off --- because they can't get a job:
The proposal has serious flaws, including the following:

Biasing Hiring and Firing Decisions Against Low-Income Workers

* The proposal would make it considerably more expensive for employers to hire workers from lower-income families than workers from higher-income backgrounds to do the same job. As a result, it would distort hiring decisions. Employers would have strong incentives to tilt hiring toward people who have a spouse with a good income (or have health coverage through a family member), teenagers whose parents make a decent living, and people without children (since the eligibility limit for the subsidies in the new health insurance exchanges will increase with family size). Low-income women with children in one-earner families would be particularly disadvantaged.

While language could be included to try to ban such discriminatory effects, it would be virtually impossible to enforce effectively. It would be extremely difficult to prove in court that an employer has passed over one applicant and hired another because of the health surcharge that employers would face if they hired people receiving health insurance subsidies. Moreover, most low-income job applicants who do not get hired could not afford to hire attorneys to initiate legal proceedings. For the tiny number that might be able to institute proceedings, the legal complaint likely would take months and, more likely, years to adjudicate. In short, the fact that low-income workers would cost an employer up to several thousand dollars more to perform the same job could not easily be overcome.

* This differential treatment of workers based on their family income also would likely influence employer decisions about which of their employees to let go when they trim their workforces to cut costs, such as during a recession. Workers from low-income families would cost the firm significantly more to retain than other workers who are paid the same wage to do the same job.

* Although this clearly is not intended, the proposal likely would have discriminatory racial effects on hiring and firing. As noted, it would discourage the hiring of lower-income people. And since minorities are more likely to have low family incomes than non-minorities, a larger share of prospective minority workers would likely be harmed.

Wouldn't it have just been easier to open up Medicare?


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