Anthem Blue Cross And The Selling Of The Health Bill Regulations

Despite my counsel to the Villagers that there is no political return in selling the regulations contained in the Senate health bill, Jon Cohn tries here, using the Anthem Blue Cross 39% rate health insurance rate hike story. Cohn writes:

[T]he best way to avoid adverse selection, as I've argued many times, is to create one giant insurance pool--in which everybody, healthy and sick, gets coverage at the same rates. And, roughly speaking, that's what the Democratic health care bills would do, by creating insurance exchanges through which all individuals in a given state would buy coverage.

This paragraph does not even make internal sense. In what way is the creation of 50 state based exchanges "creat[ing] one giant insurance pool[?]" (Unlike the Senate bill, the House bill creates a national exchange.) But even that is deceptive. The exchanges will involve only a small part of the national health insurance pool. Most are covered through employer based plans. Cohn's argument is filled with holes. More . . .

In reality, Cohn's argument is aspirational - it is about what the exchanges might become in some magical future. Consider this:

Of course, only a relatively small portion of Americans carry individual insurance coverage. The majority of people with private coverage get it through their employers, where such stark rate increases are rare. But, without reform, it's entirely possible--some would say likely--that more and more employers will be dropping coverage, leaving more and more individuals to buy it on their own. That's why the California Anthem story should get everybody's attention.

(Emphasis supplied.) Is it true that without reform, employers will be more likely to drop employee health insurance? What is the basis for this statement? The reality I believe is different. The Senate bill makes it more likely to see a reduction in employer based health insurance. And that is not a bad thing policy wise so long as there is a real safe harbor for people.

But here is why arguing for the regulatory components of the Senate health bill is a political loser - you basically have to tell people they are going to lose their employer based insurance, and indeed, the Senate health bill is intended to forward that process (that is what the excise tax is all about.) That is a political loser.

Politics is not so complicated in my opinion. Policy is. I am not going to rehash my disbelief in the power of the state based exchanges and the regulatory reform framework that the Village wonks are so convinced about. Instead i want to address the political flaws in the selling of the Senate health bill.

Here is the problem - they are selling something no one wants to buy. The Senate health bill is a political loser. It has no political constituency, except for the Village Wonks. It has numerous political foes - the most important right now being the unions - whose opposition to the excise tax is what will keep the House from passing the Senate Stand Alone health bill.

Again, leave aside the policy disagreements on the Senate health bill, the biggest problem now for its proponents is political. There is no selling the "Pass The Damn Bill" mantra. Because no political constituency really cares about passing THAT bill.

In attempting to defuse the opposition to a health bill, Rahm Emanuel has led the Obama Administration to strip the bill of any supporters. But the process has left one critical constituency in opposition to a component of the Senate health bill - yes, the excise tax and the unions are what I am talking about.

If the excise tax was not in the Senate bill, I imagine the Obama Administration could herd the Dem cats necessary to pass the bill. No one would be really excited about it. It would not have much positive impact politically. But it could be done.

But the excise tax stands in the way of the Obama Administration's game plan for passage. The Anthem Blue Cross story provides a small opportunity to present the need for a health bill in a general sense. But it will not move any of the key players necessary for passage of the Senate bill.

At this point, narratives are helpful on the margins, but without a solution to the union/excise tax problem, it is all for nothing.

Until the Obama Administration and the Senate Dems come to grips with the fact that the Senate bill's excise tax is a bill killer, nothing will be accomplished.

That is the political reality that the Villagers and the Obama Administration seem unwilling to accept.

Speaking for me only

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  • Display: Sort:
    I think you could get people excited (5.00 / 1) (#1)
    by andgarden on Thu Feb 11, 2010 at 10:02:44 AM EST
    if, in addition to neutering the excise tax, you also did a Medicare expansion. The public option is off the table, but I still think it's reasonable to try and get 50 votes for Medicare at 55.

    That is true politically (none / 0) (#2)
    by Big Tent Democrat on Thu Feb 11, 2010 at 10:04:54 AM EST
    But, at this point, the power of AHIP will block any expansion of public insurance outside of the Medicaid expansion.

    Because AHIP sees medicare (none / 0) (#3)
    by Militarytracy on Thu Feb 11, 2010 at 10:09:46 AM EST
    expansion as competition?  

    Of course (none / 0) (#6)
    by Big Tent Democrat on Thu Feb 11, 2010 at 10:14:15 AM EST
    You are taking away customers from them.

    You would think though (none / 0) (#16)
    by cawaltz on Thu Feb 11, 2010 at 10:54:04 AM EST
    that maybe this particular demographic could be expensive to their bottom lines. I wonder if the argument could be made that the government taking them on like they've done the over 65 group would improve their bottom lines?

    If that were true (none / 0) (#17)
    by Big Tent Democrat on Thu Feb 11, 2010 at 11:00:07 AM EST
    It would be in the bill right now.

    They may have to take it on the chin (none / 0) (#4)
    by andgarden on Thu Feb 11, 2010 at 10:11:49 AM EST
    assuming that Obama actually wants to get this through. With Murtha dead, you might need to give Kucinich a reason to be the 218th vote.

    AHIP take it on the chin? (5.00 / 1) (#7)
    by Big Tent Democrat on Thu Feb 11, 2010 at 10:14:51 AM EST
    From THIS Senate? You must be joking.

    Well, gotta count to 50 and 217 somehow (none / 0) (#8)
    by andgarden on Thu Feb 11, 2010 at 10:16:28 AM EST
    Unless. . .you don't.

    It would be pathetic if, after all of this, nothing passed.


    Pssst (none / 0) (#9)
    by Big Tent Democrat on Thu Feb 11, 2010 at 10:18:54 AM EST
    Nothing that springs from the Senate bill is gonna pass.

    Later this year, some "modest reforms" (tort reform, notice requirements, some other stuff) will pass with "bipartisan" support.


    Tort reform! (5.00 / 2) (#12)
    by Militarytracy on Thu Feb 11, 2010 at 10:28:09 AM EST
    It just pisses me off.  I don't think you can get a junk B.S. healthcare lawsuit even to first base these days and most people aren't even interested in such things unless gross negligence has taken place that I've been around lately.  The days of ambulance chasers and easy pickins seem to be over.  I spend a lot of time hanging out with stressed out parents who yell at doctors.  Mostly they just yell because there aren't enough miracles, and we all get beyond the pain...cry our hearts out and move on.  I see ZERO need for much tort reform if at all.  I wish they would have left a sponge or something up Glenn Beck's arse when he had his hemorrhoid meltdown and surgery.

    Before or after we lose 70 seats in the House? (5.00 / 1) (#14)
    by andgarden on Thu Feb 11, 2010 at 10:32:48 AM EST
    He wants a few wars... (none / 0) (#15)
    by Salo on Thu Feb 11, 2010 at 10:37:40 AM EST
    ...and a book deal. like all the rest. that's all he wants to do.

    And basically the end product (none / 0) (#10)
    by Salo on Thu Feb 11, 2010 at 10:23:44 AM EST
    is that the working class get their hard won benefits taxed.

    Nah (none / 0) (#11)
    by Big Tent Democrat on Thu Feb 11, 2010 at 10:26:47 AM EST
    The excise tax won't pass. It is political poison.

    I wonder (none / 0) (#13)
    by Salo on Thu Feb 11, 2010 at 10:31:20 AM EST
    I mean think about it. The Legislative presence of a Democratic majority raises false expectations in the left that anything will or can be done. Get that majority suicided away and suddenly Obama can do what he likes as we have to huddle around him to weather the GOP "storm of steel".  He can rule by fear alone at that point.

    Erm, 217 at this point (none / 0) (#5)
    by andgarden on Thu Feb 11, 2010 at 10:12:04 AM EST
    wow! (none / 0) (#18)
    by cpinva on Thu Feb 11, 2010 at 11:13:58 AM EST
    that first paragraph alone should constitute grounds for writing capital punishment: he isn't allowed to write anything, ever again, anywhere, using any form of media, not even crayons.

    The excise tax won't pass. It is political poison.

    supposedly, so is privatizing social security. yet, we have another republican proposing it as some kind of newfangled way of reducing the deficit. and people will take him as a "serious" person.

    I do not understand (none / 0) (#19)
    by gyrfalcon on Thu Feb 11, 2010 at 12:24:21 PM EST
    why BTD appears to be absolutely alone in the combined Village and blogosphere with the clarity to get this.  As he says, the policy is complicated, the politics just ain't.