Insurance Discussion

The bill includes a new public insurance plan that would pay providers and hospitals rates negotiated by the Health and Human Services secretary. Liberals had pushed for payment rates to be tied to Medicare, which they argued would mean lower costs to consumers and the federal government. But moderates’ concerns that those lower rates would hurt hospitals and other providers in their districts prevailed, even though House Speaker Nancy Pelosi, D-Calif., had backed the Medicare-based version.

In one bit of sobering news, the Congressional Budget Office estimated that only about 6 million people would sign up and that premiums for the government plan could be higher than for private coverage. The CBO says sicker people with higher costs probably would be attracted to the government plan. By comparison, 162 million people would remain covered through employer plans.

via Path clears for House to OK compromise health bill – Yahoo! News.

By now you’ve probably heard the news that the House finally has a health care bill prepped and ready to vote on (all 1,900 pages of it). While most details of the bill are widely agreed upon my the Democratic caucus — like the ban on pre-existing conditions — there was one final, contentious fight that was played out over the past couple weeks: the form of the public option included in the bill.

Many in the Congress argued that the public option should be based around Medicare’s payment structure; in two of the three House committees that passed the bill, the payment rates were meted out to be Medicare+5 percent, which would make the public option extremely competitive with private insurance, and would exert a lot of downward pressure on insurers and the premiums they charge to consumers.

While that bill wouldn’t have been anywhere close to perfect, it would’ve been a strong step forward — it would’ve created a template for a public plan that (hopefully) would be eventually expanded to enough Americans that it would’ve really changed the way we deliver insurance in this country.

Unfortunately, the Blue Dog coalition stepped up to the plate and decided that we couldn’t have that much progress so soon. They threatened to withdraw their votes from such a public option, and sent the option spiraling backwards, forcing the leadership to take up negotiated rates instead — meaning, providers and the government will negotiate rates rather than having them hover around Medicare+5 percent, meaning that the public option, in the words of the Congressional Budget Office, may actually end up charging more in premiums than the average of what private insurers charge. Which effectively dismantles much of what would make a public option so effective.

While progressives are fighting to try to get a full floor up-or-down vote on Medicare rates plus 5 percent (as well as the re-attachment Kucinich amendment that would allow states to create single payer programs if they chose, which is the only opt-out/opt-in scheme that has real promise in my opinion), the chances don’t seem too good.

So therefore it looks like the real potential strength of a public option, at least for now, has been eviscerated by the “fiscally conservative” Blue Dog coalition, which is extremely ironic, because it actually makes the bill cost tens of billions of dollars more.

I have a friend who knows one of these Blue Dogs very well. I won’t say the name of my friend or the name of the Blue Dog in question, out of respect for their privacy. During the last Congress, there was a heated battle over SCHIP — the State Childrens’ Health Insurance Program. As Congress was fighting out to get the votes to get a 2/3 majority to override President Bush’s vetoes, numerous Republicans were jumping over to the Democrats to help with their votes. Meanwhile, this Blue Dog stood his ground, waxing poetic about the deficit, and how this bill wouldn’t be paid for, so on and so forth. I talked to my friend about the congressman’s position, and she kept defending him, telling me how important it was to him that everything the government does is paid for (interestingly, the congressman never raised these concerns as he was voting for tax cuts for the ultra-wealthy or gigantic defense budgets).

Now, that same congressman is, along with most of the rest of the Blue Dog coalition, responsible for actually making this bill more expensive, at least according to all of the whip counts I know of.

So I have to ask, what exactly is it these Blue Dogs are up to? Are they really the fiscal conservatives they claim to be, or are they acting out of defense of the insurance industry here? They just made us all have to pay even more, and missed out on a chance of further cutting the deficit. Could it be that these members of Congress, many of whom face difficult races in 2010, wanted to keep insurance company dollars in their coffers and not those of their opponents? Do they have some kind of narrow ideological opposition to public insurance that goes well beyond fiscal conservatism?

Whatever the cause is, I propose that we start calling these Blue Dogs on their so-called fiscal conservatism. They shouldn’t be allowed to use that label if they’re not going to help us all save money.