Desperate Insurance Industry Now Running Ads Against Reform

(This post is part of my role as a blogger fellow with Brave New Films' Sick For Profit campaign)

Their strategy to blow up health care reform now blowing up in their face, the insurance industry kicked it up a notch today, by purchasing a million-dollar ad buy designed to scare seniors:

In a late-effort push to alter or torpedo health care reform, the major lobby for private insurers has made a multi-state, million-dollar ad purchase claiming that seniors will see their care cut under Democrat-crafted legislation.

America's Health Insurance Plans (AHIP), which released a highly critical (and widely criticized) report slamming the Senate Finance Committee's reform proposal, has quietly put out a new spot claiming that millions of seniors will see their Medicare slashed by Congress.

"Is it right to ask 10 million seniors on Medicare advantage for more than their fair share?" the ad asks. "Congress is proposing over 100 billion in cuts to Medicare advantage. The non-partisan Congressional Budget Office says many seniors will see cuts in benefits."

You can see the ad here. It's airing in swing states with Democratic Senators: Pennsylvania, Colorado, New Mexico, Missouri, Louisiana and Nevada.

One of two things is going on. The industry may truly be worried about the shape of reform and whether or not it will preserve its profits. Or they are giving space to the Baucus bill, the only one without a public option and the friendliest to their interests, so that liberals can be motivated to pass it or something like it. Savannah Guthrie just said this on MSNBC:

I think there will be courtship of those moderate Senators, but look, one thing I heard this morning here at the White House was that the insurance company report, the Price Waterhouse Cooper report, has actually been helpful to some extent (now granted this may be spin but let me just tell you what their argument is) is helpful because some of the liberal Senators who are concerned that the Baucus bill was just way too easy on the insurance companies, now have some cover. If the insurance companies think it's so objectionable that they're getting off the train and writing this report and signalling they're no longer at the bargaining table on health reform, it must be something that really hurts them.

Reform advocates are having NONE of that. MoveOn has slammed the Baucus bill, which just passed the Senate Finance Committee, in a video featuring health care hero and former CIGNA executive Wendell Potter.

"Take it from me, the Senate Finance bill is a dream come true of the health insurance industry. If there is not public option insurance companies aren't going to change. The choice of a public health insurance option is the only way to keep insurance companies honest."

This is only the beginning of the health care fight, not the end. But the insurance industry has laid their cards on the table. They are against reforming the system in any way that cuts into their profits. And they should not be appeased with a forced market and a monopoly on insurance.

That All-Important CBO Score

The CBO score for the newest version of the Senate Finance Committee bill is in, and the word incrementalism comes to mind.

According to CBO and JCT’s assessment, enacting the Chairman’s mark, as amended, would result in a net reduction in federal budget deficits of $81 billion over the 2010–2019 period (see Table 1). The estimate includes a projected net cost of $518 billion over 10 years for the proposed expansions in insurance coverage. That net cost itself reflects a gross total of $829 billion in credits and subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers; those costs are partly offset by $201 billion in revenues from the excise tax on high-premium insurance plans and $110 billion in net savings from other sources. The net cost of the coverage expansions would be more than offset by the combination of other spending changes that CBO estimates would save $404 billion over the 10 years and other provisions that JCT and CBO estimate would increase federal revenues by $196 billion over the same period [...]

By 2019, CBO and JCT estimate, the number of nonelderly people who are uninsured would be reduced by about 29 million, leaving about 25 million nonelderly residents uninsured (about one-third of whom would be unauthorized immigrants). Under the proposal, the share of legal nonelderly residents with insurance coverage would rise from about 83 percent currently to about 94 percent.

We have an $829 billion dollar paid-for bill that lowers the deficit over time, but leaves 25 million residents uninsured, 2/3 of them American citizens. The bill doesn't cover as many people because Senate amendments reduced the penalties for non-compliance with the mandate and increased the hardship exemption. Without a public option, I actually agree with that, but it narrows the risk pool, and insurance companies don't want that because they'll be forced to cover a higher ratio of sick people, in their opinion. They could all handle this by increasing the subsidies, but Obama basically put a cap on the bill at $900 billion, and the more conservative Finance Committee went even lower than that. There's also a "trigger" of sorts that will reduce subsidies to people by a fairly large amount:

In the aggregate, the Senate finance bill reduces the deficit. But there are a couple individual years when it increases it. The CBO thus estimates that "the failsafe provisions would require a reduction in exchange subsidies averaging about 15 percent during the years 2015 through 2018." That's a very bad thing, particularly in the first years of the plan. It means that, with no warning, subsidies will be cut by 15 percent, and insurance that families were able to afford the year before will become totally unaffordable. That needs to be changed.

That's not the only problem with the exchanges. An amendment in the Finance Committee basically eliminated all policy benefits to them:

In the bills that passed three House committees and the Senate Health, Education, Labor, and Pensions (HELP) Committee, the exchange would be a "prudent purchaser." In other words, it would have a staff that bargained with insurers to bring down premiums--and that made sure all plans lived up to strict guidelines for coverage and customer service. In effect, any insurer that wants to offer coverage through the exchanges has to get the equivalent of a "Good Housekeeping Seal of Approval" from the administrators. This is precisely how it works in Massachusetts.

By contrast, the Senate Finance bill envisions much weaker exchanges. Instead of choosing which plans to make available, the exchange administrators would, by law, have to accept any plan that meets a relatively minimal set of standards.

Jon Kingsdale, who runs the Massachusetts exchange, calls that a recipe for "policy disaster," as consumers faced a dizzying array of more expensive, less regulated choices. "It would be like telling your grocery store they have to offer every single kind of bread baked by every single bakery. ... The exchanges would be nothing more than an automated Yellow Pages."

Cappy McGarr, who ran an exchange that failed in Texas, says that the exchanges will fail if they don't attract a considerable market share. Making them user-unfriendly like this is a sure way to have people just run in the other direction. And firewalling them from employees of bigger businesses is another. Insurers outside the exchanges will only need to use good marketing to entice consumers into their web, especially if the exchanges are not designed well.

If Congress now creates new exchanges, as seems increasingly likely, it must prevent this phenomenon by setting two national rules: Insurers have to accept everyone and have to charge everyone the same rates regardless of health status.

Such rules would force insurers to spread risk. But enforcement would also be difficult. Every aspect of health insurance — from the rules for underwriting and setting premiums to the marketing of policies — would need to be monitored stringently to prevent companies from steering all bad risks to the exchanges.

It would be smarter for Congress to revisit the idea of creating a public plan that could provide an attractive choice for consumers and real competition for private insurers, to give them the incentive to offer good coverage at affordable prices.

Max Baucus trashed Ron Wyden's effort to design the exchanges better (there's now documented proof of this), significantly weakening them.

Igor Volsky has more. To me, it's no wonder that Republicans are starting to concede on this health care bill. Aside from the fact that they can't stop it, they know that Baucus-care isn't all that likely to work, which will help them in the long run.

...is this a good starting place? Maybe. I'm worried about its survivability. We've seen a lot of exchanges die off over the years, and while there will be some default position toward making this viable in the short-term, if for example Obama loses in 2012 I could easily see a repeal, given that the exchanges wouldn't even be in place by then.

Senate Finance Committee Final Vote Delayed

Any guesses as to why this is happening?

Early in the amendment process, the panel agreed not to hold a vote until a preliminary analysis on the legislation's cost-saving potential was available, and it appears as if the CBO will not complete its work until later in the week. That would touch off yet another delay--one that's likely to frustrate Democrats and liberal activists, who've grown impatient over the glacial pace of reform efforts.

Maybe everyone's waiting for the final CBO score. But I have a couple other theories. One is that the Committee needs some time for the White House to twist the arms of Democrats wary of approving the bill for various reasons. Jay Rockefeller and Ron Wyden are particularly upset about the fate of some of their amendments in the markup, and could take it out on the bill. If both of them refuse to support the bill, it won't pass, in all likelihood, unless Olympia Snowe votes for it.

Although Chairman Max Baucus (D-Mont.) said he has the votes to pass the 10-year, $900 billion bill out of the committee, Sens. Ron Wyden (D-Ore.) and John D. Rockefeller IV (D-W.Va.) remained undecided Sunday. If all 10 Republicans on the panel vote no, two Democratic defections would be enough to send Baucus and the Obama White House scrambling to regroup.

"More needs to be done to hold insurance companies accountable, to hold premiums down for the American people," Wyden said in an interview Sunday. "I want to continue these discussions."

Committee defeat of the bill is an unlikely scenario, but one that highlights the power every Senate Democrat -- and perhaps a few Republicans -- holds going forward in a process that could stretch beyond Thanksgiving.

I think Wyden and Rockefeller think they can improve the bill down the road. But the maximum leverage is right now, before the committee vote. So they're withholding their support until they can wring some concessions. Ultimately, Baucus will probably get his votes, but he'll need a little more time. Jon Cohn looks at the five key swing votes on the Committee - Rockefeller and Wyden, plus Bill Nelson, Blanche Lincoln and Olympia Snowe.

I have a guess that there may be another factor, however. Kent Conrad has made no secret of his disdain for the reconciliation possibility. If it did go that route, requiring only 50 votes, we may end up with a bill that, in some key parts, wouldn't even get Conrad's vote. So he's been trying to sabotage it for some time. The more the delays continue, the more that the deadline of October 15 for reconciliation comes into play. Before long, the Senate committees would have to begin that process. Conrad doesn't want that to happen. Neither does Baucus, in all likelihood, since it would lessen the power of his more centrist bill. And they've been delaying ever since. Given that there are so many issues that will need to be decided by the leadership when they merge the bills, the Finance Committee has probably already delayed the vote long enough to make reconciliation an impossibility. Mission accomplished.

Senate Finance Committee Post-Mortem

The Senate Finance Committee actually finished with their markup of the health care bill late last night. They will wait until the CBO submits a revised score based on the amendments, and then there will be a final vote next week. So, how did we do?

Well, we know that there will be no public option in the bill. Maria Cantwell's amendment for state-based purchasing pools between 133-200% of the poverty level passed. Most of the right-wing amendments, other than adding money for abstinence-only education (which I'm guessing will get stripped down the line), went nowhere. The Committee even voted down all the amendments attacking undocumented immigrants, including rolling back one that would have prevented legal immigrants from buying into the exchanges for five years, which would have been utterly senseless.

On the other hand... the bill did delay and reduce financial penalties for those Americans who choose not to buy insurance, softening the stringency of the individual mandate (there are also lots of hardship exemptions). That's good politically in a sense, but does blunt the impact of the mandate, which will probably lead to higher costs with a smaller risk pool. I agree, however, that nobody should be forced to buy a plan they can't afford. Overall, this will help with the politics of the bill.

The real disappointment was the rejecting of Ron Wyden's Free Choice Act on a technicality.

About one in the morning, Wyden's Free Choice Act came before the committee. But it never came up for a vote.

Instead, Max Baucus effectively ruled it out of order. The reason? It didn't have a full CBO score. This came as a surprise to Wyden and his team, who'd gotten the amendment scored by the CBO, and had been in endless negotiations with Baucus, the White House, employers, and labor over the past week. If the score was in fact partial, as Baucus and Conrad claimed, you'd think someone might have mentioned it. No one did [...]

To understand the Free Choice Act, you need to understand that the exchanges are currently closed to businesses over 100 employees. In many states, they'll be closed to businesses over 50 employees (the Finance Committee's bill lets states choose their threshold, either 50 or 100). And in all states, they're closed to individuals who are offered "affordable" coverage by their employer. If I don't like the insurance The Washington Post is offering, or I feel I can get a better deal on the exchange, I am simply not allowed to go use the new network and take my pick from the many plans offered.

That's a real shame, that we continue to prop up a broken and inefficient delivery system of employer-based health care because nobody, neither business nor labor, wanted to risk messing with the status quo. As a result, the insured get less choices, businesses continue to bear a large health care burden, and nobody but insurers really win. It makes little sense for businesses to want to stay in the health care business and for labor to assume that they would keep their gold-plated health benefits at the expense of a broken system forever - which didn't hold in the case of the automakers. Jon Cohn has more.

Overall, the bill was improved by the markup, but remains flawed, particularly by the absence of a real public option, but also through the affordability questions, which were only slightly improved. There's still a long way to go to make this tolerable.

Cantwell Amendment Passes

It's not much, but for people making between 133-200% of the federal poverty level it's a good start.

Senator Maria Cantwell (D-Wash.), taking a page from a program originating in her home state of Washington, has successfully maneuvered an amendment through the Finance Committee that comes close to a public option while not quite getting there.

The program, which made its way into the finance committee bill by one vote, would affect those above the 133% of the federal poverty line (those below this threshold are currently covered by Medicaid) up to 200% of the FPL. This would include a family of four earning up to $44,000.

Rather than handing over the $6500 health insurance subsidy that these people would have qualified for under the initial Baucus plan, that money would be handed over to the states to create a negotiating fund to be controlled by the state.

Participants would not get their insurance from the state through some sort of state operated public insurance option. Rather, the state would combine all this federal subsidy money and use the clout of controlling this large sum of cash to negotiate with private insurers on behalf of participants in order to get them the best deal.

It’s something of a collective bargaining approach for those in a low income bracket, with the state functioning as the local labor negotiator.

I wouldn't call it "close to a public option." It's a good policy to bundle federal monies together and allow states to bargain with it, and it will allow for competition at that low end. Of course, insurers might have to raise prices on everyone else to compensate for either lower rates on that pool, or missing out on having them in their systems. But there are caps for that, theoretically, and I would have expected those insurers to push to the max of those caps anyway. So overall, this is a good policy, and I'm glad Cantwell got it through.

Among Democrats, only Blanche Lincoln voted against it.

Finance Committee Follies

So how's that Finance Committee doing on health care?

Well, they did manage to beat back a requirement that people show a photo ID to use the exchanges or access subsidies, though the enforcement requirements in the bill still deny undocumented immigrants the ability to but insurance on the exchanges, which is pitiful, and restrict LEGAL immigrants from doing the same for five years. So it's a win without a victory.

In better news, Max Baucus continues to be pushed to the left on affordability.

In a push to lock down votes, Senator Max Baucus, the Montana Democrat and chairman of the Senate Finance Committee, is pulling together a last-minute package of changes to his health care legislation aimed at addressing the chief concern among his fellow Democrats: that health insurance be made as affordable as possible for moderate-income Americans.

“There’s an effort to solve people’s problems,” said Senator John D. Rockefeller IV, Democrat of West Virginia, who has been a critic of the bill. “How far that’ll go, we’ll see.”

Among the proposals under consideration is an amendment by Senator Maria Cantwell, Democrat of Washington, that would create a “basic health plan” for Americans earning less than 200 percent of the federal poverty level, or $44,100 for a family of four. The proposal would let states develop or expand various existing insurance programs that now typically cover people who qualify for Medicaid. Small states could develop plans jointly.

The Baucus bill would already expand Medicaid to Americans earning up to 133 percent of poverty, and Ms. Cantwell’s proposal would effectively expand it further. But because her plan is expected to be cheaper than providing subsidies to those low-income people to buy their own insurance, it could save money that could be used to make other provisions of the bill more generous.

The Cantwell Amendment sounds pretty good at first blush. While not a public option, it's a proven idea (Washington state has this) that would reduce costs up to 200% FPL that can be used to increase subsidies above that level. UPDATE: Ezra Klein has a good interview with Cantwell about her proposal. She claims it would hit 75% of the total uninsured.

But I really like what Jay Rockefeller's cooking up - a legitimate floor for what insurance companies must spend on treatment and care.

This is delectable politics. Fresh off a meeting with Ob-Rahma, Jay Rock has come back to the Senate and demanded 90% loss ratio for any coverage the subsidies pay for. "Loss ratio" is insurance-speak for what they actually have to spend providing actual health care. That means the insurance companies can't steal 20% of our tax dollars to pay for executive salaries. They get 10%.

They're peeing their pants right now.

But I suspect Jay Rock has offered this as an outcome of his meeting with Ob-Rahma. I'm sure at that meeting they said, "Jello Jay, We'd like you to pitch other ways to save money. We'd like to come up with a way to keep costs down."

And voila!!! 90%!!! Insurance companies have to actually provide health care without gobs of executive subsidies. We're actually going to demand a certain amount of health care in exchange for the half trillion MaxTax!!!

There's no way to vote against this and still claim that you are on the side of the people instead of the insurance companies. With the cost savings in the bill, not to mention the ease of using the exchange to advertise services, insurers should easily be able to spend 90% of all premiums and still make a health profit. The only problem with this is enforcement, and how you get compliance from insurers who lie about loss ratios currently.

The Finance Committee will consider all these amendments and have a final vote on the bill next week, with Harry Reid bringing a merged bill to the floor the following week. We now know the schedule - time to make sure the best bill gets out.

Public Option Vote In Moments

John Kerry just laid down the real killer argument in this whole debate - those opposed to the public option are fearful that it would be too successful and Americans would like it too much. They're protecting insurance industry profits over serving their constituents. Given how good Kerry is at talking about the public option, I'm wondering why he barely said a word about health care during the 2004 campaign. He could have been President if he managed to wind up this kind of moral authority.

We'll have a vote shortly...

...Max Baucus will vote against the amendment because he has to protect his bill and he doesn't think that the public option can get 60 votes. Well, with him voting against it, of course it won't get 60 votes! That is a total cop-out. He's also saying "Rome wasn't built in a day" and we have to start laying the foundation for health care reform, alluding to the notion that it could be added later. His argument is a total process argument to protect insurance industry profits.

...Rockefeller NAILS Baucus. "We shouldn't say that process makes more difference than people. I don't buy it when somebody says, 'I just want a health care bill, I don't care what's in it.'" Rockefeller says he's astounded that Republicans are satisfied with $480 billion dollars in new subsidies being given to insurance companies, on top of everything they're already getting. Money spent on health insurance companies and not people's care. "What is wrong with giving people a choice?"

The final vote in this committee will reflect the opinion of 13 Democrats and 10 Republicans. In the Senate we have 60 Democrats and 40 Republicans. This is not a representative sample.

Rockefeller says "If they (Republicans) want to talk about sliding to a single-payer system, there's no better way to get there than to do nothing."

...Rockefeller: "The public option is on the march."

Here's the vote on the Rockefeller amendment: Rockefeller, Aye; Conrad, No; Bingaman, Aye; Kerry, Aye; Lincoln, No; Wyden, Aye; Schumer, Aye; Stabenow, Aye; Cantwell, Aye; Bill Nelson, No; Menendez, Aye; Carper, No; Grassley, No; Hatch, No, Snowe; No; Kyl, No; Bunning, No; Crapo, No; Roberts, No; Ensign, No; Enzi, No; Cornyn, No; Baucus, No.

8 Ayes, 15 Nos. Conrad, Lincoln, Bill Nelson, Carper and Baucus have been ferreted out. We'll see if anyone flips on the Schumer "level playing field" amendment.

...Bill Nelson just agreed to vote for Chuck Schumer's "level playing field" amendment. And during Schumer's remarks, he thanked Tom Carper for helping "move us toward consensus." So we may pick up a couple votes here. Of course, the "level playing field" amendment, which doesn't tie a public option to Medicare rates, saves $85 billion less over 10 years than the Rockefeller amendment.

This pretty much confirms that there are at least 50 votes in the Senate for a triggerless public option, based on past whip counts.

...Kent Conrad saying that the Schumer amendment reflects a "significant improvement" on the Rockefeller amendment... so will he vote for it? I'm thinking no. "The place where we still have a difference is whether the non-profit option is run by the government." He's sticking with his crappy co-ops. Conrad says that Schumer is moving much closer to package that can get 60 votes on the floor, but he won't help move it, of course.

...Schumer amendment vote coming right up. Max Baucus once again says that "the public option can't get 60 votes, so I won't vote for it." It's the "innocent bystander" theory of government. Why, if only a Senator like Max Baucus had a vote on the bill, surely it could attract the necessary votes!

..here's the vote: Schumer Aye; Rockefeller Aye; Bingaman Aye; Kerry Aye; Cantwell Aye; Stabenow Aye; Wyden Aye; Menendez Aye; Bill Nelson Aye; Baucus No; Conrad No; Carper Aye; Lincoln No; All R's no.

So Carper and Nelson flipped. Amendment fails 10-13. Only Lincoln, Conrad and Baucus against it.

...In the end, I'd say this is a pretty good outcome for the hopes for a public option, actually. Ron Wyden, Tom Carper and Bill Nelson are now on the record supporting a Schumer-like public option. Add that to Chris Bowers' whip count and the Washington Independent whip count, along with Paul Kirk coming out in favor, along with Claire McCaskill, and you have 50 definite yes votes, plus 1 (Mark Warner) who says that he wouldn't vote against the bill if a public option was in there. Mark Begich is a lean yes, as is Jon Tester and Mark Pryor, but you don't even need them. 51 votes are secured for some type of public option. So you could pass a public option through reconciliation as a pure deficit reduction play and would be assured, 100%, of 51 votes at a minimum.

There will be a fight for another day.

Public Option Finance Committee Live Debate

(Bumped)

I'm listening to the public option debate in the Senate Finance Committee at this link. I guess I can embed it right here:

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Chuck Grassley is going on and on with his series of lies about the public option. All you need to know is that it saves hundreds of billions of dollars, and everyone who presumes to be worried about the total cost of the bill and at the same time rejects the public option is full of it.

Jon Walker has a good liveblog going. Earlier, Jay Rockefeller went to town on the Baucus bill:

10:24 - Rockefeller quoted in his defense of the public option former Cigna excutive Wendell Potter who called Baucus's bill the, "the Insurance Industry Profit Protection and Enhancement Act."

10:33 - Rockefeller pointed out that while the private insurance companies will receive a half trillion dollars in federal money, there is no requirement in the Mark for the private insurance companies to spend that money on care. The House bills has an minimum 85% medical loss ratio. Baucus's bill has no minimum medical loss ratio

10:37 - Rockefeller is putting the private health insurance industry on trial. He is going through all the different ways private insurance companies screw over their costumers and deny claims.

Chuck Schumer just now asked Grassley what he thinks of Medicare. He called it "part of the social fabric of America." It wasn't in 1964! Maybe in 40 years, the public option will be part of the social fabric of America. Grassley is dancing.

Bill Nelson interjects saying "how in the world do you make that leap" that a public option will lead to single payer? Grassley uses the Lewin Group statistics, not based on the public option plan on offer - also Lewin Group is owned by United Health Group and not an unbiased source.

...just to be clear, it's likely for us to lose this one. But this debate, according to Schumer, will revitalize the debate for the Senate floor. Hopefully Schumer will ensure that the floor amendment on the public option will only require a majority vote. Robert Reich has a good story on this as well.

...Orrin Hatch is trading off of the decades-old demonization of government from the Reagan era onward, saying that DC bureaucrats cannot manage health care. Well, I eagerly await Hatch, essentially a DC bureaucrat, recusing himself from all health care votes this session, including participating in any filibusters, because he clearly considers himself such a bad manager. Incidentally, the reason we're doing health care reform right now is because private management of health care has failed.

...Bob Menendez comes out for the public option. I think he may have been on the fence until now. That's another member of the leadership, the head of the Democratic Senatorial Campaign Committee, for the public option. He's the guy who delivers resources to Senate candidates, including incumbents, so that's notable.

...Note the states Menendez singled out for having no competition in the insurance market - Maine, Wyoming, Iowa, Montana, North Dakota. Every one in the Gang of Six!

...Conrad is up. Calls his co-op crap "the public interest option"! His main complaint is the Medicare reimbursement rate, which is more of an issue than I made of it last week. We'll see if he votes yes on the Schumer amendment, which does not tie a public option to Medicare rates. I think there's a way to meet halfway on this. Tying the public option to Medicare rates saves lots of money, but it could save half that by equalizing the reimbursement rates in some states.

...Nelson asks Conrad to change the name of his co-ops to something even more indecipherable.

...Bingaman is up. He's getting some clarifications. Rockefeller is getting a little fed up with the distortions of his amendment.

...Bingaman supports a public option, but it looks like he'll only vote for the Schumer "level playing field" public option instead of Rockefeller's. That's a cost, according to the CBO, of $85 billion dollars, if you look at the House bills. So I'm sure Bingaman will come up with $85 billion in new funding to make up for that, right?

...Schumer is making a very strong case for the public option. Of course, his plan would score lower and save less money, which he admits.

...TPM has that exchange between Schumer and Grassley, where Grassley calls Medicare part of the social fabric of America.



John Ensign is dredging up that Belinda Stronach (Canadian MP) came to the US for health care canard. He won't mention that she raised money for adding the cosmetic surgery she needed - COSMETIC, not the care itself - in the Canadian health care system.

Then Ensign claimed that US health care is great because if you take away every car accident and gun death, it turns out our preventable death rate is excellent. Which is just about the stupidest thing I've heard yet in this debate. Is John Ensign calling for a total gun ban in the United States?

...Debbie Stabenow's going to wrap up the debate before a lunch break. Stabenow frames the public option as "the grand compromise," which it is.

The P.O. Yo-Yo

Harry Reid pulled the yo-yo trick today. First some anonymous staffers were quoted in the NYT that the Majority Leader's merged bill that will go to the Senate floor would not include a public insurance option. Then Reid's spokesman denied it to Greg Sargent.

These yo-yo maneuvers really dispirit people, and I don't know if they're meant to be trial balloons or what, but the leadership needs to at least try to crack down on the leaks. Anyway, the public comments are quite enough, thanks. Reid himself called Olympia Snowe's trigger option "pretty doggone good" last weekend. Bill Clinton did the same thing on Meet the Press. There's no need for an additional article contributing to the death narrative. It saps the energy for reform from the most vociferous reformers, and that's probably by design.

The public option will come up for a vote in the Senate Finance Committee as soon as tomorrow. Liberal supporters admit they don't have the votes. But it will force many centrists to go public on the issue, opening them up to criticism. And even if Reid doesn't include the provision in the bill, he'll certainly allow amendments to that effect on the floor. So this is really just the beginning of a fight that will continue right through to the conference committee.

In the end, whether or not the public option survives depends on the White House's advocacy. So the only tea leaves worth reading are the ones about which politicians they are pushing to support the bill.

...I've now seen a couple assertions that 60 votes will be required for any strengthening amendments on the Senate floor. I'm not sure where people are getting this, but historically that has been something used to preserve the final bill. If this is the case, then, as Chris Bowers writes, Reid's inclusion of a public option in the merged bill really is the hinging point for whether or not it will ultimately be included.

The Art Of The Deal

The Senate Finance Committee preserved the White House deal with Big Pharma yesterday, but the vote was extremely close. So much so that I'm not convinced they'll be able to hold that deal on the Senate floor.

During the third day of the committee’s markup of the legislation, the vote on the Medicare amendment introduced by Sen. Bill Nelson (D-Fla.) provided the most awkward political moment yet for committee Chairman Max Baucus (D-Mont.) — not to mention the White House, which made a deal with drug makers to limit their exposure.

Baucus and Democratic Sens. Tom Carper (Del.) and Robert Menendez (N.J.) joined the panel’s Republicans in beating back the amendment on a 10-13 vote.

Despite Nelson’s failure to attach the language to the committee’s bill, the argument among Democrats is far from over. Senate Majority Leader Harry Reid (D-Nev.) promised to support the amendment when the bill reaches the Senate floor, Nelson said. The House’s healthcare reform bill includes similar provisions.

Maybe Ben Nelson or Evan Bayh or Mary Landrieu agree with these three - Delaware and New Jersey are big pharma states, but I don't see Ted Kaufman (who's a short-timer and who voted for cramdown in bank-heavy Delaware) or Frank Lautenberg giving in on this. I'm just not seeing 10 votes among Democrats against this policy. Blanche Lincoln voted for this in committee. So did Kent Conrad. It was Bill Nelson's amendment. Who are the conservaDems left?

I wouldn't be surprised if the White House twisted enough arms to get their deal, but I don't see a whip count that gets them there. We'll see.

Public Option Nears Finance Committee Vote

The public option debate in the Senate Finance Committee was originally scheduled for a vote today, but it was pushed back to Tuesday. While the chief cheerleaders on the committee are not entirely hopeful about its prospects in the committee, they certainly sounded confident about it overall.

"The health care bill that is signed into law by the President will have a good, strong, robust public option," (Chuck) Schumer said.

How that will happen remains an open question. But the Senators assured reporters on the call that we're all going to get a taste of their passion and persuasiveness on this issue at the ongoing Senate Finance Committee hearings on Friday.

"I think it's a great idea," (Jay) Rockefeller said of the public option. "Chuck Schumer thinks it's a great idea. And we're going to be all over it tomorrow." [...]

Schumer said that "a large majority of Democrats are for a public option" -- but that the ratio is higher in the House than the Senate, and higher in the Senate than in the Senate Finance Committee.

"I think we have a real good chance on the Senate floor," he said.

Schumer and Rockefeller have a lot of weapons at their disposal. First off, there's the pure popularity of the measure, which has ticked up in recent weeks, at 65/26 in the latest New York Times poll. This is also true in the case of swing district Democratic seats, who not only express a fundamental desire for health care reform this year, but support a public option and reject a trigger. This is also a crucially important piece from that polling:

It's wrong to think about the public option in isolation from other elements of reform. Forcing an individual mandate without a public option is a clear political loser (34% Favor / 60% Oppose), and only becomes more palatable when a public option is offered in competition with the private sector (50% Favor / 46% Oppose)

And swing district voters have already decided the private sector has failed to keep healthcare affordable, and want a public option now (48%) instead of waiting for a trigger (36%).

A mandate without a public option will be extremely unpopular because people can sense that the idea of a forced market for private insurers is designed in the interests of those insurers, not them. This is really elementary stuff.

I don't know if whether this report about Blue Dogs fading in their opposition to the public option relative to other health care goals is a sign that they're learning from these reports or not. They seem to be more interested in the regional disparities in Medicare reimbursement rates, which is really a payoff, but if those rates were adjusted, opposition to a public option tied to Medicare rates in some fashion would probably fade away. Especially considering that it's the fiscally responsible thing to do, per the CBO.

The original House bill required the public plan to pay providers 5 percent more than Medicare reimbursement rates. But as part of a package of concessions to Blue Dogs, the House Energy and Commerce Committee accepted an amendment that requires the HHS Secretary to negotiate rates with providers. That version of the plan will save only $25 billion.

In total, a public plan based on Medicare rates would save $110 billion over 10 years. That is $20 billion more than earlier estimates, a spokesman for House Speaker Pelosi said.

We'll see if this arsenal of evidence can convince Senators who really just want to protect the status quo, and more important, protect industry profits. We're finally going to see where they stand when the Finance Committee votes. We'll be watching.

Amendment Day

The Senate Finance Committee began marking up the Baucus health care bill this morning, and Part II of that hearing begins in just an hour or so. While the markup session is more a theater show than an actual horse trading session, lots of what has been going on behind the scenes will be revealed publicly over the next few days, in front of the White House and all the industry big hitters.

We know that the Republicans on the committee have given up trying to govern and are solely interested in scoring political points. Among their amendments are measures to reduce the excise tax “for any state with a name that begins with the letter ‘U’”. They have compiled 27 amendments designed to reduce affordability for regular Americans, dozens of amendments to protect industry from fees, one to change every instance of the word "fee" in the bill to "tax", and added the usual amendments around ACORN and czars. They are thoroughly unserious and have marginalized themselves from this debate.

That's proven by the fact that, based on the leaks so far, the movement is toward making the bill better from a liberal perspective than a conservative one. The affordability credits are expanding, new financing schemes are being debated, and Ron Wyden's Free Choice Act is picking up support amidst a decent CBO score:

Relative to the Chairman’s mark, the amendment as modeled would reduce the net impact on federal deficits by about $1 billion over 10 years. There would not be substantial effects on the total number of people with insurance coverage or the sources of that coverage, relative to the Chairman’s mark.

The CBO doesn't think lots of people would use Wyden's alternative, which would allow anyone to go into the exchange even if their employer offered health care. But this gives people an option, and sets the stage for an eventual move away from the employer system without a firewall propping it up. If it can show itself to be able to survive, it can prosper. If not, if the premiums go up and the employer-offered insurance gets worse, people have a safety valve. Max Baucus said this morning to Wyden, "I especially appreciate your comments about choice and competition if you don't want to be stuck with what your employer gives you. We're going to get into some ideas for how to do that."

I would like to see more counter-attacks along the lines of removing the anti-trust exemption for health insurers, to keep them in line with the policy. Dallasdoc has some great ideas. But the cantankerous nature of Republicans has actually moved the ball toward the only ones on the playing field, and Baucus-care is slowly, but surely, improving. Hopefully that will continue down the line.

Rockefeller And Wyden: Senate Finance Holdouts

Ezra Klein had two very good interviews today, with Sen. Jay Rockefeller and Sen. Ron Wyden, detailing their concerns with the Senate Finance bill and how they hope to change it. I know that people are getting bent out of shape about the emphasis on the Finance Committee bill when four other committees have jurisdiction, but right now, it's the only committee left to report something out, Wyden and Rockefeller sit on the committee so they represent the best hope for improving that version, and let's be honest, the White House is certainly using Baucus' bill as a framework, with the hope to at least just get it out of there. So it's important to take a look at their concerns.

Wyden, who like Rockefeller spent time at the White House this week, emphasized affordability concerns, like most other Democrats have. But Wyden also wants his proposal for Free Choice in the bill, allowing anyone to buy insurance off the exchange, not just those who don't get coverage through an employer. I thought he answered the concerns about the "end of the employer-based system" (you say that like it's a bad thing) pretty well:

Let me ask you about some of the concerns people have on this bill. One is that it will hasten the decline of the employer-based system. Young workers will leave quickly for cheap, catastrophic plans on the exchange. Workplaces will be left with older, sicker workers, and they won’t be able to continue offering health-care insurance.

That just doesn’t make sense, either from an economic standpoint or the nature of American life. First, companies will continue to see good benefits as a recruitment tool. It remains a primary way to attract young, talented workers. Second, as we look at this in terms of who would leave, I don’t get the sense that young, healthy workers will be the first to traipse off. Are they really going to be the ones to fill out the forms and contact the exchanges and all that? I think the most likely to go shopping are middle-class people who are pinched right now. We’ve also put into the bill safety valves for any worst-case scenario: after-the-fact risk adjustment that will review who stayed and who left and make adjustments based on that fact.

If what we’re saying is that we can’t find a sweet spot between blowing everything up in 15 minutes and telling people that you can’t improve your situation and have more choices, we’re not doing our job. And I think this is that sweet spot.

Wyden also spoke strongly against the "free rider" position, and said he is working with the Center for Budget and Policy Priorities to improve it.

Rockefeller, who has become the stand-in for liberals on health care in the Senate, has a whole different set of concerns, while still keying on affordability.

There are a number of big things. The Children's Health Insurance Program is put into the exchange. That's like putting it into a farmer's market. It loses its defined benefits. And children need defined benefits.

Obviously the public option. I feel very strongly about that as a discipline on the private health insurance market. The public health insurance option doesn't have to make a dime. It doesn't have to make Wall Street happy or shareholders happy. It just has to sell a product at cost. That will put pressure on private insurance companies to bring down their premiums. What's the alternative? My staff has done extensive research on co-ops and everyone says they can't do health insurance. The best health care co-op exists in the state of Washington, and both of Washington's senators are adamantly for a public option. That ought to tell you something.

Another issue is that 46 percent of the American people have health insurance from fairly large companies that self-insure. And they're not included in the regulations. They have to have protection from preexisting conditions and lifetime caps and rescissions too. People hear that the regulations in the bill don't apply to these companies and they think it's not possible. But it's true. And it's almost half of the insurance market!

Another piece is the MedPAC proposal. if you really want to be honest about it, eight to 10 percent of the members of Congress understand health care. At maximum. I chaired the intelligence committee, and health care makes it look like riding on a tricycle it's so complicated. So what you have is lobbyists picking on congressmen who don't know health-care reform, and they say, you know what, you could get a lot more jobs in your state if you only put more money into oxygen or a certain medical device. If you're going to do Medicare right, understanding that the trust fund is going to go downhill in 2016, you can't have Congress making these decisions. You need professionals.

My understanding is that MedPAC is in the Baucus bill, but I could be wrong. The self-insurance thing is something I discovered only recently. Large conglomerates like Disney and GE run their own insurance companies, essentially, contracting out to a health insurer to do the billing, at a fixed rate. So the profit that an insurance company could make off of insuring the employees of a large company is actually going to that large company themselves. They are running a small profit center off of their own employees. And that seems insane to me. So Rockefeller is right to bring this up.

Rockefeller did offer this bit of optimism, though.

What's the mood in the Democratic Caucus like right now?

There's very hot discussion. At the second-to-last meeting with Baucus, Democrats really let loose at Baucus. When you're getting close to the time you need to vote, public policy takes on a new type of intensity. Baucus, to his credit, had another meeting last night, and it was the best meeting we've ever had with the chairman. He told me they'd make sure CHIP is preserved. He knows he needs our votes. That's why I said I wouldn't vote for the bill. Democrats need leverage.

Rockefeller added that Olympia Snowe is getting hammered by Republican leadership for her dalliances with supporting the bill. Maybe that's why she laid down a subtle hint that "the party left me" and maybe she'd be better off elsewhere.

The fact that some Democrats are getting louder about what they would and would not accept is extremely healthy for this process. Maria Cantwell said yesterday that she wouldn't vote for a bill without a public option, and like Rockefeller and Wyden she's on the Finance Committee. Ultimately, progressives should encourage those who want to bring the bill back to the center of the Democratic caucus and away from being a Republican-lite bill.

Not So Fast, Mad Max

Jay Rockefeller is actually the chair of the health subcommittee in the Senate Finance Committee. Any "Gang of Six," or really any legislation on the Committee, should at least have his input, if not his controlling hand. Yet Max Baucus froze him out of the legislation in favor of Republicans who will never sign on to the final version and worthless schemes like the Conrad co-op proposal (which is just a thin ploy to get Blue Cross of North Dakota, which controls 90% of the market in Conrad's state, the "co-op" label so it can access federal start-up funds). Rockefeller may have the last laugh when the bill moves into the full committee.

U.S. Senator John Rockefeller, a Finance Committee member and a strong backer of a government-run insurance option, said on Tuesday he will not support the panel's healthcare bill in its present form.

Rockefeller told reporters he was unhappy with the lack of a government-run "public" insurance option in the bill, which is scheduled to be made public on Wednesday, and had problems with some of its changes in children's health insurance and Medicaid, or healthcare for the poor.

In particular, Rockefeller wants a public insurance option instead of the weak co-ops, better affordability provisions so working people can actually use the bill, and changes to the way that Baucuscare deals with the Children's Health Insurance Program and Medicaid.

Rockefeller specifically said "There is no way in its present form that I will vote for it... unless it changes during the amendment process by vast amounts." Now, getting amendments through may not be an easy task. Each Rockefeller amendment in that committee would have to get the votes of all the Democrats plus at least a couple Republicans, if Baucus and Conrad hold firm on them. Considering that 10 of the 13 Democrats on the panel were completely shut out of the process during the Gang of Six talks, I'd expect a lot of support for what Rockefeller wants to do, but Baucus and Conrad can basically nullify anything meaningful on their own, should they want to.

Still, Rockefeller's advocacy is important because it sets the tone for Democrats with the full Senate, where votes like his will be needed. Jon Cohn explains.

A little over a month ago, right before the August recess, I spoke with Rockefeller at some length. And he was clearly wrestling with how to position himself.

No living senator has done as much to promote health reform as he has. It's the cause of his life and, for the first time, the goal is within reach. He admitted that voting against a package, even a flawed one, was difficult to imagine.

But Rockefeller also made clear his frustration with the compromises Baucus was making, whether it was replacing the public plan with a co-op or gradually reducing the subsidies to help people pay for insurance. He was particularly incensed about the changes to Medicaid and CHIP, programs to which he's devoted much of his time--and on which many West Virginians rely.

At the time, it seemed like Rockefeller was still on board, if only to help get a bill out of the Finance Committee and onto the Senate floor. But you got the feeling--well, I got the feeling--that he was near the breaking point.

Sometime since that interview, clearly, he's hit it.

Every vote is precious in the Senate, given that votes on the Republican side other than Olympia Snowe and maybe Susan Collins will not be forthcoming. Harry Reid has laid down the marker that anything less than 60 votes will lead him to go through the reconciliation process (and I don't think Reid's low poll numbers in Nevada will be much of a factor - the consequences of doing nothing on health care would be far graver for him). Therefore everyone in the Democratic caucus, essentially, represents an interest group to be satisfied. Rockefeller is standing up and saying that he's perfectly willing to vote against something that doesn't fulfill the promise of health care reform as he sees it. Bernie Sanders probably feels the same way. Maybe Barbara Boxer does. Or others. Max Baucus and his cronies will have to wrestle with that.

...Incidentally, the fact that we could have a new interim Senator from Massachusetts as soon as this week makes things even more interesting.

Doctors For The Public Option

As we know, the Baucus draft to be released today will not include a public option, making it the only bill out of the five in the Congress not to have one. On this basis Olympia Snowe wants it off the table. On her side are Republicans, a few ConservaDems without the courage to admit their opposition and prefer to say "it doesn't have the votes," insurance companies and teabaggers. On the side of the public option are Tom Harkin, a majority of the House, a majority of the Senate, the President, four committees in the Congress, the wide majority of Americans, states as conservative as Arkansas, and doctors (h/t):

A RWJF survey summarized in the September 14, 2009 edition of the New England Journal of Medicine shows that 62.9 percent of physicians nationwide support proposals to expand health care coverage that include both public and private insurance options—where people under the age of 65 would have the choice of enrolling in a new public health insurance plan (like Medicare) or in private plans. The survey shows that just 27.3 percent of physicians support a new program that does not include a public option and instead provides subsidies for low-income people to purchase private insurance. Only 9.6 percent of doctors nationwide support a system where a Medicare-like public program is created in lieu of any private insurance. A majority of physicians (58%) also support expanding Medicare eligibility to those between the ages of 55 and 64.

In every region of the country, a majority of physicians supported a combination of public and private options, as did physicians who identified themselves as primary care providers, surgeons, or other medical subspecialists. Among those who identified themselves as members of the American Medical Association, 62.2 percent favored both the public and private options.

What's so interesting about this is that the doctors broadly prefer private plans to Medicare on the basis of adequacy of payment, because private plans reimburse them more generously, but they STILL prefer a public option for their patients, because they have a frickin' heart.

By the way, I agree with Chris Bowers on this point:

No matter what happens in the Finance committee, it is essential that there is a vote on health care reform with a robust public option on the floor of the Senate. If Democratic Senators can keep saying that their aren't enough votes to pass a public option, and if they aren't going to include on in their health care "reform" package, then at the very least they should have the decency to tell us which Democratic Senators were actually opposed to the public option.

We are the activists who worked our asses off to give them their majority. If they are going to not deliver on the hopes and dreams we had that led us to do that activism on their behalf, then they better damn well tell us who canceled the delivery. No more of this code of silence crap that is designed to try and play both sides. They have to stand up, in public, and make it clear which side they are on--the American people's, or the private insurance companies. We need a Senate roll call vote.

I believe we'll get that vote, and members of the Senate can pick a side. And Harry Reid can determine, when merging the HELP bill and the Finance bill, if that vote is to put the public option into the bill, or take it out, which adds a different dynamic to the proceedings. We also need to know whether House progressives will live up to their commitments by voting only for bills with the public option in it.

Stop Him Before He Capitulates Again!

Having done his best to destroy the health care bill, Max Baucus wants a stab at the climate change bill.

But while Baucus has been the public face of health care negotiations, a dedicated team of his aides has been working on the climate bill. As the Finance Committee chairman and the second-most-senior Democrat on the Environment and Public Works Committee, Baucus is in a uniquely powerful position on climate issues.

The Finance Committee is charged with overseeing the flow of money in and out of government, a jurisdiction that Baucus believes gives his committee control over how hundreds of billions of dollars in pollution allocations would be distributed to industry and consumers under a cap-and-trade system.

That turf puts Baucus in direct conflict with Sen. Barbara Boxer, chairwoman of the Environment and Public Works Committee, who believes her committee has control over cap-and-trade allocations. Boxer would fold the provisions into her broader climate and energy bill, which would establish caps on greenhouse gas emissions for the next several decades, according to Senate Democratic aides.

Massachusetts Democratic Sen. John Kerry, who’s working with Boxer to draft the climate and energy bill, says they are still working out the jurisdictional dispute with Baucus.

I've got a way to work it out. Tell him, "Butt out or we'll take your gavel away." Seriously, nobody elected Max Baucus President, and his philosophy does not reflect the majority of Democrats in the Senate, let alone in the country. Senate Dems have been talking about a way to have secret votes to keep committee chairs on top of their committees - it's beyond time to brandish that as a weapon.

My other question is, how the hell does a coal-state Dem get to be #2 in rank on the Environment and Public Works Committee?

Baucus Moves Forward

As shitty as the Baucus bill is, we do need him to report it out of committee, to move along the process. His committee has been holding things up for months. So it's a major step in the fight for a bill that he'll start marking up the week of September 20.

Senate Finance Chairman Max Baucus (D-Mont.) told a Democrats-only meeting of his committee Wednesday that he plans to begin marking up a health care reform bill the week of Sept. 20, with or without a bipartisan deal in place.

According to a source with knowledge of the situation, Baucus informed his Democratic Finance colleagues that he would move forward next week regardless of whether the gang of six bipartisan Finance negotiators brokers a deal.

A Democratic Senate source said Baucus would lay down the mark on Tuesday, the Sept. 15 deadline the chairman set for a deal with the gang on a bipartisan plan. This source said that as of now no Republicans are on board with the framework for reform that Baucus has proposed.

“He [made] clear in the meeting that this is the time for action and time to move forward to get a bill done by the end of the year,” the source said.

Better, Baucus signaled his intent to move forward regardless of whether Republicans sign on. So the Gang of Six is basically dead, and the move from the Senate appears to be to deliver something that Olympia Snowe can hopefully support, removing from them the need to go the reconciliation route. That probably means no public option and maybe a trigger, at least for the time being.

It's good that Baucus has given us time to see his framework and whip up opposition to its most egregious provisions. As for the public option, that really is going to depend on Presidential leadership, IMO.

The "Less Quality Now!" Plan

The real kicker to the Baucus draft plan in today's New York Times is squirreled away near the bottom of the article. The top-line stats include the tax on more expensive health care policies, seen as a way to get at the employer deduction, where a giant pile of money exists in health care. Then there's the mix of expanding Medicaid up to 133% FPL, subsidies inside the insurance exchange for up to 300% FPL, with assurances that people up to 400% FPL would not pay more than 13% of their income in premiums. There is no public insurance option or a trigger for one, and the concept of co-ops is strangely not mentioned at all in the article (UPDATE: Per WSJ, there are co-ops in the plan). There are limits on out of pocket expenses, albeit higher limits than in the other bills ($6000 for individuals, $12000 for families). There's no talk of either an individual mandate or an employer mandate. So there are some holes here, but if it follows the pattern of the other plans, you're ensured coverage if your employer provides it or if you make so little that you qualify for Medicaid. If you're over 65, you're on Medicare. If you fall in between all of that, you go to the exchange, and can qualify for subsidies to afford coverage.

The plan is expected to cost $850-$900 billion over 10 years, but given the coverage subsidies and Medicaid expansion, I can't see that number being so low. Plus the talk in Washington, apparently, is about a $700 billion dollar bill. So how can that all square? By allowing insurers to offer crap coverage.

Coverage under Mr. Baucus’s plan would, by some measures, be less extensive than the least generous of three levels envisioned in a bill approved by three House committees.

To compare health plans, experts often focus on the percentage of medical expenses paid by insurance, on average, for a given population. This figure ranges from 70 percent to 95 percent under the House bill’s options, but it would be less than 70 percent under Mr. Baucus’s proposal.

The only way to keep insurance premiums down for the poor, and therefore keep the subsidies down, is to make the coverage less generous. And the insurers would only pay for covered expenses. Anything not covered by the plan would go directly to the consumer. Someone making $20,000 a year would still be on the hook for up to $6,000 in medical bills under this plan, and that doesn't include their premiums or non-covered expenses. Insurers, then, get off the hook for a huge chunk of medical costs while having to pay a nominal tax, and the goal is actually to have them not pay it at all, but simply to discourage companies from buying good insurance policies for their workers. And you would still see plenty of medical bankruptcies. Virtually everyone's health coverage gets worse under this Baucus scenario. I don't remember "Less Quality Now!" being part of any sloganeering on the reform side.

The real problem is that Washington is choking on the cost of providing health coverage to those who needed it. They don't want to use any external taxes or mechanisms, and they don't want to cut into industry profits to pay for the bill inside the system. So we get an ever-reducing price tag, now around $700 billion over ten years. Ezra Klein notes that these same fiscal conservatives all voted to eliminate the estate tax on ridiculously wealthy Americans, to the tune of $750 billion over ten years. That money would have entirely accrued to the deficit, while Democrats are consumed with being responsible and paying for this health care bill. It's really all a matter of priorities - help millions of uninsured people get the critical care they need, or give Paris Hilton a tax cut. George Bush financed practically every new program he brought into being by borrowing from China and adding to the debt. But the deficit only matters when there's a Democrat in the White House.

The Baucus plan gives new meaning to the term "aiming low." We'll know by Wednesday if the President agrees.

...Josh Marshall hits something I've been saying for a while.

You 'solve' the problem of the uninsured by passing a law forcing them to buy health insurance which, by definition, most a) cannot afford or b) are gambling they won't need because they're young and healthy. Either you end up with low subsidies which still leave it onerous to buy, thus creating a lot of disgruntled people, or you get generous subsidies, which cost a lot of money.

It's sort of like reform with all the cool political downsides but none of the reform.

A bill that criminalizes you for not buying health insurance, and then makes that health insurance demonstrably worse, will be an unmitigated disaster for the Democratic Party.

No Need To Kid Ourselves

I don't think it takes a genius to see where things are leading:

CNN has learned that the White House is quietly working to draft health care legislation after allowing Congress to work on its own for months.

Multiple sources close to the process tell CNN that while the plan is uncertain, they are preparing for the possibility they could deliver their own legislation to Capitol Hill sometime after the President Barack Obama's speech to a joint session of Congress Wednesday, with one source calling the possibility of new legislation a "contingency" approach if efforts by Finance Committee Chairman Max Baucus to craft a deal fall through.

Multiple sources say the current thinking among administration officials is that the president will lay out a path to reform in his speech next week that the White House hopes can bridge the various differences in the competing proposals. Sources expect the president to emphasize the message: If Congress passes something now, it will serve as a foundation to pass further reform in the future. (emphasis mine)

The Baucus caucus met today, and Baucus said he'll simply put out his own bill, and basically they'll either have a bipartisan solution by September 15 or break up the Gang of Six and go to a markup.

It's pretty obvious what's going on. The President will settle for the trigger and try to get President Olympia Snowe to write the bill. The trigger has basically already been triggered, that's why the crisis has moved to a point where we need reform. And we know from experience that the trigger will be set up so it never gets triggered to bring a public option into being.

A trigger for the public health insurance option would create underpowered public plans that would be swallowed whole by the insurance industry. A trigger would also tell the insurance industry the exact minimum level of care and service they need to provide (a level worse than they provide now) before they face competition, giving them incentive to stay at that level and no better. That trigger will never be triggered - instead, it will kill the public health insurance option. But most importantly, a trigger wants us to wait for our crisis to worsen before we fix it.

That's not a compromise. That's not even a rational proposal. Waiting for the crisis to get worse does nothing but help the insurance industry at the expense of our wallets, our health, and our lives.

The trigger kills the public health insurance option. It is not health reform. It should be rejected.

Liberals are angry but have been marginalized in the last few days. ConservaDems, emboldened by hopes of protecting their corporate contributors, are taking a victory lap. Fight on, radical moderates, fight on.

And in between, the mainstream Dems want to take half a loaf.

Clyburn said Democrats should be satisfied if they can only achieve "half a loaf" of reforms, noting that President Lyndon Johnson didn't get all of his landmark civil rights legislation through Congress on his first try.

"We can pass a health-care bill that will do a lot of good," Clyburn said. "It may not be perfect, but we ought not to sacrifice the good on the altar of the perfect."

The writing's on the wall here. And we'll see if the Progressive Block in the House means anything.

...In his conference call with Progressive Caucus members, Obama straight up asked House liberals "how far they're willing to compromise on the public option". Greg Sargent has more. He apparently told them that they had the luxury of being in safe seats, although while they may be safe D, they won't be safe from primary challenges if they have to give on what has become this fundamental pillar of health care reform.

Saying Goodbye To Senate Finance

Leaks keep springing that the White House is ready to give up on bipartisanship and just pass a health care bill with Democrats. My message would be, hurry up!

The only committee still working on the health care bill is the Senate Finance Committee. They've been systematically dismantling the bill on a number of fronts. Not only have they ditched the public option, as well as the employer mandate which would require businesses to either provide health care for their employees or pay a percentage into the system (I may be OK with dropping that), they are striking at the very heart of what will tangibly help people in the bill - the subsidies for insurance:

The saving grace of those four bills was that the consumer protections and financial assistance in them remained reasonably strong. If reform ends up looking like those four bills, then financial assistance would be available to people earning up to four times the poverty rate--or around $88,000 a year in family income. (Subsidies would be available on a sliding scale, so that a family making $70,000 would get very little, a family making $60,000 would get more, and so on.) Such a measure would also limit out-of-pocket expenses to $10,000 a year per family, while providing other crucial protections. And, of course, it would include a real public insurance option.

If Conrad and his supporters get their way, the new health care system won't be nearly as generous--or protective. They've made clear they want a package that costs less than $1 trillion. A lot less. And, thanks to the Center on Budget and Policy Priorities, we have some sense of what that would mean in practice.

Based on previously leaked drafts of legislation going through the Senate Finance Committee--the last of the five considering health legislation, and the only where it's still hung up--the Center was able to project what a scaled back plan would look like. Their conclusions, as noted previously in this space, were pretty discouraging:

...an individual with income above $32,490, and a family of three with income above $54,930, would not receive any subsidy to help pay for coverage.

Substantial numbers of people with incomes modestly above 300 percent of the poverty line could face difficulty paying the full price for coverage. The average job-based insurance policy today would cost a family of three at 300 percent of the poverty line about 23 percent of its income. This could leave the family short of funds for other expenses such as housing and child care.

So people making between three and four times the poverty line--that is, families with incomes between roughly $66,000 and $88,000 a year--would get no assistance whatsoever. Families making less than that would still get some assistance, but it'd be a lot less than they'd get otherwise.

It gets worse. In the Finance Committee bill, the basic policy would cover only 65% of total medical costs, far less than even the current standard of 80-90%. For the poor, you'd be paying a premium of indeterminate size that don't actually cover you. Sure, the insurance company brochure and the glossy ads will say that their plans offer you affordable coverage and piece of mind. But when you try to use it, you'll find it to be junk, and you'll be on the hook for major out-of-pocket costs. Even if they're capped at $10,000 annually, that's far more than a lot of people can afford.

As Jon Cohn says, this sounds like a Trojan horse to bring Republicans back to prominence more than anything else:

Put aside, for a moment, whether this makes sense substantively. It makes absolutely no sense politically. Scaling down legislation basically means gutting the benefits that would go to the working and middle class. In other words, it would help fulfill the fear many of these voters already have and that opponents of reform have tried hard to stoke: That reform doesn't have much to offer the typical middle-income American.

You can imagine why Republicans might think this is a dandy idea. But why on earth would Democrats agree?

A lot of needed attention has been paid to all of these provisions. But understand - all of them are in the Senate Finance Committee version of the bill. The competing versions all have a higher percentage of coverage for basic policies, higher subsidies, more protection for consumers and a public option. It's good to have this information because we know what to look out for, but we simply need to demand that, if Republicans will not be needed for a bill, the Senate Finance Committee version gets thrown in the trash bin. All of the offending items under discussion exist there. Bypass the committee, borrow the House's funding mechanism and Medicare provisions (which is really the only elements under the jurisdiction of Finance), and get a bill to the floor.

Beating back the army of insurance lobbyists is as simple as devaluing the Baucus caucus.