This is not news. Nor is this a “fatal blow” for progressives.
Will the public option survive a vote on the Senate floor? Probably not—though it could happen. But this still does not mean that the public option is dead.
We know that the bill that emerges from the House will contain a MedicareE (for Everyone) alternative. The House bill and the Senate bill will then go to conference. This is the moment that matters. As a respected HealthBeat reader who knows Washington well recently told me, “Everything else is foreplay.” Much of what we are reading now is posturing–by some politicians ( Charles Schumer deserves an Emmy), by some pundits and by unnamed sources who want reporters to think that they know more than they actually know.
I would be happier if I thought both the Senate and the House bill would include a public option. But that isn’t necessary. All that is necessary is to get a bill through the House, and a bill through the Senate, with or without MedicareE. In Conference, where the two bills are merged, they can put the public option back in.
As former Congressional staffer and HealthBeat reader Jim Jaffe points out: “Remember that the Clinton bill never came to a vote in either House, so there was no chance to duke out differences in conference. Here it appears probable that each bill will pass a bill, however imperfect they may appear. I'd call that progress.” Keep in mind: once the bill goes to conference committee they won't need 60 votes in the Senate. It will be purely an up/down vote.
But isn’t Senate Finance the stronger committee? In conference won’t the Senate trump the House? Traditionally, Senate Finance has wielded great power. But in the past, it was chaired by legendary power brokers: Russell Long. Bob Dole. Lloyd Bentsen.
Max Baucus is no Lloyd Bentsen. He set out to put together a “bi-partisan bill,” and he has failed dismally. To be fair, from the beginning this was a hopeless task: the conservatives do not want reform of any kind. But Baucus should have known that.
The conservatives prefer the status quo. Many are willing to give every native-born American a piece of paper titled “insurance”—but, as I noted here, they would leave it to the insurance industry to decide what that piece of paper is worth. Its value would depend on what the customer is able and willing to pay. If the customer can’t pay roughly $13,500 (in today’s dollars) for a family plan, earns too much to qualify for a government subsidy (for example, a couple earning over $58,820) and doesn’t have an employer willing to pick up roughly 75% of the premium, he and his family will probably wind up with a high-deductible plan that they can’t afford to use. They may be able to get primary care without meeting the deductible—if they can find a primary care doctor. Bottom line: “Reform” would mean that we continue to ration care according to ability to pay.
Low-income households would be covered by subsides, but many on the third and fourth steps of a five-step income ladder would find themselves spending 12% of their income for such “coverage” as the private insurance industry decides to give them. For a family of three with joint income of $80,000, that means they could wind up paying $9,600 in premiums, plus up to $10,000 a year, out of pocket, in co-pays and deductibles.
President Obama and White House budget director Peter Orszag understand that if health insurance isn’t affordable, reform becomes a sham. The political penalty for promising what you can’t deliver would be steep. Thus they understand that for health care reform to work they must do what Massachusetts didn’t do: reduce the cost of care before rolling out full coverage.
The Commonwealth Fund estimates that administrative savings alone would make a public-sector family plan $2000 less expensive than a private-sector plan. And that’s just the beginning. Reform could save billions if some of the Medicare reforms currently under consideration are put in place over the next three years–and then incorporated in the public plan. By paying doctors and hospitals more if they collaborate to provide the effective, efficient, patient-centered care that we see at medical centers like Geisinger and Mayo —while refusing to pay for unnecessary tests, preventable readmissions, and over-priced products and services that expose patients to risk without benefit—reformers could drive premiums lower. In order to compete, many private insurers would almost certainly follow suit.
Many in the administration know what needs to be done. Medicare just needs to be begin implementing the structural changes that the Medicare Payment Advisory Commission (MedPAC) has been recommending for years—reforms that did not interest President Bush because he was engrossed in a pet project: turning Medicare over to the for-profit industry.
What will happen in Conference? Today the Wall Street Journal said it all in one sentence: “The idea could still revive if the White House weighs in strongly on its behalf.” As I have said in the past everything depends on what President Obama, Peter Orszag and Rahm Emanuel decide to do. Forget what Schumer or Snowe or even Rockefeller say today. The deal will be consummated, not on the Senate floor but in conference. Is the White House divided on this issue? Perhaps. But it is hard to see how the administration is going to deliver health care for all unless, in the end, the President insists on a public plan that, together with Medicare, will have the clout to begin eliminating the waste in our health care system.