The Wonk Room

Fred Hiatt Makes Up Statistics To Claim Health Care Would Bankrupt America

In this morning’s Washington Post, editorial page editor Fred Hiatt argues that the House health care bill “could take America a step closer to bankruptcy” and harm “the poor and vulnerable.”

Hiatt acknowledges that “[i]n a country as wealthy as America, no one should have to go without medical care” and remains hopeful that the House health care bill “would take America a giant step closer to” insuring all Americans. But, he also sees a “dilemma.” “The bill also could take America a step closer to bankruptcy. And for progressives in particular — for those who believe that government has a mission to help the poor and protect the vulnerable — that prospect should be alarming.”

But since the CBO’s analysis of the House health care bill doesn’t support Hiatt’s contention that it would bring America “a step closer to bankruptcy,” Hiatt relies on the CBO’s analysis of the President’s budget and implies that it’s Obama’s health “plan”:

The root difficulty is Obama’s insistence that the nation can afford a large new social program without raising taxes on anyone who earns less than $250,000 per year. Under his plan, according to a CBO analysis, the government will be spending 24.5 percent of gross domestic product — the total value of the national economy — by 2019 while raising only 19 percent in revenue: a huge, unsustainable gap.

The 24.5% of GDP isn’t a measure of government spending as a result of the House/Obama health care bill. It’s a measure of the outlays of all of the President’s policies in his 2010 budget in 2019 and does not capture the effects of health care reform or the House bill.

According to the CBO, the House health care bill — the one that Hiatt claimed “could take America a step closer to bankruptcy” — would actually “reduce the federal deficit by $9 billion in 2019″ and, in the decade following 2019, the “the legislation would slightly reduce federal budget deficits in that decade relative to those projected under current law—with a total effect during that decade that is in a broad range between zero and one-quarter percent of GDP.”

In 220-215 Vote, House Passes Bipartisan Health Reform Legislation

Moments ago, the House of Representatives passed the Affordable Health Care for America Act by a vote of 220-215, with one Republican — Rep. Joseph Cao (R-LA) — voting for the measure. Once the bill reached the needed threshold of 218 votes, the chamber erupted in applause. Members excitedly counted down the last few seconds of the vote. Watch it:

At the “House Call” tea party protest on Capitol Hill this week, House Minority Whip Eric Cantor (R-VA) pledged to the right-wing activists: “Be assured not one Republican will vote for this bill.” Cao’s vote must have surprised Cantor.

Cao has previously been touted by House Minority Leader John Boehner (R-OH) once as “the future” of the GOP. The White House had reportedly “been in constant contact” with him prior to the vote. “Rahm is going all in to get him,” one aide told Roll Call, referring to White House Chief of Staff Rahm Emanuel.

The House also approved, by a vote of 240-194, an amendment introduced by Rep. Bart Stupak (D-MI), which imposed tighter restrictions on abortion coverage. A GOP substitute failed in a vote of 178-258, with a single Republican, Rep. Tim Johnson (R-IL) voting against the legislation.

How Did Stupak’s Gang-Of-40 Win On Abortion

Sources tell the Wonk Room that Rep. Bart Stupak (D-MI) and his 40 pro-life Democratic colleagues successfully won debate for a restrictive abortion amendment on the House floor by moving the goal posts on an earlier agreement.

Stupak had agreed to keep the amendment from the floor if it received a hearing in the rules committee. But, once the Conference of Catholic Bishops refused to endorse the bill unless the amendment was accepted, Stupak and his colleagues demanded a vote on the floor and threatened to derail the bill. Unable to muster enough opposition to Stupak’s ‘gang of 40,’ the Democratic majority agreed to move the the amendment to the floor and vote for the full bill if the amendment passed.The Conference of Catholic Bishops has since endorsed the bill and House Republican Leader John Boehner (R-OH) and Reps. Eric Cantor (R-VA) and Mike Pence (R-IN) will all vote “yes” on the Stupak amendment.

Today, during the Democratic press conference that followed the caucus’ meeting with the President, House Speaker Nancy Pelosi (D-CA) said she recommended that the Stupak amendment be voted on the floor. The amendment is expected to pass.

House Democrats Will Consider Stupak’s Abortion Amendment On The Floor »

During yesterday’s all-night marathon hearing before the House Rules Committee to consider which amendments would be introduced during floor debate of the House health care bill, the Committee agreed to allow the full House to vote on Rep. Bart Stupak’s (D-MI) amendment to effectively ban plans in the exchange from covering abortion services. The floor will debate the amendment on the House floor for 20 minutes.

Democrats have been trying to broker a compromise on abortion coverage by offering up Rep. Brad Ellsworth (D-IN) less restrictive amendment to segregate public funds from abortion funding and hire “a private contractor to pay abortion providers, thus avoiding direct federal payments.” But that agreement “fell apart,” Stupak reported.

“We came to the point where we actually an agreement tonight, but unfortunately it fell apart. So that’s why we had to scramble to be here. I regret that the agreement fell apart, I think everyone meant well and I’m not trying to place blame,” he said at midnight:

First, our amendment does not prevent any private insurer from selling a policy which covers abortion. This ensures that those who want abortion coverage have access to it without forcing anyone or anyone else to pay for another one’s abortion with their tax dollars of with their private funds. Second, our amendment does not prevent any individual from purchasing a plan that covers abortion as long as their coverage is not subsidized with affordability credits….Our amendment does not prevent an insurer participating in the Exchange from selling health plans in the Exchange…Our amendment simply applies the current law, Hyde Amendment to the public health insurance option and the private policies purchased using affordability credits.

Watch it:

But Stupak is misrepresenting the House legislation and the existing federal restrictions on abortion funding. Currently, the House bill contains what’s called the Capps Amendment — a compromise that maintains Hyde Amendment restrictions. The arrangement protects Hyde by specifying that subsidy dollars could only be used to abort pregnancies that threaten the life of mother or result from rape or incest (Hyde allows for this). Other kinds of abortions would have to be funded with private premiums. The provision also requires that at least one plan in each market area offer abortion services and one plan not. No abortion services—even those allowed by the Hyde Amendment — can be mandated as part of a minimum benefits package.

Stupak and his allies want to go beyond Hyde. Under their amendment, women who purchase comprehensive private insurance packages — that include abortion services — would have to pay for the entire cost of the package (even if they qualify for subsidies).

They’re arguing that the current firewall between public and private money is inadequate. If a woman uses federal subsidies to pay for a basic benefit, she would have more private money available to fund her abortion, they claim. Or, alternatively, “premiums paid to that plan in the form of taxpayer-funded subsidies help support that abortion coverage even if individual abortion procedures are paid for out of a separate pool of privately-paid premium dollars.” It’s the equivalent of arguing that women who receive abortions should not use public buses or highways to travel to the abortion clinic.

The amendment won the endorsement of the Conference of Catholic Bishops but sparked criticism from several pro-choice groups. “This amendment would violate the spirit of health care reform, which is meant to guarantee quality, affordable health care coverage for all, by creating a two-tiered system that would punish women, particularly those with low and modest incomes,” said Cecile Richards, the president of Planned Parenthood Federation of America in a late-night release. “Women won’t stand for legislation that takes away their current benefits and leaves them worse off after health care reform than they are today.

Transcript: More »« Less

Rep. Virginia Foxx Suggests It’s Better To Be Uninsured Than On Medicaid

During this afternoon’s Rules Committee hearing to determine which amendments would be introduced during floor debate of the House health care bill, Rep. Virginia Foxx (R-NC) suggested that it’s better to be uninsured than enrolled in the government’s Medicaid program. “I want to ask you if you know that Medicaid patients visit the emergency room at twice the rate of uninsured patients in this country,” she said. “More government paid insurance is going to increase the number of people going to the emergency rooms.”

Rep. Jim McGovern (D-MA) responded, “I thank the gentlelady for making the case for keeping more people in this country uninsured. And I guess if that’s the Republican position, then fine”:

MCGOVERN: If you don’t have insurance then you have no choice but to go to the emergency room. But what we’re also trying to do is to put in place kind of a system, as Mr. Rangel said, that encourage prevention, and preventative care, so that people can actually not get sick and not end up in emergency rooms. So if you want to make the case that more and more people in this country should be uninsured, fine. I just disagree with you.

Watch the exchange:

“I’m making the case that your bill doesn’t insure anywhere near what our bill does, and I think that is unacceptable and is wrong in this country,” McGovern said, hinting that under the Republican alternative, the number of uninsured Americans would increase to 52 million by 2019.

Rep. Frank Pallone (D-NJ) explained that “one of the things that this bill does is make major increase in the reimbursement rate so that it gets up to the Medicare level, and even beyond, and that means that doctors will now take these Medicaid patients, they’ll get primary care, they’ll get to see a doctor on a regular basis and they won’t go to the emergency room.”

What’s Holding Up The House Health Care Vote?

This morning, on a conference call with reporters, House Majority Leader Steny Hoyer (D-MD) warned that “action on a health care overhaul could slip past a planned Saturday evening vote into Sunday — or even Monday or Tuesday — if House Republicans employ delaying tactics.” House Speaker Nancy Pelosi (D-CA) assured reporters yesterday that “we will” have enough votes to pass the House, but press reports indicate Democrats have yet to reach agreement over coverage for undocumented immigrants and abortion.

Yesterday, 20 members of the Hispanic Caucus threatened to vote against a bill that prevented undocumented immigrants from purchasing coverage in the exchange with their own money and it’s unclear if ongoing negotiations have satisfied enough of the 40 pro-life Democrats unhappy with the bill’s restrictions on abortion funding. Reps. Bart Stupak (D-MI) and Brad Ellsworth (D-IN) have offered stronger abortion language that the caucus is currently considering.

Assuming that every Republican votes against the measure, Democrats have to peel away approximately 22 unsatisfied caucus members to pass the bill in the House. President Obama is expected to officially endorse the legislation later today and personally rally support for the measure during a visit to the Capitol on Saturday. Still, major policy disagreements could delay a House vote. Below is a table laying out the areas of disagreement:

Abortion:

Immigration:

Democrats would also have to defray likely Republican efforts to use the the motion to recommit “as an opportunity to insert a social issue poison pill, likely on abortion or immigration, that would peel off enough moderate Democrats to pass.” Republicans “could craft an abortion measure that gives pro-life Democrats little choice but to vote with the minority to change the bill. That change could make the final bill unpalatable enough for most Dems that its passage would be put in jeopardy,” Politico speculates.

GOP Health Plan Would Allow For ‘Sweatshop Insurance’

Under the Republican health care alternative filed in the House, young and healthy individuals can purchase policies from insurers that don’t abide by local benefit or rate standards. The Republican bill allows the health insurer to choose a “primary state” “whose covered laws shall govern the health insurance issuer” and market policies to other states without adhering “to all of the consumer protection laws or restrictions on rate changes of the state.”

Over at MYDD, Bruce Webb, calls the provision, “Sweatshop Insurance.” “This bill goes far beyond that in stripping states of power over insurance rates and conditions,” he notes. It “explicitly expands the definition of ‘State’ to include not just D.C. and Puerto Rico, which makes some sense in context, but adds BY NAME the Virgin Islands, Guam, American Samoa and Jack Abramoff’s favorite client-the Northern Marianas home of the ‘Made in the USA’ Chinese-owned close to slave labor sweatshops.” From pages 121-122 of the bill:

As Webb goes on to explain, “companies can simply designate the Northern Marianas as the ‘primary State’ for their plan, or since it is closer the Virgin Islands and then have those governments be the sole regulator. And given the record of corruption in the N. Marianas and the willingness of various Caribbean and Atlantic Island nations to let themselves be used as off-shore banking and tax shelter entities you can bet Aetna and WellPoint are slavering at the prospect of ‘basing’ their plans out of a PO Box on some tropical nation.”

The Wonk Room tried to identify if any of the islands regulated individual insurance policies. We contacted several lobbying firm representing the N. Marianas but only reached Donna Christensen, the non-voting Delegate from the United States Virgin Islands to the United States House of Representatives. Her office did not know if the Virgin Islands had any consumer protections for policies sold in the individual market.

Republican Leaders Couldn’t Find Affordable Coverage Under Their Own Health Plan

The Congressional Budget Office has concluded that under the $61 billion Republican amendment to the House health care bill, the number of uninsured Americans would increase to 52 million by 2019, but deficits would decrease by $68 billion over the 2010–2019 period. The bill could slightly reduce premiums for Americans who purchase coverage independently.

Millions of Americans would remain uninsured and continue to pay higher premiums. In fact it’s unlikely that any of the members of the Republican House Leadership would be able to find affordable insurance under their own proposal, should they chose to give up their government-sponsored plans.

The six men and one woman in the Republican House leadership have an average age of 52 and, as a group, are more susceptible to cardiovascular disease, different cancers, high blood pressure, and host of other chronic diseases. The Republican health alternative would allow insurers to discriminate against these conditions and price the Republican leaders out of the market:

1. Leadership would not find coverage in the individual market:

Republicans hope to increase access to coverage in the individual market by giving individuals the opportunity to purchase insurance licensed in different states. But it’s unlikely that any of the House Republicans would be able to find an affordable coverage option. Insurers that sell policies in the individual market-place usually deny coverage to older Americans with pre-existing conditions or those at risk of developing chronic disease. In fact, over the last three years, “nearly three-quarters of people who tried to buy coverage in this market never actually purchased a plan, either because they could not find one that fit their needs or that they could afford, or because they were turned down due to a preexisting condition.”

2. Leadership would not find adequate coverage in high-risk pools:

When the Republican leaders are denied coverage in the individual market, they could apply for insurance in expanded state-based high risk pools, which typically provide very expensive coverage for the so-called “uninsurables.” But their legislation does not adequately fund these pools and would compel states to limit services, deny coverage for pre-existing conditions, and impose high cost sharing.

3. Leadership would not find stable coverage in association health plans:

If Republican leaders can’t purchase affordable coverage from state-run high risk pool, they could join an association-sponsored plan. Unfortunately, under their own legislation, associations are not required to provide a standard package of benefits and have an incentive to craft skimpy policies that attract healthier applicants.

The Republican legislation lowers costs for younger and healthier Americans by segregating risk pools and offering individuals who rarely use their health insurance cheaper premiums — so long as they remain healthy. The legislation doesn’t offer new choices or lower costs for the majority of the population.

Association Health Plans Have History Of Insolvency And Fraud — So Why Are Republicans Expanding Them?

Republicans have embraced health association plans as a way to help self-employed people and small businesses maximize affordability of coverage by using their leverage as a large group to negotiate lower premiums.

The Republicans’ alternative health care plan amends the Employee Retirement Income Security Act of 1974 — the federal legislation that governs employer-sponsored self-insured health policies — to allow the federal government to certify and regulate the solvency and adequacy of association plans. Under their legislation, small businesses can come together, by industry or trade, and form health plan through which they can purchase coverage for their employees.

But while the plans goals are laudable, in reality, associations could avoid covering sicker businesses by excluding certain key conditions from coverage and designing policies that only attract healthier applicants. According to the Republican bill, the association would not be required to offer a minimum benefits package and could set “contribution rates based on claims experience of the plan,” crowding employers whose employees actually use their insurance, out of coverage.

The “whole bill is set up to build fly-by-night associations. I run it for a couple of years, I shut it down,” Georgetown professor Karen Pollitz explained in a conversation with the Wonk Room. “I cover these 100 people this year. Next year, I have a different 100 members.” Indeed, between 2001 and 2003, four long-standing self-insured association health care plans became insolvent, “leaving $48 million in medical claims unpaid and 66,000 people and small businesses without insurance.” Health experts argue that association health care plans are governed by “licensing requirements that are often less stringent than those imposed on traditional insurers” and are “at far greater risk of becoming insolvent when claims suddenly or unexpectedly exceed their ability to pay them.”

The Republican legislation establishes new solvency and reserve requirements but it outsources any enforcement of self-insured or national association plans to the federal Department of Labor, “which lacks the tools, resources, and culture to protect businesses against fraud.” One report concluded that the “history of scams involving associations demonstrates that when the federal government has had sole oversight authority, fraud flourished with unscrupulous individuals leaving businesses and their workers without health coverage and with millions of dollars in unpaid medical bills.”

The legislation requires association health care plans to contribute to an ‘Association Health Plan Fund’ that would pay out outstanding claims in cases of insolvency, but leaves the federal government on the hook if the money in the fund runs out. “[I]f the Secretary determines that there is a reasonable expectation that” claims would “would not be satisfied by reason of termination of such coverage. The Secretary shall, to the extent provided in advance in appropriation Acts, pay such amounts so determined to the insurer designated by the Secretary,” the bill states on page 73.

Democrats’ House Health Care Bill Also Allows Insurers To Sell Policies Across State Lines

Republicans have long argued that allowing insurers to sell policies across state lines would provide Americans with greater choice of coverage. Under the Republican health care alternative filed yesterday in the House, young and healthy individuals can purchase policies from insurers that don’t abide by local benefit or rate standards. The Republican bill allows the health insurer to choose a “primary state” “whose covered laws shall govern the health insurance issuer” and market policies to other states without adhering “to all of the consumer protection laws or restrictions on rate changes of the state.” Insurance companies could choose a state with scarce regulations and sell policies that don’t provide adequate benefits and only attract the healthiest applicants.

Democratic leaders argue that the policy would allow health insurers to circumvent critical consumer regulations and further fragment risk pools. But a little-noticed provision on pages 202-206 of the House health care bill also allow insurers to sell policies across state lines. Section 309 says that states may form “Health Care Choice Compacts” to “facilitate the purchase of individual health insurance coverage across State lines.” But that’s where the similarities end.

While the Republican-backed proposal allows the insurance company to decide that it will be governed by the state with the scarcest regulations, the Manager’s Amendment to the House health care bill specifies that the states that form the compact can designate the “primary state,” not the insurer. The Democrats’ compacts would be subject to model guidelines developed by the Secretary of Health and Human Services (in consultation with the National Association of Insurance Commissioners) and would preserve the authority of all states to enforce local laws relating to market conduct, unfair trade practices, network adequacy, consumer protection standards, grievance and appeals, fair claims payment requirements, rate review, and fraud.

The insurer would be subject to the benefit mandate standards and rate regulations of a single primary state, but — unlike the Republican alternative — it would not be able to avoid local consumer protections and regulations. Still, some progressives fear that insurance companies will pressure compacts to chose the state with the lowest standards and that state governments would lack the resources to properly enforce local consumer protections.

The bill reported out of the Senate Finance Committee also permits states to form “health care choice compacts,” although the rules governing those compacts are still being developed by Senate staff working to produce a final Senate bill.

We Read the GOP Health Care Plan So You Don’t Have To

When the House released its 1,990 health care bill, Rep. Mike Pence (R-IN) criticized the legislation for including “the mandatory world ’shall’ in the bill 3,425 times.” Today, the Hill obtained the Republicans’ 230 page alternative, which the House leadership plans to offer as an amendment during floor debate.

The bill includes the word ’shall’ 378 times, but does very little to expand access or lower health care costs. In fact, while the House bill incorporated numerous Republican ideas and provisions, the Republican legislation is a message amendment that translates Republican rhetoric against the Democratic proposal into legislative language. “The purpose of this Act is to take meaningful steps to lower health care costs and increase access to health insurance coverage,” the bill states, “without (1) raising taxes; (2) cutting Medicare benefits for seniors; (3) adding to the national deficit; (4) intervening in the doctor-patient relationship; or (5) instituting a government takeover of health care.”

Below is a summary of the Republican plan. In short, the amendment shifts the costs and risks of insurance onto individuals and divides the market into low-cost plans for the healthy and high-cost insurance for the sick:

Access to coverage:

- Establishes high risk pools for sicker individuals: State are required to establish high risk pools for Americans who cannot purchase insurance in the individual market due to pre-existing conditions, but nothing in the legislation prohibits the state pools from excluding coverage for the very condition that makes an individual eligible in the first place (as they do today.) The bill abolishes waiting lists and specifies that the pools must provide at least two coverage options, one of which must be a high deductible plan with HSA. Premiums can be set at no higher than 150% of (state) average. The federal government will provide $15 billion in funding.

- Healthier Americans can purchase coverage on the individual market: For Americans moving from group to individual coverage, the legislation eliminates the HIPAA requirement of having creditable coverage in the past 18 months to receive individual insurance market insurance. Annual or life time spending caps are also eliminated. However, the bill will allow insures to deny coverage for pre-existing conditions and charge very different rates based on gender and age.

- Health insurers can sell policies across state lines: The insurer only has to follow the rules of the state it declares to be its “primary” state, not of secondary states in which it can also sell policies. As a result, all policies will have a ‘buyer beware’ label warning consumers that the plan is “not subject to all of the consumer protection laws or restrictions on rate changes of the state.”

- Businesses can form association health care plans: The legislation creates rules for governing association health plans, which will allow small businesses to come together, by industry or trade, and form health plan through which they can purchase coverage for their employees. Association health care plans have sole discretion in selecting specific items and services that can be included as benefits (i.e. no minimum guaranteed benefit package, or minimum costs etc). The plans are to be operated by Board of Trustees who appoint the actuary to determine financial status and viability.

- Young adults can stay on their parents’ coverage: Dependent adults can stay on their parents’ plan until they are at least 25, although the language would allow a plan to increase that age.

Lowering health care costs:

- Offers bonuses for states that lower premiums, number of uninsured: Establishes state innovation program grants to reward states for lowering the cost of their premiums. Includes bonus for reducing the number of uninsured.

- Establishes a plan finder website: States contract with private entities to create a health “plan finder” website which do not directly enroll individuals in insurance plans.

- Malpractice reform: Specifies that claims must be filed within three years, and caps non-economic damages at $250,000.

Miscellaneous:

- Enhances Health Savings Accounts: Enrollees can build their credit by contributing to their HSA and can use HSAs to pay for high deductible plan premiums. The bill extends the definition of a qualified medical expense.

- Employer wellness programs: Allows group and individual health plans to vary premiums and cost-sharing by up to 50% of value of benefits based on participation or lack of participation in a standards-based wellness program.

- Federal dollars can’t touch plans that offer abortion coverage: The bill does not allow federal funds to go to any insurance plan that offers abortion coverage. This means that a woman who wants to purchase a comprehensive health insurance plan would have to pay for the entire cost of the policy, even if she qualifies for subsidies and uses private premiums to pay for her abortion.

GOP Health Bill: Insurers Can Ignore ‘All Of the Consumer Protection Laws’ & ‘Restricitons On Rate Changes’

The new Republican health care plan expands “coverage” and “choice” by permitting health insurers to sell policies across state lines. Under the Republican proposal, the insurer can choose a ‘primary state’ “whose covered laws shall govern the health insurance issuer” and can change states “upon renewal of the policy.”

Page 129 requires a “health insurance issuer” to “provide the following notice” informing consumers in so-called ’secondary states’ that the policy is “not subject to all of the consumer protection laws or restrictions on rate changes of the state.”

Here is the notice, as it is described in the legislation:

The GOP is conceding the progressive argument. It is admitting that insurance companies would have little incentive to continue doing business under certain state rules which “require that companies issue coverage to all new customers and not set higher rates for people who are already sick.” Instead, companies could chose a state with scarce regulations and sell policies that don’t provide mental health parity, cancer screenings, or abide by regulations that limit the rates that can be charged to higher-cost consumers. This way, plans can attract the healthiest applicants and detract the sick.

After an insurer issues a policy to an individual, the GOP bill does prohibit the issuer from increasing the premiums assessed on the individual “based on a health status-related factor or change of a health status-related factor or the past or prospective claim experience of the insured individual.” However, the bill goes on to say that “Nothing in paragraph (1) shall be construed to prohibit a health insurance issuer from terminating or discontinuing coverage” or “from raising premium rates for all policy holders within a class based on claims experience.”

The Republican Leadership Health Plan: For The Healthy, While They’re Healthy »

The Republican leadership in the House has sent a health care bill to the Congressional Budget Office and the early details don’t look good:

- Insurers could circumvent state-based consumer protections by selling policies across state lines

- Health care costs could be reduced by less than 1/2 of one percentage point through malpractice reform

- Businesses with younger and healthy employees could band together and join association health care plans, while firms with older workforces wouldn’t have access to affordable coverage

- Individuals with chronic illnesses or pre-existing conditions could join very expensive and inefficient high risk pools

The Republican plan doesn’t “end insurance industry practices that discriminate against high-risk individuals or provide tax credits to help the uninsured purchase coverage.” It is designed for the healthy while they’re healthy.

Rather than driving down costs by expanding access, Republicans are hoping to expand access by driving down costs. “Our substitute aims at driving down costs,” House Minority Leader John Boehner (R-OH) told reporters Monday. “If you drive down costs, you can expand access.” But press reports suggest that this proposal doesn’t include any of the things we know can reduce costs over time — creating incentives for better coordination of care (accountable care organizations, medical homes, reducing unnecessary readmissions, etc), investments in prevention and comparative effectiveness research, other system modernizations.

The Republican legislation even undermines the existing consensus surrounding cost control. In May, a group of doctors, hospitals, drug makers and insurance companies came together to present President Obama with a letter promising to reduce the growth rate in annual health spending by 1.5 percentage points a year over the next 10 years — lowering spending overall health care spending by $2 trillion (this represents a 20 percent reduction in projected growth) — in the context of comprehensive health care reform. The hospitals promised to contribute “some $155 billion in Medicare and Medicaid savings over the 10 years” if more patients enter the hospital system as a result of health care reform. The insurance industry has said they would adopt cost containment strategies and accept anyone who applies for coverage if everyone entered the risk people. But the Republican plan doesn’t invest in comprehensive reform that opens up the system to more people and begins to control skyrocketing health care costs. It only marginally lowers the costs of insurance for the healthy — while they’re healthy:

- Allowing insurers to sell policies across state lines: Allowing insurers to sell policies across state lines would allow companies to avoid state consumer-protection laws and solvency requirements. Insurance companies “would have little incentive to continue doing business” under certain state rules which “require that companies issue coverage to all new customers and not set higher rates for people who are already sick.” Companies will charter in states with scarce regulations, and will no longer have to provide mental health parity, cancer screenings, or abide by regulations that “limit the rates that can be charged to higher-cost consumers and that limit who can be excluded for a health plan.

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McCain Adviser Holtz-Eakin Anxious About Moving Into Individual Market He Once Touted

Douglas Holtz-Eakin, a senior policy adviser to Sen. John McCain’s (R-AZ) presidential campaign, “remains unemployed — and his COBRA health coverage is running out,” the Washington Post reports. “Irony of ironies, it gets worse. Holtz-Eakin, who is about to start shopping for insurance on the individual market, is 51. And he has one of those pesky ‘preexisting conditions’ that insurance companies often cite in denying coverage”:

Holtz-Eakin said he’s been paying about $1,000 a month to extend the private health insurance he received on McCain’s campaign through the government’s COBRA program, but that will expire in a few months. This is the first time in his life he has not had employer-provided health coverage. “I worry about where I go next in the way many Americans do,” he said.

During the campaign, Holtiz-Eakin fervently defended McCain’s proposal to shift more Americans out of their employer-sponsored coverage and into the individual health insurance market, where approximately “73 percent of the adults who tried to buy insurance” “never bought a plan — because they could not afford it, could not find a plan that met their needs, or were turned down.”

“The key to real reform is to restore control over our health-care system to the patients themselves,” Holtz-Eakin insisted in August. “Instead of only getting it in the employer market, you would get it regardless of your source of insurance. And you get the same amount whether you’re rich or poor, $5,000 for every working family.”

As the campaign came to a close, however, Holtz-Eakin did acknowledge that “what they are getting from their employer is way better than what they could get with the credit” that McCain would have offered to encourage individuals to leave employer-sponsored plans. Holtz-Eakin conceded that McCain’s health care tax credit wouldn’t cover the entire cost of a comprehensive health plan and would only allow some Americans to buy insurance in the individual market.

If Holtz-Eakin is able to enroll in an individual health insurance policy, he is likely to spend more on health insurance coverage. While Holtz-Eakin’s monthly premium may be lower than what he’s paying now, he will probably spend far more on out of pocket health expenses.

Is Ronald Reagan Responsible For 1,990 Page Health Bill?

Republicans responded to the release of the House health bill by criticizing the sheer size of the legislation. House Minority Leader John Boehner (R-OH) began the Republican press conference by carrying out the 1,990 page bill and positioning the stack between the two microphones on the podium, in full view of the cameras.

“Now tell me how we’re going to fix the health care system with 1,990 pages of government bureaucracy. Now this is what the American people have been saying over the last few months, ‘enough is enough,’” he said.

Watch a compilation:

The original Medicare legislation was a mere 15 pages. Today, Congress regularly produces legislation that that is thousands of pages long. So what happened? It’s the result of the “polarization of American politics,” Congressional historian Ross Baker told the Wonk Room. In the last 50 years, “the total number of pages of legislation has gone up from slightly more than 2,000 pages in 1948 to more than 7,000 pages in 2006.”

The trend started during the 1980s, once the Regan administration began padding various committees with industry cronies and taking full advantage of the vagueness of the legislative language. Congress began writing longer bills to ensure that its intent would be properly enforced. Lesley Russell, currently a visiting Fellow at the Center of American Progress, but at the time a member of the professional staff of the House Energy and Commerce Committee, recalls how in 1987, her committee, along with Ways and Means, produced an unusually large bill governing nursing home regulations.

The Reagan administration had sought to “repeal the federal rules that governed nursing homes,” including “basic requirements that nursing homes maintain a safe and sanitary environment and respect the privacy and dignity of residents.” Congress enacted moratorium prohibiting the repeal and the Institute of Medicine was commissioned to study the conditions of nursing homes.

The report concluded that “individuals who are admitted receive very inadequate — sometimes shockingly deficient — care that is likely to hasten the deterioration of their physical, mental, and emotional health,” and Congress responded by writing “broad reform legislation, commonly referred to as the Nursing Home Reform Act.” For the first time, “the law placed a new focus on resident rights. It gave nursing home residents the right to choose a personal attending physician, to participate in planning their own care and treatment, and to be free from physical and mental abuse, corporal punishment, involuntary seclusion, and “any physical or chemical restraints imposed for purposes of discipline or convenience.”

“We knew, when we were writing this needed legislation, that it was intrinsically opposed by the administration and so we were very conscious of the need to insure that all the provisions were fully enacted as Congress intended,” Russell said. “This is my earliest recollection of Congress deliberately putting a lot of detail into legislative language,” Russell said.

Baker explained that large multi-paget bills allow Congress to hide controversial provisions, but dismissed the oft-cited argument that smaller bills would help the public better digest legislation and enhance the Democratic process. “It’s a quaint thought to think that the public would read smaller bills,” but there is really no correlation between the size of the bill and the willingness of Americans to read it, he insisted.

ANALYSIS: House Bill More Affordable Than Senate Legislation

A rough analysis of the affordability measures in the House and Senate conducted by Sonia Sekhar at the Center for American Progress Action Fund demonstrates that the House health bill provides more affordable coverage than the latest available version of the Senate legislation. While the chart below does not provide a perfect comparison between the amount an average family of four would spend on coverage within the exchange, it’s the first actual representation of the premium differences under the two bills.

Both measures provide subsidies on a sliding scale. Under the Senate bill, families between 133-300%FPL have to spend between 2 and 12% of their income on premiums, while families between 300-400%FPL, spend 12% on premiums. In the House legislation families between 150 – 400% of the federal poverty line would spend between 1.5 and 12% of income on premiums. Cost sharing amounts also vary.

The chart below estimates what families will pay for coverage (premiums and cost sharing) in the Exchange in year one, 2013:

The chart relies on the language in the Chairman’s Amendment to the Senate Finance Committee bill and the the text of the House bill (H.R. 3962). It comes with several caveats. First, we took the projected premiums and average out-of-pocket costs of a “silver” plan from the CBO’s analysis of the Baucus bill and deflated both amounts (using the CBO’s CPI projections for premiums and cost sharing) to 2013 dollars. Note that the actuarial value of the silver plan in the Senate Finance bill is 70%, while it’s 75% in the House bill, a difference we did not control for. The premiums and cost-sharing amounts will be slightly different for each bill, though not significantly so.

Read the rough affordability tables HERE.

The New Luntz Memo Is The Same As The Old Luntz Memo

GOP wordsmith Frank Luntz has penned another self-aggrandizing memo advising Republicans how to talk about health care reform. The new memo is the same as the old memo: admit the health care system is in crisis but remind Americans that the Democratic proposals would lead to a government-takeover of health care. “Suggestion: So far, most of the ads featuring concerned patients have been women. It’s time to include men in these ads, too. Treatment of prostate cancer can be delayed just as much as for breast cancer when the government takes over care – and American men deserve to know about that,” he writes.

Luntz points to poll numbers that demonstrate unease with the Democrats’ proposals:

Public anger is REAL (note to certain media outlets & bloggers who will eventually savage this memo: the town hall phenomenon is NOT manufactured). A majority of Americans (55%) agree that “When it comes to the healthcare reform debate in Washington, I’m mad as hell and not going to take it anymore.” Only 26% disagree (leaving 19%). Nearly one in five Americans strongly agree.

But it’s not that Americans are scared of exchanges, subsidies, insurance regulations or the public plan. They’re frightened by the alleged death panels, rationing and the government interference. They’re frightened by Luntz, not Obama.

Since the election, Republicans have tapped into a paranoid corner of the American electorate that sees the President as a communist intent on redistributing the wealth and outsourcing our national defense to Bill Ayers. Now, the party hopes to convince Americans that Obama will turn over the health care system to Dr. Kevorkian. That strategy lost the election and it will fail to stop health care reform.

CBO: Public Option To Attract Only 6 Million Enrollees & Doesn’t Offer Lower Premiums

The Congressional Budget Office analysis of the recently released House health bill has concluded that the bill costs $894 billion over 10 years and reduces the deficit by $104B over 10 years.

The public option would attract about 6 million enrollees by 2019 and charge premiums that are “somewhat higher than the average premiums for the private plans in the exchanges.” This is because the public option would “engage in less management of utilization” by its enrollees and “attract a less healthy pool of enrollees,” the office concludes. Moreover, since the House bill expands Medicaid up to 150% of the federal poverty line, it’s possible that the enrollees that would have enrolled in the public option went into Medicaid instead.

Below is a comparison of the relevant provisions in the House and Senate Finance Committee legislation:

Top 10 Reasons Why Republicans Should Support The House Health Bill

This morning, Rep. Mike Pence (R-IN) characterized the entire House health care bill as a “government run insurance 2.0.” “I mean, what we are seeing here is, you know, government-run insurance, mandates for businesses, an enormous tax increase, most of which or at least half of which will be paid for by small business owners.” But Pence and the Republicans should actually read the bill before dismissing it. For while the party may oppose the bill’s provisions to tax the top 0.3% of Americans to fund reform or the new fees imposed on the pharmaceutical industry to help close the donut hole in Medicare Part D, on the whole, the 1,990 page bill is a fairly moderate proposal that incorporates numerous conservative policies.

Here are just 10 reasons for why Republicans should support the House health bill:

1. REPUBLICANS ASKED FOR – DEFICIT NEUTRAL BILL: “Do the American people believe that this almost 2,000 page bill won’t add to the deficit?” [Rep. Eric Cantor, 10/29/2009]

HOUSE BILL – DEFICIT NEUTRAL BILL: According to the Congressional Budget Office, the House bill costs $894 billion over 10 years and actually reduces the deficit by $30 billion and continues to reduce the deficit over the second 10 years.

2. REPUBLICANS ASKED FOR – REDUCE COSTS OVER LONG TERM: “Nevertheless, House Republicans recognize the need to lower health care costs.” [Rep. Mike Pence (R-IN), 9/9/09]

HOUSE BILL – REDUCES COSTS OVER LONG TERM: Encourages payment reforms that can help lower costs. Requires the Department of Health and Human Services to establish specific benchmarks for expansion of the Accountable Care Organization, Payment Bundling, and Medical Home pilot programs. The bill will also slow the rate of growth of the Medicare program from 6.6% annually to 5.3%.

3. REPUBLICANS ASKED FOR – POLICIES ACROSS STATE LINES: “Interstate competition allowing people to buy insurance across state lines.” [Sen. John Thune (R-SD), 9/8/2009]

HOUSE BILL – POLICIES ACROSS STATE LINES: Allows for the creation of State Health Insurance Compacts – permits states to enter into agreements to allow for the sale of insurance across state lines.

4. REPUBLICANS ASKED FOR – MEDICAL MALPRACTICE REFORM: “Why not bring about reasonable restrictions and limits on medical malpractice claims to end the era of defensive medicine?” [Rep. Mike Pence (R-IA), 9/9/2009]

HOUSE BILL – ENCOURAGES MALPRACTICE REFORM: The bill establishes a voluntary state incentives grant program to encourage states to implement “certificate of merit” and “early offer” alternatives to traditional medical malpractice litigation.

5. REPUBLICANS ASKED FOR – HIGH RISK POOLS: “Senator McCain has a proposal sometimes called high-risk pools at the state level…These are efforts I think we can have bipartisan agreement on and deal with the question of pre-existing conditions.” [Rep. Eric Cantor (R-VA), 9/10/2009]

HOUSE BILL – HIGH RISK POOLS: To fill the gap before the Exchange becomes available in 2013, the bill creates an insurance program with financial assistance for those uninsured for several months or denied policy due to preexisting conditions.

6. REPUBLICANS ASKED FOR – ALLOW YOUNG PEOPLE TO STAY ON PARENTS’ POLICIES: “Recognizes that not all high school and college graduates are able to find a job that offers health care coverage after graduation. By allowing dependents to remain on their parents’ health policies up to the age of 25, the number of uninsured Americans could be reduced by up to 7 million.” [Republican Health Solutions Group]

HOUSE BILL – ALLOW YOUNG PEOPLE TO STAY ON PARENTS’ POLICIES: The bill requires health plans to allow young people to remain on their parents’ insurance policy until they turn 27.

7. REPUBLICANS ASKED FOR – NO PUBLIC MONEY FOR ABORTION: “The American people will not stand for government-run insurance that uses taxpayer money to fund abortions in this country.” [Rep. Mike Pence (R-IN), 10/16/2009]

HOUSE BILL – NO PUBLIC MONEY FOR ABORTION: The bill prohibits abortion services from being made part of essential benefits package and prohibits federal funds from being used to pay for abortion (except in cases of rape, incest, and to save life of the woman).

8. REPUBLICANS ASKED FOR – PROTECT SMALL BUSINESSES: “Helps employers offer health care coverage to their workers by reducing their administrative costs through a new small business tax credit.” [Republican Health Solutions Group]

HOUSE BILL – PROTECTS SMALL BUSINESSES: The bill exempts 86% of businesses from the requirement to provide coverage. Businesses with payrolls below $500,000 are exempt while firms with payrolls between $500,000 and $750,000 would pay a graduated penalty. Small businesses would also receive a tax credit that helps cover 50% of their health care expenses.

9. REPUBLICANS ASKED FOR – PROMOTE JOB WELLNESS PROGRAMS: “Promotes prevention and wellness by giving employers and insurers greater flexibility to financially reward employees who seek to achieve or maintain a healthy weight, quit smoking, and manage chronic illnesses like diabetes.” [Republican Health Solutions Group]

HOUSE BILL – PROMOTE JOB WELLNESS PROGRAMS: The bill establishes a grant program to help small employers create or strengthen workplace wellness programs.

10. REPUBLICANS ASKED FOR – DELIVERY SYSTEM REFORM: “Uses new and innovative treatment programs to better coordinate care between health
care providers, ensuring that those with chronic disease receive the care they need and do not continue to fall through the cracks.” [Republican Health Solutions Group]

HOUSE BILL – DELIVERY SYSTEM REFORM: The bill requires the Department of Health and Human Services to establish specific benchmarks for the expansion of the Accountable Care Organization, Payment Bundling, and Medical Home pilot programs.

House Health Bill Removes Insurer Anti-Trust Exemption, Taxes Health Industry

This morning, Speaker Nancy Pelosi will unveil the re-tooled Affordable Health Care for America Act (HR 3962). (Read the bill HERE.) Coming in at around $900 billion over 10 years, the legislation will extend coverage to 36 million Americans (6-7 million more than the Senate Finance version), include a national public option that reimburses physicians at negotiated rates and require individuals to acquire coverage and large employers to provide it. The bill is paid for with a surtax on the wealthy, changes to Medicare and Medicaid, and taxes on the health care industry.

Democrats successfully lowered the price tag of the original House legislation from $1.04 trillion by expanding the Medicaid program to Americans with incomes 150% of the federal poverty line and removing the SGR fix from the bill. “A permanent doc fix will be carved out of the reform bill and introduced separately today without pay-fors,” Live Pulse reports. (Read the SGR bill text HERE)

Most of the bill’s benefits won’t start until 2013 and House leaders are introducing “a temporary government program” that would “help people turned down by private insures because of medical problems.” The Senate Finance bill includes a similar provision, a high-risk pool that would be available to Americans between 2010 and 2013.

The re-tooled House bill will also “strip the health insurance industry of a long-standing exemption from antitrust laws covering market allocation, price fixing and bid rigging” and “give the Federal Trade Commission authority to look into the health insurance industry at its own initiative.”

While Democrats are still negotiating with moderate Democrats over abortion and immigration, Speaker Pelosi hopes to have the legislation on the floor next week, with a final vote before “Veterans Day,” November 11th. At the moment, “House Democrats do not have firm commitment from enough lawmakers to guarantee passage of their bill.” One whip count has shown 23 centrist Democrats intend to vote against any health bill. Assuming that all Republicans vote against it, the bill can lose at least 38 Democrats and still pass the chamber.