Health Care For America Now

The human toll of delaying health care reform is shocking. Every day we delay health care reform:

• 6,821 more people lose their health insurance [pdf]
• 2,548 more people file for bankruptcy because they got sick
• 123 more people die because they don't have the coverage they need

Yesterday, President Obama told Congress to continue their work:

Here’s what I ask of Congress, though: Do not walk away from reform. Not now. Not when we are so close. Let us find a way to come together and finish the job for the American people.

But as we know, it'll take more than just words to finish health reform and finish it right. It's going to take leadership by the President and leaders in Congress.

There is growing consensus on the way forward. The Senate bill needs to be improved before reform is finished in many ways. The way to improve the Senate bill is with majority rule, otherwise known as reconciliation.

The Center for Budget and Policy Priorities has a report on reconciliation, it's history, and its process. Their conclusion is the same as ours:

…using the reconciliation process now for health care reform would not represent a dramatic break with the past. The sharp break with past practice occurred in 2001, when reconciliation was used for the first time to pass legislation that was not paid for and greatly worsened the nation’s fiscal position.

Prior to 2001, every major reconciliation bill enacted into law reduced the federal deficit. Until then, reconciliation had been reserved for legislation that met this standard of fiscal discipline. But the standard was tossed aside in 2001. In both 2001 and 2003, the reconciliation process was used to pass costly tax cuts that were not paid for and that have substantially increased deficits and debt.

In response, at the start of the new Congress in 2007, the House and Senate formally adopted rules to restore a fiscal discipline standard to the reconciliation process by barring the process from being used for bills that would increase deficits and debt. If the reconciliation process is used in coming weeks for health reform legislation, that legislation will need to adhere to this standard — rather than to continue the sharp departure from it that the 2001 and 2003 reconciliation bills made.

…

Because rising health care costs represent the single largest cause of the federal government’s long-term budget problems, fundamental health care reform must be part of any budget solution. The foregoing examples indicate that using the budget reconciliation process to enact health reform in 2010 would be consistent with the ways in which Congress has used reconciliation in the past. Many major policy changes, including welfare reform, large tax cuts, and new health programs, have been included in past reconciliation bills. Moreover, if health reform is pursued through the reconciliation process this year, the resulting legislation — unlike the tax cuts of 2001 and 2003 — will need to be designed so it does not add to the deficit. Any legislation also is likely to include provisions, such as an independent Medicare Commission and demonstration projects to identify ways to deliver health care more efficiently, that could lead to further reforms that slow the growth of health-care costs and contribute to longer-term deficit reduction.

Speaker Nancy Pelosi has predicted she could get the votes in the House to pass a health care bill if the Senate passes a reconciliation fix. Senators Reid, Baucus, and Conrad are open to the approach.

This is a way forward. The only question now is whether Congress will do it. Leadership is required to move both houses of Congress down this road together, the road to passing a real health care reform bill and passing it quickly.

The President asked Congress to finish reform. His call has been echoed, from Senator Al Franken to AFL-CIO President Rich Trumka. The human cost of health care is too high to not finish reform and finish it right.

The news today is full of analysis and commentary against incremental reform.

As I explained yesterday, Democrats won't win politically by scaling back (have you seen even one Republican who's said they're interested in a bipartisan health care bill in the Senate?), and they won't solve the crushing moral and economic problem that is our health care system without systematic change. But I'll let others take up the argument.

The Associated Press' news analysis is almost all you need to read:

Trimming back the 2,000-page, trillion-dollar Democratic health care bills to the parts that average folks understand and like may not be as simple as it sounds.

A complete ban on insurance companies denying coverage to people with medical problems would be out of the question. Forget about guaranteed health insurance for all Americans - it costs too much. Still, Congress might be able to craft legislation that takes some rough edges off today's coverage problems and makes progress in controlling costs.

That's if Democrats and Republicans can call a truce.

Republicans, who for months have been urging "commonsense" alternatives to the Democrats' sweeping overhaul plan, may still be unwilling to help pass anything that lets President Barack Obama claim an election-year victory. They'll have 41 votes in the Senate to block it once Massachusetts' Scott Brown is seated.

Yet the nation's health care system is unlikely to heal itself. The number of uninsured will rise above 50 million unless government steps in, while ballooning costs could leave the baby boom generation with a bare-bones Medicare.

…

Obama has suggested shifting the focus to popular proposals like banning denial of coverage to those with medical problems. That particular fix is unlikely because it would encourage people to put off getting insurance until they're sick, driving up premiums for everybody else.

"In health care, everything fits together," said Sen. Jay Rockefeller, D-W.Va. "It's very hard to say we can cut this out and do that." Banning pre-existing condition denials would have to go hand-in-hand with coverage for all.

As Washington grapples with the outcome of the election in Massachusetts this week, it’s important to remember one key thing: Congress can still pass historic legislation that will make health care a right, not a privilege, in the United States.  While the procedural route may be different, Congress still can do what it intended to do before Tuesday. It can enact a comprehensive bill that will make good health care affordable to tens of millions of people who are uninsured or underinsured and end the practice of denying people coverage or charging people more for pre-existing conditions. It can end the specter of medical bankruptcy, provide free access to preventive care, and more. None of these historic achievements can be done through “incremental” reform, and failing to accomplish these goals would put the Democratic Party in profound political peril.

While it may seem appealing to carve up the many facets of reform into smaller bites, that won’t get the job done. Take, for example, the promise that has most resonated with the public: stopping insurance companies from denying coverage for pre-existing conditions. You can’t do that without requiring everyone be covered because many people would wait to get covered until they needed treatment and that would drive premiums too high. But you can’t require people to get coverage without providing income-based subsidies to make coverage affordable. And you can’t raise the money for subsidies without finding savings in the system, like the proposed changes in Medicare, or raising new revenue. All that adds up to comprehensive reform.

The same logic applies to the other basic items Americans most want from reform, like relief from medical bankruptcy or stopping insurers from charging more to women or making the health insurance market work for small business.

At its heart, comprehensive reform is a simple guarantee that you will have access to good, affordable coverage whether you work for someone else, are self-employed, or are unemployed. The bills that have passed both houses of Congress achieve that goal through the same basic mechanisms: expanding Medicaid, establishing new health insurance marketplaces, providing income-based subsidies for buying regulated insurance within those marketplaces, extending tax credits to at least small businesses, and establishing some requirements for most businesses to offer coverage or pay for it. Both bills raise the money through changes in Medicare and new revenues. Taken together, that will mean that for the first time every American will have access to affordable health care coverage.

If we look at history, we see that once we have built such a foundation, Congress will improve on it. When Social Security was enacted, it left out major categories of workers and didn’t provide for surviving spouses or dependents. Those omissions got fixed later.

If we fail to pass reform or pass minor reforms that don’t really change anything, it will be at least 15 years before the nation tries again. If we enact the agreed upon reforms, Congress will continue to debate how to improve upon what’s in place. And it will defend the new right to health care against those who would tear it down – just like Republicans have been trying and failing to privatize Social Security since it was first passed.

This isn’t just a policy question; it’s a political one. Republicans are counting on stopping the Democratic agenda so that Democrats will fail and voters will give the Republicans another chance. The Massachusetts election demonstrated that Democrats need to deliver on the promise of change. After a year of getting within sight of the finish line on comprehensive health care reform, the only choice from a policy and political perspective is to get the job done.

As the national campaign manager of the nation’s biggest progressive health care campaign – one that has organized hundreds of thousands of people in all 50 states and spent $45 million fighting for reforms that go well beyond what now seems possible – I understand as well as anyone how frustrating progressives find this situation. But we should never lose sight of what Dr. King said about health care in this nation: “Of all the forms of injustice, inequality in health care is the most shocking and inhumane.” Congress is on the brink of dramatically reducing this inequality even though the legislation has many imperfections.

So on behalf of the army of activists who have fought with us for more than a year, our message to Democrats in the House and Senate is simple: pick yourselves up, dust yourselves off, and enact the compromise plan you were set to pass before the Massachusetts election. You still have big majorities in both houses. Because of Republican obstructionism, you’ll need to use different procedures to get the job done. But just do it! And know that each and every year you will have saved tens of thousands of lives, rescued hundreds of thousands of families from medical bankruptcy, and proved to America you are up to the challenge of building a new and better future for our children and the generations that follow.

Some in power are now may now be thinking of scaling back health care reform to a bill that "could attract bipartisan support." They must reconsider. A scaled-back health reform plan would be fatally flawed, both from a policy and political perspective.

On the policy, there's no way to make a "scaled down" health reform bill work. Our health care system is a complicated and inter-connected network of pieces and policies. Changing one or just a few pieces of that system - as a scaled down health bill would seek to do - will cause immediate and severe problems in the rest of the system.

For example, you can't just do "insurance market reforms" in a vacuum. You can't outlaw discrimination based on pre-existing conditions, for example, without having everyone in the insurance system. Why? As soon as insurance companies can't charge more because you're sick, the sick in this country who have until now been denied care will flood into the system. This will raise prices for everyone, causing another problem. If prices go up, more people won't be able to afford insurance.

So, now you have to solve the problem of people not being able to afford insurance. The solution? Give people subsidies so they can afford insurance. But that creates a new set of problems. How are you going to give out subsidies and make sure that taxpayer money gets to the right people? How are you going to ensure people buy insurance with that money, and that this insurance is good insurance, not junk insurance?

To solve those problems, you need an entity that will monitor the insurance market and deliver the subsidies in an effective way. That's what the Exchange is. But just having an Exchange creates other problems. What's to stop insurance companies from just raising their rates? How do you force them to play by the rules? That's what the public health insurance option is designed to solve. If reform is enacted without it, it will be up to Exchange regulators to make sure we get a fair system. Given the history of insurance companies gaming regulation, there's real reason for pessimism.

You can't solve one problem in health care without creating another. You can't just do insurance market reforms - if you want to stop insurance companies from denying care, the top goal of health reform according to officials in the administration and in Congress, then you have to do the whole package.

Ezra Klein made the right analogy this morning:

Let's say you want to buy a house from me. And at the last minute, your portfolio take a big hit and you realize you have less money than you think. "Pare it back," you say. What do I do?

I can't just rip out the foundation. Then there's no house at all. The frame is important, too. So is the plumbing and the wiring. I can't leave that stuff half-finished, or the place is unusable. I can downgrade the lighting fixtures, but they won't save you much money.

Fundamentally, the things that make the house expensive all exist in concert with one another. The things that exist on their own — track lighting, say — no one really cares about. You can decide not to buy this house and instead buy a cheaper house. But you can't just make this house cheaper and still expect it to function as shelter. So too with health-care reform.

That's the policy. What about the politics?

The idea that we'll have bipartisanship on health care going forward is ludicrous. The Republican party just won a massive upset by being the party of NO. They perceive this strategy as a winning strategy for them and their candidates. Unless we show them otherwise by passing legislation over their objections, they have no incentive to compromise. NO is working and winning them elections, why change?

Senators like Max Baucus spent months and months working for bipartisanship. That process resulted in the incorporation of some truly bad ideas into the Senate health care reform legislation - ideas like the elimination of the public option - and it resulted in no Republican votes for the final health care bill.

At this point, even if the entirety of the health care bill was the words "Health Care Bill of 2010," Republicans would still vote against it.

There will be no bipartisanship on health care, and chasing it will only cost more time and bring us more bad policies. Republicans are determined not to meet Democrats half way.

Democrats have only lost one seat in the Senate. They still have 59 seats. That's a lot of seats. I'll expand on the process by which health care can pass in a future post. For now, it's absolutely possible to finish reform right and pass a good bill through both Houses of Congress. The only reason not to pass such a thing would be a lack of political will. That's the challenge of leadership that's now in front of President Obama, Speaker Pelosi, and Majority Leader Reid.

In a certain sense, nothing really changed last night after the special election in Massachusetts.

The need for health care reform today is as great as it was yesterday. Thousands continue to go bankrupt due to medical costs. Insurance companies still deny care to their customers. People still die because they can't afford the care they need. Thousands of people lost their health care yesterday, and thousands more will lose it today. The fact that health care must be a human right in this country is no less true than it was yesterday.

And voters still want change as much today as they wanted yesterday. In 2008, America voted for change. We voted to stand up to Wall Street. We voted to clean up Washington. And we voted to guarantee everyone quality, affordable health care.

Last night, voters stood up and said loudly and clearly, "We still want the change we voted for in 2008. And politicians in Washington must deliver, or else."

Will those politicians in Washington hear that message? Or will they shrink from history and decide passing real, comprehensive health care reform is too risky?

The American public wants to finish health reform, and they want it finished right, by holding insurance companies accountable and making health care affordable for everyone.

As David Plouffe said this morning, "If you run away from [health care], you're still going to get attacked." He's right. Democrats have been handed a historic opportunity, and if the election last night makes one thing clear, it's that voters still want Democrats to deliver on that opportunity. Speaker Nancy Pelosi and Majority Leader Reid have both pledged to get health reform done. We've got to make sure they get it done right.

Congress needs to hear from you today with this message. They need to know it's not acceptable to scale down or not pass health care reform. They need to know you expect them to get it right.

If you've called Congress in the last few weeks, call again today.

If you've written a letter to Congress over the past few days, write again today.

However you communicate with your elected officials, communicate with them today and tell them to stand up for real principles, give the voters what they want, and finish health reform right.

An agreement has been reached that would alter the excise tax in the Senate health care bill to exempt millions of middle class workers from a tax on their health care benefits. The deal would:

• Raise the threshold at which family plans are taxed from $23,000 to $24,000 per year in 2013. The threshold for individual plans would be $8,900.
• Exempt dental and vision costs from that calculation beginning in 2015 (which could raise the overall
  threshold as much as $2,000).
• Raise the threshold for higher cost plans in these categories: plans that have large numbers of women and/or older workers in them, plans that cover high-risk professions (affecting 9 million workers), and plans that cover retirees age 55 and up.

The $24,000 threshold will also move upwards if health care costs inflate more than expected in future years. In other words, people won't be penalized if insurance companies, doctors, and drug companies accelerate their rate increases.

There are also features of the deal that would ease the transition into this tax or otherwise allow workers to seek more beneficial arrangements that don't cut their benefits or raise their costs:

• States with high health care costs will see thresholds for their workers temporarily raised, affecting more than 38 million workers
• State and local employee benefit plans and union-negotiated plans would have five years to renegotiate their agreements before the tax is applied, a window that is typically given when federal laws affecting workers are enacted so that hard-won agreements will not have to be immediately renegotiated

And there's a final piece that will make the entire system stronger: Union-bargained plans have the option of purchasing their insurance on the newly-created health insurance Exchange in 2017. More people buying insurance in the Exchange means more leverage for people against the insurance companies. Allowing these large plans into the Exchange will help everyone who buys insurance in the Exchange to get lower prices and higher quality.

There is no doubt this new deal is a big improvement over the original Senate language. It keeps millions of middle class workers from having their benefits taxed, and it makes the Exchanges stronger.

Though the excise tax hasn't been completely abandoned, a step has been taken towards finishing reform right. And there are more things to fight for, like national exchanges, stronger insurance regulations, employer responsibility, and a public health insurance option. Congress and the President must listen and fix these issues so reform can work for everyone.

The issue of how the House and Senate health care bills operate their insurance Exchanges has been getting interest today. Jon Cohn explained the differences today in The New Republic, and Igor Volsky at Think Progress had a chart comparing the two plans.

They're right to highlight the differences. As California Congressional Representative John Garamendi told reporters today, "Under health reform, 30 million people will buy their insurance through the Exchanges. I spent years as insurance commissioner in California, chasing after the insurance company scoundrels. You're going to toss 30 million Americans to these sharks unless there is a real strong regulatory environment [like the House's Exchanges] and public option."

As Karen Pollitz, a health policy expert at Georgetown, explained:

Exchanges pull health reform together. They make insurance markets work better, they make them more transparent.

In today's insurance marketplace, anyone can sell anything. Junk insurance is sold alongside good insurance. It's impossible for consumers to tell the difference. Exchanges are more organized and and create a stronger marketplace. Exchanges can be more selective about which products can be sold, and insurance companies have to bid to participate in the House Exchanges, meaning lower prices and better quality.

The Exchanges also provide services to consumers. They make insurance policies clear, understandable, and easy to compare. They're certified by the entity that runs the Exchange, so consumers know the junk has been weeded out.

They also make price comparison meaningful. Today you can't tell if a cheaper insurance policy is cheaper because the company that's offering it is more efficient or simply because the company isn't going to pay your claims.

Therefore, it's crucial that these Exchanges work right, so people will be able to choose high-quality insurance at a decent price.

The House gives the federal government the power to create and regulate a national Exchange. The Senate bill has each state set up its own Exchange. The difference is stark. With a national exchange, you'll have a simple, understandable, and enforceable framework that protects consumers. With state exchanges, you might not.

Why? With state Exchanges, each state would have different rules. Some might to a good job regulating, but some might not have the time, money, or inclination to hold insurance companies accountable. Wendell Potter explained the problems this way:

Insurance companies have long decried what they call the "patchwork" of the state regulatory system, but they've benefited mightily from that patchwork. They've developed cozy relationships with insurance commissioners and their staffs in some states. And they've been able to market insurance plans that shift costs to consumers. For example, one state gave permission for a insurance company to sell a plan that had a $20,000 annual deductible - essentially junk insurance.

Congressman Garamendi followed up:

State governments vary in their ability to enforce regulations, and insurance company influence also varies. You can wind up with a commissioner in a state that has no interest in protecting consumers.

To deal with that, you need a broad based Exchange that's strong enough to overcome the insurance companies. That's the role of the federal government. To make sure the insurance sold is valuable, claims will be paid, and companies will play by the rules.

A national regulatory framework is essential to make sure nobody is getting left at the mercy of insurance companies anymore. And that framework starts with a national Exchange. Under the House bill, the states would be able to take the ball and run their own Exchange after a few years, but the bill ensures strong regulations are present from the start.

By contrast, the Senate bill allows insurers to game the system and prey on states with weak regulators. In short, the insurers prefer the Senate bill because it lets them keep making money by denying care. That's reason enough for Congress to pass the House version of the Exchanges as they work to finish reform right.

UPDATE: Audio for the call is available here [mp3].

Despite it's erosion over recent years due to skyrocketing costs, 60% of Americans still get their health care coverage through work. Strengthening and protecting this coverage is central to the goal of giving everyone a guarantee of quality, affordable health care. Like many aspects of health reform, the House health care bill does much more to give Americans affordable health care at work than the Senate bill does.

The House bill sets up a system of shared responsibility - known in health wonk circles as "pay-or-play" - that would guarantee good coverage at work. Under the system, employers would be responsible for offering employees good coverage - at least as good as the most basic plan in the new health insurance Exchange, covering preventative medicine, mental health, maternity, and other essentials - and they would be responsible for paying for 70% of that coverage. Employers would have to offer coverage to full and part-time employees, with a contribution proportional to the number of hours worked. Small businesses would be exempt from this requirement, though they would receive tax credits to help them provide insurance.

This would result in a system where all employers except the smallest would provide good health benefits for their employees. If they decide not to provide coverage, they pay into a pool of money that would help finance the coverage their employees could then buy on their own in the new insurance Exchange. Either way, employees would get good benefits that are affordable, and employers who can afford it would be pitching in fairly to help finance reform.

The Senate does not achieve these goals, and in fact includes policies that would hurt workers.

The House tri-committees have released a detailed document of the differences between the House and Senate health care bills that is worth reading in full. There are a lot of provisions, big and small, that are different between the two.

For the most part, the House bill gets us closer to truly affordable health care and a system which holds the insurance companies accountable. Here is a highlight of some of the key differences:

There's been a lot of talk about what process the health reform bills might take before the House and Senate bills are combined and a single bill gets to President Obama's desk. Instead of a formal conference committee, there will be an informal conference where Democratic leadership from the House, Senate, and White House meet to work out differences between the two bills.

In the informal conference, there is plenty of room for real changes to the bill. And any conference process is subject to a filibuster in the Senate requiring 60 votes to overcome. The real question is more fundamental: What substantive changes come out of the process?

Changes must happen in the conference process to make the final health care bill affordable to everyone and hold the insurance companies accountable. On affordability, here's what to look for:

The Senate health care bill slated to be passed by Christmas Eve falls short of affordability in three ways:

1. It lacks adequate subsidies to make health care affordable for those who don't get it through work and are buying it in the new health insurance exchange
2. It lacks any shared responsibility provision for employers, meaning employers don't have to give their employees good health benefits, increasing cost to workers
3. And it taxes health care benefits to pay for reform, again increasing costs

The House bill comes extremely close to taking care of all of those points in a way that reduces costs for you and me, although it needs improvement on subsidies for low and moderate income people, as discussed below.

And on insurance accountability, we need a national insurance exchange, national benefit standards, stronger regulations, and a national public health insurance option - all to make sure Wall-Street driven insurance companies can't keep denying our care or jacking up rates. The vast majority of these provisions are better in the House bill than in the Senate bill, and they are detailed here.

Whatever process the bill takes, substantive issues must and will be addressed to make sure we get a health bill that works for everyone and protects us from insurance industry abuses that have caused our health care crisis. We'll need to work closely with supporters in the House in Senate to make sure these issues get addressed before President Obama gets to sign something.

To that effect, if you haven't yet signed the letter to President Obama, Speaker of the House Nancy Pelosi, and Majority Leader Reid outlining what needs to be done to finish reform right, please click here and sign!

Then, keep your eyes out for the substance, not the process, as we move forward.