We're Here, We're Progressive, Get Used To It

House progressives have really tried to throw their weight around on the deal put together between Henry Waxman and the Blue Dogs. They probably should get the full list of co-signers before releasing it, but still, this represents a rare step for the Progressive Caucus in taking a stand against compromise after compromise with the conservative wing of the party. I hear they got 53 members to add their names to this:

We write to voice our opposition to the negotiated health care reform agreement under consideration in the Energy and Commerce Committee.

We regard the agreement reached by Chairman Waxman and several Blue Dog members of the Committee as fundamentally unacceptable. This agreement is not a step forward toward a good health care bill, but a large step backwards. Any bill that does not provide, at a minimum, for a public option with reimbursement rates based on Medicare rates - not negotiated rates - is unacceptable. It would ensure higher costs for the public plan, and would do nothing to achieve the goal of "keeping insurance companies honest," and their rates down.

To offset the increased costs incurred by adopting the provisions advocated by the Blue Dog members of the Committee, the agreement would reduce subsidies to low- and middle-income families, requiring them to pay a larger portion of their income for insurance premiums, and would impose an unfunded mandate on the states to pay for what were to have been Federal costs.

In short, this agreement will result in the public, both as insurance purchasers and as taxpayers, paying ever higher rates to insurance companies.

We simply cannot vote for such a proposal.

At issue seems to be the reimbursement rates for the public option, which seems odd to me, because the Medicare +5% rates in the House Tri-Committee bill only exist for the first three years, and the negotiated rates from the Health and Human Services Secretary will presumably be improved over that of private industry. I agree about the lower coverage subsidies, but again, we're talking about 1% on those between 300 and 400% of the federal poverty level, which is not determinative. Finally, looping back to the public option, I agree that bargaining rates are important, but even if they are restored, the fact that relatively few people can access it because it's firewalled for people who get health insurance from their employers seems to be a MUCH bigger problem.

If you're interested in covering people, the primary questions are the subsidies, the employer mandate and the individual mandate. If you're interested in reforming the system, the primary question is the strength of the Health Insurance Exchanges. And if you're interested in the public plan? It's the Health Insurance Exchanges. Again.

In all the bills we've seen, the public option is on the exchange. It is only available to those who are able to buy into the exchange. But most Americans can't buy into the exchange. They're not allowed. To make this very clear, imagine that the House and the Senate both pass Henry Waxman's proposal tomorrow. Liberals would celebrate. That's got a good, strong public plan. And I can't use it. Not even if I want to pay for it out-of-pocket. I work at a large employer and thus I am not allowed to buy into the exchange.

A strong public plan on a weak exchange will fail because it won't attain sufficient market share. It's as simple as that. Conversely, even a weak public plan on a strong exchange could thrive, because it would have access to a lot of customers. Focusing on the public plan and ignoring the rules of the exchange is like focusing on engine power but ignoring whether people can buy the car.

And the one remedy for this problem, the Free Choice Act, which would give employees the choice to take employer coverage or use that money on the insurance exchange, is being pushed by Ron Wyden but virtually nobody else, certainly not House progressives or the larger progressive activist community.

(Now, I will say that Matt Yglesias' contention that the exchanges aren't the most important part of reform, but the insurance regulations are, when things like rescission and pre-existing conditions don't apply to the employer market either, is a little weird. An exchange that has all of those consumer protections on the insurance industry AND is available to anyone who wants to buy in would be a game-changer, particularly with a public plan providing competition inside the exchange.)

So, if progressives are vowing not to vote for deals that don't even contain the kinds of reforms they'd want, what's going on here? I think Ezra Klein has it right.

House liberals are afraid of the dynamic in which good bills face Blue Dog opposition in the final mile and are aggressively watered down. Senate liberals are afraid of the same. And throwing this final compromise with the Blue Dogs into doubt is a show of strength. After all, House liberals feel they've already compromised plenty: Coming down from single-payer is a compromise. Cordoning the public plan off on the Health Insurance Exchange is a compromise. The whole bill is one big compromise, and every subsequent iteration is a compromise stacked atop a compromise placed upon a compromise. At some point, the compromises have to stop. Or, better yet, they have to go in the other direction.

Yep. This is not about the specifics of the bill as much as it is about changing the general dynamic. It shows me that progressive lawmakers are learning from the mood of the grassroots, who have been demanding this for a while. Furthermore, they can add that, if health care goes down, the people on the front lines will be the ones who wouldn't deliver what the people wanted and are in the kind of districts most likely to flip to Republicans. I'm sure that progressives are mindful that a half a loaf bill will open them up to challenges from the left, too.