Health Care For America Now

Harry Reid stood up for America today.

He put a public health insurance option in the Senate bill, the merged version of the two health care bills passed out of committee that will now go to the Senate floor for debate, amendments, and passage.

This is a huge victory. Putting the public health insurance option in the Senate bill that goes to the floor makes it much harder to remove later. Opponents will need 60 votes to amend the Senate bill, meaning a high bar will have to be cleared to take out or change the public health insurance option.

Why did Senator Reid do it? As he said:

I believe that a public option can achieve the goal of bringing meaningful reform to our broken system. It will protect consumers, keep insurers honest and ensure competition and that's why we intend to include it on the bill that will be submitted to the Senate for consideration.

For these reasons, the public option is what America wants. In poll after poll, in rally after rally, month after month, the American public has spoken. We want a public health insurance option to keep the insurance industry honest, to increase competition, and to give us somewhere to go if we don't want to be at the mercy of the private insurance industry any longer.

When the Washington Post - harbingers of cautious beltway conventional wisdom - has their polls showing 57% of Americans support a public health insurance option, you can be sure that this is a mainstream position.

Senator Reid deserves our thanks today for leading America forward. The fight is far from over, and to be sure, there is plenty in the Senate bill that needs to be fixed. We need:

• To make sure health care is truly affordable to everyone
• Ensure employers are responsible for helping to provide good health benefits to their employees
• Fairly finance reform rather than taxing higher-cost plans

However, Senator Reid stood up for America and he should be encouraged to keep fighting. Sign the petition below to pledge to keep fighting for a public health insurance option and quality, affordable health care for all.

Click here to sign the petition thanking Senator Reid and telling him that as he fights for us, we'll stand with him.

Reid's prepared remarks:

The last two weeks have been a great opportunity to work with the White House, Senators Baucus and Dodd, and members of our Caucus on this critical issue of reforming our health insurance system.

We have had productive, meaningful discussions about how to craft the strongest bill that can gain the 60 votes necessary to move forward in the Senate.

I feel good about progress we have made within our caucus and with the White House, and we are all optimistic about reform because of the unprecedented momentum that exists.

I am well aware that the issue of the public option has been a source of great discussion in recent weeks. I have always been a strong supporter of the public option.

While the public option is not a silver bullet, I believe it is an important way to ensure competition and to level the playing field for patients.

As we've gone through this process, I've concluded, with the support of the White House and Senators Baucus and Dodd, that the best way forward is to include a public option with an opt-out provision for states.

Under this concept, states will be able to determine whether the public option works well for them and will have the ability to opt-out.

I believe that a public option can achieve the goal of bringing meaningful reform to our broken system. It will protect consumers, keep insurers honest and ensure competition and that's why we intend to include it on the bill that will be submitted to the Senate for consideration.

We have spent countless hours over the last few days in consultation with Senators who have shown a genuine desire to see reform succeed, and I believe there is strong consensus to move forward in this direction.

Today's developments bring us another step closer to achieving our goal of passing a bill this year that lowers costs, preserves choice, creates competition and improves quality of care.

I'm happy to answer a few questions before I have to leave for a meeting.

Jon Cohn has a must read piece today, laying out (accurately, to my knowledge) the current state of play on the public health insurance option:

Brian Beutler and Carrie Budoff Brown have the essentials on the Senate situation. In a nutshell, Harry Reid thinks he has the votes to sustain a bill that includes some sort of public option compromise, whether it's a trigger or an opt-out. Max Baucus is not happy about this and, perhaps to a lesser extent, neither is Olympia Snowe. But other centrists, most notably Ben Nelson, are making pretty clear they can find a way to live with at least some versions of the public insurance compromise. That's news.

Over in the House, according to several sources, the drama began in the morning when Speaker Nancy Pelosi addressed a meeting of the Democratic caucus and laid out two main possibilities. One was the "Medicare-plus-five" version–that is, a government-run plan that would pay physicians at roughly Medicare rates with an extra five percent on top. (It'd pay hospitals standard Medicare rates without the additional five percent.) The other possibility was a "negotiated" version–that is, a government-run plan that bargained with doctors and hospitals over rates.

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Friday morning brings another caucus meeting and there, perhaps, the House Democrats will make a final decision about which way to go. There isn't much time, given the schedule Pelosi wants to keep. She wants to unveil a bill early next week and, perhaps, have a floor vote the week after that. The leadership has already sent language over to the Congressional Budget Office for scoring. As one staffer says, "it's all locked in–except for the public plan."

This is, by and large, great news. In the House, there is no question that we're going to get a public health insurance option that's national and available on day one. The only question is will we get one that saves taxpayers about $80 billion (that would be the one that pays Medicare +5 rates) or not.

In the Senate, things are also looking up. While we're not nearly as far along as the House, public support for the idea is clearly giving Senate leaders pause. As a result, there has been serious discussion of putting a real public health insurance option in the Senate merged bill. While there is still a large danger that we'll get a trigger - a catch-22 plan to kill the public health insurance option - I'm much more hopeful about the Senate negotiations than I've been in a while, especially with Senators like Nelson hinting they wouldn't support a filibuster and leaked reports saying Reid has 60 votes for cloture.

We've clearly come a long way, and the fact that the public health insurance option is a must with the American people is seeping into the conventional wisdom that surround this country's capitol.

Up next: Floor votes!

Yesterday I had a quick chat with David Balto from the Center for America Progress, an antitrust attorney in the private sector, and former Policy Director of the Federal Trade Commission, about the piece I put up on what repealing the anti-trust exemption for the health insurance industry would do. He had a few key points to make. (The following is lightly edited.)

First, he made it clear that repealing the anti-trust exemption is essential to making health reform work:

The market is broken right now. The market is highly concentrated with most markets controlled by a monopoly or duopoly. As a result profits are skyrocketing, along with costs. This is a market that's tremendously broken.

The McCarran-Ferguson antitrust exemption makes a difference when there are several competitors in a market who use it to coordinate activity that might otherwise be illegal. But when you're a monopolist like the insurance companies, you don't have a competitor to collude with, so the insurance industry hasn't needed the exemption because they don't compete with anyone now.

However, that's set to change.

The goal of health reform is to enable competition to finally break out in these markets. If it does break out, then we have a really serious problem because the insurance companies can use the McCarran-Ferguson exemption to stifle competition in ways that would otherwise be illegal because they're exempt from anti-trust regulation.

In other words, creating a public health insurance option to compete with the insurance companies is only the first step. Unless we repeal their anti-trust exemption as well, they will be able to engage in all sorts of anti-competitive deceptive and fraudulent practices to drive out competition and keeping screwing me and you over.

Balto made another point, too, about what repealing this exemption would do for people:

The McCarran-Ferguson Act [the name of the anti-trust exemption] today serves as an obstacle to anti-trust and consumer protection enforcement by the federal government, because if you try and bring federal lawsuits, they will be stifled by McCarran-Ferguson. For example, the Ingenix suit [where UnitedHealth had to pay $350 million in a settlement concerning price fixing and fraud] was brought by the state of New York. If that same suit was brought by the Federal Trade Commission [the federal agency that handles anti-trust issues], insurance companies would have defended their conduct under the McCarran exemption.

So, the FTC has been handcuffed in trying to protect consumers against anti-competitive behavior by the insurance industry

To sum up, eliminating the McCarran-Ferguson exemption is essential to making health care reform work. Without it insurance companies can stifle the competition reform is intended to create.

Health Care for America Now has a new set of TV and print ads out today. They focus on the issue I discussed yesterday - the Finance Committee's ill-conceived "excise tax" or "Cadillac" tax:

The idea for the "Cadillac" tax or "excise" tax is based on the false notion, common in health policy circles, that if only people in America felt the cost of their health insurance in their wallets, they would use less health care and thus lower costs for everyone. Proposals eliminating or adjusting the tax exemption people get for health care at work (the cost of your health plan through work is not taxed as income, as other benefits often are) aim to correct this "problem" and tax people with "gold-plated" or "Cadillac" health care plans - supposedly richer than the average family - who are spending beyond what's necessary.

Policy wonks also love this idea because it raises a ton of money, helping pay for health reform. Policy wonks miss what America gets.

The cost of your health care plan is not directly related to your income. Plenty of people who make solidly middle-class wages have "Cadillac" health care plans. Why? Their union may have negotiated a better plan for them, or they may have taken the job specifically for the benefits. Either way, as the CWA report makes clear, a "Cadillac" tax does not just affect the rich. Under the Senate Finance proposal, 40% of health care plans in this country would be eventually taxed.

…

All this begs the question: Why tax the very people health care reform is supposed to help to pay for it?

The middle class doesn't need another tax hike. Health reform should indeed be paid for, but it should be paid for by those in society who can most afford it. And indeed, that idea is popular. Most Americans support paying for health care reform by increasing the surtax [pdf] on those households making more than $350,000 per year.

Here's the TV ad:

The print ad is here.

There's a right way and a wrong way to pay for health care. Raising taxes on the middle class is definitely the wrong way.

The Senate Finance Committee just voted out their health reform bill, with all Democrats and Republican Senator Olympia Snowe voting for it. Wendell Potter, the former insurance industry executive turned whistleblower said today:

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

Now, the Senate has a choice: Will the Senate move forward with a bill that works for the American people, or one that works for the insurance industry?

The Finance bill is out of step with the other bills passed by three committees in the House and one in the Senate:

• The bill is not affordable, costing families thousands of dollars more [pdf] than Kennedy's HELP bill
• The bill does not ask employers to pitch in their fair share for their employee's health care
• The bill raises money by taxing the middle class, not the wealthy who can most afford it
• The bill does not give us a choice of a public health insurance option

Americans know what's good for them. They reject the idea of being forced to buy insurance without a public health insurance option in polling [doc] Health Care for America Now commissioned from Anzalone Liszt Research and Lake Research Partners:

Nationally, voters oppose a mandate to purchase private insurance by 64% to 34% but support a mandate with a choice of private or public insurance by 60% to 37%.

	National	House Swing Districts	Maine
"Requiring everyone to buy and be covered by a private health insurance plan"	Oppose 64% to 34%	Oppose 60% to 34%	Oppose 55% to 35%
"Requiring everyone to buy and be covered by a health insurance plan with a choice between a public option and private insurance plans"	Favor 60% to 37%	Favor 50% to 46%	Favor 55% to 40%

Note: Half of those surveyed were asked each question.

In the same poll, Americans support employer responsibility provisions 61% to 39%, oppose taxing of their health benefits, 54% to 41%, and support taxing households making more than three hundred and fifty thousand dollars per year, 60% to 40%.

The Senate has a choice. They should keep in mind the polls and do what the American people want: Give us quality, affordable health care, fair financing, and a choice of a public health insurance option.

Update

Here's the statement from Richard Kirsch, National Campaign Manager of Health Care for America Now:

“The end of the Senate Finance Committee’s process marks the beginning of the next phase – crafting a strong bill that goes to the Senate floor. The HELP Committee bill offers a better path forward in the Senate than the Finance Committee bill.

The Senate Finance Committee bill falls short on making insurance affordable to America’s families, gives employers a “free ride,” and does not create meaningful competition in the insurance market with a strong national public health insurance option. The HELP bill makes health insurance affordable to families through subsidies, lowers the cost of insurance with a public health insurance option, and promotes shared responsibility with an employer requirement to contribute to coverage.

We’re closer than ever to achieving a guarantee of good, affordable health care for America’s families and businesses, and we’re counting on Senators to put their constituents ahead of the big insurers and vote for real reform. ”

30 Senate Democrats today signed a letter to Majority Leader Reid ($), urging him to include a "robust, Medicare-like public option" in the bill he brings to the floor of the Senate:

“We have spent the better part of this year fighting for health reform that would provide insurance access and continuity to every American in a fiscally responsible manner,” the 30 Democratic Senators wrote in the Oct. 8 letter. “We are concerned that — absent a competitive and continuous public insurance option — health reform legislation will not produce nationwide access and ongoing cost containment. For that reason, we are asking for your leadership on ensuring that the merged health reform bill contains a public insurance option.”

…

Senators signing the pro-public option letter included: Jay Rockefeller (D-W.Va.), Russ Feingold (D-Wis.), Patrick Leahy (D-Vt.), Daniel Akaka (D-Hawaii), Tom Udall (D-N.M.), Kirsten Gillibrand (D-N.Y.), Roland Burris (D-Ill.), Ron Wyden (D-Ore.), Debbie Stabenow (D-Mich.), Barbara Boxer (D-Calif.), Sheldon Whitehouse (D-R.I.), Michael Bennet (D-Colo.), Dianne Feinstein (D-Calif.), Jack Reed (D-R.I.), Jeff Merkley (D-Ore.), Frank Lautenberg (D-N.J.), Benjamin Cardin (D-Md.), Al Franken (D-Minn.), Bob Casey (D-Pa.), Barbara Mikulski (D-Md.), Daniel Inouye (D-Hawaii), Ted Kaufman (D-Del.), Arlen Specter (D-Pa.), Maria Cantwell (D-Wash.), Bob Menendez (D-N.J.), Bernie Sanders (I-Vt.), John Kerry (D-Mass.), Herb Kohl (D-Wis.) and Paul Kirk (D-Mass.).

A full half of the Democratic Caucus in the Senate want a public health insurance option to be part of the merged bill Senator Reid brings to the floor. Clearly, as Senator Brown said, support for the idea runs deep, not only among the general public, but among the Senate as well.

Update

Here's the full letter:

Dear Majority Leader Reid:

We have spent the better part of this year fighting for health reform that would provide insurance access and continuity to every American in a fiscally responsible manner.  We are concerned that – absent a competitive and continuous public insurance option – health reform legislation will not produce nationwide access and ongoing cost containment.  For that reason, we are asking for your leadership on ensuring that the merged health reform bill contains a public insurance option.

As it stands, the health insurance market is dominated by a handful of for-profit health insurers that are exempt from the anti-trust laws that ensure robust competition in other markets across the United States.  Without a not-for-profit public insurance alternative that competes with these insurers based on premium rates and quality, insurers will have free rein to increase insurance premiums and drive up the cost of federal subsidies tied to those premiums.  This is simply not fiscally sustainable.

We recognize that the two Committees with jurisdiction over health reform – the Senate Finance Committee and the Senate Health, Education, Labor, and Pensions (HELP) Committee – have taken two very different approaches with respect to this issue.  However, a strong public option has resounding support among Senate Democrats – every Democrat on HELP, three quarters of those on Finance, and what we believe is a majority of the caucus.

The Senate Finance Committee included a cooperative approach to insurance market competition.  While promoting more co-ops may be a worthy goal, it is not realistic to expect local co-ops to spring up in every corner of this country.   There are many areas of the country where the population is simply too small to sustain a local co-op plan.   We are also concerned that the administrative costs associated with financing the start-up of multiple co-op plans would far outstrip the seed money required to establish a public health insurance program.

Opponents of health reform argue that a public option presents unfair competition to the private insurance companies. However, it is possible to create a public health insurance option that is modeled after private insurance – rates are negotiated and providers are not required to participate in the plan.  As you know, this is the Senate HELP Committee’s approach.  The major differences between the public option and for-profit plans are that the public plan would report to taxpayers, not to shareholders, and the public plan would be available continuously in all parts of the country.  The number one goal of health reform must be to look out for the best interests of the American people – patients and taxpayers alike – not the profit margins of insurance companies.

Health reform is about improving access to health care, containing costs, and giving Americans a real choice in the insurance plan best suited to their needs.  We urge you to fight for a sustainable health care system that ensures Americans the option of a public plan in the merged Senate bill.

Sincerely,

Sherrod Brown (D-OH)                                              John D. Rockefeller (D-WV)
Russell D. Feingold (D-WI)                                        Patrick J. Leahy (D-VT)
Daniel K. Akaka (D-HI)                                              Tom Udall (D-NM)
Kristen E. Gillibrand (D-NY)                                      Roland W. Burris (D-IL)
Ron Wyden (D-OR)                                                     Debbie Stabenow (D-MI)
Barbara Boxer (D-CA)                                               Sheldon Whitehouse (D-RI)
Michael F. Bennet (D-CO)                                         Dianne Feinstein (D-CA)
Jack Reed (D-RI)                                                        Jeff Merkley (D-OR)
Frank R. Lautenberg (D-NJ)                                      Benjamin L. Cardin (D-MD)
Al Franken (D-MN)                                                    Robert P. Casey, Jr. (D-PA)
Barbara A. Mikulski (D-MD)                                      Daniel K. Inouye (D-HI)
Edward E. Kaufman (D-DE)                                      Arlen Specter (D-PA)
Maria Cantwell (D-WA)                                              Robert Menendez (D-NJ)
Bernard Sanders (I-VT)                                              John F. Kerry (D-MA)
Herb Kohl (D-WI)                                                       Paul Kirk (D-MA)

Health reform is moving into its final stages, and yet, in a sense, the process has only just begun. Here's what's happening next.

The Finance Committee will vote on the amended Baucus bill on Tuesday at 10 am. From there, Majority Leader Harry Reid will merge the Baucus bill and the late Senator Kennedy's HELP bill into one package that will go to the Senate floor. The merger will take pieces from each bill and can include the public health insurance option like the one passed in Kennedy's HELP committee, and so it is an opportunity to stand up for the principles we believe in when it comes to health reform.

When the bill goes to the floor, it will need 60 votes just to get the floor process started. Then, Senators opposed to health reform could force 60-vote motions for each amendment offered, though amendments typically only require 50 votes to pass. Here, again, is an opportunity to stand up for our principles and make the bill better. Even if amendments are offered but are not passed, we will be able to demonstrate huge support for popular provisions (progressive taxation and employer responsibility, for example) that might not be in the merged bill.

The House must go through a similar process, with Speaker Nancy Pelosi merging the three bills passed out of committee and bringing a merged bill to the floor. What exactly that merged bill will look like is still up for debate, mostly around what kind of public health insurance option the House will consider. The House process means fewer amendments and less debate than in the Senate.

Next, the bills will be voted on in both chambers. In the Senate, the bill will likely need 60 votes for cloture - a procedural vote. Lawmakers will be under pressure to vote along party lines. After cloture, the Senate bill will only need 50 votes to pass - a simple majority. The House, as well, will only need a simple majority to pass their bill.

Then House and Senate leaders will meet to iron out the differences in their bills, called a conference. Here, too, significant changes can be made to the bills, and it's an opportunity to once again stand up for our principles and push for the provisions we want to see - progressive taxation, employer responsibility, decent affordability standards, and a public health insurance option.

After conference, one bill goes back out to both houses of Congress for final votes. No further changes can be made to the bill at this point, meaning Members of Congress will have to vote yes or no, no more negotiating.

This will be a fight until the bitter end. It's unlikely any of the provisions we all feel strongly about will be considered "safe" until conference is finished and the final bill is passed. At every step of the process, we must stand up for our principles, even if we lose some battles.

We're at the beginning of a long road.

The CBO score for the Finance Bill is out [pdf]. Here's the best paragraph in the document:

The proposed co-ops had very little effect on the estimates of total enrollment in the exchanges or federal costs because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments. As a result, CBO estimates that of the $6 billion in federal funds that would be made available, about $3 billion would be spent over the 2010–2019 period.

Co-ops are so ineffective you can't even give away the start-up money. As our ads said, the co-op idea doesn't work.

Igor at Think Progress has more on the CBO score.

It seems there is a new "compromise" version of the public health insurance option cropping up every day now. Some of these are compromises pushed by Senators themselves and some of them are wedged into the compromise frame by the media, but none of them would fit the principles for a public health insurance option.

First, let's consider Senator Cantwell's amendment that passed in the Finance Committee yesterday. Igor Volsky at Think Progress runs down the policy:

States would use their purchasing power to negotiate for more affordable coverage options, improve efficiencies, and even lower the health care costs within the Exchange (by shifting lower income and disproportionately sicker individuals into the Basic Health Plan), but they would have to contract with private insurers. And there ain’t nothing public about private insurers. From the amendment:

Under this amendment, the federal government would provide funds to participating states in order to allow such states to provide affordable health care coverage through private health care systems under contract….State administrations would seek to contract with managed care systems, or with systems that offer as many of the attributes of manged care as are feasible in the local care market. A minimum medical loss ratio of 85 percent would be required of all participating plans….State administrators should seek participation by multiple health plans to allow enrollees a choice between two or more plans, whenever possible. A participating health care system can be a licensed health maintenance organization, a licensed health insurer, or a network of health care providers established to offer basic Health Plan Services.

In other words, the federal government would provide states with funds to establish Basic Health Plans for lower income Americans that would be completely run by private insurers. As Ezra Klein explains, and Cantwell freely admits during their interview, the proposal is “entirely orthogonal to the public option debate. It doesn’t create competition or transparency or experimentation.”

As Jon Walker explains, this is a good idea, though it's not a public health insurance option:

This is not a public option. It is not a health insurance company run by, managed by, or directly overseen by Congress. What Cantwell's “basic health plan” is is simply a better way to run an exchange. This is closer to how more market-heavy universal health insurance systems are run in other countries (Switzerland, Netherlands, Beligium). The government defines the basic health care plan which must be covered, and companies mainly compete on price of premiums and provider network. In those systems, you can buy supplemental insurance which covers what is not covered by the government-defined minimum benefits package. The idea is also similar to Medicare Advantage without the choice of Medicare.

While media reports have called this an alternative for a public health insurance option, or a "quasi-public option," Senator Cantwell herself believes that it's not, sending out an email to her email list that read, in part:

While we must wait to fight another day on the public option, we did make real progress on other key provisions. Several amendments that I introduced did pass the committee – including one to make sure savings from negotiations over drug prices are passed on to consumers and NOT contributing more to pharmaceutical companies' bottom lines and another to reward doctors for providing high quality care and make sure that doctors get paid more for keeping you healthy than for ordering duplicate tests - putting quality over quantity.

That's exactly right. Cantwell's amendment is good policy and worth supporting and making part of the final bill. In fact, it would be even better - as Senator Kerry has proposed - to extend the "active purchaser" authority to the entire Exchange. Either way, though, this isn't a public health insurance option, no matter what the media claims.

And that brings us to Senator Carper's idea, which is meant to be a substitute for a public health insurance option. Here's the policy and the problems with it, again from Igor at Think Progress: