Scoring The Plan
Max Baucus says Obama is part of the problem not the solution:
Senator Max Baucus, Democrat of Montana and chairman of the Senate Finance Committee, said on Thursday that President Obama had hindered his efforts to reach a bipartisan compromise on sweeping health care legislation by opposing a tax on some employer-provided health insurance benefits.
“Basically, the president is not helping us,” Mr. Baucus told reporters outside his office. “He does not want the exclusion. That’s making it difficult.”
Baucus is a jackass, but it's also possible that this is an authorized negotiating ploy to get recalcitrant conservative Dems on board. It's hard to sort these things out from afar in the middle of a negotiation. But you do have to wonder when the head of the CBO also specifically said today that unless they repeal the exclusion (and some other things) the plans currently on the table won't contain costs:
Elmendorf: Bending the cost curve is difficult. As we said in our letter to you, there is a widespread consensus, and you quoted some of this, that a significant share of health spending is not contributing to health. But rooting out that spending without taking away spending that is beneficial to health is not straightforward.
Again, the way I think experts would put it – the money is out there, but it is not going to walk in the government’s door by itself. And devising the legislative strategies and the regulatory changes that would generate these changes is not straight forward. But the directions that have widespread support among health analysts include changing the preferential tax treatment of health insurance. We have a subsidy for larger health insurance policies in our tax code, and that like other subsidies encourages more of that activity. Reducing that subsidy would reduce that. And on the other side, changing the way that Medicare pays providers in an effort to encourage a focus on cost effectiveness in health care and not encourage, as a fee for service system tends to, for the delivery of additional services because bills for that will be paid.
So it appears that this might be shaping up as the most viable ticket to getting a good CBO score. Maybe.
I realize there are policy and political differences among experts on this subject. But as an average American worker, I can testify to the fact that the Cadillac coverage my employers always gave to the executives were outrageous. They not only got huge salaries, bonuses and platinum parachutes, they also got the kind of coverage that gave them no deductibles, unlimited massage therapy, full prescription drug coverage and 100% dental, the kinds of things that weren't even remotely available to the rank and file. It was like a little present, an afterthought, and considering how much money they were already handing out to these masters of the universe, a drop in the compensation bucket.
I am not in a position to make a judgment on whether or not the policy is correct in terms of overall financing, but in terms of whether or not it's right to tax these high benefit plans that overwhelmingly benefit pampered executives, I don't think there's any question. There is absolutely no reason that they should get the exclusion.
Everything is in motion, so who knows how this will all come out in the wash. It's worth noting, however, that if the CBO says that lifting the exclusion will allow them to better score the plans, then maybe that's a good hint about what they should do, even if the wonks disagree about whether or not it will work. Nobody really knows what will contain costs, (or at least those things aren't on the table at the moment) so they might as well take the CBO hints about what it's going to take to score the thing successfully. The cost control measures can be tweaked at a later date. It's better to get as good a plan in terms of benefits, coverage and national regulatory structure as they can on the books right now.
Update: For those who are going to be quizzing lawmakers on the CBO scoring, Ezra Klein has some good advice: if they say that the Democrats' health reform plans don't contain enough cost savings, then they should be pressed on what they would do differently. Klein has some good suggestions for specifics.