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.

Showdown In The House

There's an important meeting today in the House of Representatives, where progressives and Blue Dogs will likely show their cards on health care reform.

The Blue Dog Coalition is engaged in a member-to-member whip operation in the House, beginning with a survey of its 52 lawmakers, to find out where they stand on critical health care issues. The principal focus is the public insurance option, but the canvass also touches on various tax and revenue increase proposals to pay for reform.

For the first time since they formed in 1995, the Blue Dogs have been out-organized by their liberal counterparts. The Congressional Progressive Caucus completed its first survey and began whipping back in the spring. They launched a final whip count last week that will be finished by Wednesday evening.

The whip count builds on an earlier letter that 60 members of the progressive caucus signed, pledging to oppose any health care bill without a "robust public option."

"We're going back to those people and saying, 'Hey, are you still with the letter?'" said Rep. Raul Grijalva (D-Ariz.), co-chair of the CPC. "And if there's been slippage, how much? And if we have a committed core, how many?"

Grijalva is asking members to back the public option all the way through the process, not simply on the first vote on the House floor.

The count comes in advance of a critical House Democratic caucus meeting Thursday morning in the Capitol, where leadership will take their own whip count. The fate of the public option in the House will be largely determined by the parallel whip efforts -- and how aggressive each bloc is in pushing for its priorities. In other words, it comes down to which pack wants it more, the Blue Dogs or the progressives.

So far, Grijalva has intimated that he still has the votes, although he hasn't delivered an exact count. Blue Dogs are trying to bait Pelosi by claiming she doesn't have the votes for the bill as currently constructed, but we'll probably know that by tonight. For Pelosi's part, she has a plan to start finalizing the bill after the meeting, with a possible floor debate on the public option. However, she shot down the trigger today as "an excuse for not doing anything."

The Blue Dogs are also whining about not being protected from tough votes, because the mission of public service is to come up with the most bland, inoffensive legislation possible and not to do anything that might make anyone mad. That's the picture of leadership. These ConservaDems either don't understand politics very well or are just being opaque about their true feelings.

Politically vulnerable Democrats say Speaker Nancy Pelosi and other House leaders aren’t offering them the protection from tough votes that they did in the last Congress.

Conservative Democrats fear that dozens of members could be swept out of their districts in the midterm election next year, and that fear has been intensifying in recent weeks.

Between a tough vote on a climate change bill that many don’t expect to become law and a leftward push on healthcare legislation, Pelosi’s (D-Calif.) critics within her caucus say she’s left the so-called “majority makers” exposed.

“She keeps trying to push an unpopular package,” said Rep. Gene Taylor (D-Miss.), a centrist Blue Dog Democrat, referring to healthcare. “I think it’s fair to say they were better at it before.”

Another Blue Dog lawmaker put it more bluntly.

“They’re seriously endangering their majority,” said the Blue Dog, who requested anonymity. “With the increased margin and a [Democratic] president, there seems to be a different feeling.”

What would endanger the majority are two things - no health care bill, or a health care package without a public option, which translates into a health care package that nobody in the country would like. What you would have left is an individual mandate to force people to shell out money to private insurers only, without the price controls to make that insurance affordable, a recipe for a continued skyrocketing of premiums. People interface the health care market primarily through those premiums as long as they remain healthy, and without competition in the insurance market it's going to be hard to dial them downward. There is currently no provision forcing insurers to lower premiums as a function of lowered overall health care delivery system costs. Only competition will provide that.

As I've said, the insistence on the public option is a self-preservation strategy. Rahm Emanuel might want to throw up his hands and pretend that only Congress decides on it, but he may want to get involved. As someone who claims to have brought the Democrats the House and Senate, he should know a thing or two about losing a majority. He could also recall 1994, when he worked in the Clinton White House and pushed NAFTA on the Congress, and watched as conservative Democrats from rural districts, who lost the trust of the people through selling out their jobs, were the first in line to fall from the Gingrichites. Failure to energize the base and provide something tangible for people could produce a similar result.

Calm Before The Storm

I don't know if Mike Lux is right and the White House has thrown in with Olympia Snowe and her trigger idea, or if Sam Stein's sources are more credible, and nobody in the White House is pushing this to progressive groups overtly. But you'd have to be blind not to see this as the eventual endgame.

The White House has already pronounced themselves desperate for a bill, any bill. As much as they've talked about reconciliation, it's clear that they don't want to use it and would rather get 60 votes. They are pushing their membership in that direction, but enough of them have expressed reservations with the public option that they would probably reject the whole bill for that reason. Nobody asks them why they'd be willing to deny people health care because of one "sliver" of reform, but no matter. The White House has certainly kept themselves open to a compromise along the lines of triggers or co-ops; Peter Orszag did so again today. Getting Snowe's support means more about the Ben Nelsons and Mary Landrieus of the world signing off on cloture than it does just her vote. So the bill has been hijacked for Snowe's benefit. She's the same person who tried to delay the bill by a couple weeks to move it past the reconciliation window, which is an explicit attempt to kill the public option.

So there's not a lot of mystery here. Whether progressive groups are being sold something or not, the dynamic of the debate necessarily puts us with a trigger. Here's Mike Lux explaining that policy:

Senator Snowe is writing language into an amendment that is literally a Catch-22. The legislative language says that a public option will be set up in a state in which health care is not affordable to 95% of the state's residents, but it defines affordability as after the new tax credits that are written into the bill to make health care affordable. Not only would this be an incredibly weak public option (doing it in one state will mean it can't get the market power to compete with the big insurers), but it would be a public option that is written by its definition to never be triggered. This is a trigger specifically, intentionally designed to kill the public option.

As Lux later says, this will trigger something - not a public option, but a real civil war inside the Democratic Party.

The AFL-CIO, Howard Dean and Democracy for America, bloggers, MoveOn.org, progressive media figures, and the tens of thousands of people coming to Obama rallies and cheering wildly for a public option will figure out quickly that this trigger proposal is a farce specifically written to kill any chance of a public option. The Congressional Progressive Caucus, the Congressional Black Caucus, the Congressional Hispanic Caucus already are angry at having legal immigrants thrown under the bus by Baucus, all will explode.

As someone who spends every single day working hard to build and strengthen the bridge between the progressive community and the White House, I feel like the White House is triggering a bomb to blow the bridge up from under me (pun fully intended).

The trigger is a classic Obama "on the one hand, on the other hand" proposal. I'm afraid that nobody's going to buy that. Too many people have placed their hopes on health reform on a real alternative for competition with the private insurance industry. The White House may not like that it's dominated the debate, but it has. And there's little chance to turn that around.

Health Care Update

Looks like lawmakers are gradually expanding the puny subsidies in the Baucus health care bill:

The chairman of the Senate Finance Committee, Max Baucus, said Monday that he would modify his health care bill to provide more generous assistance to moderate-income Americans, to help them buy insurance.

In addition, Mr. Baucus said he would make changes to reduce the impact of a proposed tax on high-end health insurance policies.

Mr. Baucus, Democrat of Montana, disclosed his plans in an interview a day before the committee is to begin meeting to debate and vote on the sweeping legislation, which is intended to remake the nation’s health care system and guarantee insurance for millions of Americans.

Mr. Baucus said the changes showed that he had heard the criticism of his bill from colleagues, who asserted that many people would be required to buy insurance who could not afford it — even with federal subsidies to help defray the cost of premiums.

“Affordability — that, I think, is the primary concern,” Mr. Baucus said. “We want to make sure that if Americans have to buy insurance, it’s affordable.”

Affordability to Baucus means reducing the limit of policies from 13% of total income to 12% of total income, through subsidies up to 400% of the poverty level. That's at least a start, though still short of what's in the House bills.

As it says above, responding to changes Baucus will reduce the impact of taxing insurance companies, basically by raising the threshold when plans start to hit the tax. But this is paradoxical. Raising the subsidy levels costs money. Raising the tax threshold takes away money. Lawmakers want the bill to protect more people on affordability while taking away some of the money that would pay for those protections. There is a late and familiar entry here, however, and that's Jay Rockefeller's idea to add back in a variation of what the Obama Administration sought all along:

In fairness to Rockefeller, he's got some ideas along those lines.

He's said many times he would be perfectly happy with the sort of financing they have in the House--i.e., a straight-up tax on the rich. And while such a scheme might have trouble in the Senate, Rockefeller is trying gamely to intorduce a more scaled-down version.

Among the amendments he's introduced for this week's Finance Committee hearings is a proposal to cap the deductability of charitable contributions at 35 percent--which would, in effect, reduce the deductability of contributions that very, very wealthy people make to charities. It seems to be a version of what President Obama proposed at the beginning of this process, an idea that still has a lot of merit even though many Senators rejected it out of hand.

Would they reject it again? Maybe not in scaled-back form, which might be enough. In the end, the most likely solution to the funding problem is some sort of combination strategy--a tax that hits expensive health benefits, a tax that hits the wealthy, and, maybe, some sort of tax sugary drinks or tobacco. The new Rockefeller proposal, according to Capitol Hill sources familiar with it, will probably raise about $90 to $100 billion--which is a decent chunk of change and could pay for a lot of new subsidies.

The President wanted to roll the charitable deduction credit back to 28% - exactly where it was during the Reagan Administration, at a savings to the government that could easily top $300 billion over ten years, enough to make the subsidies big enough to make health care truly affordable for everyone. And it would only hit those who make enough money to take advantage of the charitable deduction to begin with. It's really a no-brainer.

Of course, there are more areas of conflict in the bill beyond affordability and financing. There are various amendments in the Senate Finance Committee to add a public option, as well as Olympia Snowe's amendment to add a trigger, and a weak trigger to boot. Obama went on the record saying “I absolutely do not believe that (the public option is) dead," although his close colleague Dick Durbin said today that only a "variation" of it could make it through the Senate. Nancy Pelosi continued her public statements that the public option must be included to pass the House, though House liberals, wary of a bait and switch, asked the Speaker to stand with them when the bill reaches a conference committee. Jerry Nadler reiterated the seriousness of the threat from the progressive side:

Rep. Jerrold Nadler (D-N.Y.) said Monday he is optimistic that any healthcare bill from the House will include a public (or "government-run") option, and are undertaking a whip count to test lawmakers' commitment to that measure.

"The public option is still very much alive only because the progressives have stood together and held our ground and said that, regardless of what the President or Leadership says, we won't vote for any bill [without] a public option," Nadler said in a chat online hosted by the liberal AMERICAblog.

Nadler told the blog that 60 lawmakers had pledged to vote against any healthcare bill lacking the public plan, and that liberal Democrats are "undertaking a whip count now to see how firm these pledges are."

While affordability and financing may come to some compromise position that is at least passable, the statements above show that there's no such middle ground for the public option. This may vex the White House, but they will eventually have to show their cards.

The Good Trigger?

The worst part about the Obama Administration's back room deals with the health industry wasn't just that they would impose far less cuts on stakeholders than they ought to shoulder, but that there was no mechanism beyond a handshake to ensure that the industry would even bother with those cuts. But in the President's speech the other night, he talked about imposing "automatic cuts" to reimbursement if the industry didn't abide by their commitments. It's basically a trigger - if health care growth fails to slow by the prescribed amount, then a variety of options at government's disposal would kick in. It's the brainchild of a health policy wonk named Judy Feder, and she explains the idea here.

How does a fiscal trigger work?

The idea of a trigger is that one establishes in advance a target for savings in the system, agrees on measures that need to be achieved, track that progress as the program is implemented, and if shortfalls are found, then certain actions are automatically triggered in.

What are those actions? What happens when you pull the trigger?

David Cutler and I put forward a range of options and believe a menu should be specified in the legislation. That menu could include further reductions in Medicare or changes in the tax treatment of employer-based efficiency or a strengthening of a public plan to further competition with insurers.

And why do we need this? I thought the plan already had savings in it.

The reason that David Cutler and I have been so supportive of a trigger is that we are firmly behind the cost-saving measures that are in legislative proposals and on which there is enormous agreement to change the health-care delivery system. Payment reform, a value-based purchasing system, moving away from the overprovision of low-value and high-cost procedures, and rewarding providers for better care and management of chronic illness. There's work and experience showing those measures can achieve huge savings systemwide. David Cutler and Rand's Melinda Buntin estimated (pdf) the savings at $2 trillion over the next decade.

But CBO is very cautious about scoring those measures. So it's our belief that for scoring purposes, we can put underneath them a failsafe that guarantees CBO will score the savings.

The basic idea is to force stakeholders to live up to their commitments, because the outcome would be far worse for them. And it would get us past the often arbitrary, almost always conservative scoring mechanism from the CBO (which is actually the bigger deal here, since the fiscal scolds always rely on those numbers to stop reform, but it would be harder to do so with a favorable score).

This is not a substitute for a public plan. It's a completely different area of the policy. And it can surely be screwed up or watered down in innumerate ways. But a smart legislator could use this tool to basically threaten the health industry with major cuts to their payments or essentially kicking a leg out from the stool that keeps them fat and happy. And they could ratchet up the savings the industry would have to provide year over year to keep them in line. I'm not totally convinced that will be the end result, but if Henry Waxman's in the room, we've got a fighting chance.

Spark Of Life

Some excerpts of the President's speech tonight are now available. I will say that there's a bit of a harder edge in these remarks, particularly toward out-and-out opponents of reform, the likes of which have disrupted town halls all last month. This follows the feistiness of Obama's Labor Day speech to the AFL-CIO. Here's an excerpt of the excerpts:

But what we have also seen in these last months is the same partisan spectacle that only hardens the disdain many Americans have toward their own government. Instead of honest debate, we have seen scare tactics. Some have dug into unyielding ideological camps that offer no hope of compromise. Too many have used this as an opportunity to score short-term political points, even if it robs the country of our opportunity to solve a long-term challenge. And out of this blizzard of charges and counter-charges, confusion has reigned [...]

But know this: I will not waste time with those who have made the calculation that it’s better politics to kill this plan than improve it. I will not stand by while the special interests use the same old tactics to keep things exactly the way they are. If you misrepresent what’s in the plan, we will call you out. And I will not accept the status quo as a solution. Not this time. Not now.

Everyone in this room knows what will happen if we do nothing. Our deficit will grow. More families will go bankrupt. More businesses will close. More Americans will lose their coverage when they are sick and need it most. And more will die as a result. We know these things to be true.

That is why we cannot fail. Because there are too many Americans counting on us to succeed – the ones who suffer silently, and the ones who shared their stories with us at town hall meetings, in emails, and in letters.

"More will die as a result." That's not half-stepping it at all. And I'm glad that Obama didn't take Saxby Chambliss' patronizing advice and show "humility". From the looks of these excerpts, he won't.

And yet, this is an easy target. Teabaggers and Birthers do not have a role to play in this debate. The President might want everyone to think they do, but they don't. They don't have the votes to stop anything if the majority really wants to pass a bill. The universe of 50-60 votes in the Senate and 218 in the House, those are the ones who will enact health care reform or not. And to them, early reports show that he will be tepid and broadly receptive to whatever they might demand.

He's going to support medical malpractice reform, a sideline of the debate which has little positive value (just see the results in the states which have already enacted it) and may make it harder for patients to seek justice if harmed by their doctor. What's more, it will not change any Republican minds on the overall bill. With respect to the public option, Obama reportedly plans to endorse it, though pointedly, it appears nowhere in his excerpted remarks. What's more, David Axelrod said again today he would not draw lines in the sand and seek compromise on the provision:

He thinks that could be good for consumers, and he's going to make the case for that, but he's also going to make the point that this is not--this is an ends to a means. It's not the essence of this debate. It's a part of--it's one of the tools, and there are other ideas out there that-to-bring competition and choice that are--that are worthy as well," Axelrod said [...]

Questioned further by Wolf Blitzer, Axelrod said Obama will nod at both of most commonly suggested public option alternatives: the co-op model, and the triggered public option.

"He will acknowledge [co-ops]," Axelrod said. "There's the idea of putting trigger on the public option so it goes into effect at some date when it's clear that a market is uncompetitive. There are a number of ideas, but what is very important is that we have the kind of competition and choice that will help consumers in many states in this country."

This just seems to me like arguing from a position of weakness. You allow room for a compromise and your opponents will pounce. Olympia Snowe basically said today that the White House must give up on the public option, as she knows he'll be flexible and she can just wait him out.

A lot of people are talking about what they want to see in the speech. Jon Cohn argues that he wants some commitment to universal coverage, something that future governments would have to take away. That's good on the policy side. Drew Westen wants a simple message and draw clear lines between allies and enemies, letting the public know who is responsible for the broken system. Tim Noah doesn't want any more speeches, because with reform so close, the goal should really be pounding on moderates until they submit. Paul Krugman says that Obama should eschew details and go for the gut, laying out the personal horror stories and the urgent need for action now. Actually, I think based on the excerpts that he's going to do just that.

I think all of this is right for its own reasons, but more than anything, I actually want to see some spirit. The Republicans have clearly made a decision to destroy Obama's Presidency through endless fearmongering and fauxtrage. They started a bonfire over this Van Jones hiring and the White House let the hit squad walk all over them. This didn't appease the right but whet their appetites for more. The only way to fight such bullying, such blatant hatred, is through showing some toughness.

First of all you have to decide if you really want to win. If you just want to spend your time debating hypotheticals and dreaming of how swell things could be while weaving yourself a safety net of emergency qualifiers in case things don't go the way you planned, go get a job at the fucking Brookings Institution. But if you're gonna go to ideological war, then go to ideological war. And if you are going to fight this war you have to ask yourself "what would Dick Cheney do?"

Never apologize.
Never admit weakness.
Never concede points.
Never defend.
Always attack.

You have to remember that, in the case of the Glenn Beck conservative wing (a group of people who make the Dittoheads look like Quakers), you are dealing with a crazy salad of stupid people (and let's quit excusing them as "low information voters"...they're dumbshits), lunatics, assholes, racists, political performance artists, opportunists, and the kind of people who make eugenics seem desirable if not downright necessary.

These are not the people you need or want. You want the mushy middle and the mushy middle loves people who project strength and power. It makes them feel safe. They like being on the winning team. Power and winning intoxicates them. If they write for the Politico, it gives them boners and they'll write anything you want them to. But these people do not respond in the quite the same way to squishy papering over of defeat.

Many of those who have abandoned Obama of late are doing so because they have openly questioned his leadership and resolve. They don't know if he's willing to fight for them. They aren't so concerned with the details, but they want to know that they have a champion for their interests. So act like a winner. Show confidence and not even-handedness. Show the spark of life.

...good news: Marc Ambinder, sock-puppet for the White House press shop, reports that 100 House liberals will be the intended audience for the speech.

Intrigue In The Palace On Health Care

The President will apparently support and endorse the public option in his speech tonight but fall short of demanding it. More on that in a later post. Really, if the members of Congress supporting a public option don't show their mettle in this debate, it won't totally matter what the President supports.

Over the past 48 hours, the blogosphere has blown all kinds of holes in Max Baucus' bill, but on Capitol Hill people are being a bit more circumspect, probably because they just want him to pass the sucker out of his committee so we can get on with the work of health care reform. And yet even media types are slagging Baucus for delaying the same bill he could have had in June for three months for no particular reason. So clearly, his centrality to the debate has lost traction.

The center of gravity has really shifted toward Olympia Snowe. And therefore, it's good to see Robert Reich knock her trigger proposal back to kingdom come. Reich rightly notes that this idea we can devise a formula to know definitively if insureres are living up to their responsibilities is ludicrous. Therefore, corporate interests and Republicans (redundant) will just argue the numbers on the trigger and delay the public option forever. And adding a five-year delay just snuffs out all of the political energy for change.

Even better than this is Chuck Schumer arguing enthusiastically for using reconciliation for at least part of the bill - and a public option would fit that mold.

Q: I’m curious, the leadership was trying to use reconciliation as way to force Republicans to the bargaining table. Do you think that failed and do you think reconciliation is still part of the plan?

A: I think we still have to look seriously at reconciliation because even with 60 Democrats, you know, if we’re able to get somebody here from Massachusetts, it’s not easy to do.

Q: Are you planning on having an interim appointment from Massachusetts?

A: No, I don’t know. That would be up to the Massachusetts state legislature but I know they’re considering it. Ah, so, so the bottom line is that even with 60 or even if Olympia Snowe comes to some kind of agreement, it’s going to be hard, and I’ve always favored using reconciliation for good parts of the bill. I think that will get you the best bill, the strongest bill and the bill that will have the greatest positive effect on the American people. Ultimately, we’ll be judged not by whether we pass the bill, but ultimately we’ll be judged by weather it works. Leaving the bill as something that doesn’t work, even if we pass it, leads to hurting both the country and the party.

Now if THAT could only become the center of gravity opinion in the health care debate...

In addition to the slagging of Baucus-care and Snowe-care and the talking up of reconciliation, you have the insistence from House progressives to only vote for a bill with the public option. And as Anthony Weiner notes, there's a strategic component to this as well:

Dem Rep. Anthony Weiner, who’s taken on a counterintuitive and increasingly high profile role defending the public plan, just said for the first time in an interview with me that he doesn’t see “any way” he can vote for a bill without the public option in it.

“I dont see how I could,” said Weiner, when I asked whether he’d vote for a bill without a robust public plan. “I dont see any way I could.” His throwing down of the gauntlet is more striking when you consider that he’s known at home in New York as a moderate who’s not known for bucking leadership [...]

“All of the protest letters in the world don’t add up to much if you don’t finally stand up and vote No on something the President and Nancy want,” Weiner said. “There is clearly a sense that progressives in Congress are easily rolled.”

“If the Congressional left can’t pass even something as modest as a watered down public option, then frankly I don’t think anyone is going to take the left very seriously later on in this Congress,” Weiner continued. “When Blue Dogs talk, there are fewer of them but they have more influence than when progressives talk.”

Yes, this is a proxy for future fights and a means to change the dynamic in the Congress, getting respect for progressives pushing the agenda that got most Democrats in Congress elected. The combination of all of these things is adding up to a decent enough strategy, but the President is also no bystander here. More on that in a moment.

Fines For Failing To Pay Insurance Companies

This was a spectacular headline to weather for a full day atop Drudge:

Americans would be fined up to $3,800 for failing to buy health insurance under a plan that circulated in Congress on Tuesday as President Barack Obama met Democratic leaders to search for ways to salvage his health care overhaul [...]

The latest proposal: a bipartisan compromise that Sen. Max Baucus, D-Mont., a moderate who heads the influential Finance Committee, was trying to broker.

Baucus, meeting with a small group of fellow senators, promoted a plan that would guarantee coverage for nearly all Americans at a cost to taxpayers of under $900 billion over 10 years.

Some experts consider that a relative bargain because the country now spends about $2.5 trillion a year on health care. But it would require hefty fees on insurers, drug companies and others in the health care industry to help pay for it.

Just as auto coverage is now mandatory in most states, Baucus would a require that all Americans get health insurance once the system is overhauled. Penalties for failing to get insurance would start at $750 a year for individuals and $1,500 for families. Households making more than three times the federal poverty level - about $66,000 for a family of four - would face the maximum fines. For families, it would be $3,800, and for individuals, $950.

As I've pointed out, the bill is a bargain because Baucus achieves it through allowing insurers to provide less comprehensive health coverage to practically everyone in the country.

This will, and should, be the next line of attack for conservatives - that everybody will have to pay $3,800 to the government if they don't buy health insurance. That's just the maximum fine, but that will become the individual fine for everyone in the country after a trip through the conservative puke funnel. And there's an exemption if you can't find insurance premiums less than 10% of your income. But I prefer to look at the other side of this. This bill forces you to give up to 10% of your income to insurance companies who have, as part of their business, lied their way out of paying for health care for decades. Health insurers can also charge individuals five times as much based on their age, under this plan, a stark difference from the 2:1 community rating in the other Congressional plans. And the coverage doesn't have to be very good, particularly for young adults, who can get "only-if-you're-hit-by-a-bus" coverage. I believe in an individual mandate to increase the risk pool to the maximum level, but the above headline is its threat - that it just looks like a stick-up.

If Baucus wants Olympia Snowe to sign on to this, and the bill appears to be designed that way, he's probably going to have to increase the subsidies to 400% of federal poverty level, or at least 350%. Of course, that would cost more money, and Snowe wants to pay for the bill entirely through internal system costs, which I don't think can fill that gap. Baucus' numbers on revenue don't even seem to add up. Maybe something like David Cutler and Judy Feder's plan could make it in:

Health policy experts David Cutler and Judy Feder, however, have an innovative proposal for making them count. In a paper for the Center for American Progress, they argue for the implementation of "failsafe" policies — crude, surefire interventions — that will kick in if the expected savings don't manifest. Limiting the growth of Medicare payments, for instance. Increasing the excise tax on insurers. Moving the public plan towards Medicare rates.

You can think of a dozen with little trouble. But if you kept them looming behind the curtain — the Oddjob to your Goldfinger — in the event that the expected modernization savings didn't manifest, it would make the anticipated savings visible to CBO, and free up money for affordability. Moreover, it would make those savings more likely to manifest, as insurers wouldn't want more of tax on their heads and hospitals wouldn't want lower rates, and so there would be more of an incentive to implement some of the softer, gentler reforms.

All in all, I understand why policy experts think the pendulum is swinging back toward reform happening. But without a public option, forcing people under penalty of fines (and what if they don't pay the fines? Prison?) to fork out a bunch of money to private insurance companies is just going to be flat-out unpopular. Especially if the help from the government to pay for that insurance is not affordable, which I don't believe it is in the Baucus plan. I guess Snowe's trigger would be tied directly to affordability, but it just seems like a trigger would be written so as to assure its never coming into existence.

Pelosi Starting To Warm To The Trigger...

It looks like all the Washington gossip has gotten to Nancy Pelosi, seen today trying to thread the needle on triggers.

But I said it before and I'll say it again: The health insurance industry, which is out there fighting the public option tooth and nail because it does increase competition, which they don't want. They'd be better getting a public option now than one that is triggered because if you have a triggered public option, it's because the insurance industry has demonstrated that they're not cooperating, they're not doing the right thing, and I think they'll have a tougher public option to deal with.

She's trying to keep progressive activists on her side by saying that she would only accept a trigger that would bring into existence something like Medicare for All. But that assumes the trigger would be written in such a way that it could ever conceivably get pulled. And I think we all now that's not how this works. The formula for pulling the trigger would get debated endlessly, insurers would sue based on their version of the formula, and conservatives would call it a government takeover of health care and the beginning of the death panels and all the things you saw on display in August.

Pelosi's trying to sell a dead fish as a pet. There's nothing called a "triggered public option" that will satisfy progressives who think the market for health insurance is irreparably broken and private insurers are not to be trusted. Triggers are a Washington type of solution, where the solution isn't offered, but gives everyone involved something they think they can run on down the road.

As Paul Krugman describes well, the politics of reform without a public option will be extremely damaging to the Democratic Party for years to come.

Remember, to make reform work we have to have an individual mandate. And everything I see says that there will be a major backlash against the idea of forcing people to buy insurance from the existing companies. That backlash was part of what got Obama the nomination! Having the public option offers a defense against that backlash.

What worries me is not so much that the backlash would stop reform from passing, as that it would store up trouble for the not-too-distant future. Imagine that reform passes, but that premiums shoot up (or even keep rising at the rates of the past decade.) Then you could all too easily have many people blaming Obama et al for forcing them into this increasingly unaffordable system. A trigger might fix this — but the funny thing about such triggers is that they almost never get pulled.

Let me add a sort of larger point: aside from the essentially circular political arguments — centrist Democrats insisting that the public option must be dropped to get the votes of centrist Democrats — the argument against the public option boils down to the fact that it’s bad because it is, horrors, a government program. And sooner or later Democrats have to take a stand against Reaganism — against the presumption that if the government does it, it’s bad.

But they're not doing that. They're sensing an opportunity to pass something, anything, and because Olympia Snowe supports triggers, they figure most ConservaDems will agree. So we have the half a loaf caucus in the House telling Democrats that they'll have to accept whatever the Senate rams down their throats. (The Senate could actually pass a public option as a deficit reduction play through reconciliation right now - but nobody wants you to know that.)

Rahm Emanuel was been pushing for triggers since well before the summer. It protects the insurance industry while allowing everyone to pretend they passed a strong bill. And that means industry will still line the pockets of Democrats as a token of thanks for preserving the status quo.

That's the decision for people to make when they assess this - whether to endorse that.

Trigger Happy Jack

Over the weekend, Ben Nelson, the most conservative Democrat in the Senate and as such a decent bellweather for where the health care policy might go, appeared to support a trigger for the public option, as long as it wasn't a "hair trigger." DougJ surmised that his conception of a hair trigger would be one that might actually go off, and he would prefer a trigger that just remains hypothetical forever. And he's right. There's a trigger in the 2003 Medicare Part D bill that would allow the government to sell prescription drugs through a public option if the drug companies couldn't do it properly themselves. And that trigger never got pulled. So Ben Nelson wants that same dynamic play out in the overall health care bill.

Ezra Klein argues that the public option on offer would not equal cost control because it doesn't use Medicare bargaining rates and its own pool of customers is too small to bargain for anything meaningful. Which is true - ask Ian Welsh - and why I support both using Medicare bargaining rates and opening up the exchanges to those who get coverage from an employer. It's also true that getting a public option into place will increase the possibility that it can be opened up or paired with Medicare rates in the future, whereas no public option on this go-round will make it nearly impossible to get one later - basically the same exact heavy lift as we're seeing now. There's also a distinction to be made between cost control to the federal government and cost control to the individual premium purchaser. A non-profit public option that still uses the Department of Health and Human Services to bargain for rates will have a lower cost to the individual in that market. The CBO estimate of 10 million subscribers is just an estimate - but it should be said that even with those numbers, the CBO saw the public option as a net savings of $150 billion over ten years, contra Tom Brokaw. If the public plan can offer the same basic coverage at a lower cost, people will buy it. And insurers will lower their premium costs to capture more of the market share. They call it "price wars" in other industries, and it's been virtually non-existent in the insurance market forever. The Swiss version of regulated insurance mandates works because basic coverage is provided entirely by non-profits.

As Matt Yglesias says, Switzerland is a country which "came late to the universal health care game thus did it in a way that involves a lot of compromises with existing interest groups." The single-payer countries all enacted their proposals in the early postwar period at the latest, when the health industry wasn't as large and powerful and medicine wasn't as advanced. It has clearly gotten progressively harder to outflank the more entrenched special interests. That's what we're seeing today with the move toward a trigger that will never trigger itself. That may be evident in the House bill even though it has a public option, considering the meager nature of that option and the too-low coverage subsidies.

But this is a game of inches. And we need to enact as much as possible in this moment of opportunity, and move to the cost controls and refining of the elements later. We need to inscribe universal coverage in the American system with a major check on for-profit insurers. That's why the wavering from House liberals desperate to bargain is extremely troubling.

Amid fresh signs that the White House is preparing to back a scaled-down health care overhaul that would only include a public insurance option as a fallback plan, several House liberals told Roll Call that they could support such a bill depending on how it was structured.

The “trigger” approach has been considered a deal-killer by liberals on and off Capitol Hill, and the willingness of some Congressional Progressive Caucus members to entertain it reflects a recognition that a bruising August recess has imperiled prospects for reform and redrawn expectations for what is possible.

“This is a way to get a bill,” Rep. Bill Pascrell (D-N.J.) said. “I believe it’s worth listening to because I want legislation that is going to, in some shape or form, expand coverage and bring down the cost of health care.”

Liberals stressed that the shift does not amount to an abandonment of their commitment to a “robust” public insurance option. They said they would only support a trigger if that approach guaranteed the same access, quality and affordability.

“I don’t want to give the impression that I’m so flexible that I’m willing to compromise away meaningful reform,” Rep. Jim McGovern (D-Mass.) said. “But there may be a variety of ways of getting there than the one I originally formulated in my mind.” [...]

“We’re the caucus that least marches to a unified drummer — that’s not what we do,” Rep. Mike Capuano (D-Mass.) said. “I’m serious about increasing access and quality, but that doesn’t mean it has to be a grand slam home run. I’ll take a ground-rule double if that’s what it takes. I’m happy to compromise if that’s what it takes. But compromise is compromise — it’s not rolling over.” [...]

Rep. Sam Farr (D-Calif.), a Progressive Caucus member, said he did not support the approach but did not foreclose on it, either. “It depends on how strong that trigger is,” he said. Farr said he has seen triggers implemented effectively in California. “Triggers work, but they’ve got to be really clear as to how they operate,” he said. “The only way I could see it getting progressive votes is by making sure the public option is strong and goes into operation.”

(Farr's actually right, but he won't be writing the bill and the language on the trigger, and surely he knows it will be written to never come into existence.)

There's just no reason to even participate in an article like this. It only serves to weaken the position of the caucus. Mike Capuano in particular clearly has no negotiating skills whatsoever - telling the world that the Progressive Caucus has no unity?

I recognize that these members want a reform bill badly. But use your poker face, fercryinoutloud. The other side of the caucus certainly is.

...They could play it like John Conyers:

“It is clear that real reform means injecting real competition into the insurance market to improve affordability and drive down health care costs. The centerpiece of this reform is a robust Medicare-like public health insurance plan tied to the Medicare provider system. Like many of my colleagues in both the House and Senate, I will oppose any health care reform bill that lacks such a plan. I will also oppose any legislation that seeks to replace a robust public health insurance option with health care cooperatives or which ties the availability of the public option to a trigger mechanism. In this effort, I stand in solidarity with House progressives, the majority of my friends in organized labor, millions of health care providers, and 72 percent of the American people.

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.

In Three Years, I Could Support The Plan That Doesn't Start For Four Years

Here's what's actually crazy about what Joe Lieberman is saying here.

The Democratic-turned-independent senator said he knows his opposition to the government-run option will probably foil the Democrats' efforts to pass the bill.

"There will be no shot at 60 votes, because I'm not the only one," he said.

But he added: "If we start this out and three years from now a case can be made that the private market is not working effectively, I would support the public option."

The public option, in the plans on offer, wouldn't start until 2013, FOUR years from now.

Of course, the way a trigger would be set up would be to ensure that the insurance industry cleared whatever arbitrary marker they needed to in order to stave off competition. So the notion of a public option coming into being somehow in the future would be a fantasy.

That's how it works. But Lieberman, who knows this, is being completely disingenuous here.

Requiem For A Dream

White House spinners tried to keep the home fires burning on the public option today, but it's quite clear they're putting a stake in it. They're letting Olympia Snowe, who supports a trigger, where a public option would only be authorized if the insurance industry failed to meet certain benchmarks, basically write the bill. And telegraphing desperation is not exactly the way to hold firm to principle, even if Obama "favors" a competition mechanism for private industry.

“It’s so important to get a deal,” a White House official said, speaking on the condition of anonymity in order to be candid about strategy. “He will do almost anything it takes to get one.”

That's a recipe for success.

The only specifics in the Robert Pear article include the White House following that same tactic of cutting out whatever the small minority of screamers have determined to be outrageous, like the end-of-life care provisions (death panels!), or the health disparity data provisions (taking our personal information!), as if that will somehow placate people who don't want government, let alone reform. And then, since he's telegraphed weakness, there's even down to this:

If Mr. Obama does not gain traction by making these concessions, his allies on Capitol Hill said, they may have to consider bigger changes. For example, they said, rather than requiring all Americans to carry health insurance, Congress might start by requiring coverage of children, or families with children.

Giving up on universal health care? Great, he's bargaining back to John Kerry's 2004 platform. Fantastic.

Quietly, Progressive Caucus members are being told that the public option is a dead letter. But it sounds to me like the whole thing will wither away as well. Olympia Snowe is going to offer a bill with a few insurance reforms, a smaller price tag that would cut either coverage subsidies or Medicaid expansion, and... that's it. Insurance companies, if there's an individual market, would get a bailout, essentially, a license to print money by making refusal to buy their product a crime. Jerry Nadler put it best:

"Without a public option, this bill will do a lot of nice things but only by throwing a couple hundred billion dollars at insurance companies," says Nadler, adding that a public option is necessary to hold down the cost of health insurance. "What is the point of passing a bill that mandates people to buy insurance that is going to be unaffordable?" he says [...]

What of the argument that the House Dems should not permit the perfect to be the enemy of the good? Isn't half a loaf better than none? "I am convinced," Nadler remarks, "that you can't take a loaf without the public option because that's not sustainable, with the costs going up. If we did this, what will we accomplish in the end?"

This is going to start a major split in the party. Just what we need to put things back together!

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.

Rahm Is Desperate To Cave

In The Wall Street Journal, Rahm Emanuel explained how he could live with a trigger option on the public plan:

It is more important that health-care legislation inject stiff competition among insurance plans than it is for Congress to create a pure government-run option, White House Chief of Staff Rahm Emanuel said.

"The goal is to have a means and a mechanism to keep the private insurers honest," he said in an interview. "The goal is non-negotiable; the path is" negotiable [...]

One of the most contentious issues is whether to create a public health-insurance plan to compete with private companies.

Mr. Emanuel said one of several ways to meet Mr. Obama's goals is a mechanism under which a public plan is introduced only if the marketplace fails to provide sufficient competition on its own. He noted that congressional Republicans crafted a similar trigger mechanism when they created a prescription-drug benefit for Medicare in 2003. In that case, private competition has been judged sufficient and the public option has never gone into effect.

The President quickly walked back the comment, saying that "one of the best ways to bring down costs, provide more choices, and assure quality is a public option that will force the insurance companies to compete and keep them honest."

It's curious that Emanuel cites the trigger in the prescription drug benefit. That has never been tripped, and indeed the White House needed to strike a deal with the pharmaceutical industry to lower costs under Medicare Part D. So a lack of competition unnecessarily raised profits for the industry by at least $80 billion (the cost of the deal) over a decade, and there's STILL no public drug company option. These triggers are Washington compromises designed to never meet the standard where they would have to be tapped.

Emanuel's orientation is to accommodate centrists and kick liberals. He's been doing it since he entered politics. There's plenty of elements to health care just as important as a public option, but that's the most controversial, and so the Chief of Staff wants to cave on it to reach a compromise. The other issues, like the health insurance exchanges, the subsidies for the poor, Medicaid eligibility, the baseline level of care, etc., isn't getting the same attention, so Emanuel figures he can just strangle them behind closed doors. With the public plan, a high-profile issue, Emanuel probably thinks he has to lay the groundwork for a capitulation. Or, he's maybe lowering expectations, so Chuck Schumer can rush in and dictate the process, watering down the public plan down to a "level-playing field" piece of insignificance. But Rahm's problem is exactly the same as during the Clinton Administration:

If short-term pressures to accommodate concerns about the deficit curb Obama's ambitions, the result could be not only disaffection among progressives but also disappointment among the less ideologically inclined. Despite their skepticism about government, most in this latter constituency want Washington to foster economic expansion and improve their health coverage.

The president will thus have to balance worries about losing some moderate support against the larger danger of failing to achieve the sweeping change he promised. The obvious path for Obama -- the one he is likely to take -- is first to achieve his reforms, particularly in health care, and later to pivot to dealing with the deficit, once the economy starts improving. (Obsessing about the deficit in a downturn is not a recipe for recovery.) And centrist Democrats in Congress could usefully recall that the party's inability to deliver on Bill Clinton's 1992 campaign pledges, particularly on health care, led to a stunning defeat two years later that decimated its moderates and liberals alike.

In his first six months, Obama showed he was up to the job. This summer will test his ability to make agonizing choices -- and make them stick.

The public won't be bullshitted by a bill, any bill. People will need a tangible benefit, and for better or worse, that has become the public plan. Those who stand in the way will have trouble reclaiming their legitimacy.

The Ever-Circling Trigger

Olympia Snowe, one of the few Republicans who may support a health care overhaul, has returned to the concept of a "trigger" for the public option, delaying its implementation and allowing the insurance industry an effective monopoly.

Sen. Olympia Snowe, a key figure in shaping federal health care legislation, said Monday that a government-run plan that would take effect if the private insurance market fails to deliver affordable coverage could bridge the partisan divide that threatens to derail President Barack Obama's efforts to reform the system.

Snowe, R-Maine, said she's working with Sen. Chuck Schumer, D-N.Y., to establish that kind of a framework in the bill expected to emerge next month from the Senate Finance Committee.

In an Associated Press interview in Portland, Snowe said it would be unfair to include a government-run health insurance option that would take effect immediately.

"If you establish a public option at the forefront that goes head-to-head and competes with the private health insurance market ... the public option will have significant price advantages," she said.

Responding to Snowe's comments, Schumer spokesman Brian Fallon said the Democrat will continue to seek a consensus with Republicans but believes there must be a public option that "is available to all Americans from the first day."

Schumer will talk with anyone, but his principle of a public option on day one is completely at odds with Snowe's concept. By the way, Schumer's vision of a public option, which apparently appears in the Senate HELP Committee's draft legislation, isn't good enough. It's the "level-playing-field" option that forsakes Medicare bargaining rates for a public insurance plan, turning it into a weak non-profit that won't drastically impact the marketplace.

But Snowe's concept, which would undoubtedly set an unrealizable standard to prevent the public option from ever coming into existence - that's how it works with Medicare Part D, which has a trigger as well - is a complete non-starter. And keep in mind, EJ Dionne informed us yesterday that the main GOP negotiator in the Senate, Chuck Grassley, will not sign onto a deal if only Snowe supports it, which means it would have to move to the RIGHT of Snowe's concept. And those Republicans are out there today demonizing the public plan as a "Washington takeover".

Fortunately, Democrats have been warning the GOP that they're willing to go it alone on health care if they remain unhelpful, using budget reconciliation requiring only 50 votes. There's still hope that the debate over the public option and health care reform generally will remain internally focused. But seeing Snowe step out on the trigger is worrying.

Meanwhile, consistent with my belief that more than the public option matters in this debate, here's Ezra Klein on health insurance exchanges, a concept that would add competition to every health care marketplace. Any public option would live in here, but it would also break the mini-monopolies in various regions, by offering an exchange that would allow consumers to choose from a variety of policies. The idea is to create a true insurance marketplace. However, if a national exchange gets whittled down to a state-based one, then it's effectively no different than current rules for the individual insurance market.

The strong version is national, or at least regional. It's open to everyone: The unemployed, the self-employed, and any business, no matter the size, that wants to buy its workers in. There's risk adjustment to reduce the incentive for cherrypicking. And all this means that each exchange has many tens of millions of people, giving it tremendous advantages in scale, simplicity and standardization. With tens of millions of potential customers, insurers are eager to participate, and they will bid aggressively to ensure they're included in the market and compete aggressively to make sure they're successful within it. Over time, the combination of increased efficiencies and greater competition drive down costs in the exchange, which will lead more employers to use it, which will in turn give it more scale and bargaining power.

The weak version is state-based. It's open to only the unemployed, the self-employed and small businesses. Risk-adjustment, if it exists at all, is crude. With such a limited pool of applicants, insurers aren't driven to compete, and the efficiencies of scale and competition are minimal. It never really grows, and instead exists as a marginal policy to mop up those who aren't covered by employers.

"Strong exchanges now!" doesn't exactly make sense on a bumper sticker, but it's plenty important.

Health Care Reform's Enemies Taking Heat

The difference between 1994 and today is not that there are no longer forces who wish to undermine reform and keep the health care sector safe for the profiteers, it's that this time, somebody responds.

Example #1: Ben Nelson boldly claims he will never support a public option in health care. Change Congress and other advocacy groups hammer him relentlessly and run ads in his state. Nelson decides he will not filibuster a health care bill with a public plan.

The Nebraska Democrat, who has skeptically approached the idea of a government or publicly-run insurance program, additionally told state Democrats not to assume that he will oppose such a proposal in a final reform package.

"He's not against anything right now," said Bud Pettigrew, the chair of county chairs for the Nebraska Democratic Party, who fielded a phone call from Nelson on Monday. "But he does want to read the plans that come out first and then make a judgment."

"He is open to some type of government plan but he wants to see the details first," Pettigrew added. "He wishes the liberals would give him a chance."

And yet, even if Nelson were to oppose the final bill, his vote may not hold as much significance as expected. According to Pettigrew, the senator said he will not be the 60th Senator to sustain a filibuster on a bill that he ultimately would oppose. "If it comes to cloture I would vote for it," Nelson said, according to Pettigrew. "I will not be the deciding vote."

Adam Green has done incredible work on this. According to Pettigrew, Nelson told him that "the liberals are kicking him in the ass right now and he is feeling it."

Example #2: Third Way, a milquetoast moderate group, put together a hyper-incrementalist and lame plan for a public option that wouldn't be public, wouldn't be available to everyone, and wouldn't be able to use bargaining power to control costs. Bloggers call them out on it. The aforementioned Adam Green rallied people to call the Third Way leadership. Ryan Grim finds out that the plan was written by "policy analysts with longtime connections to the health insurance industry." Third Way is forced to respond:

Third Way is committed to helping the President and Congress succeed in enacting meaningful and comprehensive health care reform.

Currently one of the most discussed aspects of the President's reform effort is a public plan option. In a draft Third Way memo that has been widely circulated and mis-characterized, we propose a number of policy ideas that would help ensure that a public plan is crafted in an effective way -- and can garner the votes needed to advance broad health care legislation.

There is an urgent need for real health care reform in America. Health care in our country has not worked for average Americans: it is too easy to lose coverage, it is too easy to see premiums rise, it is too easy to be denied access to care. Third Way's latest report found that only 64% of working age Americans have had the high standard of health care coverage: 4 years of uninterrupted private health care.

That is a crisis.

That's why we need health reform that provides stable coverage, stable cost and reliable, quality care for all Americans.

That's a backtrack. They now have absolutely no credibility on this topic.

Example #3: The Blue Dog Caucus puts out a letter laying down their principles for health care reform, including a "trigger" option that would hold back the public plan unless insurers failed to meet certain conditions. In any other time, this would immediately become the only available option in the debate. This time, Health Care for America Now, which had gotten 20 Blue Dogs previously to endorse a public plan without a trigger, called the Blue Dogs' bluff, members of the coalition jumped ship, and the Blue Dogs had to backtrack from their initial hard position, calling it instead a "starting point" for negotiations.

In the face of relentless progressive advocacy, the forces that would rather keep the status quo turn to jelly.

However, I still fear that progressives aren't aiming their guns at all the targets. Inside that HuffPo piece on Ben Nelson, he acknowledges that he opposing capping the employer deduction for health care benefits.

In addition to telling Pettigrew about his take on the public plan, Nelson also relayed word that he opposed a measure to end the tax exemption for employers who provided health care coverage to their workers. That proposal, which has gained some traction in Congress (including with Senate Finance Committee Chairman Max Baucus), is seen as a practical way to help pay for reform.

That idea has not been properly explained to the public and will get crushed if the situation persists, leaving a yawning gap of funding that nobody seems to want to pay for. And Steny Hoyer has already objected to using MedPAC to lower Medicare costs, again a policy that has been ill-explained to the public and will cause a revolt in Congress without popular support.

I love what progressives are doing around health care, but if they don't target the funding mechanism it won't pass.

Health Care, Progressive Action and the Myth of Bipartisanship

This was the weekend when the make-or-break battle for health care reform that may define the fortunes of the Democratic Party for the next several decades began. The President signaled a willingness to get more involved. Citizen town hall meetings were held all across the country. More engagement from Obama is expected, with the public and inside the Capitol.

However, from the policy side, the more significant action came from the Progressive Caucus on Friday, when they mapped out their principles for a public option, and the bare minimum such an option must include to get their votes. Most importantly, they demanded that such an option not be conditioned to a "trigger", and not enacted unless insurers don't meet certain requirements.

The Congressional Progressive Caucus calls for a robust public option that must:

Enact concurrently with other significant expansions of coverage and must not be conditioned on private industry actions.
Consist of one entity, operated by the federal government, which sets policies and bears the risk for paying medical claims to keep administrative costs low and provide a higher standard of care.
Be available to all individuals and employers across the nation without limitation
Allow patients to have access to their choice of doctors and other providers that meet defined participation standards, similar to the traditional Medicare model, promote the medical home model, and eliminate lifetime caps on benefits.
Have the ability to structure the provider rates to promote quality care, primary care, prevention, chronic care management, and good public health.
Utilize the existing infrastructure of successful public programs like Medicare in order to maintain transparency and consumer protections for administering processes including payment systems, claims and appeals.
Establish or negotiate rates with pharmaceutical companies, durable medical equipment providers, and other providers to achieve the lowest prices for consumers.
Receive a level of subsidy and support that is no less than that received by private plans.
Ensure premiums must be priced at the lowest levels possible, not tied to the rates of private insurance plans. (emphasis mine)

In conclusion, the public plan, like all other qualified plans, must redress historical disparities in underrepresented communities. It must provide a standard package of comprehensive benefits including dental, vision, mental health and prescription drug coverage with no pre-existing condition exclusions. It must limit cost-sharing so that there are no barriers to care, and incorporate up-to-date best practice models to improve quality and lower costs. All plans, including the public plan, must include coverage for evidence-based preventive health services at minimal or no co-pay. All plans, including the public plan, should be at least as transparent as traditional Medicare.

That boldfaced bit means that the public plan could potentially use bargained rates to lower costs. This is all very, very good. And unlike the more fractured Blue Dog Caucus, the Progressives seem united around this. Max Baucus now expects a public option in the Senate Finance Committee version, the most skewed to the right of any of the plans. Considering that critics of the public option are using its selling points to criticize it, I'm reasonably certain that public opinion will also line up along with a popular President and the bulk of the Democratic caucus for a public option.

Len Nichols, the director of health policy at the New America Foundation and the co-author of a proposal to level the field through governance and pricing regulations, said that state employee health plans are “proof of concept” that governments can maintain fair competition. “They do not unleash this impulse to take over the world,” Mr. Nichols said. “I don’t see this leviathan behavior.”

But critics argue that with low administrative costs and no need to produce profits, a public plan will start with an unfair pricing advantage. They say that if a public plan is allowed to pay doctors and hospitals at levels comparable to Medicare’s, which are substantially below commercial insurance rates, it could set premiums so low it would quickly consume the market.

Yes, that would be HORRIBLE.

It's brilliant politics to line up the argument as one between those who seek to lower premiums for Americans and those who think the current broken system is the best the world has ever known. I know who wins that politically. My fears, however, are over this myth of bipartisanship that animates discussion of major issues. I don't understand this mentality:

Senator Charles E. Grassley of Iowa, the senior Republican on the Finance Committee, recalled how Mr. Obama made a personal pledge of bipartisanship when he and Senator Max Baucus of Montana, the committee’s Democratic chairman, joined the president for a private lunch at the White House last month.

“I said, ‘Yeah, it’s a problem,’ ” Mr. Grassley said of the public plan, “and he said something along the lines of, ‘If I get 85 percent of what I want with a bipartisan vote, or 100 percent with 51 votes, all Democrat, I’d rather have it be bipartisan.’ ” [...]

Senator Ron Wyden, an Oregon Democrat who is a longtime proponent of revamping health care, said Mr. Obama seemed to be wrestling with how far he could push Congress.

“The president is very much aware that to bring about enduring change — health care reform that lasts, gets implemented, wins the support of the American people and does not get repealed in a couple of years — you need bipartisan support,” said Mr. Wyden, who was among two dozen Senate Democrats who met with Mr. Obama about health care last week. “So he’s grappling with, how do you do that?”

I just don't agree with that. Medicare was a bipartisan vote - and not even very bipartisan - in an ideologically jumbled and mixed-up time period. The ideological cleansing of the parties has basically been completed, and you're simply not going to get more than a token couple Republicans to vote to reform health care in any meaningful way. The durability of the plan after passage relies on its effectiveness. If it drives down costs, if it increases access and quality of treatment, no politician in their right mind would vote it out of existence. And so Obama ought to craft the policy that affords the most chance at success. In 20 years, nobody will be able to name who voted for or against the plan. The cost curve bending or stiffening will not be dictated by the number of Republicans in support. The goal should be to get the best plan with the amount of votes needed for passage. Any extra really is gravy.

The Congressional Research Service has a nice preview document laying out all the issues in health care reform. And Ezra Klein peeks at a document setting October 1 as the soft deadline for a bill on the President's desk. Here we go.

Blue Dogs Desperate To Remain Relevant

Yesterday the Blue Dog Caucus sought headlines by trying to strangle the public option by putting enough conditions on it to render it useless.

Conservative House Democrats set strict conditions Thursday for any government-run insurance plan Congress creates as part of a health care overhaul, ruling out support for a plan that resembles Medicare — the option favored by many liberals.

The lines drawn by the Blue Dog Coalition, if adhered to by lawmakers crafting the health overhaul, would result in a government-run plan that works much like private insurance plans [...]

Among their requirements: The public plan must negotiate payment rates with providers; participation in the plan must be voluntary for both providers and patients; premiums and copayments under the plan must pay for its operations; and the plan must follow the same actuarial standards and regulations required of private insurers.

Some conservative health policy experts have questioned whether it makes sense for the government to create a public plan that essentially replicates plans offered by private insurers. A public plan would draw most of its cost-cutting power from its ability to dictate prices, like Medicare, these experts argue; without that ability, it might save the government and consumers little or no money.

I think this is the second fallback option for the forces seeking to destroy the public option. First they'll attach an unrealizable trigger to it, keeping it from implementation unless certain impossible conditions are met. The Blue Dogs support that too, it's at the bottom of their statement of principles. Failing that, they'll boil down the public option until it basically becomes a non-profit health insurer with all the same restrictions as private insurers. The lack of profit motive, less overhead and administrative costs would probably save consumers a little money, but the real money comes from the monopsony bargaining power of using government rates. As Matt Yglesias points out, this doesn't come close to being a fiscally conservative argument - a world where the public plan can use Medicare bargaining rates forces private insurers to compete on price and quality, lowering costs to the system, and therefore costs to the government. And the supposed fiscally conservative Blue Dogs are against that.

If all 51 Blue Dogs actually went to the mats over their twin concepts of strangling the public option, there would be concern. But as is common, their press release simply does not reflect the views of their members. Mike Michaud of Maine strongly supports a public insurance option and criticized the Blue Dog statement yesterday. Patrick Murphy of Pennsylvania said this:

Congressman Murphy stands with President Obama in supporting the inclusion of a public option in health care reform legislation. While the Congressman is a member of the Blue Dog Coalition, he does not always agree with them on every issue. In this case, he does not believe that we should wait several years to see if our currently broken system gets worse before introducing a public option. Including a public plan as one of many choices in a health insurance exchange is a good way to introduce transparency and competition into the insurance market, curb sky-rocketing costs, and hold private insurance companies accountable so that we can finally accomplish comprehensive, genuine reform this year.

The Blue Dogs have a frayed coalition and very few options in the House of blocking strong reform. The action on this bill remains in the Senate, where 37 Senators are on the record in support of a public option, out of the 50 needed to pass it through budget reconciliation. So the Blue Dogs tossed some bait hoping to get media coverage, but in reality, they've got nothing.

If you have a Blue Dog for a representative, you should ask them outright, whether they support slow-walking a public health insurance option or attaching so many conditions to it that it doesn't do much of anything, or whether they support the President and the majority of the American people who want a choice of a not-for-profit alternative. You might remind them that 62% of all US bankruptcies are due to medical bills, that 47 million Americans have no health insurance, that the CEOs of major insurers make millions and millions of dollars while denying care and coverage, and I'm sure you can find a few other data points from your own personal experiences.