Health Care For America Now

The polling on health reform has long been scattered and misunderstood. The issue is so complex that it's very hard to boil down into a few yes or no questions. And because the issue is so hot, every pollster and their mother wants to grab a headline with new poll results.

There are a few things that can be teased out, however. First, for the most part, people like what's in the health care bills.

Poll after poll finds support for banning denial of care based on pre-existing conditions, creating the Exchanges as a marketplace for health care, requiring business to pitch in for health care costs with tax credits to small business, closing the Medicare donut hole, and helping people afford insurance.

Kaiser's February tracking poll [pdf] illustrates the findings:

Newsweek's latest poll, taken in mid-February, backs up the assertion that people like the main components of the health care bill. Of course, some things aren't as popular - an individual mandate without a public option or the excise tax, for example - but Newsweek's poll has another finding that is noteworthy.

Second, when people find out what's in the bill, support for it rises. Newsweek's latest poll in mid-February found that while initial support for "Obama's health reform plan" were 40% favor to 49% opposed, once people learn what's in the bill - both the good and the bad - 48% support and 43% oppose. Kaiser tracking polls, among others, have had similar findings.

Third, people want to see reform passed more than they want Congress to fail or "start over."

Again, Kaiser has clear data on this point:

Recent polling by Franklin and Marshall [pdf] and ABC/Washington Post back up the point.

And finally, the public is closely divided on the question of whether they support or oppose the current health care plan, and support is rising. Via Pollster's average of health care polls:

It's also worth noting that a significant portion of the opposition, anywhere from 10% to 30% depending on which poll you cite, is because health reform "doesn't go far enough," not that it goes "too far."

There's no question that Congress and the President can and should do things to make these bills more popular. The fixes coming to an up-or-down vote in the Senate that will fully close the donut hole and scale back the excise tax is a start. But there are a lot of myths about health reform's popularity, especially right now, that are worth putting to rest.

There's a new poll out today from the Washington Post. It's got a few findings that Congress would do well to pay attention to.

Here's the main point:

A huge majority of Americans want a comprehensive health care bill passed. That includes 88% of Democrats, 56% of Independents, and almost a majority - 42% - of Republicans. If Congress thinks they can get away with not passing a bill, given those numbers, they've got another thing coming.

When you add these numbers to a few other questions in this poll, you get a picture of the electorate that really wants reform done right.

The poll shows that 49% oppose the health care bills in Congress and 46% support. But when people are asked about whether they support major features in the bills, they say yes. Banning denials for pre-existing conditions is popular with 80% of people. Requiring employers to offer insurance to full time employees is supported by 72% of people.

The picture is becoming clear: America wants to see a comprehensive bill passed and they support major components of the legislation. They also don't see the current bill in the Senate as the final bill - they want to see some changes before President Obama signs something. And there's no doubt that a great many people have been influenced by the negative advertising the insurance industry and its allies have been flooding the airwaves with, coupled with the media's focus on process rather than policy.

So how do we get comprehensive reform done? Again, the poll is telling. 58% think Republicans in Congress are doing too little to compromise with Obama, and 68% think Republicans should rarely use the filibuster to block legislation. Though the poll didn't ask whether people would support passing health care by majority rule using reconciliation, one can assume those numbers would be favorable.

Putting it all together, America wants comprehensive reform, they want reform finished right before a bill is signed, and they think Republicans are standing in the way, which gives an implicit endorsement for Democrats to use majority rule to do what the American people want.

America wants real health care reform, wants it done right, and wants it done now.

Because every single Republican in the Senate continues to say NO to health reform, and because the House is rightly unwilling to pass the flawed Senate bill unchanged, anything that gets sent to the President's desk will have to be passed in the Senate using the budget reconciliation process, otherwise known as majority rule.

In recent years, the use of the filibuster to block legislation has skyrocketed. While it still only takes 51 votes to pass a bill in the Senate, the minority has ramped up the number of times its blocked legislation with only 41 votes. The Republican party of NO started codifying the use of the filibuster for every piece of legislation proposed by the opposing party under President Clinton. Since then, the use of the filibuster has jumped:

To date, the Republican party has filibustered every single piece of legislation introduced by Democrats in the Senate.

That's not how this country was supposed to work, and it's certainly not how the Senate is supposed to work. The American people voted for change in 2008, and they're making clear that if Congress doesn't deliver, there will be problems at the ballot box.

So how does health care move forward? Budget reconciliation.

One huge issue that's received almost no attention in the debate on health care reform is what will happen to health coverage at work. There's been an enormous amount of attention paid to what will happen to the small percentage of Americans - less than 10% - who will get coverage through the new health insurance marketplaces called Exchanges. Will they have access to a public health insurance option? Will the government subsidies be enough to make health care affordable? Will insurance companies be able to raise rates because of health conditions, age, or gender?

This discussion - the one that's dominated the debate - has nothing to do with the majority of Americans, some 150 million, who will continue to get their health coverage at work. During the past decade, coverage at work has deteriorated with employees paying a bigger share of premiums for shrinking benefits. A study of employers released this past fall found that the trend is sure to continue in 2010. A key question is whether reform will deal with this growing problem for most working Americans.

What will happen depends on which reform bill you read. The House bill guarantees people will get good coverage they can afford. But the Senate bill not only fails to protect employees in large firms but also encourages employers in low-and-moderate wage businesses to offer barebones insurance plans and shift workers to part-time jobs.

For the key question most people ask when it comes to health reform - "Will I get good health coverage I can afford?" - the House bill provides unambiguously good news for people at work. The House bill requires all but the smallest employers to offer and help pay for good benefits or pay a percentage of their payroll to the government to help cover the cost of subsidies. Coverage must include a good package of benefits as defined by the federal government. Employers are required to pay a specified share of premiums for individual and family coverage, and the new insurance rules would apply to coverage offered by all employers, large and small. As a result, the House bill will not change a thing for people who get good coverage now at work but will establish a floor to protect people against the national trend toward skimpier benefits and higher costs to employees.

As the informal conference process moves forward, the premiums and out-of-pocket costs the uninsured, individuals, and small businesses will pay on the new health insurance Exchange is getting a lot of focus:

Congressional Democrats and President Barack Obama began work in earnest Tuesday on difficult issues still standing in the way of their national health care overhaul after months of tortuous debate. Topping the list: How to help Americans pay for insurance premiums.

At a White House meeting that stretched into Tuesday evening, the president and Democratic congressional leaders agreed on fast-track negotiations that would bypass the need for a formal conference to resolve differences between the House and Senate health care bills.

Obama "also stated his intention to work with leaders to strengthen affordability … beyond what is in the Senate bill," said a House leadership aide, who spoke on condition of anonymity because the meeting was private.

Affordability for people in the Exchange is a key issue. Along with making sure health care is affordable at work, not taxing health benefits, holding insurance companies accountable with strong regulations, and creating a public option, it's key to finishing health reform right.

To make health care affordable for the millions who will buy it on the Exchange, who are largely the most vulnerable populations - the uninsured, individuals, and small businesses - the affordability provisions from the House and Senate bills should be merged.

When people buy health insurance in the new Exchange, they will receive tax credits to help them afford health care premium and out-of-pocket costs. Those tax credits (or subsidies) vary based on income, so people who make more money receive less assistance.

Under the House bill, families who make less money (between about $18,000 and $36,000 per year) would pay on average only about 2% to 8% of their income (on a sliding scale, so families making $18,000 would pay 2%, families making $36,000 would pay 8%) for health care costs. That's not chump change, but that's very affordable compared to the Senate bill, where the same families would pay between about 9% to 13% of their income on average for health care costs.

For a family making $36,000 per year, paying almost $5,000 in premiums and out-of-pocket costs on average every year is not affordable. The House provisions are clearly better for people in that income range.

But for families who make more money (between about $64,000 and $73,000 per year), the Senate bill is better. These families would pay about 15% of their income, where under the House bill they would pay about 17% on average per year.

(For a full look at the numbers at various income levels, see the analysis here. [pdf])

To make health care affordable for everyone along the income scale, the House provisions for lower and middle income people and the Senate provisions for higher income people should be combined, so we end up with a scale of tax credits that works for everyone.

Of course, we need to fix more than affordability for people on the Exchange. Making sure employers pay for good health insurance, not taxing middle class benefits, strong regulations, and a national public option are key as well. These and other issues will get a look as we fight to finish reform right.

The public health insurance option is treated in the media like an ideological sacred cow, something that must necessarily be sacrificed to moderates in order to pass health reform. The reality is, the public health insurance option would perform an essential function in the overall health care system.

The public health insurance option gives us the way to control insurance company costs and behavior. No other proposal would do this.

First, cost. The public option would put a lid on insurance company rate increases.

Even the CBO - a notoriously conservative outfit - has confirmed this fact. In their analysis of the House health care bill, they concluded that the public option would keep overall insurance premiums within the health insurance exchange down.

This would work in the way you'd expect - through competition.

Say I'm one of the over 50 million people who will get health care through the exchange under the House bill. When the exchange is finally open for business, I'll get to pick from any plan available. Likely, that will include plans from the for-profit insurance companies (one from Aetna, one from Unitedhealth, etc…), plans from the non-profits like Blue Cross Blue Shield, and the public health insurance option. Every one of those plans has to provide good benefits for me, so nobody can sell cheap but junky insurance in the exchange. And I'll receive a fixed subsidy to help offset the cost if I can't afford the plans.

So, let's say the insurance companies decide to do what they always do and price their plans sky-high. That means in the exchange, every plan will have a huge price tag except for the public health insurance option, which, having no profit motive and no executives to pay, has no reason to raise prices like the private insurance companies do. Which plan do you think I'm going to choose? Given I'm getting a fixed subsidy, the public option is going to be better for my wallet. And I also know the public option is looking out for my health, not for profit, so I don't have to be worried it will deny my care like the private insurance companies do.

Taken in aggregate, if the insurance companies keep raising their rates, all of the 50 million plus people in the exchange - 1/6th of America's population - will choose the public option, costing the private insurance companies a huge amount of business. So what will insurance companies do? They won't raise their rates. In fact, they'll keep their prices low to attract business. In indeed, this is exactly what the CBO said would happen.

Sometimes it’s easy in the policy and political debates around health reform to lose sight of what, ultimately, this is all about. For me, Thanksgiving was a good reminder. There were 18 of us around the table, and at least 11 of my family members would see lower – sometimes dramatically lower – health care costs under the legislation that is likely to pass Congress. And all of us – everyone at the table– would see some benefit.

Let’s start with my cousin. She’s fought advanced cancer all year and is now in remission. Out of work during this literal fight for her life, she’s paying $18,000 a year for coverage, money she inherited when her mother died earlier this year. At this rate, she’ll use up her inheritance soon. She hopes to get back to work but will likely be self-employed when she does. Under the health reform legislation, she would pay for coverage based on her income and would have the security of coverage she could afford.

My wife’s niece, a self-employed film producer in Los Angeles, was out of work in the depressed movie industry up until a few weeks ago. Living with asthma, she kept paying for health coverage even as she fell behind on her mortgage. The legislation in Congress would also scale her health coverage to her income.

I have a singer-songwriter musician brother, a married father of two, who has been paying more and more for less and less coverage. And my sister is also married and a mother of two. She and my brother-in-law are both self-employed and buy a high-deductible plan. Both families would pay less for better coverage.

Then there’s my daughter. A year out of college, she has a low-wage job in Boston but has health coverage she can afford because of the Massachusetts law. It’s easy for people on the left to dump on the Massachusetts bill because it doesn’t do enough to control costs. But as a father who doesn’t have to worry about his daughter being uninsured or having to pay more than $300 a month for medication she needs, I’m extraordinarily grateful that Massachusetts has covered almost all of its residents now.

The legislation in Congress would help others at our Thanksgiving table too.

Jonathan Gruber of MIT is out with a new report today, proving once again that health reform - this time the Senate version in particular - would save people money. And once again, he's relying on CBO numbers to prove the point. Here's the argument:

In a letter to Senator Reid on November 20, the Congressional Budget Office (the official government scoring agency) reported that they estimated the cost of an individual low-cost plan in the exchange to be $5200 in 2016. This is a plan with an "actuarial value" (roughly, the share of expenses for a given population covered by insurance) of 70%. In their most recent communication with Congress, CBO also projected that, absent reform, the cost of an individual policy in the non-group market would be $5500 for a plan with an actuarial value of 60%. This implies that the same plan that cost $5500 without reform would cost $4460 with reform, or almost 20% less.

Gruber goes on to chart some of the savings for people:

It's worth noting that the premium savings - calculated between $200 and $400 - are before the subsidies are applied. When the subsidies are factored in, you can see how significant the savings are, especially at lower incomes.

The Senate bill - with exchanges, a public health insurance option, and generous subsidies for lower incomes - would indeed save people a good chunk of change. Of course, there are parts that can and should be improved - better affordability standards for all Americans, for example - but critics who take the insurance industry line and say reform will increase costs are dead wrong.

There was a phone call today with farm leaders from the National Farmers Union and affiliated groups. Their message to those Senators who are not on board yet with a public health insurance option? Rural America needs a public health insurance option most.

The facts in rural America are stark. Roger Johnson, President of the National Farmers Union, noted that rural people spend 22% more on premiums and out of pocket costs than their urban counterparts do. They're also 70% more likely to be uninsured. And where 8% of the population overall rely on individual health insurance policies, the kinds of policies where the insurance companies screw you the most and therefore make the best profit on, 33% of farmers and ranchers rely on these policies.

As a result, farmers and ranchers in rural America get hit hardest by insurance company abuses. John Hansen, President of the NFU in Nebraska, explained:

Farming and ranching is a risky business, with a low margin.

There is a continual pattern of ranchers and farmers out here who can't afford health insurance, or have a body part that has a problem not covered by the insurance policy due to pre-existing exclusions. They have an accident or get sick and suddenly, their entire farm is being fed into the medical system. This is not a theoretical problem.

Annie Cheatam, President of the NFU in New England, added:

Farmers are also very eager to provide health insurance to their employees. But they are reporting that their rates are going up 15-20% a year. No small business can sustain that kind of increase over time. Rates went up 90% in Maine since 2000.

States like Arkansas, Nebraska, and Maine have some of the largest rural populations per capita in the country. Perhaps as a result, the NFU and their allies have found broad support for health reform and the public health insurance option. That's why they are confident that Senators like Blanche Lincoln (who chairs the Agriculture Committee in the Senate and is intimately aware of rural concerns) will find a way to do the right thing. Olly Neal at the Arkansas Land and Farm Development Corporation said:

Senator Lincoln is our friend, and we're pleased she agreed to debate the health care bill. We think, knowing her, that she'll find a way to be supportive of it, and we hope it'll include a public option. We believe there's a way she can get to that support. The majority of Arkansas has shown itself to be supportive of a public option, and we think she'll respond to that majority.

Rural America needs the public option perhaps even more than the rest of America does. The Senators from rural states who are thinking about standing in the way need to do the right thing for their constituents.

Last week, after the House health care bill was unveiled, the CBO released their analysis of the bill. In it was a few paragraphs on the public health insurance option that seemed noteworthy and puzzling:

Roughly one-fifth of the people purchasing coverage through the exchanges would enroll in the public plan, meaning that total enrollment in that plan would be about 6 million.

That estimate of enrollment reflects CBO’s assessment that a public plan paying negotiated rates would attract a broad network of providers but would typically have premiums that are somewhat higher than the average premiums for the private plans in the exchanges. The rates the public plan pays to providers would, on average, probably be comparable to the rates paid by private insurers participating in the exchanges. The public plan would have lower administrative costs than those private plans but would probably engage in less management of utilization by its enrollees and attract a less healthy pool of enrollees. (The effects of that “adverse selection” on the public plan’s premiums would be only partially offset by the “risk adjustment” procedures that would apply to all plans operating in the exchanges.)

This analysis confirms a lot of what I've been saying about the insurance industry. Even with regulation, they will continue to seek out younger, healthier people they can make money on, while dumping older, sicker people they lose money on. Risk adjustment mechanisms (such as those built into the House bill) can help mitigate some of this, and surely, stronger risk adjustment mechanisms may be necessary. But as usual, the CBO is obscuring the real story.

Jonathan Gruber, MIT health care economist, has put together a fuller picture of the CBO's analysis of the public health insurance option:

In a letter released today, the Congressional Budget Office (the official government scoring agency) reported that they estimated the cost of an individual low-cost plan in the exchange to be $5300 in 2016. This is a plan with an "actuarial value" (roughly, the share of expenses for a given population covered by insurance) of 70%. In their September 22nd letter to the Senate Finance Committee, the CBO projected that, absent reform, the cost of an individual policy in the non-group market would be $6000 for a plan with an actuarial value of 60%. This implies that the same plan that cost $6000 without reform would cost $4540 with reform, or almost 25% less.

In other words, Gruber says the CBO has confirmed that even though the public option premiums themselves may be slightly higher than private premiums within the Exchange, the public health insurance option will act to keep overall premium levels down.

The CBO's analysis of the House health care bill seems to confirm this, saying [pdf]:

"[The House bill] would also include a public plan that CBO estimates would place some downward pressure on the premiums of private plans operating in the exchanges.

While it's hard to accurately predict what's going to happen eight or ten years from now, the overall picture is clear. Put together, the conclusion by the CBO is that the public option works. Not only does it save money - $25 billion, less than a public option with negotiated rates, but still a chunk of change - but it holds down private premiums as well.