The Blue Dog Ransom Note

Politico Pulse published the "list of demands" from the Blue Dogs on health care. Here they are:


--Effectively bend the cost curve 

--Realign incentives to reward high quality, efficient health care; include value-based purchasing, value index, innovation center for Medicare and Medicaid, and other delivery system reforms

--Increase small business exemption and adjust for inflation 

--Address end-of-life care

--Adjust the value and cost of subsidy levels

-- Provide affordability credits on a sliding scale from 100-300 percent FPL 

-- Public option must negotiate rates with providers, provide greater clarity on opt out, compete on a level playing field, and be available as a fallback 

--Establish consumer-driven, state-based co-ops 

--Create state-based exchanges with a federal fallback 

--Maintain current state-federal partnership with Medicaid, while implementing reforms that increase its value and effectiveness

"Bend the cost curve" is a buzzword and not a negotiating point. Realigning incentives is great - I think that cost controls should be taken up by the bill. But as Jon Cohn says, the rest of these are not serious proposals.

Politico this morning published a list of their demands. It included more aggressive efforts to control costs, which is great. But it also included cuts to the subsidies that would help people afford insurance, which is the opposite of great.

I suspect the House leadership will discuss the former request, but not the latter. Nor should they. They are committed to passing a bill that makes sure everybody can get affordable insurance. They've written a bill that, although not perfect, accomplishes that. That is a good thing.

Increasing the small business exemption will drain the system of funds. Lowering subsidies will do nothing but make the bill less popular to the public in order to achieve some arbitrary cost. It will not lower costs to the individual, which in the end they care about more than costs to the government. Making the insurance exchanges state-based reduces competition, and the same with making the public option a fallback. That will increase costs. As Obama said yesterday in his conference call with bloggers, there's no evidence that a co-op plan will work at all to keep insurance companies honest. In order to change incentives for insurers, you need scale and resources. The Blue Dogs want to strip those and also change incentives?

One reform you do not see on the Blue Dog's list is capping the employer deduction. Harold Pollack and Nate Silver have compelling pieces today making the case for the employer deduction as a way to curb spending, move away from an inefficient system of providing insurance, and improve the possibility of joining the civilized world in guaranteeing not-for-profit health care for all. There are ways to cap this deduction, and not eliminate it, that would satisfy unions who don't want to see their generous benefits go away (I'd prefer paying them out, actually) and start to reduce costs. The Blue Dogs aren't all that concerned with it.

Which shows me that they're simply not serious about this effort. They want to either delay reform indefinitely or come up with something that they can bring to their districts and tell independents and conservatives that they got for them, probably in the form of a direct payoff. They have been so incoherent about costs that they cannot be operating from any position of principle. They just don't want to do this bill.