The Good, The Bad and The Ugly On The Health Care State Of Play

I've now offered heaps of negative and a dash of positive with respect to the leaks and grumbles from the White House on health care. I hate to chase the media scuttlebutt so hard, but we're starting to see something that looks really bad, tempered by the fact that it could all be bullshit.

First, the bad. Ezra Klein, recipient of a few WH trial balloons before, gets another talking about the "two camps" in the White House on health care, with no decision yet made, and both of which sound like pretty horrendous compromises.

Both camps agree that the cost of the bill has to come down. The question is how much, and what can be sacrificed.

The first camp could be called "universal-lite." They're focused on preserving the basic shape of the bill. They think a universal plan is necessary for a number of reasons: For one thing, the insurance market regulations don't work without universality, as you can't really ask insurers to offer standard prices if the healthy and the young don't have to enter the system. For another, it will be easier to change subsidies or improve the benefit package down the road if the initial offerings prove inadequate. New numbers are easier than new features. Creating a robust structure is the most important thing. This camp seems to be largely headed by the policy people.

The second camp is not universal at all. This camp believes the bill needs to be scaled back sharply in order to ensure passage. Covering 20 million people isn't as good as covering 40 million people, but it's a whole lot better than letting the bill fall apart and covering no one at all. It's also a success of some sort, and it gives you something to build on. What that sacrifices in terms of structure it gains in terms of political appeal. This camp is largely headed by members of the political team.

Both camps accept that the administration's proposal will be less generous than what has emerged from either the HELP or House Committees. The question, it seems, is how much less generous.

The linchpin for this approach appears to be Olympia Snowe. Ed Henry just said this on CNN:

HENRY: My colleague Dana Bash and I have learned from a source, each one of us, that this White House right now is very quietly in serious conversations with Republican Senator Olympia Snowe, a key moderate.

She is basically the last Republican out of those gang of six senators who have been negotiating, really the last Republican that has an open line to this White House right now.

What we're hearing that she's talking about with White House staff is sort of a scaled-back bill that would focus on insurance reforms that both sides could agree to, but would not have a full public option, instead, would have a so-called trigger. What that means in layman's terms is basically that the insurance companies would have a couple of years to make some dramatic changes.

If they do not make those changes, then a public option would be triggered. So, it would be used down the road. They would hope that this would appease liberals by saying it's not completely off the table. And the big hope is that this could bring along another moderate Republican, like maybe Susan Collins of Maine, some conservative Democrats, like Ben Nelson and Mary Landrieu in the Senate, who don't want a public option, but would sort of potentially be open to a trigger like this.

Suzy Khimm did a decent reporting job trying to understand Snowe's perspective on the health care debate. She's actually to the left of many moderate Democrats on the issue, but there's a lot that's clear. She wants triggers and not a public option (she calls it a "safety net plan"). She likes subsidies up to 300% of FPL and may even go to 400%, though with a smaller bill, that's impossible. She supports financing from "within the health care system," which is only possible with massive scale-backs, and certainly eliminates any talk of wealth taxes or limiting the employer deduction. She's open to reducing the minimum benefit floor, making an even higher profit margin available for insurance companies. She also wants to open the insurance exchange to more businesses, which isn't bad, wants to stop price discrimination for older consumers (limit the modified community rating so older people aren't gouged), and wants to avoid reconciliation because at the end, you'd wind up with a worse bill. So it's a mixed bag.

Snowe doesn't want to be alone on the bill, so she'll have to rope in someone to her right - probably Susan Collins or George Voinovich - bound to water down the final product even more. And if this is all true, we're at bad-bar-hiding-the-fact-they-have-no-liquor level right now. You're talking about a cheaper bill, and since all the money goes to coverage expansion that means more poor people left without coverage or forced into coverage they cannot afford. The "universal-lite" proposal would be compromised and clambering, but at least could be improved upon later. The scale-back approach will do nothing to control costs and put us in a terrible spot down the road. And I don't understand if Snowe supports universality. We know she supports triggers, which, based on past experience, will be created in such a way that they can never be attained.

Basically, a Snowe bill would be a big sloppy kiss to the insurance industry, at the expense of working people who cannot afford the coverage they may be forced into getting.

On the other hand....

I've seen enough signs that things are moving well to not be bowled over by random chatter. Mike Lux is right that we shouldn't freak out at every anonymous quote meant to demoralize the base, and we should continue to push for a strong bill, which is well within reach.

Other than occasional unnamed White House staffers who enjoy dissing their progressive friends for their own reasons, and the occasional progressive blogger who takes everything Politico and Ceci Connolly says seriously and is therefore convinced Obama is out to do us wrong, I see little evidence Obama and progressives are at war over health care. It is progressives, after all, who are actually fighting for the ideas Obama laid out or health care in his campaign and earlier this year, ideas Obama has not renounced or said he is giving up on. From what I can tell, Obama is doing everything he can to try to get a bill out of Senate Finance and then out of the Senate itself, while continuing to support Pelosi in her efforts to get the strongest possible bill out of the House.

Having fought this fight in 1993-94 and so far this year, I know how tough this is to pass, and how ugly the process is. I take nothing for granted, and take nothing on faith. Health care reform could still die; war over what goes to the floor could still tear the Democratic Party apart; politicians including Obama could still sell progressive activists down the river to get a bill, any bill, passed. But all of the above is conventional wisdom, not fact and not a done deal.

The White House has just announced that Obama has raised the stakes even higher, through the roof in fact, by doing an address to a joint session of Congress next Wednesday. That means this White House is determined to pass a bill on health care reform by hook or by crook, by any means necessary. I hope that also means that the White House realizes passing some meager, small compromise of a bill, with the stakes this high, would be a political nightmare. But one way or another, they will show their cards next Wednesday. Will the President, in front of a joint session of Congress, meekly give up fighting for anything big? Will he declare war on his progressive friends? Will he announce that he no longer cares about keeping insurance companies honest? We will know the answers after his speech, but I wouldn't be drawing any firm conclusions until after you listen to the speech.

I think this is generally good advice. Obama's been actually selling reform for weeks, and so whatever he's got prepared for this joint session had better be something new instead of a statement of broad principles. So we'll know when he lays out his cards.