Friday, October 2, 2009

Big Picture

Now that the Senate Finance committee appears ready to pass a bill, it seems likely that a merged reform bill will come to the floor in the Senate. The House is discussing what to do, and they are clearly looking ahead at a potential conference committee and deciding how to alter what has already been passed.

The big questions/hard decisions.
1. How to pay for it? The House has an income tax increase that the Senate never even considered. The Senate has a tax on high cost premium health insurance plans. The Senate approach has several things going for it and I expect it will win out. 1. It redirects money already in the health system. 2. It should actually have a chance to slow health care cost inflation. The tax will be passed on to consumers, but that is the point; to lessen over-insurance which helps drive cost increases. I would prefer a more aggressive capping of the tax exclusion. Sen. Carper had an amendment along these lines in the Finance committee and I am not sure if it was ever voted on or not.

2. Cultural Symbols. One of the most interesting aspects of reform this time around has been to watch the Dems get their legs under them in arguing for choice and competition. These are two of the most powerful cultural symbols in our nation. And the Dems are making this the centerpiece of their plan. Exchanges are markets that allow people to choose their insurance plan and to have insurance companies compete for their business. Competition is the main way that the Baucus bill says that costs will be constrained. Add into that the argument that indivdiual responsibility is the reason behind an individual mandate, and the Dems are essentially making the arguments that Repubs made in 1993-94.

The main Repub cultural symbols are government takeover of health care, and socialism. At some point the words get used so much for so many things (that people making the charges used to be for) that they lose their sting.

3. Wyden Amendment. Late last night the Wyden Amendment was apparently discussed in the Finance Committee but not voted on becuase the Chairman said it hadn't been scored by CBO. But, Wyden has said CBO says it is budget neutral. This seems certain to come back up on the floor of the Senate. The arugment goes, if we are going to have choice and competition as the way to hold down costs, we need to have more of it. It would seem to me that the House would be able to easily put this (allow people with employer based insurance to choose to shop in teh exchange) into their bill, and therefore get it into a conference.

4. Medicare Advantage. No doubt many in congress would like to take a pass on limiting spending on these....but if you do, you are then looking for over $100 Billion over 10 years to hold the line on budget neutral. I think the fact that this is good policy to stop overpaying these plans (even though it will lead to lower enrollment) will win out in the end....but mostly because it will be hard to make up the lost revenue.

5. Malpractice. The surest sign that Republicans don't want a bill of any type and will stay in full block mode is their not jumping at the opening the President gave them on malpractice. There have been a few speeches and the like....but it will really be interesting to see if Republicans and conservative Dems in the Senate try and put in some sort of failry stringent malpractice reform on the Senate floor.

Of course, one of the tricky issues for Republicans is that this may be more useful as something to complain about than it is to actually address it. Because tort law has always been a state issue. So, this is Republicans saying the federal gov't should over-ride states and enactment tort the same time people like Gov. Pawlenty, who is running for President, is saying that Minnesota may sue under the 10th amendement and say the federal government can't constitutionally pass an individual mandate. Not so coherent.

6. Public Option. Seems dead to me, but will likely come up again. The co-ops idea is weak and not worth much. I would support public option, but wouldn't fight over the co-op. Will be interesting to see if Sen. Snowe pushes on the trigger notion.

7. Affordability. Biggest question is whether insurance actually affordable for those being forced to buy. Cap tax exclusion and kill two birds: add about $250 B over 10 into subsidies, and REALLY do probably put the brakes on non-elderly cost inflation if you cap at the mean. Seems unlikely, but is good policy.

8. State options. There seems to be lots of movement on this front with Wyden and Carper and Cantwell especially open to all sorts of state choices. If you open this up, we could really have some interesting experiments across the nation.

9. Buy across state lines. This is no panacea. If I call an insurance company in Arkansas and ask them to write me a policy (if we make that legal) I suspect they would say, 'fine so long as you come to Arkansas to get your care.' The problem with this as a pass one law and the problem fixes itself is that a major reason premiums differ across states is that rates of health care use differ in ways that are hard to explain. There are probably some common sense changes that would allow bordering states or regions to set up arrangements, but this is no quick fix.

10. Will there be any changes that cause health insurance industry to revolt and oppose? This is one of the most interesting questions to me. Wyden amendement might do it. Would it be too late for them to change? How would they argue that competition is bad (I know it would be for them, but culturally how do you argue it). And why do employers not seem to want out of the insurance buying business as much as it seems like they should want out?

It should be an intersing run until December.

1 comment:

  1. Thank you Mr. Taylor for some accurate comments about Medicare Advantage. I just turned 65 and enrolled in a Medicare Advantage Plan. It is fantastic, but it is obvious that the government provides too great a subsidy. I would happily have an increase in premium so that universal health care could be realized. The current Advantage plan is there because Bush and his people wanted the government out of Medicare, regardless of cost.