As featured on p. 218 of "Bloggers on the Bus," under the name "a MyDD blogger."

Thursday, June 18, 2009

The Big Fold

The very serious people who run our discourse think we have to drop the public option because Republicans and insurance companies don't like it.

Daschle, Dole Say Public Option Must Be Scrapped ABC World News reported, "Former Senate leaders launched a bipartisan push for healthcare reform, but they took issue with a central feature of the President's plan, a public, government-run health insurance program." Bob Dole was shown saying, "If you want to stop this thing dead in its tracks, or dead on arrival, in my view, you put the public plan in it." ABC noted that even Tom Daschle, "once Obama's top healthcare adviser, said the public option probably needs to be scrapped." Daschle: "We've come too far and gained too much momentum for our efforts to fail over disagreement on one single issue."

This just perfectly captures the fact that there's an America inside the Village and one outside. Outside the Beltway, more than 3/4 of all Americans believe "it’s important for Americans to have a choice between a public/government insurance plan and a private one." Inside the Beltway, Republicans and insurance companies don't like it, so we should just scrap it. Daschle is essentially saying that the prospect of reform is too important to actually include reform.

Interestingly enough, Daschle did include a public insurance option in his bipartisan poohbah plan yesterday - but only administered through the states:

Daschle, Dole and Republican Howard Baker released a bipartisan plan today that would tax some employer-provided health-insurance premiums, require individuals and large employers to buy health insurance, and create public insurance pools run by states instead of the federal government [...]

In a bid to blunt Republican opposition to setting up a government-run insurance plan for those without coverage, Dole, Baker and Daschle suggest giving states, instead of the federal government, the option of establishing insurance-purchasing pools. These pools would extend coverage to everyone regardless of their health status or ability to pay, Daschle said.

Not only does it appear optional, but obviously you'd get more leverage and bargaining power to cut costs in a national plan rather than one in, say, Wyoming, and one in South Dakota, and so on. Also, do you trust Sarah Palin or Mark Sanford or Rick Perry to set up a robust state public insurance plan?

Tom Daschle has been folding like a cheap suit since before I was born. But he's no longer in Congress or the White House. It's the scurrying around from Max Baucus, trying to gut his own bill to lower the cost from the CBO budget score, that really threatens reform. And unquestionably, he's taking his cues from Daschle, or at least has the same mindset. Actually, it's worse:

And yet Sen. Baucus is bending over backwards to jettison a public health insurance option to appeal to Congressional Republicans. Despite a bipartisan collection of former Senate Majority Leaders endorsing a $1.2 trillion plan, Baucus is looking to trim $600 billion out of his plan – even if it means that its ability to cover more Americans will be substantially reduced. You can’t cut out a third of your bill without taking the axe to primary care, prevention, subsidies for the middle class to afford premiums, and everything that we know our health care system actually needs, and needs desperately. And what, aside from a couple fewer insults from John McCain, will you have gained?

Simply put: Congress is focusing on the wrong thing. Leaders who are able to get us over the finish line by creating a bill that can substantially improve health care access, cost-control and quality in this country aren’t focused on the best bill – they’re focused on a dog and pony show of interpersonal drama, and looking to placate a constituency with no credibility rather than solve the problem. It's time to turn off Project Runway and start making the change we elected them to create.

Baucus has vowed to keep the cost to $1 trillion over ten years, as if that number has acquired a certain magic. Keep in mind that over the same 10-year spread, we spend $6-$7 trillion on the military. And Baucus' idea for cutting the cost? Cutting the subsidies to the very people forced into buying insurance.

You can cut a $1.6 trillion reform bill down to $1.3 or even $1.2 and still come up with a pretty good program. In fact, some reforms designed to reduce the program's cost would actually make it better. You could, for example, introduce more aggressive payment reforms to reward efficiency and outcomes. You could create a real public plan that controls costs better than private insurers could. You could even do both.

But my suspicion--based on what I've heard and seen over the last few months--is that knocking the price tag all the way down to $1 trillion will mean a lot less money to subsidize insurance for people who can't afford it and far fewer guarantees that insurance would be adequate. In other words, you could end up with many more people still uninsured or underinsured.

Obviously we need a public plan, but this whittling down of the costs shows the real rocky part of this whole thing, the fact that nobody can agree on how to pay for it. The vaunted MedPAC option, which would streamline spending and identify waste, couldn't come up with anything specific in its annual report. And Kevin Drum is right to find this scary:

The New York Times reports that House Democrats are considering a value added tax as a way of financing healthcare reform. A VAT is one of those things that economists and think tankers all love, but it's also one of those things that's never had any real chance of being adopted in the United States. So it surprised me that Dems were even seriously talking about it.

But Tyler Cowen has a take on this that I hadn't thought of:

"From my distant perch out here in Fairfax (and Arlington), I believe this means health care reform is falling apart. It means the unions won't let them tax health insurance benefits and the CBO won't let them punt on the issue of finance."

Financing was always going to be a problem. Cowen's probably rooting for failure, so take his cheerleading with a grain of salt. But watching Baucus run for cover, watching Daschle do the old el foldo, I'm seriously pessimistic that anything out of Washington will meet the expectations of anyone in the country.

...Ezra Klein: "Health reform is, I think it fair to say, in danger right now."

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