The Strange Politics Of The Excise Tax

Ezra Klein thinks the revival of the public option could kill the chances for a health bill this year. His analysis is impenetrable in my opinion. But I am actually struck by something different -- Ezra Klein never seems concerned that the excise tax is going to kill the health bills period. And not once has Ezra raised any concern about the fallout of the excise tax. Indeed, he has been a big proponent of it despite the political poison that it is.

I think this is fairly easy to explain -- Ezra does not mind the public option, but he really loves the excise tax. Of course, I am just the opposite. But the reality is the reality. There are lots and lots and lots of people on the record opposing the excise tax. Not so many opposing the public option.

The available on the record evidence is that the excise tax is the much heavier lift than the public option. Indeed, I would posit that the only way to save the excise tax is with the addition of a public option. When will the Villagers start worrying about the political problem the excise tax causes? My prediction is never - because they really love that excise tax.

Speaking for me only

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    Whether the excise tax is (5.00 / 1) (#1)
    by observed on Fri Feb 19, 2010 at 05:40:46 PM EST
    good policy is a very complicated question. I'd have to spend dozens of hours reading to get even a reasonable idea whether it could work.
    On the other hand, there are policies which seem to be much simpler to analyze. Chief among those is single payer, of course; even the public option is probably easier to score.
    The problem with the excise tax is that its success depends on changing health care consumption habits by negative incentives.
    For that reason it's almost impossible to sell the excise tax honestly.
    What will they say:"Hey, if we get rid of the health insurance you like, you'll consume fewer unnecessary services, vastly reducing waste"
    Yeah, right.

    Exactly (5.00 / 2) (#3)
    by ruffian on Fri Feb 19, 2010 at 05:56:28 PM EST
    An unnecessary service is something your neighbor gets, not the test your doctor says you should have. If there is any dis-incentivizing going on, it needs to be at a different decision point than the patient.

    And if there is some tort reform needed to prevent doctors from covering their behinds with long-shot testing, I am not averse to that. Though I think that is an excuse more than a real cause.


    Are there any figures on the (5.00 / 1) (#4)
    by nycstray on Fri Feb 19, 2010 at 06:03:53 PM EST
    % of population getting "unnecessary services"?

    Bad questioner! Asking for facts on which to base (none / 0) (#6)
    by jawbone on Fri Feb 19, 2010 at 06:16:07 PM EST
    analysis? Not in Versailles, you don't!

    Actually, that is a very good thing to ask about. It seems, based on what I've read of any such studies, that it's not patients asking for unnecessary procedures, but some doctors.


    While there may be a prob with some drs (none / 0) (#9)
    by nycstray on Fri Feb 19, 2010 at 06:24:16 PM EST
    I've also heard the "run to the dr for a hangnail" type of argument for abuse of health insurance. I have to wonder if the abuse on both sides equal the $$ of what the un/underinsured cost the systems (across the board) . . .  and if the abusers even come close in numbers of people to the un/underinsured.

    That type of argument is ridiculous. (5.00 / 1) (#10)
    by observed on Fri Feb 19, 2010 at 06:26:32 PM EST
    It's the big ticket items like major surgeries and expensive tests that are the issue.
    Anyway,I bet most people don't even go to the doctor enough---I know I don't.

    You go to the doctor?!?! (none / 0) (#27)
    by lambert on Fri Feb 19, 2010 at 09:09:48 PM EST

    May be ridiculous (none / 0) (#32)
    by nycstray on Fri Feb 19, 2010 at 09:42:53 PM EST
    but I hear it.

    As far as testing goes, advocates can really help with that. My mom is so on top of what they do with my dad, and has me appointed as hers. But even as an individual, we can speak for ourselves, and perhaps some public service education should be in order. Although, that would prob not mesh with corp America ...


    It's (none / 0) (#39)
    by TeresaInSnow2 on Sat Feb 20, 2010 at 02:19:09 PM EST
    not ridiculous.  It's the waste in the system.  And it's not out of the ordinary.  And it's not that once that a person went in for a hang nailish event, it's the twice a month, every single month.  It's the excessive visits the emergency ward, etc.

    The major surgery is not waste in the system.  Most people don't undergo major surgery unless they need it.

    But it's not seeing the whole picture to ignore that the waste exists.  You're distorting the facts.

    And yes, the doctors do it too.  I went for my yearly doctor's appt (because I need it to get some meds refilled).  I told him of a symptom. He said, you need a Vitamin D test.  I asked him, what would the treatment be if I found I was deficient?  He said, Vitamin D.

    I said, skip the test, I'll just increase my Vitamin D and see if it helps.  Plenty of people with "good" insurance will just go along with the doctor, have the test, and if denied the test, would say, "THEY'RE DENYING MY NECESSARY TESTS!"  No, they arent, sometimes they're denying the UN-necessary tests.

    Doctors are in this to make money too.

    These are all arguments for single payer.  With single payer in other countries, you aren't allowed to go to the doctor anytime you want, and doctors aren't allowed to give any treatment they want.  And both of these are why treatment is provided at much less cost.

    I know I'm unpopular for pointing all of this out.  But at least I'm intellectually honest.  


    Do you have anything that supports your (none / 0) (#40)
    by Anne on Sat Feb 20, 2010 at 04:37:57 PM EST
    claim that:

    With single payer in other countries, you aren't allowed to go to the doctor anytime you want, and doctors aren't allowed to give any treatment they want.  And both of these are why treatment is provided at much less cost.

    I don't know that I have ever read that provider access is restricted in single-payer countries; the Japanese, for example, go to the doctor more than people in any other country, and yet, their costs are lower and their outcomes are better.

    Keeping people out of the doctor's office, and keeping doctors from treating their patients is not, I believe, a feature of successful single payer systems; what you are describing sounds more like the nightmare that was the HMO revolution.


    I read somewhere (5.00 / 2) (#21)
    by gyrfalcon on Fri Feb 19, 2010 at 07:16:24 PM EST
    can't find it now, that in Texas, which passed the "malpractice reform" the Republicans dream of, there's been zero difference in the number of tests being ordered.

    Yes, it doesn't seem that malpractice (5.00 / 2) (#24)
    by Zorba on Fri Feb 19, 2010 at 07:29:34 PM EST
    tort reform in Texas made any difference.  Link and Link.  And there's tons of other links, too.

    The village is bizzaro world (5.00 / 0) (#2)
    by andgarden on Fri Feb 19, 2010 at 05:49:16 PM EST
    and Ezra is channeling just how.

    He's also the same guy that admitted (none / 0) (#29)
    by nycstray on Fri Feb 19, 2010 at 09:25:32 PM EST
    when he got his new job, he didn't have health insurance a few months in. AND was surprised. That's about the time I threw his opinions to the gutter. Not that I was paying much attention to him anyway . . . .   ;)

    They are murderers (none / 0) (#36)
    by Salo on Fri Feb 19, 2010 at 10:24:37 PM EST
    Thieves and worse still- class enemies.

    It's because the excise tax penalizes labor. (5.00 / 2) (#5)
    by esmense on Fri Feb 19, 2010 at 06:15:32 PM EST
    Since the McGovern campaign many Democratic elites have seen's support as a detriment to the party's future, and believed Democrats must cut their ties to Labor. (Former McGovernite's get upset when you tell them this, but it is true. McGovern's campaign was based on this strategy).

    McGovern ran against "Big Labor" in the primary of '72 and won with a new coalition of more affluent and educated young people and moderate Republicans. Like Obama, he enjoyed his greatest strength in more conservative, Republican leaning states in the West.

    Obama's winning coalition was very similar with the addition of strong support from minorities (a support that in large part went to Humphrey in '72).

    That coalition of New Democratic elites or Neo Liberals or whatever you want to call them has never shared Labor's economic interests. Plus, they see serving Labor's interest as a detriment to getting the votes of other affluent, yet socially liberal, voters.

    Ezra takes it as a given that catering to Labor's is bad for the Democrats. Bad policy. Bad politics. He may not even know anyone else who thinks differently.

    Interesting take on this. I wonder if Young Ezra (none / 0) (#8)
    by jawbone on Fri Feb 19, 2010 at 06:19:19 PM EST
    knows any labor union members? Oh, yeah -- those MCMers (Member of the Mainstream Corporate Media). And he's one of them, but they're "different" from those union members who actually, desperately need decent health care coverage to be covered as they don't earn enough to cover all those lovely co-pays and deductibles.

    Ah, elites.


    I would point out that McGovern is still at it (5.00 / 1) (#11)
    by esmense on Fri Feb 19, 2010 at 06:29:05 PM EST
    He roused himself recently to make a full throated attack ad against "Big Labor,"  castigating the Democrats for supporting "card check."

    OMG! What a waste of credibility and his energy!! (none / 0) (#12)
    by jawbone on Fri Feb 19, 2010 at 06:32:47 PM EST
    It's just so convenient for the (5.00 / 2) (#18)
    by Anne on Fri Feb 19, 2010 at 07:08:30 PM EST
    excise tax proponents that there is a whole contingent of voters who have such a predictable, access blogger-generated, Pavlovian response to  just the mention of those two words - public option - that they can continue to keep it as conceptual as possible until they have secured support for the excise tax.  Once they get what they want they can reveal that - surprise! - "the" public option is as bad as it could possibly be, will be delayed as long as possible, will be full of holes that private industry will be able to drive monster trucks through - meanwhile the private companies will be jacking up premiums, increasing co-pays and deductibles, no one will have better, more affordable access to care and those who have "good" insurance will be penalized for having it - because the excise tax will be fully operational - no sweat.

    And, hey - they did the best they could...

    And work will begin apace on Obama's Simpson-Bowles Commission to examine ways to get the deficit under control - or as Mr. Subliminal would say, cut and gut Social Security, Medicare and Medicaid.

    For the love of God, people, wake up.  

    The tenacity for the excise tax (5.00 / 1) (#22)
    by KeysDan on Fri Feb 19, 2010 at 07:17:40 PM EST
    in the face of reality goes beyond labor unions to what is dear to the heart of its drafters . So too, the "savings" from Medicare, while rarely discussed either in generalities or specifics, is part of their soul. The organizing principle of the plan, it seems to me, is to  increase health insurance coverage, by hook or crook while decreasing access and reducing care, with smoke and mirrors.  The less care is better care is the policy, and in keeping with the Bush hand-me-down Downing Street Memo, their facts have been fixed around it.   The excise tax is seen as being unlike a sin tax, a golden cost cutter with only beneficial outcomes. The Medicare "savings without cuts" is seen as the way to cut costs and, as a nice bonus,  limit new taxes to finance the program.   The cost containment of less care is just as good, is based on counterintuitive assertions not to mention studies that have, been revealed as, to put it nicely, flawed.  

    Exactly (none / 0) (#33)
    by klassicheart on Fri Feb 19, 2010 at 09:44:53 PM EST
    So Ezra is trading on his credibility to make this absurd argument.  He deserves ignominy.  Logic has nothing to do with Ezra's arguments.  He has a conflict of interest since his own personal agenda takes precedence over a fair analysis of the policy.

    Should read; "have seen labor's support" (none / 0) (#7)
    by esmense on Fri Feb 19, 2010 at 06:16:40 PM EST
    not "have seen's support" Sorry.

    The Public Option Only Makes Sense (none / 0) (#13)
    by kidneystones on Fri Feb 19, 2010 at 06:44:02 PM EST
    at the state level. Abortion is the elephant in the room for any publicly-funded public health plan. Sounds nuts but there's a large constituency that is never going to want to use tax dollars to pay for an abortion.

    Ezra inched closer to sanity when he acknowledged several weeks ago that reform at the state level makes much more sense. He's right.

    The level of disagreement about what any public option should offer is high enough to render even a plan that voters like impractical when it gets down to funding specific procedures. That's part of what Baucus and Nelson understood. Selling a national plan was never going to be easy. Selling publicly funded abortion is for all intents and purposes impossible.

    Cap and trade epic fail, and HCR are two issues smart dems best forget, not because everything about the legislation is all bad, but because they're both perceived as rotting corpses.

    If you want to know who the real Obama haters are now, I'd say it would be the progressive wing of the Democratic party. The hostility we see, and we're seeing quite a bit, is simply the tip of the ice-berg.

    Were O a different color, Hamsher would be making O into another Lieberman. In case you haven't noticed, O has already thrown the entire Dem organization under the bus. O will be running against Washington again just as he did in 2008.

    He needs Republicans in Washington to do that. Anybody paying attention?

    I disagree with your premise (5.00 / 1) (#35)
    by cawaltz on Fri Feb 19, 2010 at 10:12:47 PM EST
    that any program reform should be done on a state level. Medicaid is a nightmare because states have such different views on what qualifies someone for Medicaid. Furthermore, a national plan of 30 million, which wuld be somewhat similar in size to Medicare, would have bargainig power whereas I am not certain the same could be said if this were to be implemented state by state. It concerns me that just like those on Medicaid, you would find places where doctors opted out.

    I definitely prefer national standards over state ones.


    Not to mention the simple (none / 0) (#19)
    by gyrfalcon on Fri Feb 19, 2010 at 07:12:34 PM EST
    fact of the Hyde Amendment.  It is not an issue -- at all -- whether a public option would cover abortion.  It would not.  End of discussion.



    Look at the groups opposing each (none / 0) (#15)
    by david mizner on Fri Feb 19, 2010 at 06:57:23 PM EST
    Against the excise tax: labor, progressives.

    Against the PO: AHIP, Pharma, Senate centrists

    Guess who Team Obama will pick every time.

    Now, I see your point, as a practical matter, the excise tax is a bigger barrier to passage, but I think there remains the sense in the Village that House Dems, thrown enough bones and enough elbows, will cave, and I'm not entirely sure that's inaccurate.

    Brown taught the House Democrats they're going to (none / 0) (#17)
    by Dan the Man on Fri Feb 19, 2010 at 07:08:12 PM EST
    lose their seats if they vote for the excise tax.  Now some of them might not care so long as they get jobs for the insurance industry after losing, but they know what what the consequence for voting for it is.

    Oh, my God! (none / 0) (#20)
    by gyrfalcon on Fri Feb 19, 2010 at 07:14:25 PM EST
    What's the rationale for canceling her policy?

    The rationale is that they can (5.00 / 1) (#38)
    by Militarytracy on Sat Feb 20, 2010 at 12:01:16 AM EST
    This is why I'm stunned when I read at Orange that the most important thing we must do is pass the mandates....with everything else watered down into worthlessness.  There are worse things than not having insurance, like paying your whole life and then getting cancelled once you are now going to cost them money.  It reminds me of what they just did with everyone's retirement, they took the money and there is nothing in return.

    That's awful--so sorry to hear this, Donald (none / 0) (#25)
    by kempis on Fri Feb 19, 2010 at 08:36:39 PM EST
    ...and I hope that HCR results in affordable, reliable health care for her and for us all.

    It's a dim hope, but I'm hanging on to it. The future looks bleak without it.

    We aren't real to them, Donald. (none / 0) (#26)
    by Anne on Fri Feb 19, 2010 at 09:02:57 PM EST
    None of this is real to them; it's a game of politics and process, with the end game only about themselves.

    I am so sorry your sister-in-law is having to face this horror; no one should have to deal with the stress of having a safety net summarily yanked out from under them - especially one I'm sure she has paid dearly to have.

    What should be painfully obvious is that even in the midst of this so-called reform effort, the insurance companies have no intention of paying even lip service to the fiction that they care about the people they insure, and that they want to work with the Congress to provide good coverage at affordable rates; they are going to suck as much money out of people until they are forced to stop, and the hell with the lives at medical and financial risk.

    I will keep your sister-in-law in my thoughts; I hope she will at least appeal this decision, and will hope it is resolved in her favor.

    You can't kill a zombie... (none / 0) (#28)
    by lambert on Fri Feb 19, 2010 at 09:11:38 PM EST
    ... because it's already dead.

    I'm so sorry. (none / 0) (#30)
    by nycstray on Fri Feb 19, 2010 at 09:34:10 PM EST
    I hope the baby is doing well and your SIL is also and that her health improves. And that she can get the care she needs.

    What's really F'ed up, is those that support this sh*t, want us to have babies. They just don't seem to care what happens after . . . .

    I will keep both in my thoughts.

    Attack Ezra's credibility (none / 0) (#31)
    by klassicheart on Fri Feb 19, 2010 at 09:38:02 PM EST
    BTD---your argument is perfectly logical...in fact, it is indisputably the correct approach.  Therefore, one must play hardball with Ezra at this point...and all others, by name, in logical order...People read you and respect your arguments...but perhaps you must add more than logic to your repertoire.  Republicans are very skilled at this.  Again, what would Machiavelli do?
    Ezra needs to be attacked personally on his credibility.  He is taking this position so he remains in sync with the villager powers that be.  His own personal well being is taking precedence over the best interests of Democrats.  That is unacceptable.  He needs to be personally questioned as to his ethics.  We need to start employing a warfare strategy with these villagers.  This is a war...and until we accept that and employ new strategies to attack the manifest  deception of villagers like Ezra, we will always lose.  Hardball is what is required for those who push this nonsense.  This is a war.
    We will not win by playing nice.

    Ezra is my friend (none / 0) (#37)
    by Jeralyn on Fri Feb 19, 2010 at 11:41:24 PM EST
    And we don't do personal attacks here, and certainly not on my friends.

    The question is whether credibility is important (none / 0) (#34)
    by klassicheart on Fri Feb 19, 2010 at 09:57:51 PM EST
    to Ezra.  He is young enough that perhaps it is.  But since he has chosen to play in a battlefield, he should not be surprised when the game gets real and rough...and this becomes not just about intellectual games but about livelihood.

    What are you saying here? (none / 0) (#41)
    by pfish on Sat Feb 20, 2010 at 06:02:14 PM EST
    Are you seriously suggesting that BTD should attack Ezra with the intention of threatening his job?  Have you gone mad?  Time for some fresh air and a break from the internet.

    I very much disliked (none / 0) (#42)
    by RickTaylor on Mon Feb 22, 2010 at 10:01:41 AM EST
    the excise tax when I first heard of it. I felt it would make the bill easy to demonize as another liberal plot to take your money and give it to undeserving people. Since then, people I respect, including Paul Krugman, have argued it's good policy. I don't understand why (reducing the price of something by artificially increasing it doesn't make sense to me), but perhaps I'm just not well informed enough to understand. On the other hand, I find Atrios's argument persuasive that it's not enough for the bill to be good policy, it has to be popular. People argue if it's imperfect it can be improved over time once it's in place, but that will only work if enough people like it once it has passed.