Health Care For America Now

Ezra Klein at the Washington Post takes issue with Health Care for America Now's stance on the excise tax.

I appreciate Ezra saying he has a lot of respect for HCAN. We continue to differ on the policy issues around taxing higher cost health benefits, whether doing it head-on as was proposed in the past, or through the back-door, as is the case with the 40% excise tax on high cost plans in the Senate Finance bill.

First, Ezra claims that the excise tax is isn't really a tax on the middle class:

The ad says the excise tax is "a 40% tax on health-care benefits of middle-class workers." It isn't. It's not even a little like that. It's a 40 percent tax on employer-provided health-care benefits above $21,000 for a family, and $8,000 for an individual. If your family's health-care premiums cost $23,000, then there's a 40 percent tax on $2,000 of your premiums. It's inconceivable that anyone's full health-care policy would be taxed at 40 percent.

Moreover, your family's health-care premiums probably don't cost $23,000. The average employer-provided health-care plan cost $13,375 in 2009. There are some middle-class workers with uncommonly generous health-care plans, but they're not the norm. This isn't as progressive as a tax on millionaires, but it is, in general, progressive. Goldman Sachs traders, for instance, have health-care plans valued around $40,000 a year. Wal-Mart employees don't.

But income and the value of people's health care plans do not correlate. The Communications Workers of America, using data from the Joint Committee on Taxation (JCT) and an analysis by Citizens for Tax Justice (CTJ), concluded that 40% of health care plans will be hit by this excise tax by 2019.

Second, as Ezra notes, the excise tax "isn't as progressive as a tax on millionaires. " Yup. Health Care for America Now is for progressive financing, which is why our new ads push for having people who earn more than $250,000 pay their fair share. That's what the House bill does and it's what the President's initial proposal to fund health care through lowering tax deductions for people who earn more than $250,000 does too.

Ezra goes on to support employers buying less generous health care plans for their employees:

The argument against the excise tax is that it cuts the deficit by encouraging employers to shop for cheaper plans. The Joint Committee on Taxes suggests that the tax won't raise money because people will pay it. It will raise money because it will encourage employers to purchase cheaper plans for their employees and divert money they've saved into wages, which are taxable income. That means that a number of very generous plans will become more like middle-range plans. They'll have deductibles if they don't already, tighter networks, tiered drug formularies and so forth. Any plan that's lavish enough to even near the tax is going to remain a very generous plan, but it will become less so on the margin.

Some people, myself included, think that's a good thing.

I don't.

The problem here is confusing cutting costs with shifting costs. Cutting costs means finding ways to make health care more efficient and to provide better care for the same or less money. But shifting costs is different. By incentivizing employers to offer less generous health care benefits, which means higher deductibles and the like, "costs" may go down, but in reality the policy simply transfers these costs to the worker. Moreover, higher out-of-pocket costs can discourage people from getting the care they need.

In his The Take blog in the Washington Post (8/12), Dan Balz writes that the vocal opposition to Obama on health care isn't really about health care as much as it is about the debate over the role of government.  He's right. But Balz's proposed solution - jettisoning the public option - would do nothing to diminish the right-wing anti-government opposition. Such a move would simply take the legs out from under any progressive support for reform.

Balz is correct that extreme reaction to the health care proposal is really a rejection of the notion that government can help solve key problems in America. The election last fall was a strong repudiation of those who would limit the government's role in solving huge challenges facing the nation. President Obama's New Foundation program faces the same virulent reaction that FDR engendered with the New Deal.

No matter what the President proposes on health care, the right will loudly label it a "government take-over." Just as soon as the economic stimulus bill was introduced, the right-wing message machine began demonizing government-funded research on which medical treatments work the best.  Every component of Democratic health reform plans is characterized as a government take-over: establish standard benefit packages for insurance plans, require individuals and businesses to contribute to coverage, set up an insurance marketplace, etc.

The public option became an early lightning rod because the health insurance industry started gunning for it the week after Election Day. Republicans quickly jumped in. For the industry, having to compete with an insurance plan that has a public mission and the clout to deliver good, affordable health care is a threat. They'd like reform to deliver a government mandate for everyone to buy insurance, giving them tens of millions of new, profitable customers without making them compete with a public health insurer.

But if the public option weren't part of the Obama/Democratic reform plan, the right would still be screaming about a "government take-over" as loudly as it is now. If you look at the Frank Luntz Republican message playbook, it doesn't discuss the public option or any other policies; it's a ready-made, anti-government message for any and every Democratic policy proposal.  And the right-wing anger we're seeing now isn't directed at giving people a choice of a public health insurance plan. Instead, opponents have managed to turn a doctor's discussing a living will with a patient into euthanasia.

If scuttling the public option won't quiet the right, it will definitely quiet the left. And that would be disastrous to the prospects of Democrats passing legislation this fall. Giving people an alternative to the private health insurance industry is the one issue that highly motivates progressives. Over and over again at Health Care for America Now, it is what our tens of thousands of activists - from grassroots community people to high-dollar Democratic donors - want to talk about.  For them it has become the measure of whether health reform is about real change or just a cosmetic lift to a broken system. Responding to those same voices, the four Democratic committees in Congress have passed legislation that includes a public option, and the President has consistently reaffirmed his support.

Maybe that's another reason that Republicans in Congress are so focused on killing the public option.  The Republican strategy for health reform is the same as the insurance company strategy for paying big medical claims: delay and deny. If Republicans in the Senate succeed in killing the public option, they'll cause mass desertion from the progressive army that's powering the President's agenda for reform.

History buffs will recognize The Guns of August as Barbara Tuchman's classic history of World War I. The reference works now because August 2009 just opened with trench warfare on health care reform. Unfortunately, the right-wing mob is seeing some early superficial success. We need to enter the battlefield immediately to defend the President's top priority, providing a guarantee of good, affordable health care to all this year.  This is a call to arms for the army of activists who powered President Obama to the White House.

We are already seeing the violent excesses of the right. They hung freshman Maryland Congressman Frank Kratovil in effigy, painted Texas Rep. Lloyd Doggett as a devil with horns, and screamed insults at HHS Secretary Kathleen Sebelius. This is an angry minority, bitter about an America that they don't recognize, led by a man that doesn't look like them.

These are the same crazies that applauded calls to violence last fall at Sarah Palin rallies and made a hero of Joe the Plumber. But remember, as the public began to understand what the far right-wingers really stood for, it didn't take long for a great majority of the electorate to write them off.

But since health care won't be decided at the popular ballot box, we can't just wait for the public to recognize the reality behind this nutty minority. There are two prizes in the battle at hand - the national press narrative and Congress' support. We have to win the press war by making it clear that shouts of "socialized medicine" and "government health care" are from a mob on the fringe of American politics. And we need to be sure that wavering Democrats in Congress see that there is strong popular support for health care reform.

Health Care for America Now is joining with progressive groups throughout the country to out-gun the tea-baggers in August. Members of Congress are spending their time at home trying to gauge public support for reform before returning to Washington after Labor Day. It will be a contest all month long, and we have to take it on with all the urgency that the historical task at hand demands.

We've launched a new page on our website to help you take action in August: www.healthcareforamericanow.org/fight. Here you'll find out how you can join the fight locally. We'll list town hall meetings and events by Congressman from both political parties so that we can show strong support for reform and keep control of meetings. We'll also tell you how you can directly challenge those members of Congress who are siding with the far right, often using the same extreme rhetoric of the tea-baggers. And we'll be organizing our own actions to show how Congressional opponents of reform are carrying water for the health insurance industry. The page includes pointers for how to organize your own action and how to prepare and respond to the right-wing mob.

As President Obama said on the night he was elected, "I know you didn't do this just to win an election and I know you didn't do it for me. You did it because you understand the enormity of the task that lies ahead. For even as we celebrate tonight, we know the challenges that tomorrow will bring are the greatest of our lifetime."

Of all the challenges in American history, there is none greater than turning health care from a privilege to a right. We need everyone in America who believes that health care is a right to rise to the challenge that the President laid out before us on Election Day. Right now, this month, is the time to declare that this is our country and that an extreme right wing minority will not wreck our nation's path to health care justice.

Today in his address to the nation from a Children’s Hospital President Obama stated, "We can't afford the politics of delay and defeat when it comes to health care. There are too many lives and livelihoods at stake." He couldn’t be more right. Now is not the time to hold up health care over every single thing that needs to be fixed. Now is the time for bold action to make good, affordable health care a right. The question is, can Congress rise above the demands of every lobbying group and make it happen?

Two House committees have now approved legislation that will make good health care affordable to American families and small businesses, stop insurance company abuses and offer a choice of private insurance or a public health insurance plan. Despite united Republican opposition the bills passed the committees with the support of 90% of Democrats. With key votes ahead in the next 10 days, It’s time for all members of Congress to get on the right side of history.

There are two types of arguments in the debate. First, there are obstructionists, mostly from “the party of NO,” who just want to block health care reform to politically damage the President. In a recent call to Conservative activists in the Republican Party, Sen. DeMint said, “If we're able to stop Obama on this, it will be his Waterloo. It will break him." It is clear that they have no concern for the millions of Americans facing rising premiums and who are one serious illness away from bankruptcy.

Secondly, there are some in Congress who are missing the big picture. Yes, there are parts of this legislation that we all want to improve on. However, it is simply ridiculous to vote against an entire structural change that will provide quality, affordable health care to thousands of your constituents because it doesn’t address ever problem in health care. Work with your colleagues to make it better – don’t block it.

We can’t make any excuses that will embolden the opponents of reform. There are real consequences for people each day that we put this off. Here is what happens every three weeks that we delay health care reform in America:

• 143,250 people will lose their health insurance coverage [pdf]
• 53,507 people will file for bankruptcy because they can't pay their medical bills
• 1,265 people will die [pdf] because they lack coverage

Washington insiders want to talk about the horse race, and the political bickering, but that is not what the American people care about. People care about premiums rising four times faster than wages, not bipartisan compromises that will water-down reform.

Just this week in Tennessee, hundreds of citizens with no access to health care lined up for a Remote Area Medical event. Remote Area Medical was created to serve people in third world countries, but now spends most of their time in the U.S. as the only alternative for thousands of people all over the country to see a doctor – including thousands of children. Stan Brock, Remote Area Medical’s founder, said, “We have had to cut back on our operations in places like Haiti, Guatemala, and India because of the tremendous demand here in the United States.”

Enough is enough. Big changes like this don’t come easy. It’s time for our leaders to stand up for us and rise above the petty political back and forth. No excuses — Health care can’t wait!

The right-wing attack on health care is coming into full view. Not surprisingly, they've settled on a tried and too-often true strategy: scare the @@#% out people. Health care reform will be defined as a "government-takeover."  The result of government-run health care will be long lines, waiting for treatment, not getting the treatment you need, not being able to choose your doctor or hospital. Health care reform is government rationing and Washington bureaucrats running the health care system.

While It started this winter with Rush Limbaugh's reaction to the health proposals in the Presidents Economic Recovery bill, the message was given a huge boost a few days ago when Republican message meister Frank Luntz briefed Republicans in the House on "The Language of Health Care 2009: The 10 Rules for Stopping the ‘Washington Takeover' of Healthcare."

Luntz's message is already being used by Republicans in the Senate and House. South Carolina Senator Jim DeMint published an article this week in which he said: "That's how a government take-over of your health care will try to get costs under control: cheap, outdated treatments, long waiting lists, and low-tech hospitals. It won't take long before families realize the true costs of such a plan aren't counted in dollars and sense."

Now Rick Scott, the disgraced former head of Columbia/HCA, is running ads on TV talking about people in England who have died because of government health care.

Will this message work? Not if we get our message out in response. The big problem with the Republican strategy to, as Luntz said, "kill what they're [Democrats] trying to do," is revealed in Luntz's memo:  "…because the American people blame the insurance companies more than almost anybody else for why health care is such a mess in this country right now."

Everyday people in America get their health care denied by insurance company bureaucrats, directed by insurance company CEOs who make millions of dollars a year, flying around in their corporate jets, paid for by hiking your premiums, denying you the care you need and coming in-between you and your doctor.
The American people know that. We have to remind them.

Take a look at this exchange between me and John Roberts, the host of CNN's American Morning, last week (you can also watch it here):

In 1993, William Kristol wrote a now-famous memo advising Republicans that their ticket to power was blocking health care reform no matter what it looked like. Newt Gingrich followed that advice, and the rest - as they say - is history.

Taking a page from that history, Republican message maestro Frank Luntz told the Republican House conference this week - shrunk back to its 1993 size - that "You're not going to get what you want, but you can kill what they're trying to do."

Luntz's prescription for Republicans is to replay the 1993-1994 Republican playbook of attacking "government" health care: "government rationing care…Washington bureaucrats…government takeover…" You get the picture.

Only this time it won't work. And the reason that Luntz's recycled prescription won't cure Republican's political ailments is revealed in another one of Luntz's remarks to the Republican House members: "…because the American people blame the insurance companies more than almost anybody else for why health care is such a mess in this country right now."

The attack on government health care falls flat when confronted by the everyday experience of Americans with private health insurance. As New York Senator Charles Schumer said on Tuesday at the Senate Finance Committee roundtable, "Well, let me tell you, the American people have some problems with the government. But they have a lot more problems with private insurers."

HHS Secretary Kathleen Sebelius made the same point at a Ways and Means Committee hearing the following day: "I know there's a lot of talk about not having bureaucrats make health decisions, but I think it's equally important not to have private insurance companies make health decisions, overruling protocols recommended by health providers."

The Senator's and Secretary's observations should give some encouragement to those who worry that Democrats will be cowed by the retreaded, anti-government rhetoric from the right. This is a fight that we have prepared for and welcome. We at Health Care for America Now anticipated the fear-mongering attacks that Luntz is promoting and found that if we respond aggressively, we win the argument hands down.

It really is a different world inside the Beltway. Up till four months ago I'd spent my entire organizing career - 33 years - outside of Washington, D.C. I'd always known that the Beltway was a different place, with its own culture, dominated by lobbyists and disconnected from America. On a couple of occasions I'd sat in a strategy meeting with representatives from the Hill and found it an out-of-body experience. I was in a conversation that was talking about America but totally disconnected from America. At least the America I knew - the concerns of people in their daily lives.

The heart and soul of Health Care for America's campaign is based outside the Beltway. We believe that we can never compete with the lobbyists and campaign cash of the other side. We think we'll win by turning the Beltway inside-out, by making Congress listen and respond to the voices of people at home. That's why we based our campaign on the labor, community, online and constituency groups that have the greatest ability to move people at the grassroots and netroots. Why we have 120 organizers in more than 40 states, based in locally-rooted organizations with the demonstrated history and capacity to move people into action on local and statewide politics. Why we are building a coalition that of April 30th hit the 1,000 group member milestone; 848 of our members are state and local organizations and businesses in 46 states.

But make no mistake about it, we need to play inside the Beltway too and play big. We have to understand the conversation in D.C. and respond to it both inside and outside the Beltway. This takes a fully coordinated strategy - and a lot of translation.

Here's an example of how reality looks different based on where you sit. A couple weeks ago NY Senator Charles Schumer was reported by national AP to be promoting a compromise on the public health insurance plan that would allow private insurers to play a big role. Our folks in NY heard that and reacted strongly. They assumed - as I would have too just a few weeks ago - that Schumer was being pressured by the private insurance industry to cave. But the reality is more complicated, a lot more complicated.

Bear with me a little on the details here.

Make no mistake about it, yesterday's election was a mandate to enact legislation that will provide a government guarantee of quality, affordable health care for all. But to realize a promise of such historic magnitude, it will take our nation believing monumental change is possible. President-elect Obama announced last night his win was just the beginning saying, "This victory alone is not the change we seek. It is only the chance for us to make that change. And that cannot happen if we go back to the way things were."

When the Obama campaign decided to spend 86% of its October advertising on health care, it both recognized that health care was the most important issue to break through with swing voters on the economy and raised the expectation that health care would be at the top of the Obama agenda. Obama himself made it clear he sees health care as an essential plank for restoring the economy when he gave his major health care address in Newport News, Virginia on October 4, 2008. He rhetorically asked whether the nation could afford health care given the economic crisis and answered, "In other words, the question isn't how we can afford to focus on health care – but how we can afford not to. Because in order to fix our economic crisis, and rebuild our middle class, we need to fix our health care system too. So it's clear that the time has come – right now – to solve this problem: to cut health care costs for families and businesses, and provide affordable, accessible health insurance for every American."

1. McCain will tax your health care benefits at work

McCain's health care plan will make people pay income taxes on the value of their health care benefits at work. So if your employer pays $10,000 a year for your health insurance, you will start having to pay taxes on that $10,000, just like you do on your wages or salary.

2. And give you a tax credit for less than five months of health care (after that you're on your own).

McCain will give a family a tax credit of $5,000 0 – paid to your insurance company -  but the average cost of a family health care plan in 2007 was $12,680. So McCain's plan will give you enough to pay from January to May. You'll need to come up with the money for June through December!

3. You may be one of 20 million people who will lose your health benefits

A study published in the respected journal Health Affairs found that 20 million will lose their employer paid for health insurance under the McCain plan, because many employers will decide they no longer have a responsibility to pay for health coverage for their workers.

4. And be forced to buy health insurance on your own

When you lose your health coverage at work, you'll need to look for coverage in the individual market. But you'll no longer have your employer doing the shopping for coverage and paying for coverage.

5. You won't be covered for pre-existing conditions - and may not be able to get coverage at all

When you are on your own, health insurance companies do not cover pre-existing conditions and they often refuse to sell any coverage to people who have had asthma, cancer or other common diseases. The federal law that protects people who get health insurance at work doesn't apply when you buy health insurance in the individual market.

6. But you will pay higher premiums as you get older or sicker or if you're a woman

In the individual market, health insurance companies charge higher premiums to people as they get older and charge more for people who have been treated for illnesses. Younger women get charged more than men of the same age, simply because they can become pregnant.

7. You may have deductibles as high as $11,200 a year

You may only be able to afford insurance plans with high deductibles, which under current federal law can be as much as $11,200 for a family plan.

8. With barebones benefits and no consumer protections

John McCain's plan would take away the protections that your state now offers people who buy health insurance on their own. Your state law requires health insurance to provide standard benefits and consumer protections. McCain's plan allows health insurance companies to get out of following your state's health insurance laws.

9. McCain protects health insurance profits - by passing the cost to taxpayers and the sick.

McCain's solution for people whom health insurance companies won't cover - because they've been treated for an illness - is to put them in a high-risk pool, paid for by state taxpayers and by charging high premiums.

10. Of course, John McCain won't have to worry about any of this for his health care.

You may not be covered, but John McCain will. As a Senator, he'll still get good coverage paid for by the federal government. As a veteran, he can also get cared for through the Veteran's Administration. And as a senior, he can get Medicare. That's three ways that the government provides health care for John McCain.

Health Care for America Now! (“HCAN”), a section 501(c)(4) issue advocacy organization, is a broad coalition of nonprofit and political organizations that are working to promote quality, affordable health care for all Americans.  HCAN and each of its members conducts and funds only activities appropriate to its tax and election law status. This statement was not funded or endorsed by HCAN’s 501(c)(3) members.

I guess it was predictable in this day of "balanced" reporting, where each side gets equal treatment regardless of the lunacy of its arguments, that Health Affairs would feature articles from competing economists about the faults in the health care proposals of Senator McCain and Senator Obama. That approach feeds into the mainstream press' balanced cynicism, as in the lead of the Associated Press article, "John McCain's health care plan won't lower the ranks of the uninsured. Barack Obama's fails to curb the soaring cost of health care…" I would have hoped instead that Health Affairs, which is after all a publication of Project Hope, would have also invited articles about why each plan would work, instead of featuring articles about each plan's shortcomings.

Fortunately, the problems with the McCain plan are so huge that they've been getting more attention than the charges made against the Obama plan by three conservative economists, one of whom is an advisor to the McCain campaign (The Obama Plan: More Regulation, Unsustainable Spending, Joseph Antos, Gail Wilensky, Hanns Kuttner, Health Affairs, September 16, 2008). In a nutshell, the McCain plan would mean even higher cost and worse coverage - as if that were imaginable, given the state of the health insurance system now. What's been getting less attention is that the conservative criticism of the Obama plan is based on the same fundamental misunderstanding of health economics that is at the heart of our health care problem and would be accelerated by the McCain plan.