The Senate Finance Committee just voted 14-9 at 2:53 p.m. today to approve the modified chairman's mark health reform bill. Senator Olympia Snowe (R-ME) voted with all 13 Committee Democrats in favor, and all the remaining Republicans voted against. In a committee which has a long history of bipartisanship, at least a slight vestige of the remains. By this vote and the 60 votes it will take on the Senate floor in a few weeks to take it up, it appears we have turned the corner in taking on monopoly health insurers. Enactment of some health insurance reform now seems likely this year.
Sunday, the health insurers released a PriceWaterhouseCoopers study for America's Health Insurance Plans that claims the cost of private health insurance ($12,300 for a family today) would rise 79% over the next 10 years under the current system and 111% under the Senate Finance Committee bill because it lacks a strong coverage requirement, because its directly taxes health insurers and other health providers, and because of cost-shifting from Medicare. AHIP's President appeared on MSNBC to hammer it home. A spokesperson for Senate Finance Chair Max Baucus (D-MT) immediately called the study "a health insurance company hatchet job, plain and simple." The White House called it "an insurance industry analysis that is designed to reach a conclusion which benefits the industry, and does not represent what the bill does." Later, the White House issued a detail, point by point rebuttal. This is a good example of monopoly power and of how adroit monopolists can be in defending their exploitation of the American public.
The Senate Finance bill is far from perfect, but it sets us on a course over the next several years to fix some of the most egregious flaws in our health care system. You can be assured that more bills will follow in coming years as we evolve our way to a more rational health care system.
A true American
Snowe has proven herself to be a great lawmaker today for not kowtowing to the Republicans and to the healthcare industry.
I congratulate her for having a spine and for putting the American people ahead of her party.
Political Courage
Political courage is in rare supply these days. Senator Snowe certainly exhibited plenty last Tuesday afternoon.
health care reform
Outside of the excise tax (which is an unfortunately watered down version of the employer exclusion) the health care reform bill doesn't change much of the system and will likely exacerbate its central defects.
health care reform
The main problem with health care reform this year is that the problem is simply too big to fix in one bill or all at once. I'd be happy if this bill corrected half of our health care problems. Like energy legislation, we will be back at this every year or two for a long time before we "bend the cost curve" and show real improvement for most Americans.
Righteous indignation
...spokesperson for Senate Finance Chair Max Baucus (D-MT) immediately called the study "a health insurance company hatchet job, plain and simple." The White House called it "an insurance industry analysis that is designed to reach a conclusion which benefits the industry...
This coming from the same people who have put together a plan that they swear will be budget neutral because, as the WaPo just described it:
"it *pretends* that doctors will take a 25 percent cut in reimbursements the following year and then stay at that low level forever. No one believes that will happen..."
That's $245 billion there they are pretending about.
So if you want to cheer this plan, fine -- but, please, spare us the righteousness.
Pretend budget neutral health reform
I agree that it's quite unlikely a retrospective reestimate 10 years from now of today's Senate Finance bill would show budget neutrality.
Right about the dubious
Right about the dubious assumption of those offset spending cuts, at least on schedule and in the specified form, and let's also bear in mind that even if they do take place, those cuts in projected spending of that magnitude -- and much more -- would be necessitated anyway to mitigate our already unsustainable long-term fiscal imbalance, only now they are considered "offsets" for incremental spending, necessitating even deeper cuts to "offset" the foregone deficit reduction that these cuts would have provided. In other words, because the cuts being presented as "offsets" were going to happen anyway, they should be taken as a given, and the real budgetary impact of healthcare "reform" is simply the incremental spending (less any of those theoretical and questionable savings from supposedly "bending the curve").
Hennessey critiques AHIP study and Baucus's response.
Keith Hennessey, former director of the NEC, critiques both sides yesterday at.
http://keithhennessey.com/2009/10/12/pwc-study/
I'll take criticism of the AHIP study as given to the people here.
His comments on the Baucus response -- and on AHIP's apparent strategy ...
~~~~
... PWC, AHIP, and Ms. Ignani are careful to write that they are studying the effects on insurance premiums of four elements of the Baucus bill, rather than the effects of the entire Baucus bill ... AHIP opposes the four elements studied by PWC.
The PWC analysis ignores three important effects of the Baucus bill:
1) More insured people means greater demand for medical care, raising prices for both medical care and health insurance.
2) CBO thinks competition in the exchanges will somewhat reduce premiums for those who buy health insurance outside of employment. I doubt this factor is large.
3) The Baucus bill would subsidize the purchase of health insurance for those lower- and middle-income people who buy health insurance outside of employment.
I believe the first factor is the most significant source of premium increase in the Baucus bill. But AHIP likes this factor, so they left it out of the study they requested of PWC.
Chairman Baucus’ response
Chairman Baucus’ staff is emphasizing the subsidies. This is a weak response that should make other Democratic members nervous.
They are, in effect, conceding that their bill makes health insurance more expensive. Sure, it’s more expensive, but don’t worry, we subsidize a lot of people so it ends up costing them less on net.
Once again, this confuses gross and net costs, and conflates reducing health insurance costs with shifting those costs onto others.
This argument fails on policy and political fronts:
Policy: The President’s primary goal has been to slow the growth of health insurance costs.
The PWC study is flawed, but its qualitative conclusions are correct -- the Baucus bill would make private health insurance more expensive, not less. The bill therefore fails to achieve the President’s core policy goal.
Policy: Subsidies are available only to those who buy health insurance outside of employment.
If the Baucus bill makes health insurance more expensive, then everyone who gets health insurance through their job loses -- higher costs, lower wages, and no subsidies.
Politics: The last time I checked, more than 100 million people get their health insurance through their job or the job of a family member.
Question for Chairman Baucus: How does your bill help a relatively young and relatively healthy worker who gets health insurance through work? Doesn’t your bill make this worker’s health insurance more expensive, and therefore cut his wages?
Politics: Some of those who buy health insurance outside their job would get government subsidies larger than their wage cuts, and some Congressional Democrats think this makes these people winners.
I think most Americans would say they would rather not have a policy that cuts their wages by $1 and in exchange promises them a government subsidy worth slightly more than $1. I would rather keep $1 in wages than exchange them for $1.05 of government subsidies.
The politics of this study...
AHIP’s strategy is inscrutable. If your goal is to kill the bill, fine, release a study like this the day before markup ends, and come out guns a-blazin’. But this outcome has been foreseeable for months. If AHIP’s goal was to kill this bill, they should have done this months ago.
A much better explanation is that AHIP is trying to use this study to generate support for modifying the bill.
This would be consistent with AHIP’s and Ms. Ignani’s rhetoric, and with their apparent strategy to work with the White House and Democratic Congressional majorities to support legislation and try to modify it to their liking.
Ms. Ignani is a Democrat and former union official inclined to work with a Democratic President and Congress.
She may also be playing strategic defense, hoping that by not directly opposing legislation she can avoid an all-out war with a White House and Congress that can hurt her members in countless ways.
If this is still AHIP’s strategy, they still got the timing wrong. Washington Democrats are inclined to pick fights with the health insurers, and the timing of this release gives them an excuse to do so. Left-wing Democrats can use this move to justify shifting more of the policy pain to insurers, not less. We already saw an absurd “windfall profits tax” on health insurers floated last week.
And these provisions in the Baucus bill have been telegraphed for months. Why wait so long to go public opposing them?
Health insurers win financially if and only if final legislation includes a strong individual mandate and does not take too much directly out of health plan hides.
That requires threading a tiny needle. If Ms. Ignani’s strategy backfires, she could destroy private health insurance in America.
Keith Hennessey's critique
Thanks for bringing Keith Hennessey's cogent critique here. It's very true.
The insurance industry will
The insurance industry will always be greedy, hopefully the health care reform will help people that need it.
This new information was
This new information was based on a study performed by Price Waterhouse, who was hired by the insurance lobbyist. This study looked at the cost, without any attention being payed to the cost savings within the bill. The overall result was so inaccurate, that the accountants who participated in the study distanced themselves, and explained just that. To look at this for what it really is, is to know that the insurance companies are basically saying, pass this bill and we raise your premiums!