Healthcare Reform Update #01

There have been numerous developments on the healthcare reform front since congress has returned from July 4th recess.  The biggest development is that the Democrats now have a so called “super majority” since they now have 60 seats in the Senate thanks to the addition of progressive Senator Al Franken of Minnesota.

Senator Bernie Sanders (I-VT) in a couple interviews this week described what 60 seats mean the best.  There is a big difference than voting against a final healthcare bill and supporting a Republican filibuster.  If conservative Democrats want political cover in their more conservative states they can simply not vote for the final bill but if they refuse to vote for cloture it opens them to more severe repercussions.  In essence passage of the final healthcare bill will only require 50 votes in the Senate, that’s assuming that Vice President Biden would be willing to break a tie.

This “super majority” has spurred on one Democratic leader already.  Testicular challenged, Senate majority leader Reid (D-NV) is using his new found “super majority” muscles to firmly order Senator Baucus (D-MT) to stop chasing after Republican votes on his Finance committee in crafting a healthcare bill.

“According to Democratic sources, Reid told Baucus that taxing health benefits and failing to include a strong government-run insurance option of some sort in his bill would cost 10 to 15 Democratic votes; Reid told Baucus it wasn’t worth securing the support of Grassley and at best a few additional Republicans.

By Tuesday afternoon, the Finance Committee began looking at ways other than taxing health benefits to deliver a health care overhaul that costs less than $1 trillion and is deficit-neutral, as Baucus wants.”

Since taxing medicare benefits is off the table that will please progressive members of congress however it does make it more difficult to find ways to fund the final bill.   It is ironic that to get more Republicans on board increasing taxes on benefits was a selling point.  It just goes to show that raising taxes is fine with the GOP when these increases do not affect the rich or big business.  Based on an article put out late today these conditions could delay healthcare bills being introduced to the general assemblies in congress though some Democrats say progress is still on target.  Of course Republicans reiterated their NO for any real healthcare reform in the article. 

“Sen. Judd Gregg, R-N.H., who did not attend the meeting in Reid’s office, later told reporters a so-called public option “can only have one purposes … to lead to a single-payer program” under which all policies are issued by the government.”

“That is a non-starter,” he said.

The president’s chief of staff Rahm Emanuel made a major blunder this week talking to the WSJ he left the door open for alternate ways to keep insurance companies honest like the highly incredulous “trigger” plan and co-ops.  Private insurance has already pulled the trigger on the American people by refusing to cover people with pre-existing conditions or at affordable rates, refusing treatments and refusing to pay claims while adding massive costs increases to our failed healthcare system.

President Obama attempted to control the damage by issuing a statement from Moscow to reiterate his support for a public plan saying it is the best way to keep insurance companies honest.  In fact a strong public option is the only way to keep private healthcare insurance honest.   A resent study by the Commonwealth Fund shows a stong public option is the best way to cut costs based on the bills now being considered in congress.

Following is a summary of the cost projections from the study.

With no universal healthcare costs will rise 6.5%
With only private universal healthcare costs will rise 5.8%
With universal healthcare with public option costs will rise 5.6%
With universal healthcare with public option and Medicare limits costs will rise 5.2%

A 1.3% reduction in cost increases amounts to about $2 trillion dollars over 10 years.  Unfortunaly the glide slope predicted by these projections still indicates that even a strong public option will need to be tweaked or morph into a virtual single payer system to be sustainable over time.

Probably the most encouraging findings from the study shows how a strong public option would cut premiums in the following graph.

Move on and other progressive groups have rightfully pulled the trigger on Rahm for the shit storm he created.  Reportedly Emanuel has backed off his comment when speaking to congressional Democrats.  Rep. Charlie Rangel (D-NY) probably summed up Emanuel’s untimely and inappropriate PVJs (personal value judgments) the best.

“Rep. Charlie Rangel (D-NY), chair of the powerful Ways and Means Committee, said the Chief of Staff “”made a hell of a mistake. He made a hell of a mistake and he knows it.””

Vice President Biden announce a deal that would cut reimbursements to hospitals about $155 billion over 10 years.  It is common practice to negotiate reimbursements for Medicare and Medicaid but this goes further than Bush’s tepid approach to leverage public healthcare to reduce costs.  These cost reductions are necessary to help a final healthcare bill cover the uninsured and create a public plan.  The downside is that some struggling non profit hospitals will need additional funds to stay open.  Some of the money is already supplied in budget increases but further funding or exceptions may be necessary.

The HELP committee scored a bill last week with a public option that would cost about $600 billion over 10 years but the projections are on an incomplete bill while details are being hashed out.  The final bill will be much closer to $1 trillion over 10 years which is still within targets.  The HELP committee met on the healthcare bill yesterday.  I watched the committee meeting on C-SPAN last night and of course the leading Republican on the committee Senator Gregg (R-NH) pointed out some flaws in the bill but offered no constructive alternatives.

Economist Paul Krugman had some good things to say about the HELP committee bill.

“HELP Is on the Way

Now, about those specifics: The HELP plan achieves near-universal coverage through a combination of regulation and subsidies. Insurance companies would be required to offer the same coverage to everyone, regardless of medical history; on the other side, everyone except the poor and near-poor would be obliged to buy insurance, with the aid of subsidies that would limit premiums as a share of income.

Employers would also have to chip in, with all firms employing more than 25 people required to offer their workers insurance or pay a penalty. By the way, the absence of such an “employer mandate” was the big problem with the earlier, incomplete version of the plan.

And those who prefer not to buy insurance from the private sector would be able to choose a public plan instead. This would, among other things, bring some real competition to the health insurance market, which is currently a collection of local monopolies and cartels.”

The HELP committee bill still contains compromises with the public plan like adopting provider rates somewhat higher than Medicare but it’s still a work in progress.  Senator Sanders is trying to add an amendment to the HELP committee bill to leave it up to states if they want to institute mandatory single payer healthcare insurance systems.  This approach would only strengthen public healthcare and would be excellent for large states like CA that have large enough populations to give a single payer system enough leverage to lower provider costs and improve their financial situation in the long run.

Three House committees are working on healthcare reform bills in committee and are committed to strong public options in each bill appearing to draw a line in the sand according to some reports.

In a late development even President Clinton showed much optimism that healthcare reform will happen under President Obama.

Senator Rockefeller announced on The Ed Show that he had just released a study detailing rampant fraud perpetrated by private healthcare insurers so look for more updates on that developing story.

Overall the healthcare fight is still moving forward and the outcry over Emanuel’s comments seems to have revitalized the progressive base’s and Democrats’ willingness to fight harder for a strong public option.  There is a palatable change in the urgency and dedication to including a public plan in the healthcare bills in congress.  Hopefully the president and other Democratic leaders can use this renewed momentum to push conservative Democrats into action.  We know Rahm Emanuel’s job is to push legislation but the president and his administration along with Senate Democrats need to learn the lesson that Americans do not want any healthcare reform which may have been true at one time.  Americans want real healthcare reform with a strong public plan as a major component.