Something a little bit more light-hearted for you this Saturday evening ... although the phenomenon it uncovers, which Ed Kilgore discusses here, is worth giving some thought to.
Six of these recent quotations are by right-leaning organizations, individuals, or interest groups ... and six are by left-leaning ones. See if you can tell which is which! Answer key is in the first comment to this post.
1. “The debate before us today is not whether insurance market reforms are needed. [...] The critical policy questions are whether the current legislation can bend the cost curve and result in a sustainable system. While the bill makes important improvements in access and takes steps towards cost-containment, it lacks accountability to ensure that costs are brought under control."
2. "The latest Senate health care bill [...] does too little to guarantee that uninsured Americans will actually be able afford the coverage they'll be required to purchase."
3. "[If] there is no government-run option, the public will have no choice but to pay their premiums to private insurers. Yes, that’s right. The Democratic party is on the verge of enacting a requirement, enforced with federal tax penalties, which would effectively require hard-working Americans to hand over even more of their wages to profit-hungry, private insurance companies."
4. "The most consequential health care legislation in the history of our country [...] shouldn’t be determined by one vote-margin strategies -– surely we can and must do better."
5. "Real reform would significantly lower costs, improve the delivery of health care and give all Americans a meaningful choice of coverage. The current Senate bill accomplishes none of these."
6. "The first rule of medicine is, "Do no harm." [...] Unless Democratic leadership steps up to fix this misguided proposal, our only recourse will be to kill it.
The fundamental failing of the newest Senate proposal is that it requires individuals to purchase health insurance, but does nothing to [...] stop spiraling health costs from eating up an ever-increasing percentage of our national productivity."
7. "There is an enormous, rising tide of populism that crosses party lines in objection to the Senate bill."
8. "The Senate Democrats' legislation is a Medicare-cutting, tax-hiking, no-real-reform, 2,000-page monstrosity opposed by the majority of the American people.
The only winners would be Big Government, Big Pharma, and Big Insurance."
9. "And we know Americans are outraged by what’s happened in this debate: a bill that was supposed to lower costs, lower taxes, and lower premiums will actually raise all three — making existing problems not better, but worse."
10. "The health care bill [...] bizarrely forces millions of people to buy extremely inadequate products from the private health insurance industry -- regardless of whether they want it or, worse, whether they can afford it. [...] In other words, it uses the power of government, the force of law, to give the greatest gift imaginable to this industry -- tens of millions of coerced customers."
11. "Two hundred billion dollars in new insurance premiums per year. And $463,000,000,000 in taxpayer subsidies over the next 10 years. That's how much health insurance companies could reap [...] That's because [the bill includes] an individual mandate -- a requirement that every American purchase health insurance or be fined -- a policy that candidate Barack Obama opposed but that President Barack Obama supports."
12. "The real risk is that this will impact middle-income workers the most who have been crushed by the economy. They don’t need an additional burden."
12.19.2009
An Extremely Premature Retrospective on the Kill Bill Strategy
@ 2:34 PM
The reaction from the kill-billers to the Senate's health care compromise seems to be somewhat muted this afternoon.
One reason may simply be that this is occurring on a Saturday when a lot of people are traveling and a lot of people who aren't traveling are snowed in. But, also, the compromises that Nelson extracted are not especially significant -- the more substantive changes were really wrought by Lieberman. And in fact, there are several changes to the bill that work in the opposite direction.
For instance: the CLASS Act has survived; the ban on lifetime coverage limits was restored; there was no tinkering with the Medicaid provisions; there's some Ron Wyden like amendment to permit workers to opt out of their employer-provided coverage and purchase insurance on the exchanges instead; the abortion language in the Senate's bill is milder than that which is already in the House's (to an extent that may actually be a problem); a provision to allow people to purchase insurance through non-profit programs organized by the OPM was inserted, and some decent medical loss ratios were established.
While the very nature of last-minute negotiations makes it hard to draw straight lines from point A to point B, it seems likely that if the kill-billers had not pushed back so hard against Lieberman, the bill would have been worse -- maybe much worse. It's sometimes said that a good compromise serves to make everyone equally unhappy. I'm not quite sure if that's the case here, but it does seem that Lieberman pushed things very close to the brink, to the extent that Nelson didn't have much leverage. Allow states to opt-out of their Medicaid obligations, for instance, as Nelson was said to have desired, and the unions might have gone from neutral to outright hostile to the bill, the opposition in the progressive blogosphere would have become nearly universal, and even the "wonk bloc" -- people like Ezra Klein and Jonathan Cohn and Paul Krguman and myself -- might have said this was a bridge too far. Nelson certainly could have voted to kill the bill outright, but he wasn't going to succeed in making it substantially more conservative.
From a policy standpoint, indeed, I think the kill-bill / public-option-or-bust strategy has helped to push the bill toward an optimal outcome. Certainly not optimal in the sense of "the best bill that the Senate could possibly have passed", or "the best bill that progressives could have hoped for". But in terms of the best bill that the Senate was actually going to pass, given the 60-vote requirement, an unpopular Congress, and an inexplicably lackluster performance from the White House, this is probably fairly close -- especially if some further concessions can be realized in conference with respect to the magnitude of the subsidies.
With that said, the downside to the kill-bill / public-option-or-bust strategy was not necessarily in terms of producing a suboptimal policy outcome. Rather, it was arguably political, both in terms of having drawn out the process, and in terms of framing the bill in negative terms both during and after its passage. You certainly haven't had a lot of people, outside of the White House and the Congress itself, going on MSNBC or CNN or Fox News and talking about the good that this bill would do. It's been trashed from both the left and the right. Is it surprising that only 30-something percent of the country still supports it?
Politically speaking, indeed, this was a very costly negotiation for the Democrats. Approval ratings for President Obama, for the Democratic Congress, and for the health care bill itself have declined slowly but quite steadily over the course of the past six months, and the Democrats will exit this debate being much more vulnerable in 2010 than they were going in. Some of that was inevitable -- ultimately, you win elections and accumulate political capital for a reason, which is to achieve your policy goals. And health care -- a big, cumbersome piece of policy that does not lend itself well to 30-second soundbyes -- tends to be especially costly from a political capital standpoint. Still, even relative to those diminished expectations, this seems to have gone quite poorly for the Democrats.
Do I blame the kill-billers for that? No, not mostly. Mostly I blame the White House, and most of what blame I don't assign to the White House I assign to Joe Lieberman, and most of what blame I don't assign to Joe Lieberman I assign to Max Baucus. But, it does seem that one of the most significant potential upsides to passing the bill -- motivating the base -- may now be significantly muted.
I mostly don't blame the kill billers for that either, nor do I expect them to cheerlead for a policy that leaves them feeling dissatisfied. But to the extent that some of the opposition on the left has been based on (i) an unrealistic read of the political environment, or (ii) an ill-considered (IMO) desire to use health care as a pawn in a somewhat amorphous long-run power struggle, or (iii) a principally emotional reaction to the intrinsically and inevitably ugly mechanics of compromise -- I do assign them some of the blame for this portion of the political fallout.
But the kill-billers also helped, perhaps a lot, to make this a better, more progressive bill. And that upside will in all likelihood prove to outweigh and outlive the downside.
UPDATE: To clarify a couple of things. Yes, I still think opposing the bill from the "left" on the policy merits is extremely hard to defend and is close to being categorically wrong, and if the kill-billers actually did kill the bill, it would be a catastrophic mistake.
On the other hand, merely threatening to implode the bill so as to strengthen it could obviously be a canny negotiating tactic.
What has actually happened is probably somewhere in between. It seems to me that most of the opposition is, in fact, sincere -- the kill-billers really do think (or perhaps have convinced themselves) that the bill is worse than nothing. They may be wrong -- I think they're very wrong! But ironically, the self-evident sincerity of their position may help to make it more credible -- as a negotiating tactic.
One reason may simply be that this is occurring on a Saturday when a lot of people are traveling and a lot of people who aren't traveling are snowed in. But, also, the compromises that Nelson extracted are not especially significant -- the more substantive changes were really wrought by Lieberman. And in fact, there are several changes to the bill that work in the opposite direction.
For instance: the CLASS Act has survived; the ban on lifetime coverage limits was restored; there was no tinkering with the Medicaid provisions; there's some Ron Wyden like amendment to permit workers to opt out of their employer-provided coverage and purchase insurance on the exchanges instead; the abortion language in the Senate's bill is milder than that which is already in the House's (to an extent that may actually be a problem); a provision to allow people to purchase insurance through non-profit programs organized by the OPM was inserted, and some decent medical loss ratios were established.
While the very nature of last-minute negotiations makes it hard to draw straight lines from point A to point B, it seems likely that if the kill-billers had not pushed back so hard against Lieberman, the bill would have been worse -- maybe much worse. It's sometimes said that a good compromise serves to make everyone equally unhappy. I'm not quite sure if that's the case here, but it does seem that Lieberman pushed things very close to the brink, to the extent that Nelson didn't have much leverage. Allow states to opt-out of their Medicaid obligations, for instance, as Nelson was said to have desired, and the unions might have gone from neutral to outright hostile to the bill, the opposition in the progressive blogosphere would have become nearly universal, and even the "wonk bloc" -- people like Ezra Klein and Jonathan Cohn and Paul Krguman and myself -- might have said this was a bridge too far. Nelson certainly could have voted to kill the bill outright, but he wasn't going to succeed in making it substantially more conservative.
From a policy standpoint, indeed, I think the kill-bill / public-option-or-bust strategy has helped to push the bill toward an optimal outcome. Certainly not optimal in the sense of "the best bill that the Senate could possibly have passed", or "the best bill that progressives could have hoped for". But in terms of the best bill that the Senate was actually going to pass, given the 60-vote requirement, an unpopular Congress, and an inexplicably lackluster performance from the White House, this is probably fairly close -- especially if some further concessions can be realized in conference with respect to the magnitude of the subsidies.
With that said, the downside to the kill-bill / public-option-or-bust strategy was not necessarily in terms of producing a suboptimal policy outcome. Rather, it was arguably political, both in terms of having drawn out the process, and in terms of framing the bill in negative terms both during and after its passage. You certainly haven't had a lot of people, outside of the White House and the Congress itself, going on MSNBC or CNN or Fox News and talking about the good that this bill would do. It's been trashed from both the left and the right. Is it surprising that only 30-something percent of the country still supports it?
Politically speaking, indeed, this was a very costly negotiation for the Democrats. Approval ratings for President Obama, for the Democratic Congress, and for the health care bill itself have declined slowly but quite steadily over the course of the past six months, and the Democrats will exit this debate being much more vulnerable in 2010 than they were going in. Some of that was inevitable -- ultimately, you win elections and accumulate political capital for a reason, which is to achieve your policy goals. And health care -- a big, cumbersome piece of policy that does not lend itself well to 30-second soundbyes -- tends to be especially costly from a political capital standpoint. Still, even relative to those diminished expectations, this seems to have gone quite poorly for the Democrats.
Do I blame the kill-billers for that? No, not mostly. Mostly I blame the White House, and most of what blame I don't assign to the White House I assign to Joe Lieberman, and most of what blame I don't assign to Joe Lieberman I assign to Max Baucus. But, it does seem that one of the most significant potential upsides to passing the bill -- motivating the base -- may now be significantly muted.
I mostly don't blame the kill billers for that either, nor do I expect them to cheerlead for a policy that leaves them feeling dissatisfied. But to the extent that some of the opposition on the left has been based on (i) an unrealistic read of the political environment, or (ii) an ill-considered (IMO) desire to use health care as a pawn in a somewhat amorphous long-run power struggle, or (iii) a principally emotional reaction to the intrinsically and inevitably ugly mechanics of compromise -- I do assign them some of the blame for this portion of the political fallout.
But the kill-billers also helped, perhaps a lot, to make this a better, more progressive bill. And that upside will in all likelihood prove to outweigh and outlive the downside.
UPDATE: To clarify a couple of things. Yes, I still think opposing the bill from the "left" on the policy merits is extremely hard to defend and is close to being categorically wrong, and if the kill-billers actually did kill the bill, it would be a catastrophic mistake.
On the other hand, merely threatening to implode the bill so as to strengthen it could obviously be a canny negotiating tactic.
What has actually happened is probably somewhere in between. It seems to me that most of the opposition is, in fact, sincere -- the kill-billers really do think (or perhaps have convinced themselves) that the bill is worse than nothing. They may be wrong -- I think they're very wrong! But ironically, the self-evident sincerity of their position may help to make it more credible -- as a negotiating tactic.
Nelson Pledges Support For Health Care Bill, Making Passage Likely
@ 12:08 PM
According to multiple reports, Nebraska Senator Ben Nelson has agreed to support the Democrats' health care legislation after a series of amendments introduced by Majority Leader Reid. This potentially gives the Democrats exactly 60 votes for passage. Maine's Olympia Snowe, the most moderate Republican, is not expected to lend her endorsement.
Needless to say, this dramatically increases the likelihood that Democrats will pass a bill, although it is not certain. How could the bill die? There are basically five ways:
1) There is a 'surprise' conservative vote against cloture. Technically, speaking, there are not 60 Democrats who have formally stated that they'd vote yes. Or, someone could renege on their promise to vote yes. With Snowe -- and presumably Collins -- apparently poised to vote against the measure, there is no margin for error.
Still, being good Bayesians about all this, it seems likely that we would have heard something if this were the case. After all, announcing one's potential opposition to the bill is a highly profitable enterprise: Ben Nelson, Joe Lieberman, and Mary Landrieu have at various points in the past two weeks leveraged their threats into either significant changes to the bill text (Nelson and especially Lieberman) or significant 'bonuses'/bribes for their states (Landrieu and Nelson). To announce one's opposition now would probably just kill the bill outright, and fail to extract any such concessions. Therefore, this seems unlikely, although it's certainly not impossible. The odds probably improve from 'very unlikely' to merely 'unlikely' if the Republicans succeed in delaying the floor vote until after Christmas.
2) There is a 'surprise' liberal vote against cloture. As Chris Bowers has pointed out, while Democrats like Bernie Sanders and Roland Burris have threatened not to vote for the bill upon final passage, none have yet threatened -- much less pledged -- to vote with the Republicans on a filibuster. Also, the amendments forced by Nelson appear to be somewhat milder than what I had been anticipating, and Reid has also introduced a couple of changes that the liberals should like, such as a ban on lifetime coverage limits. So, although the senators we are dealing with -- particularly Roland Burris -- are somewhat unpredictable, this too seems unlikely.
3) The bill receives 60 votes for cloture, but fewer than 50 for final passage. We mention this for the sake of completeness, but it seems extremely unlikely as most of the 'veto points' in the Senate, like Nelson and Evan Bayh, have essentially been treating their cloture vote as equivalent to an up-or-down vote. Nor is there enough potential liberal opposition. If Nelson, Lieberman, Bayh, Landrieu, and Lincoln (from the right) and Burris, Sanders and Feingold (from the left) all voted against final passage, that would still leave the bill with two extra votes to spare.
4) The House votes against the conference report. According to many sources, including the White House in their Thursday conference call, there is still highly likely to be a conference report in order to reconcile the House and Senate versions of the bill -- which of course contain significant differences, including the public option.
This is arguably the most likely avenue for the bill's defeat; the measure, after all, passed the House with only two extra votes, and I'd expect some liberal groups to shift their attention to the House and urge progressives to kill the bill. However, that neglects the fact that some moderate and conservative Democrats who voted against the bill the first time around will probably now vote for the compromise with the Senate, which will be significantly more moderate. It also neglects the fact that Nancy Pelosi is a significantly more skilled vote-whipper than Harry Reid. So, this is perhaps the most interesting thing to watch, but it again seems unlikely that the bill will fail to clear the hurdle.
EDIT/UPDATE: Opposition from pro-life Democrats to the Senate bill's milder abortion language could still be a significant flashpoint.
5) The Senate filibusters the conference report. Yes, conference reports can be filibustered, although they can't be amended, which reduces the likelihood of brinkmanship gone awry. Once the bill has been reported out of conference, you can't threaten to vote against cloture in order to extract concessions because you won't get any -- you can simply vote against cloture to kill it.
Of course, it's that qualifier that matters -- once the bill has been reported out of conference. The fight, to the extent there is one, is liable to take place in the conference committee itself. At the end of the day, though, I figure there are probably a majority of votes in the House for the Senate bill as is -- for every liberal vote that is potentially lost, a Blue Dog vote is potentially gained. And so long as there is that daylight, the Democrats are highly likely to find it. That's not to suggest that there won't be some real issues to be hammered out, or that there isn't some chance of best-laid-plans going awry, but again this isn't a likely outcome.
Overall, the safe and sensible assumption is that the bill is in the 80-90 percent likelihood range for moving to the President's desk and becoming law.
UPDATE: The CBO score is out. It appears that the bill will be marginally more expensive than the previous version, but will also raise marginally more revenues, so the net effect on deficits (vis-Ã -vis the original version) is basically zero. Also, the CBO has stated that the changes are unlikely to significantly alter the premiums that taxpayers are expected to pay under the bill; the public option would have saved the government some money by reducing the amount of subsidies, but would not have had a significant effect on the premiums that individuals pay.
* * *
Another important point: Nelson has stipulated that his vote is contingent upon there not being very many changes in conference committee. So while, on the one hand, the changes to the Senate's bill are milder than what many had anticipated (and some of the changes push the bill in a more progressive direction), on the other hand, they may represent a bit of a 'pre-compromise' with the House.
I would hope that the House has some leverage, however, with respect to the magnitude of the subsidies provided to lower-income individuals and families; this is an area in which the White House has indicated it may be actively involved.
Needless to say, this dramatically increases the likelihood that Democrats will pass a bill, although it is not certain. How could the bill die? There are basically five ways:
1) There is a 'surprise' conservative vote against cloture. Technically, speaking, there are not 60 Democrats who have formally stated that they'd vote yes. Or, someone could renege on their promise to vote yes. With Snowe -- and presumably Collins -- apparently poised to vote against the measure, there is no margin for error.
Still, being good Bayesians about all this, it seems likely that we would have heard something if this were the case. After all, announcing one's potential opposition to the bill is a highly profitable enterprise: Ben Nelson, Joe Lieberman, and Mary Landrieu have at various points in the past two weeks leveraged their threats into either significant changes to the bill text (Nelson and especially Lieberman) or significant 'bonuses'/bribes for their states (Landrieu and Nelson). To announce one's opposition now would probably just kill the bill outright, and fail to extract any such concessions. Therefore, this seems unlikely, although it's certainly not impossible. The odds probably improve from 'very unlikely' to merely 'unlikely' if the Republicans succeed in delaying the floor vote until after Christmas.
2) There is a 'surprise' liberal vote against cloture. As Chris Bowers has pointed out, while Democrats like Bernie Sanders and Roland Burris have threatened not to vote for the bill upon final passage, none have yet threatened -- much less pledged -- to vote with the Republicans on a filibuster. Also, the amendments forced by Nelson appear to be somewhat milder than what I had been anticipating, and Reid has also introduced a couple of changes that the liberals should like, such as a ban on lifetime coverage limits. So, although the senators we are dealing with -- particularly Roland Burris -- are somewhat unpredictable, this too seems unlikely.
3) The bill receives 60 votes for cloture, but fewer than 50 for final passage. We mention this for the sake of completeness, but it seems extremely unlikely as most of the 'veto points' in the Senate, like Nelson and Evan Bayh, have essentially been treating their cloture vote as equivalent to an up-or-down vote. Nor is there enough potential liberal opposition. If Nelson, Lieberman, Bayh, Landrieu, and Lincoln (from the right) and Burris, Sanders and Feingold (from the left) all voted against final passage, that would still leave the bill with two extra votes to spare.
4) The House votes against the conference report. According to many sources, including the White House in their Thursday conference call, there is still highly likely to be a conference report in order to reconcile the House and Senate versions of the bill -- which of course contain significant differences, including the public option.
This is arguably the most likely avenue for the bill's defeat; the measure, after all, passed the House with only two extra votes, and I'd expect some liberal groups to shift their attention to the House and urge progressives to kill the bill. However, that neglects the fact that some moderate and conservative Democrats who voted against the bill the first time around will probably now vote for the compromise with the Senate, which will be significantly more moderate. It also neglects the fact that Nancy Pelosi is a significantly more skilled vote-whipper than Harry Reid. So, this is perhaps the most interesting thing to watch, but it again seems unlikely that the bill will fail to clear the hurdle.
EDIT/UPDATE: Opposition from pro-life Democrats to the Senate bill's milder abortion language could still be a significant flashpoint.
5) The Senate filibusters the conference report. Yes, conference reports can be filibustered, although they can't be amended, which reduces the likelihood of brinkmanship gone awry. Once the bill has been reported out of conference, you can't threaten to vote against cloture in order to extract concessions because you won't get any -- you can simply vote against cloture to kill it.
Of course, it's that qualifier that matters -- once the bill has been reported out of conference. The fight, to the extent there is one, is liable to take place in the conference committee itself. At the end of the day, though, I figure there are probably a majority of votes in the House for the Senate bill as is -- for every liberal vote that is potentially lost, a Blue Dog vote is potentially gained. And so long as there is that daylight, the Democrats are highly likely to find it. That's not to suggest that there won't be some real issues to be hammered out, or that there isn't some chance of best-laid-plans going awry, but again this isn't a likely outcome.
Overall, the safe and sensible assumption is that the bill is in the 80-90 percent likelihood range for moving to the President's desk and becoming law.
UPDATE: The CBO score is out. It appears that the bill will be marginally more expensive than the previous version, but will also raise marginally more revenues, so the net effect on deficits (vis-Ã -vis the original version) is basically zero. Also, the CBO has stated that the changes are unlikely to significantly alter the premiums that taxpayers are expected to pay under the bill; the public option would have saved the government some money by reducing the amount of subsidies, but would not have had a significant effect on the premiums that individuals pay.
* * *
Another important point: Nelson has stipulated that his vote is contingent upon there not being very many changes in conference committee. So while, on the one hand, the changes to the Senate's bill are milder than what many had anticipated (and some of the changes push the bill in a more progressive direction), on the other hand, they may represent a bit of a 'pre-compromise' with the House.
I would hope that the House has some leverage, however, with respect to the magnitude of the subsidies provided to lower-income individuals and families; this is an area in which the White House has indicated it may be actively involved.
12.18.2009
An Uncharitable Take on a Liberal Poll
@ 3:40 PM
Over at Firedoglake, Jane Hamsher cites a poll, commissioned by Research 2000 for the progressive activist organizations Progressive Change Campaign Committee and Democracy for America:
No, it isn't.
Why not simply have the question say: "Would you favor or oppose requiring all Americans to buy health insurance?". Or, "Would you favor or oppose requiring all Americans to buy health insurance or pay a fine?". That would be a more charitable -- and neutral -- question.
It's a bit redundant, rather, to emphasize the phrase "even if they find insurance too expensive or do not want it". Particularly when that statement is not literally true. Rather, the Senate bill, as Jane's colleague Jon Walker notes, would exempt individuals from having to buy insurance if the plans would constitute more than 8% of their income.
Or, if you want to provide more information to "help" the respondent come up with a response, why not mention the benefit of the mandate -- that it's necessary to keep premiums affordable in a world of guaranteed issue? Or, why not mention that the government will provide billions of dollars in assistance to low and medium income people to help them afford health insurance? Kaiser, for instance, does mention that in their poll, which has this far more charitable question:
The goal, of course, is not to be charitable -- it's to be as fair as possible. Kaiser's question, for my tastes, is somewhat too charitable to the pro-mandate side of the argument. And Hamsher's, contra her claims, is a little too charitable to the opposition's.
Would you favor or oppose requiring all Americans to buy health insurance — the so-called mandate — even if they find insurance too expensive or do not want it?
FAVOR 38%
OPPOSE 51%
NOT SURE 11%
I’d also note that the wording of the question is the most charitable rendering the issue is ever likely to get.Hamsher's claim that "the wording of the question is the most charitable rendering the issue is ever likely to get" is a little audacious.
No, it isn't.
Why not simply have the question say: "Would you favor or oppose requiring all Americans to buy health insurance?". Or, "Would you favor or oppose requiring all Americans to buy health insurance or pay a fine?". That would be a more charitable -- and neutral -- question.
It's a bit redundant, rather, to emphasize the phrase "even if they find insurance too expensive or do not want it". Particularly when that statement is not literally true. Rather, the Senate bill, as Jane's colleague Jon Walker notes, would exempt individuals from having to buy insurance if the plans would constitute more than 8% of their income.
Or, if you want to provide more information to "help" the respondent come up with a response, why not mention the benefit of the mandate -- that it's necessary to keep premiums affordable in a world of guaranteed issue? Or, why not mention that the government will provide billions of dollars in assistance to low and medium income people to help them afford health insurance? Kaiser, for instance, does mention that in their poll, which has this far more charitable question:
Would you favor or oppose requiring all Americans to have health insurance, either from their employer or from another source, with financial help for those who can't afford it?That poll produces a dramatically different result: 66 percent in favor of the mandate and 31 percent opposed.
The goal, of course, is not to be charitable -- it's to be as fair as possible. Kaiser's question, for my tastes, is somewhat too charitable to the pro-mandate side of the argument. And Hamsher's, contra her claims, is a little too charitable to the opposition's.
12.17.2009
A Typology for Congressional Retirements
@ 4:13 PM
Lost amid the attention to the health care bill this week are the ramifications of Tennessee Democratic Congressman Bart Gordon's announcement Monday of his pending retirement. Chris Cilliza and Dan Balz wrote a detailed piece in the Washington Post Tuesday about the larger issue of Democratic retirements and party competitiveness next November that's worth reading.
As I wrote Monday in a guest post over at Salon’s War Room, retirements happen every cycle but mass retirements tend to happen to either (a) when a party is about to suffer major losses, or (b) after a party has suffered major losses and usually its majority. In the first case, retirees want to avoid the pain, hassle and embarrassment of an expected loss, of either their seat or even their role as a majority-caucus member; in the second, survivors, whatever their level of electoral safety, just don't find it as meaningful to be in the minority.
That distinction led me to think about a more general typology for retirement calculus.
In the figure above, looking row-wise, we have the two cycles mentioned above: when a majority-party member anticipates his party is in danger of losing significant seats, perhaps including his/her own, and possibly the chamber majority; and a member of a party that just lost the majority the previous cycle, or very recently.
Column-wise, I have trichotomized members as either representing (1) normally safe seats temporarily in jeopardy because their incumbents, for reasons like scandals, are in specific trouble; (2) swing-district seats that are structurally competitive regardless of incumbent; or (3) safe seats that are safe only because that particular incumbent is popular in what might be an otherwise competitive district. (I've left out retirements in seats that are overwhelmingly tilted toward one party or the other because, in theory, the retirement there should not matter in terms of partisan control.)
OK, for the Democrats, now in power, we are most interested in the top row. And more specifically the DCCC and Chris Van Hollen should be more worried as we move left to right along the three cells.
And it this last category of seats that make Gordon's announcement tough for Democrats, because Gordon is the Democratic equivalent to a Jim Leach. Specifically, he's one of the 49 so-called "McCain Democrats"--that is, Dems representing districts John McCain carried in 2008. McCain's margin was 25 points in Gordon's district. Of the other three announced Democratic retirees, in terms of potential risk of losing the seats, fellow Tennessean John Tanner's districts was carried by McCain by 13 points, KS' Dennis Moore was carried by Barack Obama by just 3 points, and WA's Brian Baird's seat is perhaps the safest for Democrats (Obama +9).
The real worry, as Cilizza and Balz note, is a quartet of southern House Democrats rumored to be pondering retirement--and all four are McCain Democrats. With their McCain margins in parentheses, they are: AR's Marion Berry (+20 for McCain), TX's Chet Edwards (+35), AR's Vic Snyder (+10), and SC's John Spratt (+7). In short, they are four more Bart Gordons in waiting. And that's why Gordon's retirement, if it does open the floodgates and out pour the above, that spells DCCC trouble.
Now, as everybody by now knows, I've made the case for building non-southern majorities. And if I were to be told that those four southern Dems were going to be replaced by four midwestern ones, that would be one thing. But losing seats is still a bad outcome for Democrats, even if they are Blue Dogs who often vote against the Speaker and the President.
**Sorry, thanks to readers I realize I confused my Iowa Jims, and cited Jim Leach (who didn't retire) instead of Jim Nussle (who did) in the top-right box. It doesn't change the general typology, but my sincere apologies for the error. I've written about 25 posts in the last four days for Salon and 538 and, not that that's an excuse, but I guess I'm a bit fried right now.
As I wrote Monday in a guest post over at Salon’s War Room, retirements happen every cycle but mass retirements tend to happen to either (a) when a party is about to suffer major losses, or (b) after a party has suffered major losses and usually its majority. In the first case, retirees want to avoid the pain, hassle and embarrassment of an expected loss, of either their seat or even their role as a majority-caucus member; in the second, survivors, whatever their level of electoral safety, just don't find it as meaningful to be in the minority.
That distinction led me to think about a more general typology for retirement calculus.
In the figure above, looking row-wise, we have the two cycles mentioned above: when a majority-party member anticipates his party is in danger of losing significant seats, perhaps including his/her own, and possibly the chamber majority; and a member of a party that just lost the majority the previous cycle, or very recently. Column-wise, I have trichotomized members as either representing (1) normally safe seats temporarily in jeopardy because their incumbents, for reasons like scandals, are in specific trouble; (2) swing-district seats that are structurally competitive regardless of incumbent; or (3) safe seats that are safe only because that particular incumbent is popular in what might be an otherwise competitive district. (I've left out retirements in seats that are overwhelmingly tilted toward one party or the other because, in theory, the retirement there should not matter in terms of partisan control.)
OK, for the Democrats, now in power, we are most interested in the top row. And more specifically the DCCC and Chris Van Hollen should be more worried as we move left to right along the three cells.
- A1. In the top-left cell, if an incumbent is in personal trouble in a district that normally would never be in peril, you actually want a retirement. LA's William Jefferson is the perfect example. He didn't retire--the voters "retired" him. But in the long term the Democrats should be able to recover this seat, and probably wouldn't have lost it if Jefferson did the right thing and resigned so some Democrat not plagued by scandal could step in. Duke Cunningham resigned and Republicans held that seat; but when Richard Pombo, also in an ethical stew, soldiered ahead, Democrat Jerry McNerney won. So, these are districts where retirement may actually be a relief or, at worst, a short-term and small worry.
- A2. In the top-middle cell, you have retirees from swing districts. Obviously, you'd rather have your incumbent running for re-election. But if they are going to retire, the risk of losing the seat, though raised, is mitigated by the fact that a swing district was going to be a fight and require resources. In other words, this is a seat you could lose in a small- or large-wave cycle even with your incumbent running for re-election.
- A3. Retirements in the top-right cell are safe so long as their longtime, popular incumbents remain there, but otherwise favor the other party. Republican Jim Leach** of Iowa, for example, held one of the most Democratically-leaning seats in the House before he decided to throw in the towel. When he did, progressive Democrat Dave Loebsack swept in to grab it.
And it this last category of seats that make Gordon's announcement tough for Democrats, because Gordon is the Democratic equivalent to a Jim Leach. Specifically, he's one of the 49 so-called "McCain Democrats"--that is, Dems representing districts John McCain carried in 2008. McCain's margin was 25 points in Gordon's district. Of the other three announced Democratic retirees, in terms of potential risk of losing the seats, fellow Tennessean John Tanner's districts was carried by McCain by 13 points, KS' Dennis Moore was carried by Barack Obama by just 3 points, and WA's Brian Baird's seat is perhaps the safest for Democrats (Obama +9).
The real worry, as Cilizza and Balz note, is a quartet of southern House Democrats rumored to be pondering retirement--and all four are McCain Democrats. With their McCain margins in parentheses, they are: AR's Marion Berry (+20 for McCain), TX's Chet Edwards (+35), AR's Vic Snyder (+10), and SC's John Spratt (+7). In short, they are four more Bart Gordons in waiting. And that's why Gordon's retirement, if it does open the floodgates and out pour the above, that spells DCCC trouble.
Now, as everybody by now knows, I've made the case for building non-southern majorities. And if I were to be told that those four southern Dems were going to be replaced by four midwestern ones, that would be one thing. But losing seats is still a bad outcome for Democrats, even if they are Blue Dogs who often vote against the Speaker and the President.
**Sorry, thanks to readers I realize I confused my Iowa Jims, and cited Jim Leach (who didn't retire) instead of Jim Nussle (who did) in the top-right box. It doesn't change the general typology, but my sincere apologies for the error. I've written about 25 posts in the last four days for Salon and 538 and, not that that's an excuse, but I guess I'm a bit fried right now.
20 Questions, 20 Responses
@ 1:15 AM
I'm happy that this debate seems to be evolving into something a little more civilized on all sides. This is my response to Markos Moulitsas (DK) at Daily Kos and Jon Walker (JW) at FireDogLake who were kind enough to respond to the 20 questions I posed earlier. This is a lot of text, so I apologize in advance for any typographical or readability issues.
One of the fundamental rules of political forecasting is never say never -- miracles, or at least things that seem like miracles beforehand -- can happen occasionally. But it would probably take a miracle to get any sort of marginally robust public option into the bill. At least 2-4 senators have stipulated outright that they'd vote to filibuster such an effort, have been saying so for months, progressives have no obvious leverage over them. Blanche Lincoln will not be unhappy if liberals block the bill; she'll be thrilled that she doesn't have to make a no-win vote and can blame Bernie Sanders or Roland Burris or the SEIU for her troubles. I don't know how many times you can bang your head against the wall before this sinks in. It's not like liberals haven't tried everything in the playbook to get a public option into the bill; they've been both dogged and creative in their pursuit of one. It hasn't worked.
Perhaps there's some chance of reviving the Olympia Snowe trigger, which to my knowledge only Joe Lieberman is firmly opposed to. Indeed, this is probably a more plausible path than the Medicare buy-in provision, where the opposition has more unequivocal and the support less robust. But the Snowe trigger has not been considered an acceptable solution by most liberals -- and understandably so, because it's a fairly poor excuse for a public option.
At some point, though, the assertion that a halfway-decent public option can still be passed via regular order begins to smack of the First Stage of Grief. At the very least, I would suggest that Kill-Billers spend some time engaged in the thought experiment of how they might feel about the bill if it really were this way or the highway.
Markos' point that this represents a "simplistic view of liberals" is intriguing -- certainly, it is interesting to me how some of the liberal and conservative critiques against the bill have started to coalesce -- but we'll address this at another time.
And the evidence that the insurance industry would benefit from this bill on balance -- on either a marginal or an aggregate basis -- is almost completely lacking. Jon's point that "insurance stocks have gone up dramatically with each day of bad news for the public option" [emphasis mine] is absolutely correct -- I have observed this as well. But my question is how insurance company profits would respond to a public-option-less bill versus the status quo.
If you look at the aggregate amount passed on to middle class people under the excise tax, it would exceed the aggregate amount passed on to upper-class people. But that's only because there are a lot more middle class people in the country than upper class people. On a per-person basis, the tax is quite progressive up to about $200,000 (at which point it becomes somewhat regressive). Also, as the CBPP study notes, most of the reduction in premiums that the excise tax would facilitate would be passed back to the workers in the form of higher wages.
There is also a debate about how much cost savings the excise tax would generate; the CMS study that Jon cites says "only" $100 billion total through 2019, whereas the CBPPstudy says $74 billion per year by 2019. I honestly don't know where the difference in assumptions lies, but the tentative consensus among economists is probably closer to the CBPP estimate.
This is not to say, by the way, that the excise tax can't be designed better -- possibly including a carve-out for deals negotiated under collective bargaining. But this does need to be a tax applied to insurance, and not merely to income, if it's going to have any "curve-bending" effects.
Indeed, this why it's so hard to do incremental health care reform. If you want to cover people with pre-existing conditions, you need an individual mandate or everyone will be furious that their premiums have gone up. But if you have an individual mandate, you had better have subsidies to help poor people to afford the coverage. The nexus of the individual mandate and the magnitude of the subsidies is really what needs to be explored here.
Of course, if you have some kind of forced choice, you want it to be as appetizing a choice as possible. The bill on the floor fact does create a somewhat more competitive insurance market -- through the exchanges. It's not what I'd like to see, but given that profit margins for private insurance companies are not high, I'm not sure that competition per se is quite the problem that it's been made out to be. The high profit margins in the industry, rather, come at the provider level -- not the insurer level. The reason, for instance, that a public option benchmarked to Medicare rates would have been so powerful is because Medicare squeezes the providers.
If your lone objective were to end up with something that you could call a public option, then yes -- reconciliation offers some possibility of that. But I don't see how you're likely, on balance, to wind up with a better bill -- losing the guaranteed issue provision alone would probably outweigh the inclusion of a public option.
There's also the idea, which Jon has advanced, of using the reconciliation process for some parts of the bill but not for others. It's a creative idea, but I don't see how it works, since it's not like you can keep this a secret from people. If you plan to pass certain provisions under reconciliation so as to circumvent Ben Nelson, it seems to me nearly certain that Ben Nelson would counter-circumvent you by filibustering the parts of the bill that you attempted to pass under regular order. So you'd still end up with half a loaf -- although maybe a different half than you might have otherwise.
Now, I certainly do think the Democrats would have some chance of passing portions of the bill under reconciliation in 2011; in that case you wouldn't have this transparent bait-and-switch with the moderates and could claim that you'd received a new mandate from the public.
Also, tax cuts are a relatively straightforward application of the reconciliation process -- health care is not, and the resulting procedural debate would last weeks if not months, giving the public plenty of time to stew over it.
The point is, at this point I don't think they've been directing their focus in ways that optimize the progressive-ness of the health care bill. But, as both Markos and Jon imply, that might not be the point. Rather, progressives are fighting a sort of proxy war over the public option -- as a way to exert their influence and authority. This is where I've always parted ways with the strategy -- I think health care is too important an issue to use as a demonstration of one's authority. What might be better? Financial reform would be one answer. But obviously, the cat is way out of the bag now on the public option and people have become vested in their positions.
I don't agree with Jon's pessimism that the bill will be "crippled" -- because of loss aversion, it's much harder to take something away from someone than to give it to them in the first place. And so long as the filibuster is in place, it will protect the status quo -- in this case, a new status quo in which poor and sick people get more help from the government.
But I've never seen things get quite so personal -- I've gotten as many nasty comments and e-mails from Democrats on this issue as I have in the past six months from conservatives (on all issues). That emotion is a factor in this debate seems self-evident to me. I do somewhat regret egging things on with a deliberately provocative headline on Tuesday. But I would urge everyone to take a deep, deep breath, to the extent possible.
1. Over the medium term, how many other opportunities will exist to provide in excess of $100 billion per year in public subsidies to poor and sick people?Certainly, one of my fundamental assumptions is that a bill with a decent public option cannot be passed through regular order. I'll tackle Jon's arguments about reconciliation down below -- for now let's consider regular order.
MM: The assumption here is that this bill is the only option on the table. The House still has a say in the matter. And really, the point of reform isn't to shovel taxpayer dollars to the insurance companies, it's to expand care and lower costs. I'm not willing to surrender on costs.
JW: Killing the current deal does not preclude passing the good parts of health reform through reconciliation. When they are forced to face passage of some of these reforms with reconciliation, or the threat of reconciliation, it is not impossible to envision Lieberman, Nelson, and Lincoln backing down on their threat of joining a filibuster.
One of the fundamental rules of political forecasting is never say never -- miracles, or at least things that seem like miracles beforehand -- can happen occasionally. But it would probably take a miracle to get any sort of marginally robust public option into the bill. At least 2-4 senators have stipulated outright that they'd vote to filibuster such an effort, have been saying so for months, progressives have no obvious leverage over them. Blanche Lincoln will not be unhappy if liberals block the bill; she'll be thrilled that she doesn't have to make a no-win vote and can blame Bernie Sanders or Roland Burris or the SEIU for her troubles. I don't know how many times you can bang your head against the wall before this sinks in. It's not like liberals haven't tried everything in the playbook to get a public option into the bill; they've been both dogged and creative in their pursuit of one. It hasn't worked.
Perhaps there's some chance of reviving the Olympia Snowe trigger, which to my knowledge only Joe Lieberman is firmly opposed to. Indeed, this is probably a more plausible path than the Medicare buy-in provision, where the opposition has more unequivocal and the support less robust. But the Snowe trigger has not been considered an acceptable solution by most liberals -- and understandably so, because it's a fairly poor excuse for a public option.
At some point, though, the assertion that a halfway-decent public option can still be passed via regular order begins to smack of the First Stage of Grief. At the very least, I would suggest that Kill-Billers spend some time engaged in the thought experiment of how they might feel about the bill if it really were this way or the highway.
2. Would a bill that contained $50 billion in additional subsidies for people making less than 250% of poverty be acceptable?Here's one of the bits that I find disingenuous. "That money will help a few people in the short term"? That framing doesn't seem proportionate to the good that this bill would do. As I wrote earlier tonight the bill is and always was "a big bleeping social welfare program". Indeed, it's almost without doubt the biggest bleeping social welfare program that liberals have had an opportunity to pass in a generation. I don't know how you can just brush off providing $900 billion in subsidies, or helping 30 million people to become insured. That's not some side effect of the bill; it's the whole point of the bill.
MM: This betrays a simplistic view of liberals, as if our answer is to merely shovel money at a problem. What we're looking for is good policy, which in this case, would also be good politics. So no, throwing money at the insurance companies doesn't change a thing. The insurance industry would simply absorb the new subsidies just like universities have raised tuition to shovel up any increases in financial aid.
JW: That money will help a few people in the short term, but, in the long run, our system built on private insurance companies is unsustainable, and will ruin our entire economy. I have zero confidence that the subsidies promised today will remain the same in the future. They might be increased by future Democrats or reduced in 2016 by a Republican Congress. Without cost controls, that money will quickly be eaten up by the ever-growing cost of health care. This reform is about trying to fix the system, not patch it with more money.
Markos' point that this represents a "simplistic view of liberals" is intriguing -- certainly, it is interesting to me how some of the liberal and conservative critiques against the bill have started to coalesce -- but we'll address this at another time.
3. Where is the evidence that the plan, as constructed, would substantially increase insurance industry profit margins, particularly when it is funded in part via a tax on insurers?The Record Profits Myth strikes again -- I don't like the insurance companies either; I'd gladly get rid of them and replace them with single payer. But the industry's profits are low: only about 3.3%.
MM: Where is the evidence that insurance companies would rig the system to extract record profits? I don't know. Perhaps the last decade or two might provide the answer.
JW: The fact that the price of private, for-profit insurance stocks have gone up dramatically with each day of bad news for the public option. More importantly, the bill doesn’t need to increase profit margins to make the insurance companies more profitable. It will increase overall profits by expanding their customer base, which has be shrinking for years.
And the evidence that the insurance industry would benefit from this bill on balance -- on either a marginal or an aggregate basis -- is almost completely lacking. Jon's point that "insurance stocks have gone up dramatically with each day of bad news for the public option" [emphasis mine] is absolutely correct -- I have observed this as well. But my question is how insurance company profits would respond to a public-option-less bill versus the status quo.
4. Why are some of the same people who are criticizing the bill's lack of cost control also criticizing the inclusion of the excise tax, which is one of the few cost control mechanisms to have survived the process?This is another area in which liberals have tended to quote some questionable data. It's simply not true that the excise tax would "disproportionately affect blue collar workers in high-risk jobs".
MM: Because it is a measure that would disproportionately affect blue collar workers in high-risk jobs, or workers that have given concessions on wages to preserve good benefits packages. Limit that provision to people making over X amount (say, $100K/year), and I wouldn't have a problem with it.
JW: The excise tax is designed horribly. It’s a very weak cost control that will only reduce NHE by $100 billion by 2019. That is a 0.3% reduction. And it will only do that by encouraging employers to provide their employees with worse quality insurance policies that cover fewer procedures and have higher co-pays and deductible. Let’s say that again: the Senate bill achieves cost control by making the health insurance you already have through your employer worse so you will have fewer procedures. I support cost control mechanisms that do not hurt the quality of health insurance. The excise does not meet this important criteria. The people who told you it is a magical cost control mechanism sold you magic beans. Drug re-important alone would do a better job of bring down NHE.
If you look at the aggregate amount passed on to middle class people under the excise tax, it would exceed the aggregate amount passed on to upper-class people. But that's only because there are a lot more middle class people in the country than upper class people. On a per-person basis, the tax is quite progressive up to about $200,000 (at which point it becomes somewhat regressive). Also, as the CBPP study notes, most of the reduction in premiums that the excise tax would facilitate would be passed back to the workers in the form of higher wages.
There is also a debate about how much cost savings the excise tax would generate; the CMS study that Jon cites says "only" $100 billion total through 2019, whereas the CBPPstudy says $74 billion per year by 2019. I honestly don't know where the difference in assumptions lies, but the tentative consensus among economists is probably closer to the CBPP estimate.
This is not to say, by the way, that the excise tax can't be designed better -- possibly including a carve-out for deals negotiated under collective bargaining. But this does need to be a tax applied to insurance, and not merely to income, if it's going to have any "curve-bending" effects.
5. Why are some of the same people who are criticizing the bill's lack of cost control also criticizing the inclusion of the individual mandate, which is key to controlling premiums in the individual market?I don't know how people can still be arguing that the individual mandate isn't necessary. If you don't have a mandate but require insurers to cover people with pre-existing conditions, you get extreme adverse selection and possibly even a death spiral.
MM: Because without premium caps or a public-run competitive option, there is no incentive for them to lower their premiums. They have a monopoly, and monopolies aren't in the business of unilaterally reducing their prices. There are two ways to force them to do so -- government regulation or market competition. The former is out, and the latter is inadequate.
JW: The individual mandate only works if you have a strong social contract between people on the government. The government must promise to provide everyone with access to quality affordable health insurance, and then the people agree to an individual mandate to buy insurance. This bill fails to guaranty either quality or affordable health insurance. There is no ban on annual limits, meaning the insurance companies can now put a cap on how much they will pay out. They will still be allowed to drop their sick customers and deny claims if they decide their customers need an “unreasonable” amount of health care. And the maximum out-of-pocket limit is far too high. It will not stop medical bankruptcy if you get really sick, which makes a mockery of the whole idea of insurance.
The goal of reform is to hold down overall health care spending, not premiums. An individual mandate only holds down premiums if the premium money is used to pay for care to spread the risk. There is nothing stopping the insurance companies from just pocketing that extra money or using it to bribe providers with higher reimbursement rates to lock out competitors.
Indeed, this why it's so hard to do incremental health care reform. If you want to cover people with pre-existing conditions, you need an individual mandate or everyone will be furious that their premiums have gone up. But if you have an individual mandate, you had better have subsidies to help poor people to afford the coverage. The nexus of the individual mandate and the magnitude of the subsidies is really what needs to be explored here.
Of course, if you have some kind of forced choice, you want it to be as appetizing a choice as possible. The bill on the floor fact does create a somewhat more competitive insurance market -- through the exchanges. It's not what I'd like to see, but given that profit margins for private insurance companies are not high, I'm not sure that competition per se is quite the problem that it's been made out to be. The high profit margins in the industry, rather, come at the provider level -- not the insurer level. The reason, for instance, that a public option benchmarked to Medicare rates would have been so powerful is because Medicare squeezes the providers.
6. Would concerns about the political downside to the individual mandate in fact substantially be altered if a public plan were included among the choices? Might not the Republican talking point become: "forcing you to buy government-run insurance?"By no means am I dismissive of the perspective that the mandate has some potentially damaging political effects. I just think it's liable to have more to do with the extent to which insurance is perceived as affordable, rather than who you're buying it from -- someone who gets deeply subsidized insurance from Aetna is not likely to complain, whereas someone who gets "unaffordable" insurance from the government probably will. (And for what it's worth, the CBO has estimated that premiums for the public option would actually be higher than those for private plans, although in exchange for much better coverage.)
MM: If you start worrying about Republican talking points, you've lost the game. They're accusing Democrats of trying to kill grandma. They're not going to back off because a talking point isn't 100 percent accurate. 2010 will be the year of the "commie socialist Democrats", no matter what health care reform bill is passed.
In any case, Republicans have tried to destroy socialist programs such as Medicare and Social Security for years. If people like a program, there's nothing the GOP can do about it.
JW: The Republicans will say what they want anyway, but if there is a choice between public and private insurance it would not be true. And with a public option, at least you would not be forcing some people to give their money to the extremely unpopular health insurance companies — which is probably why the overwhelming majority of Americans support having that choice. Of course I’m more concerned about policy than politics when it comes to the individual mandate.
7. Roughly how many people would in fact meet ALL of the following criteria: (i) in the individual insurance market, and not eligible for Medicaid or Medicare; (ii) consider the insurance to be a bad deal, even after substantial government subsidies; (iii) are not knowingly gaming the system by waiting to buy insurance until they become sick; (iv) are not exempt from the individual mandate penalty because of low income status or other exemptions carved out by the bill?Certainly, the mandate penalty needs to be designed carefully so as not to pervert incentives. The point is that not that very many people will fall into the category of feeling like they're "forced" to buy insurance because most of them will continue to get policies through their employers, or will think they're getting a pretty good deal.
MM: Is this argument that the mandate doesn't matter because too few people will be subject to it? If so, then strip it out. It shouldn't matter.
JW: If people are “exempt” from the individual mandate because the private insurance companies made insurance too expensive for them to buy (which thanks to the 1:3 age rating would be the older sicker people most in need of insurance) what is the point of the individual mandate? This sounds like a recipe to price out the old (nonprofitable) and force only the young (profitable) to buy insurance. The individual mandate should only be used for an “everyone in” system. This is “everyone in” except those whom the private insurance companies price out of the market.
8. How many years is it likely to be before Democrats again have (i) at least as many non-Blue Dog seats in the Congress as they do now, and (ii) a President in the White House who would not veto an ambitious health care bill?The notion that only Blue Dog seats are endangered is flat wrong. There's almost no way that Democrats will end up with more votes for a public option at any point in the near future -- keep in mind that the House passed its bill, which had only a mediocre public option, by just about the bare minimum of votes.
MM: I'm not sure how the future composition of Congress has anything to do with a battle in our current congress. This battle isn't over. But if anything, this argues for pushing for the most progressive bill possible.
In any case, most of the endangered Democrats next year are of the Blue Dog variety, while most of our (relatively meager) pickup opportunities are in Democratic-leaning districts. In other words, while our majorities will likely be smaller, it will be a more intellectually cohesive caucus. That's why all of the outright House retirements thus far have been Blue Dogs -- they're not interested in having to defend themselves in a caucus that is trending leftward.
JW: Zero more years, because if they can’t get this Senate bill passed they will use reconciliation. Obama has decided he must pass health care reform, and if reconciliation is his only option he will use it.
9. If the idea is to wait for a complete meltdown of the health care system, how likely is it that our country will respond to such a crisis in a rational fashion? How have we tended to respond to such crises in the past?This is one of my less pertinent questions -- I certainly haven't seen this argument raised by either MM or JW although I have seen it in places. For the record, I think it goes without saying that politics are very dynamic and unpredictable in crisis situations. If you examine the collective response to recent cataclysms such as 9/11, the financial meltdown, and global warming, it has been a little scary for progressives.
MM: No, the idea is to get the best possible legislation today. We may not be able to get something with reconciliation before Obama's State of the Union Address, but I don't think something this important should be beholden to something as trivial as a speech, even one as important as the SOTU.
JW: That is not the idea at all, and completely irrelevant. The Senate bill will fail to stop the rapidly approaching meltdown of our health care system, and anyone is a fool for thinking otherwise. The CMS predicted that even if the bill passed, the cost of an average premium for a family of four will still increase roughly $1,000 a year. The meltdown is coming either way. This Senate bill is at best a very expensive band aid, and at worst a way to quicken the meltdown.
10. Where is the evidence that the public option is particularly important to base voters and/or swing voters (rather than activists), as compared with other aspects of health care reform?There's no doubt that the public option is popular, especially with the base -- as we have been reminding people over here for months. But polls also show that it's considered one of the less important aspects of health care reform, especially for swing voters. We need to remember that the "activist left" and "the base" are two different and distinct things, although obviously there is some overlap especially in the Internet age.
MM: Given that the current bill only has 32 percent support, I don't think this turd of a bill in the Senate has much support of anyone, much less party activists. And the voter intensity numbers are clear -- base Democratic voters are planning to sit out 2010. And I doubt 18-29 year olds -- a key part of the Democratic base -- are going to be thrilled with a mandate. In fact, it may be the single least popular item in the bill.
JW: Once again this is about policy for me, but there are many polls showing stronger support for the public option than the President’s health care bill. The few polls done on the matter have also shown that without a public option the individual mandate is extremely unpopular. If Democrats in Washington did not think the people cared about the public option they would have killed it a long time ago.
11. Would base voters be less likely to turn out in 2010 if no health care plan is passed at all, rather than a reasonable plan without a public option?I'm actually coming around to the view that Democrats are about equally screwed either way, in large part because of the vehemently negative reaction that we've seen from the left over the past 72 hours. The left is fracturing over this issue in ways that are nothing like what I've experienced since I began covering politics for a living -- which granted, was only two years ago.
MM: Nope, if Democrats gave it a serious shot, and then built campaigns around the obstructionists. Caving in to Lieberman, Republicans, and corporate interests, on the other hand, sends the message that the Democratic super majorities are irrelevant, and all the hard work from the last four years in electing them was a wasted effort.
JW: My goal has always been reconciliation, the use of the nuclear option, or the White House using its influence to back down conservative Democrats — something that hasn’t happened yet. I think this question is misleading because that is not the actual choice on the table. It is bad bill with regular order, a better bill with 50 votes in the Senate, or no bill.
12. What is the approximate likelihood that a plan passed through reconciliation would be better, on balance, from a policy perspective, than a bill passed through regular order but without a public option?I don't understand the confidence here, and it smacks to me of wishful thinking. I'm not a process wonk, but the overwhelming opinion among people who are is that, although the public option might survive the reconciliation process, things like the ban on denying coverage for people with pre-existing conditions, the additional regulations on insurers, and the creation of the health insurance exchanges would almost certainly not. Plus, the bill would have to be deficit neutral over five years and would be subject to renewal every five years.
MM: Likelier. Seems self-evident. And really, Medicare and the VA health system shows that the government is quite capable of handling health care.
JW: Extremely high. If I did not believe a much better bill could be passed using reconciliation I would not have been advocating for it for months. It is a pure myth that a good bill cannot be passed using reconciliation.
If your lone objective were to end up with something that you could call a public option, then yes -- reconciliation offers some possibility of that. But I don't see how you're likely, on balance, to wind up with a better bill -- losing the guaranteed issue provision alone would probably outweigh the inclusion of a public option.
There's also the idea, which Jon has advanced, of using the reconciliation process for some parts of the bill but not for others. It's a creative idea, but I don't see how it works, since it's not like you can keep this a secret from people. If you plan to pass certain provisions under reconciliation so as to circumvent Ben Nelson, it seems to me nearly certain that Ben Nelson would counter-circumvent you by filibustering the parts of the bill that you attempted to pass under regular order. So you'd still end up with half a loaf -- although maybe a different half than you might have otherwise.
Now, I certainly do think the Democrats would have some chance of passing portions of the bill under reconciliation in 2011; in that case you wouldn't have this transparent bait-and-switch with the moderates and could claim that you'd received a new mandate from the public.
13. What is the likely extent of political fallout that might result from an attempt to use the reconciliation process?More wishful thinking, IMO. The Bush tax cuts were popular; health care is not. Moreover, the filibuster actually polls well, so use of the procedure itself would be unpopular. If you intersect an unpopular policy with an unpopular process, I don't know what you're going to get, but the downside risk would seem to be fairly profound -- as in, I'd take even money at that point that the Democrats would lose the House.
MM: Fallout with the DC press corps? They didn't mind when Republicans used it to pass their tax cuts under Bush, but that's a different time. I'm sure they'll hyperventilate about it now. The voters? I've seen no data that suggests they care about process. Just results. Democrats would cheer, Republicans would bitch, but those guys will bitch anyway.
JW: I think it will be very small. People care more about results than process. If reconciliation results in this early Medicare buy-in starting in 2010, I think it would be a huge net political gain for Democrats by showing that reform is working.
Was there a political fallout from Bush’s tax cuts because they where done through reconciliation? I do think there was.
Also, tax cuts are a relatively straightforward application of the reconciliation process -- health care is not, and the resulting procedural debate would last weeks if not months, giving the public plenty of time to stew over it.
14. How certain is it that a plan passed through reconciliation would in fact receive 51 votes (when some Democrats would might have objections to the use of the process)?Hey, if this were the only risk I'd say "go for it". But it is another contributing factor on the downside. For starters, you're going to lose any senator who is already looking for an excuse to vote against health care reform -- meaning Lincoln, Lieberman, Nelson, Landrieu. You're going to lose a couple of process hawks -- Byrd, probably Conrad, probably Bayh, maybe Feingold. There are far short of 50 enthusiastic votes for the public option -- there are closer to about 43, and that includes a couple of the process hawks. The odds of getting to 50 votes under reconciliation would seem to be about 60/40 at best.
MM: It'd be nice to find out.
JW: First you only need 50 votes plus the vice president to break the tie. Second, are you really asking progressive to not stand up for better policy because there are possibly 11 Democrats who will bring down the reconciliation bill to protect their absurd Senate clubhouse feel?
The Democrats in the Senate seem were willing to give Joe Lieberman anything he wanted to get a bill labeled “health care reform” passed. If they will swallow their pride for Lieberman, they will do it for reconciliation if that is the only way the can get the “win.”
15. Are there any compromises or concessions not having to do with the provision of publicly-run health programs that could still be achieved through progressive pressure?There are a lot of ways that progressives might be directing their focus -- arguing for more generous subsides, for instance.
MM: Expand medicaid, add a national exchange instead of the state one, get rid of mandate, etc.
I'm curious ... how many concessions has the other side made? Maybe it's time for a "compromise" that actually includes a compromise.
JW: No. If progressive pressure cannot protect the extremely popular public option, I don’t see a single thing progressives can win on.
Progressive have zero power in Washington if they can not draw a line in the sand and say enough is a enough. Only by being willing to bring down a bad bill will they force those in power to listen to them instead of Joe Lieberman. Unless progressive are willing to play hardball, all the power will remain with Joe Lieberman (who has announced his intention to rewrite the climate change bill).
The point is, at this point I don't think they've been directing their focus in ways that optimize the progressive-ness of the health care bill. But, as both Markos and Jon imply, that might not be the point. Rather, progressives are fighting a sort of proxy war over the public option -- as a way to exert their influence and authority. This is where I've always parted ways with the strategy -- I think health care is too important an issue to use as a demonstration of one's authority. What might be better? Financial reform would be one answer. But obviously, the cat is way out of the bag now on the public option and people have become vested in their positions.
16. What are the chances that improvements can be made around the margins of the plan -- possibly including a public option -- between 2011 and the bill's implementation in 2014?I'm not sure that there's a fundamental disagreement here -- my point, as made under #12 above -- is that I think the proper application of the split-the-bill strategy is to split it between the current Congress and the next one that convenes in 2011.
MM: I'm actually a little more optimistic about this. But here's the thing -- everyone surrenders now, the impetus for such tinkering will be gone. If people are angry and campaign on these key issues, then political pressure will be maintained for further action. The "surrender now" crowd actually makes further tinkering less likely, not more.
JW: If Obama does not feel a need to listen to progressive on the issue of health care reform at this moment, I don’t see how that will change between now and 2014. If anything, when people are not looking the lobbyists will go to work slowly crippling all the new regulations this bill will add. As long as we have this 60 vote myth controlling everything in Congress, all the power is with Joe Lieberman.
I don't agree with Jon's pessimism that the bill will be "crippled" -- because of loss aversion, it's much harder to take something away from someone than to give it to them in the first place. And so long as the filibuster is in place, it will protect the status quo -- in this case, a new status quo in which poor and sick people get more help from the government.
17. What are the potential upsides and downsides to using the 2010 midterms as a referendum on the public option, with the goal of achieving a 'mandate' for a public option that could be inserted via reconciliation?This is largely addressed under #16 above. I simply wanted to point out that the fight over the public option, to the extent that people regard it as a gratifying organizing exercise, will not end just because a bill has been adopted that doesn't include one.
MM: The public option remains popular, despite the year-long demonization process by insurance interests, Republicans, teabaggers, and even some Democrats. Popular enough to base a "referendum" around it? Beats me, I'd have to see more data. But if 2010 is a referendum on that current Senate bill, we're in deep trouble.
And in any case, I don't think we have much of a choice in the matter. 2010 will be all about Democratic "socialists", and HCR will be Exhibit A in the wingnut playbook.
JW: I don’t know and I don’t plan to find out. We can get the public option now using reconciliation and that is what progressive should demand. It does not matter if we “win” the referendum on the public option in 2010, we already “won” the referendum on health care reform in 2008 when Barack Obama campaigned on it. If we can’t hold our elected representatives to account now it is foolish to think we will in two years.
18. Was the public option ever an attainable near-term political goal?My answer is probably not; this is addressed at length in my article from Monday. Progressives asked for this fight, and actually made a lot of progress -- but it was always going to be a profoundly uphill battle. To use it as a litmus test for progressive efficacy was rather risky, in the same way that it's risky to declare your training regime a failure because you collapsed on the last stage of the Ironman Triathalon.
MM: Yes. But even if it wasn't, perhaps we would've been better off starting with a Medicare For All approach, or at least an expansion (back when Lieberman was for it). I'm sure someone will write a book about all the tactical mistakes made during this battle. There's no doubt the Democrats blew it big time, but that's not the same as saying a desired policy outcome was not attainable.
JW: Yes. If Reid had used reconciliation months ago we would already have a bill passed with a public option.
19. How many of the arguments that you might be making against the bill would you still be making if a public option were included (but in fact have little to do with the public option)?This is obviously something of a rhetorical question, so we won't dwell on it. Certainly, some of the points about the individual mandate have been in play for months now. What I tend to find more disingenuous are the people who have suddenly decided that the bill was really about cost control after all, and that the coverage aspects of the bill are merely incidental. It's (mostly) a coverage bill and always has been; a bill that was primarily targeted at cost control would have looked much different from the get-go.
MM: Depends on the details of that public option.
JW: I don’t know about others but I have always argued against the excise tax. I have always said the individual mandate is only acceptable if the government provide everyone with access to decent cost effective health insurance.
20. How many of the arguments that you might be making against the bill are being made out of anger, frustration, or a desire to ring Joe Lieberman by his scruffy, no-good, backstabbing neck?I know Markos and consider him a friend; I don't know Jon but always find him level-headed. So, this is not meant to implicate them. Nor am I going to go about trying to illustrate for you exactly which arguments against the bill were or weren't made out of spite.
MM: Max Baucus caused more damage to this process than Lieberman, by slowing things to a crawl pretending that Enzi (from Wyoming!) was ever a good-faith negotiator, giving Republicans and teabaggers a chance to ramp up the hysteria and slowing whatever initial momentum the administration and congressional Democrats ever had on the issue.
I don't give a shit about Lieberman's opposition. He's just confirming everything we ever said about him. In fact, it's kind of nice seeing the Beltway and congressional Democrats start to finally understand who the real Lieberman is. But I never expected anything less from him, so pretending that this is some weird grudge match minimizes what are serious policy disagreements. Lieberman may be petty about this, but I'm not. I settle those grudges on the electoral battlefield, not the policy one.
And it's clear, we've been fighting this fight long before Lieberman decided to shine the spotlight on himself.
JW: My arguments against the current bill were all made long before Joe Lieberman was empowered by Harry Reid to remove the public option. Now that the public option has been removed, the regulations have been weakened and the excise tax remains, I think the bill will do more long term harm than good when it comes to health care reform. FDL drew the line in the sand on the public option close to 6 months ago. This is not anger — this is long-term planning.
But I've never seen things get quite so personal -- I've gotten as many nasty comments and e-mails from Democrats on this issue as I have in the past six months from conservatives (on all issues). That emotion is a factor in this debate seems self-evident to me. I do somewhat regret egging things on with a deliberately provocative headline on Tuesday. But I would urge everyone to take a deep, deep breath, to the extent possible.
12.16.2009
Health Care: The Elevator Pitch
@ 7:53 PM
I've written several thousand words about health care over the past 48 hours, and tens of thousands of words over the past six months. Some of those words have been a bit, uh, confrontational. So let's try this approach instead. This is my summation -- my elevator pitch for passing health care reform:
Ben Nelson and Blanche Lincoln are probably willing to sign off on $900 billion in public subsidies so that poor and sick people can have better access to health care. Is there really no way we can make this work for us?
To anticipate several of the objections to this:
But it's not real reform! You're right: the bill is not "real reform" in the sense of something that fundamentally alters the structure of the current, predominately private, predominately employer-based insurance system. The only solutions that I'm aware of that might do that are single payer and Wyden-Bennett, either of which I'd prefer to what's on the table now -- but neither of which are liable to be politically viable any time soon. By the way, I don't think a bill with a public option would constitute fundamental reform either -- it would be better, but it's still tinkering around the edges of a flawed system.
But it doesn't control costs! No, the bill is not particularly great, or even particularly good, when it comes to cost control -- especially without the public option. But, it is liable to help at the margins. According to CMS, the Senate's bill would increase total health care spending nominally -- by about 0.7 percent. However, in so doing, it would cover about 10 percent more people than the status quo does -- so this represents something like a 9 percent efficiency gain. Now, those estimates were made before the public option was removed, which was expected to reduce the bill's tab by about $25 billion, or about 3 percent of the total outlay. Wipe out the public option, and you reduce the efficiency gain further, to somewhere in the mid-high single digits. It's not great, but it's something. It certainly doesn't make the problem worse.
But it's not efficiency that matters -- it's the total amount of spending! In the long run, you're probably right. Eventually, Americans will need to be willing to do one of the following: (i) fundamentally restructure the health care system; (ii) tolerate worse health outcomes in exchange for less spending; (iii) tolerate material trade-offs in other areas of the economy; (iv) take potentially catastrophic risks with the national debt; (v) find a way to grow GDP at 5 percent per year for the foreseeable future. Given that (v) is unlikely, we'll indeed need to make some tough choices -- and to some extent, indeed, this bill just kicks that can down the road.
But in the medium term, I'm not sure how persuasive this side of the argument is, especially coming from liberals. If the concern were the total amount of health care spending, why not just wipe out Medicare and Medicaid, let poor and old people grow accustomed to shorter life expectancies, and call it a day?
But the subsidies aren't generous enough! Now, here is where I have a great deal more sympathy -- $900 billion in public subsidies might be nice, but that money might be distributed in the wrong way. In particular, there's not quite enough assistance to people between roughly 150 and 300 percent of poverty, for whom health care will become much (!!) more affordable but perhaps not quite affordable enough.
This is a problem that should be fixed. And it's one, I think, that probably can be fixed: if not on the Senate floor than in conference, and if not in conference than at some point between now and implementation in 2014. Perhaps, for example, the House's structure for subsides should be adopted, which are slightly more generous to people making less than 250 percent of poverty but slightly less so to people making more than 250 percent. Perhaps people with children need to receive a bit more assistance as compared with childless couples. Perhaps, since the bill projects to realize some deficit savings, those savings can be shaved a little bit. These are disputes about numbers -- and disputes over numbers are generally easier to resolve than debates over structures. And since these numbers impact people's bottom lines, indeed, they're something that all Democrats should be receptive to -- it's not like Ben Nelson wants lower-middle class families to be teed off because they're forced to buy not-quite-affordable insurance any more than Chris Dodd does. So get it fixed -- and pass the bill. The alternative, remember, is that these families have a choice between buying insurance at an absolutely back-breaking price point (in excess of $10,000 per year for the premiums alone), and going without health care coverage at all.
But that money isn't really going to poor people -- it's going to Cigna! Then there's an argument I have much less sympathy for: that the $900 billion is not ultimately going to disadvantaged people, but rather to insurance companies. Some of the money, indeed, will turn into insurance company profits. But how much? Probably not very much: most likely about $30 billion of the $900 billion, or about 3.3 percent, which is the average profit margin in the insurance industry. The insurance industry is actually not very profitable -- it may be inefficient, but it is not especially profitable. The vast majority of that $900 billion goes to improve health outcomes for poor and sick people.
Keep in mind that, although the insurance companies would be allowed to add some highly profitable customers under this bill (young, healthy people for whom health insurance is a bad deal) it will also add some highly unprofitable ones -- people with pre-existing conditions, whom they will now be required to accept. (You can't really have one without the other: if you banned limitations on rescissions or pre-existing conditions but did not have an individual mandate, premiums would skyrocket.) Also, the insurance industry is taxed directly under this bill, and is also penalized indirectly through the excise tax, which will reduce insurance spending among a generally profitable set of customers.
The idea of calling this an insurance company "bailout" is not really credible. The bill would preserve the private, for-profit insurance system rather than kill it -- but it's not much of a bailout. Indeed, I've seen virtually no evidence that it would in fact improve insurance company profit margins, on either a percentage or an absolute basis.
A slightly longer version of the elevator pitch. So, we've talked a lot about what the bill is not. It's not structural reform. What is it, then? At the end of the day, it's a big bleeping social welfare program -- the largest social welfare program to be implemented since the Great Society. And that's really what it's been all along: fundamental reform like single-payer or Wyden-Bennett was never really on the table. The bill comes very close, indeed, to establishing what might be thought of as a right to access to health care: once it's been determined that people with pre-existing conditions cannot be denied health care coverage, and that working class people ought to receive assistance so that they can afford health care coverage, it will be very hard to remove those benefits. It's the sort of opportunity that comes around rarely -- and one that liberals will greatly regret if they turn down.
Ben Nelson and Blanche Lincoln are probably willing to sign off on $900 billion in public subsidies so that poor and sick people can have better access to health care. Is there really no way we can make this work for us?
To anticipate several of the objections to this:
But it's not real reform! You're right: the bill is not "real reform" in the sense of something that fundamentally alters the structure of the current, predominately private, predominately employer-based insurance system. The only solutions that I'm aware of that might do that are single payer and Wyden-Bennett, either of which I'd prefer to what's on the table now -- but neither of which are liable to be politically viable any time soon. By the way, I don't think a bill with a public option would constitute fundamental reform either -- it would be better, but it's still tinkering around the edges of a flawed system.
But it doesn't control costs! No, the bill is not particularly great, or even particularly good, when it comes to cost control -- especially without the public option. But, it is liable to help at the margins. According to CMS, the Senate's bill would increase total health care spending nominally -- by about 0.7 percent. However, in so doing, it would cover about 10 percent more people than the status quo does -- so this represents something like a 9 percent efficiency gain. Now, those estimates were made before the public option was removed, which was expected to reduce the bill's tab by about $25 billion, or about 3 percent of the total outlay. Wipe out the public option, and you reduce the efficiency gain further, to somewhere in the mid-high single digits. It's not great, but it's something. It certainly doesn't make the problem worse.
But it's not efficiency that matters -- it's the total amount of spending! In the long run, you're probably right. Eventually, Americans will need to be willing to do one of the following: (i) fundamentally restructure the health care system; (ii) tolerate worse health outcomes in exchange for less spending; (iii) tolerate material trade-offs in other areas of the economy; (iv) take potentially catastrophic risks with the national debt; (v) find a way to grow GDP at 5 percent per year for the foreseeable future. Given that (v) is unlikely, we'll indeed need to make some tough choices -- and to some extent, indeed, this bill just kicks that can down the road.
But in the medium term, I'm not sure how persuasive this side of the argument is, especially coming from liberals. If the concern were the total amount of health care spending, why not just wipe out Medicare and Medicaid, let poor and old people grow accustomed to shorter life expectancies, and call it a day?
But the subsidies aren't generous enough! Now, here is where I have a great deal more sympathy -- $900 billion in public subsidies might be nice, but that money might be distributed in the wrong way. In particular, there's not quite enough assistance to people between roughly 150 and 300 percent of poverty, for whom health care will become much (!!) more affordable but perhaps not quite affordable enough.
This is a problem that should be fixed. And it's one, I think, that probably can be fixed: if not on the Senate floor than in conference, and if not in conference than at some point between now and implementation in 2014. Perhaps, for example, the House's structure for subsides should be adopted, which are slightly more generous to people making less than 250 percent of poverty but slightly less so to people making more than 250 percent. Perhaps people with children need to receive a bit more assistance as compared with childless couples. Perhaps, since the bill projects to realize some deficit savings, those savings can be shaved a little bit. These are disputes about numbers -- and disputes over numbers are generally easier to resolve than debates over structures. And since these numbers impact people's bottom lines, indeed, they're something that all Democrats should be receptive to -- it's not like Ben Nelson wants lower-middle class families to be teed off because they're forced to buy not-quite-affordable insurance any more than Chris Dodd does. So get it fixed -- and pass the bill. The alternative, remember, is that these families have a choice between buying insurance at an absolutely back-breaking price point (in excess of $10,000 per year for the premiums alone), and going without health care coverage at all.
But that money isn't really going to poor people -- it's going to Cigna! Then there's an argument I have much less sympathy for: that the $900 billion is not ultimately going to disadvantaged people, but rather to insurance companies. Some of the money, indeed, will turn into insurance company profits. But how much? Probably not very much: most likely about $30 billion of the $900 billion, or about 3.3 percent, which is the average profit margin in the insurance industry. The insurance industry is actually not very profitable -- it may be inefficient, but it is not especially profitable. The vast majority of that $900 billion goes to improve health outcomes for poor and sick people.
Keep in mind that, although the insurance companies would be allowed to add some highly profitable customers under this bill (young, healthy people for whom health insurance is a bad deal) it will also add some highly unprofitable ones -- people with pre-existing conditions, whom they will now be required to accept. (You can't really have one without the other: if you banned limitations on rescissions or pre-existing conditions but did not have an individual mandate, premiums would skyrocket.) Also, the insurance industry is taxed directly under this bill, and is also penalized indirectly through the excise tax, which will reduce insurance spending among a generally profitable set of customers.
The idea of calling this an insurance company "bailout" is not really credible. The bill would preserve the private, for-profit insurance system rather than kill it -- but it's not much of a bailout. Indeed, I've seen virtually no evidence that it would in fact improve insurance company profit margins, on either a percentage or an absolute basis.
A slightly longer version of the elevator pitch. So, we've talked a lot about what the bill is not. It's not structural reform. What is it, then? At the end of the day, it's a big bleeping social welfare program -- the largest social welfare program to be implemented since the Great Society. And that's really what it's been all along: fundamental reform like single-payer or Wyden-Bennett was never really on the table. The bill comes very close, indeed, to establishing what might be thought of as a right to access to health care: once it's been determined that people with pre-existing conditions cannot be denied health care coverage, and that working class people ought to receive assistance so that they can afford health care coverage, it will be very hard to remove those benefits. It's the sort of opportunity that comes around rarely -- and one that liberals will greatly regret if they turn down.
20 Questions for Bill Killers
@ 1:30 PM
1. Over the medium term, how many other opportunities will exist to provide in excess of $100 billion per year in public subsidies to poor and sick people?
2. Would a bill that contained $50 billion in additional subsidies for people making less than 250% of poverty be acceptable?
3. Where is the evidence that the plan, as constructed, would substantially increase insurance industry profit margins, particularly when it is funded in part via a tax on insurers?
4. Why are some of the same people who are criticizing the bill's lack of cost control also criticizing the inclusion of the excise tax, which is one of the few cost control mechanisms to have survived the process?
5. Why are some of the same people who are criticizing the bill's lack of cost control also criticizing the inclusion of the individual mandate, which is key to controlling premiums in the individual market?
6. Would concerns about the political downside to the individual mandate in fact substantially be altered if a public plan were included among the choices? Might not the Republican talking point become: "forcing you to buy government-run insurance?"
7. Roughly how many people would in fact meet ALL of the following criteria: (i) in the individual insurance market, and not eligible for Medicaid or Medicare; (ii) consider the insurance to be a bad deal, even after substantial government subsidies; (iii) are not knowingly gaming the system by waiting to buy insurance until they become sick; (iv) are not exempt from the individual mandate penalty because of low income status or other exemptions carved out by the bill?
8. How many years is it likely to be before Democrats again have (i) at least as many non-Blue Dog seats in the Congress as they do now, and (ii) a President in the White House who would not veto an ambitious health care bill?
9. If the idea is to wait for a complete meltdown of the health care system, how likely is it that our country will respond to such a crisis in a rational fashion? How have we tended to respond to such crises in the past?
10. Where is the evidence that the public option is particularly important to base voters and/or swing voters (rather than activists), as compared with other aspects of health care reform?
11. Would base voters be less likely to turn out in 2010 if no health care plan is passed at all, rather than a reasonable plan without a public option?
12. What is the approximate likelihood that a plan passed through reconciliation would be better, on balance, from a policy perspective, than a bill passed through regular order but without a public option?
13. What is the likely extent of political fallout that might result from an attempt to use the reconciliation process?
14. How certain is it that a plan passed through reconciliation would in fact receive 51 votes (when some Democrats would might have objections to the use of the process)?
15. Are there any compromises or concessions not having to do with the provision of publicly-run health programs that could still be achieved through progressive pressure?
16. What are the chances that improvements can be made around the margins of the plan -- possibly including a public option -- between 2011 and the bill's implementation in 2014?
17. What are the potential upsides and downsides to using the 2010 midterms as a referendum on the public option, with the goal of achieving a 'mandate' for a public option that could be inserted via reconciliation?
18. Was the public option ever an attainable near-term political goal?
19. How many of the arguments that you might be making against the bill would you still be making if a public option were included (but in fact have little to do with the public option)?
20. How many of the arguments that you might be making against the bill are being made out of anger, frustration, or a desire to ring Joe Lieberman by his scruffy, no-good, backstabbing neck?
2. Would a bill that contained $50 billion in additional subsidies for people making less than 250% of poverty be acceptable?
3. Where is the evidence that the plan, as constructed, would substantially increase insurance industry profit margins, particularly when it is funded in part via a tax on insurers?
4. Why are some of the same people who are criticizing the bill's lack of cost control also criticizing the inclusion of the excise tax, which is one of the few cost control mechanisms to have survived the process?
5. Why are some of the same people who are criticizing the bill's lack of cost control also criticizing the inclusion of the individual mandate, which is key to controlling premiums in the individual market?
6. Would concerns about the political downside to the individual mandate in fact substantially be altered if a public plan were included among the choices? Might not the Republican talking point become: "forcing you to buy government-run insurance?"
7. Roughly how many people would in fact meet ALL of the following criteria: (i) in the individual insurance market, and not eligible for Medicaid or Medicare; (ii) consider the insurance to be a bad deal, even after substantial government subsidies; (iii) are not knowingly gaming the system by waiting to buy insurance until they become sick; (iv) are not exempt from the individual mandate penalty because of low income status or other exemptions carved out by the bill?
8. How many years is it likely to be before Democrats again have (i) at least as many non-Blue Dog seats in the Congress as they do now, and (ii) a President in the White House who would not veto an ambitious health care bill?
9. If the idea is to wait for a complete meltdown of the health care system, how likely is it that our country will respond to such a crisis in a rational fashion? How have we tended to respond to such crises in the past?
10. Where is the evidence that the public option is particularly important to base voters and/or swing voters (rather than activists), as compared with other aspects of health care reform?
11. Would base voters be less likely to turn out in 2010 if no health care plan is passed at all, rather than a reasonable plan without a public option?
12. What is the approximate likelihood that a plan passed through reconciliation would be better, on balance, from a policy perspective, than a bill passed through regular order but without a public option?
13. What is the likely extent of political fallout that might result from an attempt to use the reconciliation process?
14. How certain is it that a plan passed through reconciliation would in fact receive 51 votes (when some Democrats would might have objections to the use of the process)?
15. Are there any compromises or concessions not having to do with the provision of publicly-run health programs that could still be achieved through progressive pressure?
16. What are the chances that improvements can be made around the margins of the plan -- possibly including a public option -- between 2011 and the bill's implementation in 2014?
17. What are the potential upsides and downsides to using the 2010 midterms as a referendum on the public option, with the goal of achieving a 'mandate' for a public option that could be inserted via reconciliation?
18. Was the public option ever an attainable near-term political goal?
19. How many of the arguments that you might be making against the bill would you still be making if a public option were included (but in fact have little to do with the public option)?
20. How many of the arguments that you might be making against the bill are being made out of anger, frustration, or a desire to ring Joe Lieberman by his scruffy, no-good, backstabbing neck?
12.15.2009
Berlusconi the Survivor
@ 12:30 PM
Many governments experience a dwindling of popular support over the course of their administrations, particularly those who initially command much broader personal support than their policies or electoral margins would suggest.
Many leaders receive threats, requiring large scale security details, onerous background checks and restrictions of movement.
Yet, most do not get whacked in the face with a minature church.
As succinctly put by BBC News:
" Prime Minister Silvio Berlusconi of Italy is recovering in hospital after an assault left his face covered in blood following a rally in Milan.
He suffered two broken teeth, a minor nose fracture and cuts to his lip after being struck by a man wielding a souvenir model of the city's cathedral. "
The most recent events mark an interesting point in the life and political career of the 73-year-old multi-billionaire, who has consistently made headlines regarding personal shenanigans much more often than policy decisions. In the last year, his wife has filed for divorce after a highly public feud, he brought controversy by joking about Barack Obama's "suntan," audio tapes of him having sexual relations with a paid escort were made public and he argued that sexual assault in Italy was difficult to stop because Italian women are just "so beautiful."
At the same time, Berlusconi's personal approval ratings have fallen from a high of around 63 percent to a recent figure of just 50.1 percent, even though he receives generally favorable treatment in the Italian press*.
He owns the largest commercial broadcasting company in Italy, Mediaset, the largest magazine and book publishing company, as well as soccer powerhouse A.C. Milan. His stranglehold on Italy media and links to the mafia led The Economist to publish a blazing April 2001 feature article which on the cover read "Why Silvio Berlusconi is unfit to lead Italy." Berlusconi proceeded to sue the magazine for defamation, a charge which was dismissed by the Italian courts (along with assessing cost-recovery for the UK-based weekly) in 2008.
Despite consistent public embarrassment, charges of corruption or links to the Mafia every five years or so, clear conflicts of interest between his own fortune and holdings and the Italian political sphere, and a divided country over which he is Prime Minister, Berlusconi has managed to survive and thrive in the power politics of the Italy for nearly twenty years.
Entering his first election in 1994 at the helm of the "Forza Italia," a party he founded the year before, Berlusconi launched a huge television advertisement campaign on Mediaset's three major television stations. At the same time, he allied Forza Italia with his wealthy power base in Milan, represented by the Northern League (Lega Nord), while at the same time allying with the very conservative and southern-focused National Alliance (Alleanza Nazionale), leading the coalition to a sweeping victory with 366 deputies, against the opposition "Alliance of Progressives" who won just 213 seats.
This was actually no small feat. For generations, and quite evidently since World War II, Italy has been politically and economically divided in a generally north-south fashion. A good starting place to frame the modern situation is the 1946 referendum, the first after the destruction of WWII, which asked the Italian popular to decide between becoming a parliamentary Republic or for the monarchy to continue in power.
The geographic division of the vote was remarkable.
Showing the major fractures in a united Italy, voting patterns in 1946 reflected the dominant split in the country, with more socially conservative and poorer populations in the south, as well as the wealthy connected to the monarchy in Rome, voting for the King (in purple). The red segments of the Industrial north (which drove much of the "il boom" of the 1950s and 60s) were interested in a republican way forward, including a return to the European fold.
Returning to 1994, the year of Berlusconi's first victory, a similar pattern of income distribution remained, but this time with a different political outcome.
Much as it was 50 years before, economic power in Italy in the 1990s was centered in the northern provinces and around Rome.
However, the 1994 Berlusconi coalition cut across these historical barriers and built a solid vote total among both the wealthiest and the working poor (not the poorest quintile, but just above, in the 20 percent to 40 percent of the median group). Social conservatives were targeted as well, with Berlusconi advertising a traditional center-right platform.
The 1994 coalition fell apart just one year later, when corruption investigations in Milan into Berlusconi's activities and accusations of broken promises from some coalition partners forced the PM to resign.
In the 1996 election, Berlusconi's attempted comeback was blunted by his trying to go it with just his most conservative allies -- leaving the Lega Nord to run independently and denying him major support outside of Sicily, Puglia, and just two of the wealthy northern provinces, who were split between the Lega Nord, Olive Tree coalition and Alliance for Freedom.
After five years in the wilderness, Berlusconi was able to rustle up the 1994 coalition again, this time for the 2001 general election. It was 1994 all over again in more ways than one, with Berlusconi's new party the "House of Freedoms" running on the platform of a "Contract with the Italians."
The winning map provided no real suprises, with a mixture of the weathy north and the middle poor south coming together in support of the House of Freedoms:
The "inter-regio" of 2006-2008, when an unpopular Berlusconi was narrowly edged by the Democrats-led "Union" coalition led by Romano Prodi, was much like the late 1990s, when a backlash against Berlusconi's outlandish ways knocked him out of power for several years.
But the Survivor prevailed again in 2008, basically driving the same storyline that has fueled him all along. "Out of love for Italy, I felt I had to save it from the left," he has repeatedly said, mixing his image of a brash, colorful and somehow "regular" Italian, while playing also the role of the caretaker and friend.
With a flair for the dramatic, he declared earlier this year in front of Italy's constitutional court:
"I am without doubt the person who's been the most persecuted in the entire history of the world and the history of man."
And victim he was on Sunday, with the miniature Milanese Duomo bloodying his face not unlike a short but poignant street fight. Indeed, the Italian Minister of Interior declared that the Prime Minister was "at risk of being seriously injured, or killed."
But survive he did indeed, as his has for two decades. Knocked down and laughed at for his clownish and conservative ways, yet back again, with power, influence and money firmly gripped in his hand.
---
Renard Sexton is FiveThirtyEight's international columnist and is based in Geneva, Switzerland. He can be contacted at sexton538@gmail.com
* Press freedom in Italy ranks far below other EU states, in part because of the power the current PM has over broadcasting.
Many leaders receive threats, requiring large scale security details, onerous background checks and restrictions of movement.
Yet, most do not get whacked in the face with a minature church.
As succinctly put by BBC News:
" Prime Minister Silvio Berlusconi of Italy is recovering in hospital after an assault left his face covered in blood following a rally in Milan.
He suffered two broken teeth, a minor nose fracture and cuts to his lip after being struck by a man wielding a souvenir model of the city's cathedral. "
The most recent events mark an interesting point in the life and political career of the 73-year-old multi-billionaire, who has consistently made headlines regarding personal shenanigans much more often than policy decisions. In the last year, his wife has filed for divorce after a highly public feud, he brought controversy by joking about Barack Obama's "suntan," audio tapes of him having sexual relations with a paid escort were made public and he argued that sexual assault in Italy was difficult to stop because Italian women are just "so beautiful."
At the same time, Berlusconi's personal approval ratings have fallen from a high of around 63 percent to a recent figure of just 50.1 percent, even though he receives generally favorable treatment in the Italian press*.
He owns the largest commercial broadcasting company in Italy, Mediaset, the largest magazine and book publishing company, as well as soccer powerhouse A.C. Milan. His stranglehold on Italy media and links to the mafia led The Economist to publish a blazing April 2001 feature article which on the cover read "Why Silvio Berlusconi is unfit to lead Italy." Berlusconi proceeded to sue the magazine for defamation, a charge which was dismissed by the Italian courts (along with assessing cost-recovery for the UK-based weekly) in 2008.
Despite consistent public embarrassment, charges of corruption or links to the Mafia every five years or so, clear conflicts of interest between his own fortune and holdings and the Italian political sphere, and a divided country over which he is Prime Minister, Berlusconi has managed to survive and thrive in the power politics of the Italy for nearly twenty years.
Entering his first election in 1994 at the helm of the "Forza Italia," a party he founded the year before, Berlusconi launched a huge television advertisement campaign on Mediaset's three major television stations. At the same time, he allied Forza Italia with his wealthy power base in Milan, represented by the Northern League (Lega Nord), while at the same time allying with the very conservative and southern-focused National Alliance (Alleanza Nazionale), leading the coalition to a sweeping victory with 366 deputies, against the opposition "Alliance of Progressives" who won just 213 seats.
This was actually no small feat. For generations, and quite evidently since World War II, Italy has been politically and economically divided in a generally north-south fashion. A good starting place to frame the modern situation is the 1946 referendum, the first after the destruction of WWII, which asked the Italian popular to decide between becoming a parliamentary Republic or for the monarchy to continue in power.
The geographic division of the vote was remarkable.
Showing the major fractures in a united Italy, voting patterns in 1946 reflected the dominant split in the country, with more socially conservative and poorer populations in the south, as well as the wealthy connected to the monarchy in Rome, voting for the King (in purple). The red segments of the Industrial north (which drove much of the "il boom" of the 1950s and 60s) were interested in a republican way forward, including a return to the European fold.Returning to 1994, the year of Berlusconi's first victory, a similar pattern of income distribution remained, but this time with a different political outcome.
Much as it was 50 years before, economic power in Italy in the 1990s was centered in the northern provinces and around Rome.However, the 1994 Berlusconi coalition cut across these historical barriers and built a solid vote total among both the wealthiest and the working poor (not the poorest quintile, but just above, in the 20 percent to 40 percent of the median group). Social conservatives were targeted as well, with Berlusconi advertising a traditional center-right platform.
The 1994 coalition fell apart just one year later, when corruption investigations in Milan into Berlusconi's activities and accusations of broken promises from some coalition partners forced the PM to resign.In the 1996 election, Berlusconi's attempted comeback was blunted by his trying to go it with just his most conservative allies -- leaving the Lega Nord to run independently and denying him major support outside of Sicily, Puglia, and just two of the wealthy northern provinces, who were split between the Lega Nord, Olive Tree coalition and Alliance for Freedom.
After five years in the wilderness, Berlusconi was able to rustle up the 1994 coalition again, this time for the 2001 general election. It was 1994 all over again in more ways than one, with Berlusconi's new party the "House of Freedoms" running on the platform of a "Contract with the Italians."The winning map provided no real suprises, with a mixture of the weathy north and the middle poor south coming together in support of the House of Freedoms:
The "inter-regio" of 2006-2008, when an unpopular Berlusconi was narrowly edged by the Democrats-led "Union" coalition led by Romano Prodi, was much like the late 1990s, when a backlash against Berlusconi's outlandish ways knocked him out of power for several years.But the Survivor prevailed again in 2008, basically driving the same storyline that has fueled him all along. "Out of love for Italy, I felt I had to save it from the left," he has repeatedly said, mixing his image of a brash, colorful and somehow "regular" Italian, while playing also the role of the caretaker and friend.
With a flair for the dramatic, he declared earlier this year in front of Italy's constitutional court:
"I am without doubt the person who's been the most persecuted in the entire history of the world and the history of man."
And victim he was on Sunday, with the miniature Milanese Duomo bloodying his face not unlike a short but poignant street fight. Indeed, the Italian Minister of Interior declared that the Prime Minister was "at risk of being seriously injured, or killed."
But survive he did indeed, as his has for two decades. Knocked down and laughed at for his clownish and conservative ways, yet back again, with power, influence and money firmly gripped in his hand.
---
Renard Sexton is FiveThirtyEight's international columnist and is based in Geneva, Switzerland. He can be contacted at sexton538@gmail.com
* Press freedom in Italy ranks far below other EU states, in part because of the power the current PM has over broadcasting.
Why Progressives Are Batshit Crazy to Oppose the Senate Bill
@ 3:42 AM
Pick your subheadline:
a) It's time to stop being polite and start getting real.
b) Here's hoping a picture is worth 1,000 words.
Any questions?
OK, I imagine that there will be a few. Here's how I came up with these numbers.
Senate Bill. These estimates are straightforward -- they're taken directly from the CBO's report on premiums for people at different income levels. A family of four earning an income of $54,000 would pay $4,000 in premiums, and could expect to incur another $5,000 in out-of-pocket costs. The $4,000 premium represents a substantial discount, because the government is covering 72 percent of the premium -- meaning that the gross cost of the premium is $14,286, some $10,286 of which the government pays.
One caution: this reflects the situation before the public option was removed from the bill. But, provided that the subsidy schedule isn't changed as well, that shouldn't change these numbers much.
Status Quo. In 2009, the average premium for a family in the individual market was $6,328, according to the insurance lobbying group AHIP. However, this figure paints an optimistic picture for two reasons. Firstly, the average family size in the AHIP dataset is 3.03 people; for a family of four, that number would scale upward to $7,925, by my calculations. Secondly, the CBO's estimates are based on 2016 figures, not 2009, so to make an apples-to-apples comparison, we have to account for inflation. According to Kaiser, the average cost of health coverage has increased by about 8.7 percent annually over the past decade, and by 8.8 percent for family coverage. Let's scale that down slightly, assuming 7.5 annual inflation in premiums from 2009 through 2016 inclusive. That would bring the cost of the family's premium up by a nominal 66 percent, to $13,149. And remember: these are based on estimates of premiums provided by the insurance lobby. I have no particular reason to think that they're biased, but if they are, it's probably on the low side.
Not only, however, would this family paying a lot more under the status quo, but they'd be doing so for inferior insurance. According to the CBO, the amount of coverage in the individual market would improve by between 27 and 30 percent under the Senate's bill. Taking the midpoint of those numbers (28.5 percent), we can infer that there would be about $1,427 in additional cost sharing to this family in the status quo as compared with the Senate bill; this would bring their cost sharing to $6,427 total.
Add the $6,247 to the $13,149 and you get an annual cost of $19,576 -- for a family earning $54,000! Obviously, very few such families are going to be able to afford that unless they have a lot of money in the bank. So, some of these families will go without insurance, or they'll by really crappy insurance, or they'll pay the premiums but skimp on out-of-pocket costs, which will negatively impact their fiscal and physical health. But if this family were to want to obtain equivalent coverage to that which would be available to them for $9,000 in the Senate bill, it would cost them between $19,000 and $20,000, according to my estimates.
Status Quo with SCHIP. Fortunately, some families in this predicament do receive some relief via the SCHIP program. SCHIP eligibility varies from state to state; a family earning income at 225 percent of the poverty line, as this family does, is eligible for SCHIP in about half of the country.
Premiums are fairly cheap under SCHIP -- for a family at 225 percent of poverty, generally on the order of about $60 per month to cover two children. We'll assume that this will inflate slightly to $75 per month, or $900 per year, by 2016.
The two adults in the household will still have to buy insurance in the individual market, which will cost $7,684 by 2016. That makes the family's total premium $8,584.
For the adults, we assume that the cost sharing component runs proportional to premiums, and totals $3,756. For the children, this calculation is a little bit more ambiguous. Out-of-pocket costs under SCHIP are capped at 5 percent of family income, which would be $2,700 for this family. But that's a cap and not an average -- we'll assume that the average is half of the cap, or $1,350. Total cost-sharing, therefore, is $5,106 between the adults and the children.
This means that premiums plus out of pocket costs will equal $13,690 for this family. I estimate the subsidy by subtracting this figure from the cost of unsubsidized insurance in the individual market; the difference is $5,885.
Caveat/Disclaimer. There are, obviously, some simplifying assumptions here, especially with regard to SCHIP. The only thing I can promise you is that I'm "showing my work". I would actively encourage people to pick apart these numbers and come up with their own, more robust estimates. One thing that should probably be accounted for is that the families in both the status quo and the status quo + SCHIP cases will frequently be able to deduct their health care expenses from their taxable income, especially if they've incurred substantial out-of-pocket costs. That means that the difference in net costs is slightly exaggerated by my figures.
* * *
Nevertheless, it's clear that this family would be receiving a very substantial subsidy, on the order of $10,000 in pretax income, under the Senate's bill. The reason I picked this particular family is because it provides a reality check against the example selected by the great Darcy Burner, who argued in an article at Open Left:
In fact, Burner's example is unfortunately chosen; she picked one of the groups -- a low-income family in the individual market -- that would benefit the most under the Senate package. Other groups would not be so beneficially impacted. Premiums are projected to rise slightly, for instance, for high-income earners in the individual market, although this is a small fraction of people and they'd get better health coverage as a result. And people in the employer market would not be much affected, except those with generous benefits packages subject to the excise tax; these folks would have to pay more out of pocket, although probably in exchange for more cash income. On the other hand, there are those who have a pre-existing condition and who are not able to buy health coverage at all, and for whom the benefit is almost incalculably large.
I understand that most of the liberal skepticism over the Senate bill is well intentioned. But it has become way, way off the mark. Where do you think the $800 billion goes? It goes to low-income families just like these. Where do you think it comes from? We won't know for sure until the Senate and House produce their conference bill, but it comes substantially from corporations and high-income earners, plus some efficiency gains.
Because this is primarily a political analysis blog, I think people tend to assume that I'm lost in the political forest and not seeing the policy trees. In fact, the opposite is true. For any "progressive" who is concerned about the inequality of wealth, income and opportunity in America, this bill would be an absolutely monumental achievement. The more compelling critique, rather, is that the bill would fail to significantly "bend the cost curve". I don't dismiss that criticism at all, and certainly the insertion of a public option would have helped at the margins. But fundamentally, that is a critique that would traditionally be associated with the conservative side of the debate, as it ultimately goes to mounting deficits in the wake of expanded government entitlements.
And please do pick apart my numbers: I'm sure that you will find some questionable assumptions and possibly some outright errors. But if you found a persuasive, progressive policy rationale against the bill, I'd be stunned.
EDIT -- Another important point or two: To the extent there are critiques about this post, they are liable to revolve around the fact that $9,000 is not so affordable for our not-so-imaginary family. Two things to note on this:
Firstly, in most years, the family will not be paying $9,000. They'll be paying closer to $4,000 -- the base cost of the premium -- or maybe $5,000 for a few meds and doctors' visits and so forth. The costs will be much higher in those years when a member of the family gets sick. But the alternative in those years would be not having health insurance at all -- and in that case, either the the family member might die from the condition or the family will go bankrupt trying to prevent that.
Also, frankly, the individual mandate penalty is not very harsh, especially for lower-income people, so there's some potential for gaming the system in a way that isn't economically optimal but would give this particular family a better deal than suggested above.
Secondly, the critiques over the level of subsidies are rather tangential to where the locus of progressive energy has been -- on the public option. The presence of a watered-down public option would make very little difference in terms of this family's cost structure -- and yet, this same bill with a public option is one that most liberals would be head-over-heels for.
I happen to agree that the cost subsidies need to be improved somewhat for this type of family and indeed I wish that this is where more of the left's energy had been directed. Fortunately, I think this is something that really can (still) be improved in conference committee or on the floor. For instance, if you adopted the House bill's subsidies for families at under 250% of poverty, and the Senate's (which actually become more generous) for people at greater than 250% of poverty -- perhaps in exchange for a harsher (not weaker!) individual mandate penalty -- you'd have a pretty reasonable compromise.
a) It's time to stop being polite and start getting real.
b) Here's hoping a picture is worth 1,000 words.
Any questions?
OK, I imagine that there will be a few. Here's how I came up with these numbers.
Senate Bill. These estimates are straightforward -- they're taken directly from the CBO's report on premiums for people at different income levels. A family of four earning an income of $54,000 would pay $4,000 in premiums, and could expect to incur another $5,000 in out-of-pocket costs. The $4,000 premium represents a substantial discount, because the government is covering 72 percent of the premium -- meaning that the gross cost of the premium is $14,286, some $10,286 of which the government pays.
One caution: this reflects the situation before the public option was removed from the bill. But, provided that the subsidy schedule isn't changed as well, that shouldn't change these numbers much.
Status Quo. In 2009, the average premium for a family in the individual market was $6,328, according to the insurance lobbying group AHIP. However, this figure paints an optimistic picture for two reasons. Firstly, the average family size in the AHIP dataset is 3.03 people; for a family of four, that number would scale upward to $7,925, by my calculations. Secondly, the CBO's estimates are based on 2016 figures, not 2009, so to make an apples-to-apples comparison, we have to account for inflation. According to Kaiser, the average cost of health coverage has increased by about 8.7 percent annually over the past decade, and by 8.8 percent for family coverage. Let's scale that down slightly, assuming 7.5 annual inflation in premiums from 2009 through 2016 inclusive. That would bring the cost of the family's premium up by a nominal 66 percent, to $13,149. And remember: these are based on estimates of premiums provided by the insurance lobby. I have no particular reason to think that they're biased, but if they are, it's probably on the low side.
Not only, however, would this family paying a lot more under the status quo, but they'd be doing so for inferior insurance. According to the CBO, the amount of coverage in the individual market would improve by between 27 and 30 percent under the Senate's bill. Taking the midpoint of those numbers (28.5 percent), we can infer that there would be about $1,427 in additional cost sharing to this family in the status quo as compared with the Senate bill; this would bring their cost sharing to $6,427 total.
Add the $6,247 to the $13,149 and you get an annual cost of $19,576 -- for a family earning $54,000! Obviously, very few such families are going to be able to afford that unless they have a lot of money in the bank. So, some of these families will go without insurance, or they'll by really crappy insurance, or they'll pay the premiums but skimp on out-of-pocket costs, which will negatively impact their fiscal and physical health. But if this family were to want to obtain equivalent coverage to that which would be available to them for $9,000 in the Senate bill, it would cost them between $19,000 and $20,000, according to my estimates.
Status Quo with SCHIP. Fortunately, some families in this predicament do receive some relief via the SCHIP program. SCHIP eligibility varies from state to state; a family earning income at 225 percent of the poverty line, as this family does, is eligible for SCHIP in about half of the country.
Premiums are fairly cheap under SCHIP -- for a family at 225 percent of poverty, generally on the order of about $60 per month to cover two children. We'll assume that this will inflate slightly to $75 per month, or $900 per year, by 2016.
The two adults in the household will still have to buy insurance in the individual market, which will cost $7,684 by 2016. That makes the family's total premium $8,584.
For the adults, we assume that the cost sharing component runs proportional to premiums, and totals $3,756. For the children, this calculation is a little bit more ambiguous. Out-of-pocket costs under SCHIP are capped at 5 percent of family income, which would be $2,700 for this family. But that's a cap and not an average -- we'll assume that the average is half of the cap, or $1,350. Total cost-sharing, therefore, is $5,106 between the adults and the children.
This means that premiums plus out of pocket costs will equal $13,690 for this family. I estimate the subsidy by subtracting this figure from the cost of unsubsidized insurance in the individual market; the difference is $5,885.
Caveat/Disclaimer. There are, obviously, some simplifying assumptions here, especially with regard to SCHIP. The only thing I can promise you is that I'm "showing my work". I would actively encourage people to pick apart these numbers and come up with their own, more robust estimates. One thing that should probably be accounted for is that the families in both the status quo and the status quo + SCHIP cases will frequently be able to deduct their health care expenses from their taxable income, especially if they've incurred substantial out-of-pocket costs. That means that the difference in net costs is slightly exaggerated by my figures.
* * *
Nevertheless, it's clear that this family would be receiving a very substantial subsidy, on the order of $10,000 in pretax income, under the Senate's bill. The reason I picked this particular family is because it provides a reality check against the example selected by the great Darcy Burner, who argued in an article at Open Left:
Affordable coverage for everyone: FAIL.We can debate whether $9,000 for a family earning $54,000 is "affordable"; what we know is that it's a hell of a lot more affordable than the status quo, under which the family might have to pay more than twice as much to receive equivalent coverage.
The latest CBO estimates for the Senate bill say that a family of four with a household income of $54,000/year should expect to pay 17% of their gross income on healthcare - about $9,000/year. (And that was when there was a public option to hold down costs!) That's more than they'll spend on federal taxes. That's more than they'll spend on food. I'm guessing if you took a poll, very few Americans would consider that affordable. And because of the way they've approached this, there's no effective cost cap on premiums and nothing providing downward pressure, so this is a problem that would get worse rather than better over time.
In fact, Burner's example is unfortunately chosen; she picked one of the groups -- a low-income family in the individual market -- that would benefit the most under the Senate package. Other groups would not be so beneficially impacted. Premiums are projected to rise slightly, for instance, for high-income earners in the individual market, although this is a small fraction of people and they'd get better health coverage as a result. And people in the employer market would not be much affected, except those with generous benefits packages subject to the excise tax; these folks would have to pay more out of pocket, although probably in exchange for more cash income. On the other hand, there are those who have a pre-existing condition and who are not able to buy health coverage at all, and for whom the benefit is almost incalculably large.
I understand that most of the liberal skepticism over the Senate bill is well intentioned. But it has become way, way off the mark. Where do you think the $800 billion goes? It goes to low-income families just like these. Where do you think it comes from? We won't know for sure until the Senate and House produce their conference bill, but it comes substantially from corporations and high-income earners, plus some efficiency gains.
Because this is primarily a political analysis blog, I think people tend to assume that I'm lost in the political forest and not seeing the policy trees. In fact, the opposite is true. For any "progressive" who is concerned about the inequality of wealth, income and opportunity in America, this bill would be an absolutely monumental achievement. The more compelling critique, rather, is that the bill would fail to significantly "bend the cost curve". I don't dismiss that criticism at all, and certainly the insertion of a public option would have helped at the margins. But fundamentally, that is a critique that would traditionally be associated with the conservative side of the debate, as it ultimately goes to mounting deficits in the wake of expanded government entitlements.
And please do pick apart my numbers: I'm sure that you will find some questionable assumptions and possibly some outright errors. But if you found a persuasive, progressive policy rationale against the bill, I'd be stunned.
EDIT -- Another important point or two: To the extent there are critiques about this post, they are liable to revolve around the fact that $9,000 is not so affordable for our not-so-imaginary family. Two things to note on this:
Firstly, in most years, the family will not be paying $9,000. They'll be paying closer to $4,000 -- the base cost of the premium -- or maybe $5,000 for a few meds and doctors' visits and so forth. The costs will be much higher in those years when a member of the family gets sick. But the alternative in those years would be not having health insurance at all -- and in that case, either the the family member might die from the condition or the family will go bankrupt trying to prevent that.
Also, frankly, the individual mandate penalty is not very harsh, especially for lower-income people, so there's some potential for gaming the system in a way that isn't economically optimal but would give this particular family a better deal than suggested above.
Secondly, the critiques over the level of subsidies are rather tangential to where the locus of progressive energy has been -- on the public option. The presence of a watered-down public option would make very little difference in terms of this family's cost structure -- and yet, this same bill with a public option is one that most liberals would be head-over-heels for.
I happen to agree that the cost subsidies need to be improved somewhat for this type of family and indeed I wish that this is where more of the left's energy had been directed. Fortunately, I think this is something that really can (still) be improved in conference committee or on the floor. For instance, if you adopted the House bill's subsidies for families at under 250% of poverty, and the Senate's (which actually become more generous) for people at greater than 250% of poverty -- perhaps in exchange for a harsher (not weaker!) individual mandate penalty -- you'd have a pretty reasonable compromise.
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