What People Know About The Health Insurance Premium Assistance Bill

Ezra Klein writes two good posts. In the first one, he writes:

[s]o far as health-care reform goes, the public option is fairly simple, and undeniably prominent [only 30% of Americans think they can explain it.] Imagine how many could explain the exchanges, or the mandate, or the benefit package ...

Further, I doubt 10% even know the words exchange or mandate have anything to do with the health care bill. That rude awakening is the biggest political pitfall for Democrats. There is no support for a mandate or the Exchange because no one has been honest about these provisions. The second post from Ezra states:

The idea is that the Office of Personnel Management would choose nonprofit plans that met national standards and offer them on every state exchange (unless states opted out). These plans would be private, but the OPM would act as an aggressive purchaser, ensuring that they met high standards and conducted themselves properly. It's a private option with a public filter, essentially. [. . .] But the fact remains that private plans are not public options, no matter how much extra scrutiny they're subjected to.

I agree. And for the delivery of non-mandated health insurance premium subsidies, it is an acceptable vehicle imo.

It is, of course, NOT reform. It is not sufficient to support an individual mandate, which should be stripped from the bill if this is the end result.

The last important question - the public option question has now been answered (the Obama Administration is tired of it, it wants it to go away) - is how this health insurance premium assistance bill will be funded. There is of course the fact that this will involve a transfer of money for individuals to the health insurance companies. This is inevitable when the goal is to get more people insured without adding a public option (the increase in Medicaid eligibility is the exception here.) So who should pay for that? Ezra writes:

The House and Senate need to figure out their revenue measures [. . .]

Indeed. I favor the well off paying for this. The House bill provides the most progressive funding mechanism, charging a surtax on incomes above $500,000 a year to fund the health insurance premium assistance act. The Senate bill has one provision that I can support - increasing the Medicare tax for incomes above $200,000 a year. but it also contains an unacceptable regressive tax - the excise tax.

The excise tax should be a deal breaker on the funding side. It is sold as "cost containment" when in fact it is "coverage containment." It will fall on people of all incomes who have been provided good health insurance benefits in lieu of higher pay. No progressive in good conscience should support it. I do not oppose an excise tax that applies to PERSONS who make at least 300,000 a year. I would strongly oppose an excise tax that will apply to all income groups. That is a regressive tax.

The endgame is upon us and reform efforts are over. There will be no reform in this bill. There is not a single reform worth an individual mandate that will survive in this bill.

Without meaningful reform, an individual mandate is too high a price to pay.

And even with meaningful reform, a progressive financing arrangement is essential to a good bill. The House bill's financing mechanisms are clearly what progressives should support.

Speaking for me only

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    if progressives had any moral compass (5.00 / 3) (#8)
    by azhealer on Mon Dec 07, 2009 at 08:54:30 AM EST
    they would oppose this new non-PO completely...

    we are totally screwed -- by the people WE worked so hard to elect.

    Sec 1555.--- mandate for individuals, but opt-out for private health insurers

    here is an industry investor analysis:

    News is incrementally positive for healthcare stocks as Senate seems to
    have gone full circle back to one of the original "public plan" designs
    that would be less negative, and possibly net positive, for industry.
    Specifically, common ground may be found in the Senate on a public plan
    modeled after the federal employee health benefit plan (FEHBP). We think
    it has potential to succeed in the Senate (in which case we think it's
    likely the House would agree to it).  This new plan would allow people
    who don't work for the U.S. government to buy insurance through the plan
    offered to government employees.  Companies like Aetna, Coventry, Medco,
    and WellPoint could have an edge in such a plan because they participate
    in that FEHBP plan today.  Government-run plans like Medicare and
    Medicaid are not offered through the exchange.  Republican Senator Snowe
    called it a positive development

    Well, I may be wrong (none / 0) (#27)
    by robotalk on Mon Dec 07, 2009 at 11:01:21 AM EST
    but the way FEHBA works is that the OPM negotiates rates with insurers.  

    Of course, insurers don't have to participate, but then they don't get the benefit of the pool business if they don't.

    I assume the pool of the mandated would be included in the pool of federal employees, so they lose business if they don't participate.  

    I would like to see an option that if the OPM does not feel the insurers are negotiating fairly or economically, OPM could set up its own hospitals and networks ala Kaiser.

    Actually, I would like Medicare for all, but I become increasingly unrealistic.


    Well (5.00 / 1) (#23)
    by lilburro on Mon Dec 07, 2009 at 10:47:27 AM EST
    is there a more damning measure of the failure of the "11th dimensional chess" strategy?  

    Someone, explain to me again the benefit of Obama staying out of the conversation.

    Well (5.00 / 3) (#28)
    by Ga6thDem on Mon Dec 07, 2009 at 11:22:03 AM EST
    I don't know that he really helped that much when he was in the conversation because he doesn't have convictions. He's desperate to pass anything and call it "reform" even if it's the worst piece of junk ever. Obama is good at promoting himself but not much else.

    Trouble is (5.00 / 1) (#37)
    by cal1942 on Mon Dec 07, 2009 at 12:53:16 PM EST
    when he did get into the conversation he screwed up with statements about cutting billions from Medicare without explaining what exactly was being cut.

    We've heard so often that Obama is brilliant, etc.

    If he's so damned smart then he should have known that even mentioning Medicare and reduction or cut in the same sentence would cause fear and panic.

    It was the same with his statements about Social Security funding during the primaries; restarting a battle that had only recently been won.

    An unmitigated disaster.  An empty suit.


    Now needs some/any/thing for Best SOTU Evah ... (none / 0) (#30)
    by Ellie on Mon Dec 07, 2009 at 12:03:59 PM EST
    ... and he's got nuthin'.

    One woman's opinion.

    No rollbacks of Bush/Cheney crud, no restored lost Constitutional rights, no changes on Afghanistan deployments.

    I can't even say this view is cynical or disappointed, since the HRC trajectory seemed set in advance. (Why the arbitrary end of Dec "deadline" combined with the extremely passive "Make Me!" and closed-door fluffer to Congress batting around abstracts, such as being part of history?)

    Feh. Don't have a dog in this fight. I shelved relocation and work plans until it's SAFER (ie, I figured in a 18-30 mos margin to solvency but will not work without a safety net.)


    What is reform by your definition? (none / 0) (#1)
    by steviez314 on Mon Dec 07, 2009 at 08:15:31 AM EST
    It's not single payer, like Medicare--that's just a financing mechanism too, like a public option.

    True health care reform changes the delivery system, not the financing system.  That means doctors on salary (NHS in England)--never going to happen here.

    It means payment for health care outcomes, not services--maybe some day.

    It means comparative medical testing.  It means payment penalties for poor service (like hospital infection rates--that's in the bill).  It also means cost/benefit tradeoffs--and look how well received the under-50 mammogram recommendations were!

    So, I think by your definition, health care reform has never been on the table.

    Now, I happen to think that a public option to conpete with insurance companies, subsidies for the poor to buy it, outlawing the most egregious insurance industry practices--these ARE health care reform.

    NO (5.00 / 1) (#2)
    by Ga6thDem on Mon Dec 07, 2009 at 08:19:42 AM EST
    that's not health care reform that health insurance reform.

    That's a pithy phrase--so tell me what IS (none / 0) (#3)
    by steviez314 on Mon Dec 07, 2009 at 08:28:50 AM EST
    health care reform?

    If it's going to the NHS model, it has no support in the U.S.

    If it's the other things I mentioned about care, I'm not sure how much support it would have even among progressives.


    a non-profit PO for all (5.00 / 6) (#7)
    by Dadler on Mon Dec 07, 2009 at 08:45:43 AM EST
    That is healthCARE reform, IMO.  Health INSURANCE reform is simply altering slightly the rules of the private game to make it appear we have changed things for the public when, in reality, they will not change much at all. We may get some healthcare assistance for those in need, which is a good thing, but that is still, let's be clear, really just a handout to insurance companies. Without real cost controls, without very strict regulation, nothing significant will really occur, and we will continue pissing into the wind and wondering why our eyes are burning.  In short, we are a very dumb nation when it comes to investing in things that encourage social stability on the public level. In fact, we act as if we'd genuinely prefer social instability.

    Reality is this: corporations, including healthcare corps, OWN this country from top to bottom. They can do, essentially, whatever they please. And they will not cut their profits for anything. So...unless every American has the ability to opt out of that for-profit system, there is no real reform of the system, only tinkering at the edges.

    That is how our corporate oligarchy works and has for some time. Offer just enough to just enough people to stave off revolt.


    I would add (none / 0) (#38)
    by cal1942 on Mon Dec 07, 2009 at 01:05:01 PM EST
    that this isn't even tinkering at the edges.  This is a massive grant of public money to a parasite.

    Real health care reform won't happen (5.00 / 1) (#12)
    by Cream City on Mon Dec 07, 2009 at 09:02:41 AM EST
    here -- having doctors have to work for the government (say, as they do in the VA) and/or get cost approvals from the government, etc.

    Britain started going to that almost a century ago, while the medical monopoly fought it off, and then the insurance industry and big pharma and more enlisted in the battle and started building their obstacle courses to real reform, too.  So they have had almost a century here to set up our system in such a way that we end up in this circular h*ll of how the heck to unravel it all and start over.

    It's too late now.  We may still have been able to do it in the New Deal, when even docs and others in the medical mess were desperate, too -- but we didn't.  We may still have been able to do it sixty years ago when Truman was (at least) the third president to call for it, but he lacked the political capital and faced a conservative Congress.  By the time we got to LBJ, it took all the political capital and prowess he had to at least get through the much-modified Medicare.

    By the time we got to the Clintons in the '90s -- well, you witnessed it, with a Congress again so conservative that Truman would have welcomed it.

    In sum, that boat sailed, in part because of the insane American fear of so-called "socialism."


    I don't think doctors are the real (none / 0) (#18)
    by inclusiveheart on Mon Dec 07, 2009 at 09:21:17 AM EST
    problem in the healthcare industry at this point.  They're not really making what they used to at all.  The cost of medical school is amazingly high now.  Doctors' pay is getting worse and worse.  In fact, one of the reasons why a lot of physicians have finally decided that this private insurance system is problematic is that they've fallen victim to their malicious practices more and more over the years too.

    Correct. That's why (none / 0) (#22)
    by Cream City on Mon Dec 07, 2009 at 10:46:19 AM EST
    you see them disappaer over the decades in my comment.

    Not sure we disagree much (5.00 / 2) (#4)
    by Big Tent Democrat on Mon Dec 07, 2009 at 08:40:19 AM EST
    We agree on the public option and we agree that a regulatory framework that would insure that insurance companies do not engage in certain practices would be reform.

    We also agree that nothing in the proposals that will survive will do either.

    We disagree in that you call assistance for insurance premiums for the less well off is reform. It is not. Unemployment insurance is not reform. Assistance For Dependent Children (AFDC) is not reform. Financial aid for the less well off for college is not reform.

    Hell, progressive taxation is not reform.

    These are all progressive programs. But none of them are reform.

    Social Security and Medicare reformed our retirement benefits system by replacing the system then in place.

    These other programs provide assistance to the less well off so that they can better cope with the EXISTING system.

    Two different things. Oftentimes, the latter is much more important.  


    I think a public option without assistance (none / 0) (#9)
    by steviez314 on Mon Dec 07, 2009 at 08:55:41 AM EST
    wouldn't be reform either.  It's the combination of many of these things, that result in universal coverage, that in toto, expands the compact between government and the people.

    I don't think we have to employ the Drs (5.00 / 6) (#5)
    by andgarden on Mon Dec 07, 2009 at 08:40:53 AM EST
    to have reform. Medicare for all would go a long way.

    That would replace our private insurance system (5.00 / 1) (#6)
    by Big Tent Democrat on Mon Dec 07, 2009 at 08:43:48 AM EST
    That would be radical reform of the health insurance industry.

    It also would be the most effective cost containment measure imaginable.

    Would it deliver better health care? I do not know. I think viewing the nation as a whole, yes.

    It would certainly deliver cheaper health insurance. To all.


    Maybe not (none / 0) (#10)
    by andgarden on Mon Dec 07, 2009 at 08:59:08 AM EST
    It is telling that Social Security has never really replaced private retirement plans, for example. The difference, I guess, is that Medicare is a more of a bottomless pit for the user (though Social Security is--temporally speaking).

    It is telling that SS hasn't replaced (5.00 / 3) (#15)
    by inclusiveheart on Mon Dec 07, 2009 at 09:14:52 AM EST
    private retirement funds?

    What does that tell you?

    You are, of course, aware that Congress established 401ks, IRAs, etc. as alternate vehicles of retirement savings.  That was really about enriching Wall Street not so much you and me.

    In any case, the reality is that it is no accident that SS contributions have stayed relatively low and that we are more than just encouraged to invest retirement funds in private funds.


    401Ks, IRAs, etc (none / 0) (#32)
    by cal1942 on Mon Dec 07, 2009 at 12:19:41 PM EST
    Were intended only as a supplement.  

    Their creation was a huge mistake because it gave employers an out and reduced revenue.


    Seems to me (none / 0) (#39)
    by Steve M on Mon Dec 07, 2009 at 01:31:54 PM EST
    that our national savings rate is way too low as it is (not that I'm complaining right this second, in the midst of a recession, about people not saving).  I'd hate to see what it would look like if we didn't have 401k's and the like.

    Social Security (none / 0) (#14)
    by jbindc on Mon Dec 07, 2009 at 09:08:47 AM EST
    was never meant as a complete retirement plan for people, so that's my guess as to why it never replaced private plans.

    A couple fun SS facts:

    Payroll taxes were first collected in 1937, also the year in which the first benefits were paid, namely the lump-sum death benefit paid to 53,236 beneficiaries.

    The first reported Social Security payment was to Ernest Ackerman, who retired only one day after Social Security began. Five cents were withheld from his pay during that period, and he received a lump-sum payout of seventeen cents from Social Security.

    The first monthly payment was issued on January 31, 1940 to Ida May Fuller of Ludlow, Vermont. In 1937, 1938 and 1939 she paid a total of $24.75 into the Social Security System. Her first check was for $22.54. After her second check, Fuller already had received more than she contributed over the three-year period. She lived to be 100 and collected a total of $22,888.92

    Indeed, it's an insurance program (none / 0) (#17)
    by andgarden on Mon Dec 07, 2009 at 09:21:04 AM EST
    But it's not impossible to imagine that it could have been much more.

    employer versus individual mandate (none / 0) (#11)
    by souvarine on Mon Dec 07, 2009 at 08:59:52 AM EST
    The argument from Democrats and long-term health care policy analysts is that the only way to get reform in the U.S. is through replacing employer provided health insurance with universal, individual insurance. To get that you must have an individual mandate. Our employer based system obscures too many of the costs, leading to our inefficient health care system.

    To many progressives single payer is the only fair way to achieve mandated individual coverage, the public option is a compromise approach that would ideally evolve into de-facto single payer.

    But it is not clear to me that the public option is the only way to fairly achieve universal coverage and with that the reforms to our system of payments, insurance and health care. I can understand Klein's argument that there are other paths, I don't understand your argument that the only path to reform is the public option.

    In Canada, for example, (none / 0) (#19)
    by robert72 on Mon Dec 07, 2009 at 09:29:30 AM EST
    the individual does not pay directly for health care, except for a small monthly charge of $54 or about $120 for a family. Health care is paid for through income taxes.
    If a PO cost is charged to the consumer, then people are still at the mercy of whatever that option is going to charge and many will still fall through the cracks - too rich for assistance and too poor to be able to afford it.

    How is the monthly charge collected? (none / 0) (#24)
    by oculus on Mon Dec 07, 2009 at 10:47:31 AM EST
    What is the penalty for not paying the monthly charge?

    If you are on social assistance (5.00 / 1) (#40)
    by robert72 on Mon Dec 07, 2009 at 10:37:08 PM EST
    it is waived. If you are under a certain poverty level there is assistance or it is waived - I am not sure of the income level. If you work, it comes off your paycheck. I have never heard of anyone being refused service.....

    Other things that people may not know (none / 0) (#13)
    by MO Blue on Mon Dec 07, 2009 at 09:04:46 AM EST
    A close reading of the bill reveals other surprises, like the section titled "No lifetime or annual limits," which is intended to protect people from huge out-of-pocket expenses.

    Where annual benefits are concerned, the Senate bill bans only "unreasonable" limits. What that means is not spelled out; a Senate aide said the Treasury Department would set the standard.

    In addition, the bill says that certain health plans could continue to use annual and lifetime limits. As Timothy Stoltzfus Jost, a law professor at Washington and Lee University, interprets it, those potentially exempt from the ban include companies that self-insure, meaning they pay employee health benefits out of their own coffers, and businesses with more than 100 employees.

    Further, the prohibition on lifetime and annual limits applies only to limits "on the dollar value of benefits."

    In the past, health plans have gotten around restrictions measured in dollars.....http://tinyurl.com/ydjy7xj

    Private Insurers Exempted from Mandate in Bill (none / 0) (#16)
    by azhealer on Mon Dec 07, 2009 at 09:17:35 AM EST
    Section 1555 of Senate Bill --- page 367

    9 No individual, company, business, nonprofit entity, or
    10 health insurance issuer offering group or individual health
    11 insurance coverage shall be required to participate in any
    12 Federal health insurance program created under this Act
    13 (or any amendments made by this Act), or in any Federal
    14 health insurance program expanded by this Act (or any
    15 such amendments), and there shall be no penalty or fine
    16 imposed upon any such issuer for choosing not to participate in such programs.

    I completely agree (none / 0) (#20)
    by Capt Howdy on Mon Dec 07, 2009 at 10:04:43 AM EST
    that the republicans have, again, won the information (or disinformation) war.  
    when I was home for the holidays we had the expected screaming match over health care reform over the turkey.  it was stunning how completely uninformed and wrong the critics (everyone but me) was.  
    the amazing thing was once I educated them they were onboard with health care reform.
    which tells me if we had been trying harder we could have a lot more popular support.

    from republico (none / 0) (#21)
    by Capt Howdy on Mon Dec 07, 2009 at 10:31:55 AM EST
    As the Senate debate drags on, public support for the Democratic health care reforms remains very weak. The latest RealClearPolitics average shows just 40% in favor with nearly 49% opposed.

    These figures remain a bit puzzling because individual items within the bills still poll strongly.

    Next open thread, I want to know about ... (none / 0) (#31)
    by Ellie on Mon Dec 07, 2009 at 12:12:40 PM EST
    ... all that Host with the Most bling you got, notably, how you're restoring it.

    TMI: I got a bunch of stuff through an estate and being someone's secret Bestie -- who knew? -- and don't want to wreck it.


    Like they taught us in tort (none / 0) (#25)
    by robotalk on Mon Dec 07, 2009 at 10:54:29 AM EST
    rights and duties, hand in hand.  Right to mandate purchase of health insurance, duty to control cost and coverage.

    What is reform .... (none / 0) (#26)
    by nyrias on Mon Dec 07, 2009 at 10:58:54 AM EST
    PO is reform because it changes the system drastically.

    I would NOT call any additional assistance (with or without PO) reform. This form of redistribution exists already today (Medicare for example).

    Without more scrutiny, i do not know if a govt run system will work (because of inefficiencies and stuff) but certainly I buy into a public OPTION. Because if the PO is really inefficient, then most people will just go back to private insurance. If not, the PO will act as a competitive force to keep the profit incentives of the insurance company in check. I don't see any downside here, as long as the PO is self-funded.

    I think the best case scenario is to keep the PO self-funded, and have a SEPARATE assistant program for those who cannot afford anything. This set up will have LESS of a chance that taxes are mis-used in the PO system.

    GEE ZUZ (none / 0) (#33)
    by cal1942 on Mon Dec 07, 2009 at 12:38:15 PM EST
    i do not know if a govt run system will work (because of inefficiencies and stuff)

    Ever hear of Medicare nyrias?

    My point is that all we ever hear from conservatives is the broken record nonsense that government programs are always inefficient.


    It is a new program ... (none / 0) (#35)
    by nyrias on Mon Dec 07, 2009 at 12:44:25 PM EST
    It is not medicaid. How would we really know if it will be efficient?

    Are you saying ALL govt programs are efficient? I am merely pointing out that there is a risk and I am FOR IT anyway.

    Geez, can someone take a more moderate and sensible position here?

    I don't agree that ALL govt programs are inefficient.

    I don't agree that ALL govt programs are efficient.

    Sometimes we just don't know without trying and this one is worth trying.


    Efficiency huh (none / 0) (#34)
    by cal1942 on Mon Dec 07, 2009 at 12:42:10 PM EST
    keep the PO self-funded, and have a SEPARATE assistant program for those who cannot afford anything

    You claim inherent inefficiency and then suggest an agency to act on top of another agency.


    Sigh .. please READ (none / 0) (#36)
    by nyrias on Mon Dec 07, 2009 at 12:46:47 PM EST
    I did not CLAIM inefficiency. I said we don't know and there is a chance of it. Which is quite different.

    Plus, inefficiency or efficiency in running public insurance is different from an assistant program. There can be more transparency if the two are separated. (And thus, can be updated separately at a later date).


    Plugged-in Ezra reports (none / 0) (#29)
    by andgarden on Mon Dec 07, 2009 at 11:52:29 AM EST
    Medicare buy-in is gaining attention. We have been teased with this before, but of course I think that's a "compromise" that the liberals can easily (willingly) support. I find it hard to believe that this one could really slip by.