Obama, Health Reform, Plan B

Interesting article in the Washington Post worth taking a quick view. According to WaPo:

Increasingly, the White House appears to favor having the House pass a version of the measure that cleared the Senate with 60 votes in December. The Senate would then pass changes to the bill to satisfy some demands of House Democrats. That Senate vote would take place under a parliamentary procedure known as reconciliation, which requires 51 votes rather than 60.

It remains unclear whether Democrats have enough votes within their ranks for this strategy to work. At the same time, it is only “one option” the president is considering, a senior White House official said Sunday.

In addition, the Washington Post points out that White House adviser Nancy-Ann DeParle “said on Sunday she thinks Democrats will secure enough ayes on the measure and signaled that the administration could be moving toward trying to pass it along party lines.”

The Wall St. Journal’s Health Blog points out, however, that there may be some difficulty in implementing such a plan:

But the process of keeping enough Democrats in line for even a simple majority is tricky: House members in particular still like their bill better than the Senate version and the changes they seek from the Senate also aren’t a sure thing before the House votes.

The President is expected to unveil his strategy later in the week.

Of Summits, Nadirs & Reconciliation

There are any number of places to find recaps and summations of the Health Care Reform Summit. This article from AP’s Erica Werner, “Obama, GOP agree on some health areas,“ outlines the commonalities and differences; this article from AP’s Charles Babington, “Obama, GOP fail to reach accord on health bill,“ focuses more on the apparent failure of the process. Perhaps the two articles display a glass half-full/ half- empty rift within A.P. as well.

Seemingly, the one aspect of the health care and the health care finance system Democrats and Republicans agreed most strongly on is that the glass is, euphemistically stated, half- empty. The fundamental disparities between the two groups, however, become apparent as soon as the discussion moves towards how to fill that glass. Notably, the Republicans have strongly espoused that the year’s worth of work represented by the House and Senate bills be “scrapped,” or, in the words of Senate Republican leader Mitch McConnell of Kentucky, “start over with a blank piece of paper.” The Senate bill runs 2400 pages.

But perhaps the most significant thing which happened today at the summit is what was not said. When Republicans repeatedly asked for reassurances that Democrats would not circumvent the parliamentary procedure of the filibuster with the parliamentary procedure of reconciliation, the Democrats, including President Obama, declined. In doing so, the Democrats reserved for themselves the ability to pass a bill with a simple majority in the Senate (51 votes) instead of the 60 votes it would require to overcome a filibuster.

As WaPo’s E.J. Dionne put it:

Obama sent a very strong signal toward the end of the summit: He wants a bill even if the only way to get it is through the reconciliation route. “I don’t think that the American people are interested in the process inside the Senate,” Obama replied in response to Sen. John McCain’s criticism of the idea that the Senate might try to pass a bill with fewer than 60 Senate votes. Most Americans, Obama said, believe in “majority rule.” So they do.

I have already written about my own constitution based questions and misgivings regarding the filibuster as practiced in modernity–wherein Senators need not go through the arduous task of actually holding the floor with non-stop speech. Where arguably, the day-in and day-out de facto supermajority requirement for the Senate to pass legislation begs the question: Yes, “Each House may determine the Rules of its Proceedings….” but what happens when the rule of procedure swallows the law?

Ezra Klein writes:

According to UCLA political scientist Barbara Sinclair, about 8 percent of major bills faced a filibuster in the 1960s. This decade, that jumped to 70 percent. The problem with the minority party continually making the majority party fail, of course, is that it means neither party can ever successfully govern the country.

But perhaps this can all be reconciled.

Excise & Healthcare Reform, Part II, or: “What Overall Effect Would the Cadillac Plan Tax Have?”

Part I of this series provided an overview of the excise on high-cost health insurance plans contained in the Senate’s healthcare reform bill, the Patient Protection and Affordable Care Act (PPACA).  This part summarizes the projected general effects of the excise provision.  The final part of this series will address the problematic and controversial consequences of the excise and possible alternatives.

Three governmental agencies have been primarily responsible for calculating the effects of healthcare reform legislation for Congress:  the Congressional Budget Office (CBO), the Joint Committee on Taxation (JCT), and the Center for Medicare and Medicaid Services (CMS).  Both the CBO and JCT operate under the auspices of Congress, while CMS operates within the Department of Health and Human Services (HHS).

Additionally, numerous private entities separately analyze legislative language to ascertain its effects.  As expected, private entities often issue findings that differ, in varying degrees, from those provided by governmental entities.  This post focuses on the government findings regarding the excise provision, upon which the Senate relied (presumably) in passing the PPACA.  This post is summarized from information contained in the following documents:

JCT letter to Representative Joe Courtney, Dec. 08, 2009

JCT letter to Representative Joe Courtney, Oct. 16, 2009

CBO letter to Senator Bayh, Nov. 30, 2009

CBO letter to Senator Reid, Dec. 19, 2009

CMS memorandum “Estimated Financial Effects of the ‘Patient Protection and Affordable Care Act,’ as passed by the Senate on December 24, 2009,” Jan. 08, 2010

Present tax law allows for the exclusion of employer-provided health benefits from individual income tax and contributions made by employers from FICA (Federal Insurance Contributions Act) tax. The excise would generate approximately $148.9 billion dollars in revenue from 2010-2019.  The excise tax itself would not be deductible from Federal income tax.

For each year after 2013, the actual excise tax collected would account for a smaller percentage of the total revenue collected as a result of the excise provision.  This would be the result of an increase in wages following shifts away from the high-cost insurance plans.  The JCT provided the following explanation:

[T]he Joint Committee on Taxation estimates that the excise tax would be mainly passed along [to consumers] through increases in premiums and that many consumers respond by reducing their demand for insurance above the excise cap.  As described above, because health insurance premiums are a component of compensation, which is not likely to fluctuate due to the excise tax, as consumers spend less on tax-excluded benefits, their taxable cash wages will increase.  Therefore, as the value of health insurance plans decline, the income tax base will increase in the long run.

The total number of health plans affected by the excise would increase from 2010-2019 due to the compounding difference between the inflation rate applied to the premium threshold and medical cost inflation.  The percent of active plans affected by the excise tax would increase during the 2013-2019 period from 14% to 27% and 9% to 22% for single plans and family plans, respectively.  The average premium for those affected plans would actually be lowered.  How?  CBO provides:

For policies whose premiums remained above the threshold, the tax would probably be passed through as a roughly corresponding increase in premiums.  However, most employers would probably respond to the tax by offering policies with premiums at or below the threshold; CBO and JCT expect that the majority of the affected workers would enroll in one of those plans with lower premiums.  Plans could achieve lower premiums through some combination of greater cost sharing (which would lower premiums directly and also lower them indirectly be leading to less use of medical services), more stringent benefit management, or coverage of fewer services.

The excise certainly generates a significant amount of revenue to fund other aspects of healthcare reform.  However, the excise is also expected to decrease the overall national health expenditures (NHE).  According to CMS, the excise “…would have an initial, significant impact on the overall level of expenditures.”  Furthermore, “In 2019, these impacts would reduce the total NHE by an estimated 0.3 percent.”   The current NHE projection for the year 2019 is $4.7 trillion.  That puts the savings at $14.1 billion.

The excise generates revenue, reduces affected premiums, and “bends the cost curve.” So, what is the problem?

Excise & Health Reform, Part I, or: “What is an Excise & How Would this Tax on Cadillac Plans Work?”

[Ed. Note: We are very pleased to introduce James Christiano to the blog. He is a law student here at Seton Hall Law and, after receiving his B.A. in psychology in 2002, worked from 2003 to 2008 as a District Adjudications Officer for the United States Citizenship and Immigration Services (USCIS), an agency within the Department of Homeland Security.  During his time with USCIS, James was primarily responsible for adjudicating applications for immigration benefits, including naturalization, lawful permanent resident status, and work authorization. As you might imagine, James has an eye for regulatory analysis, and will be offering a series of posts (to start) on provisions in the health reform bill regarding  "excise" along with analysis as to their potential impact.]

One of the many controversial aspects of healthcare reform is the Senate’s proposed excise on high-cost health insurance plans.  Such high-cost plans have often been referred to, arguably inappropriately, as “Cadillac plans.”  This post provides an introduction to the proposed excise on high-cost plans as provided in the Senate Bill.  Subsequent posts will address the ramifications and controversies of the excise.  (Note: The Senate Bill contains other excise provisions, including a 5% excise on elective cosmetic surgery procedures, which this post does not discuss.)

What is an excise?

Black’s Law Dictionary defines excise as “[a] tax imposed on the manufacture, sale, or use of goods (such as a cigarette tax), or on an occupation or activity (such as a license tax or an attorney occupation fee).”  Excises are commonly, and redundantly, referred to as “excise taxes.”

A quick skim of Subtitles D and E of Title 26 of the United State Code provides one an idea of the types of goods and activities that Congress has deemed deserving of an excise.  A few examples are luxury passenger automobiles, certain vaccines, communications services, authorized and unauthorized wagers (i.e., gambling), petroleum, firearms, cigarettes, and “excess expenditures to influence legislation.”

Excise currently imposed on group health plans

Federal law already subjects group health plans to an excise under certain circumstances.  For instance, 26 USC § 5000 imposes an excise on certain group and large group health plans deemed “nonconforming” — i.e., those that do not comply with the requirements of particular subsections of 42 USC § 1395y(b)(1) and (2).  Additionally, 26 USC § 4980B and D impose an excise (as a form of penalty) on group health plans that fail to meet HIPAA and COBRA requirements.

Excise on high-cost plans in the Senate Bill

The Senate Bill includes a provision imposing a 40% excise tax on high-cost, employer-sponsored health insurance plans.  High-cost plans would include those costing $8,500 for individuals and $23,000 for those other than self-only, beginning in the year 2013.  Starting in 2014, the threshold for high-cost plans would be increased annually by the change in the Consumer Price Index (CPI) plus 1%.  These thresholds are further increased for individuals employed (or previously employed) in certain high-risk professions or the repair or installation of electrical or communications lines.  Also, residents of states that rank in the top 17 among the highest-costing average employer-sponsored health insurance plans would be subject to more lenient thresholds for the years 2013, 2014, and 2015 (120%, 110%, and 105% of the threshold, respectively).

For each given high-cost plan, the coverage provider would be responsible for paying a 40% tax on the amount equal to the cost of the coverage exceeding the threshold.  For example, a coverage provider would be subject to an excise of $400 for a plan costing $24,000 in 2013 ($24,000 - $23,000 = $1,000; $1,000 x 40% = $400).  A coverage provider may be the insurance issuer, the benefits plan administrator, or the employer, depending on the coverage arrangement.

Brown Wins Kennedy’s Senate Seat, Health Reform Plot Thickens

This just in from the Washington Post:

Massachusetts state Sen. Scott Brown was elected to the U.S. Senate on Tuesday, winning a special election over two opponents, the Associated Press projected. Brown — the first Republican senator from the Bay State in 31 years — willgive the GOP 41 seats in the Senate, enhancing the party’s ability to demand changes in legislation.

“Enhancing the party’s ability to demand changes in legislation.” That is certainly one way of saying it. As we live under the yoke of the Senate’s filibuster rule, and the stated aim of soon-to-be (or maybe not so soon) U.S. Senator Brown is to put a halt to the health reform legislation currently poised for informal reconciliation between the two houses of Congress, it is dizzying to think that the life’s work of Senator Ted Kennedy may well be torn asunder by the man who’ll take his seat. It is a biting irony of classical greek proportions.

And I find myself wondering, honestly, “What would Ted Kennedy do?” A consummate politician and a superb tactician, I doubt, considering the stakes, he would be adverse to the Massachusetts Secretary of State’s position:

Secretary of State William F. Galvin, citing state law, says city and town clerks must wait at least 10 days for absentee ballots to arrive before they certify the results of the Jan. 19 election. They then have five more days to file the returns with his office.

Galvin bypassed the provision in 2007 so his fellow Democrats could gain a House vote they needed to override a veto of then-Republican President George W. Bush, but the secretary says U.S. Senate rules would preclude a similar rush today.

Ah! The Senate Rules. As that yoke of the modern filibuster draws nearer round the throat of health care reform, and the phrase “in the nick of time” begins to hang in the air like a concrete goal, these words to the opponents of health care reform seem apt:  Live by the sword….

An Overview of Exchanges under the House and Senate Bill

On January 8th, 2010, the Alliance for Health Reform and The Commonwealth Fund  co-sponsored and moderated a panel discussion on the health insurance exchanges that are being proposed in both the House and the Senate health reform bills. The panel consisted of Washington and Lee professor Timothy Jost, John Kingsdale of the Massachusetts Commonwealth Health Insurance Connector Authority, and Philip Vogel of the Connecticut Business and Industry Association (CBIA), which runs the non-profit CBIA Health Connections, a health insurance exchange for the state of Connecticut.

The co-sponsors have uploaded all of the event’s materials, including a webcast of the entire event, as well as all of the powerpoint slides and papers. All of this information can be found here.

Professor Jost and the Commonwealth fund created detailed charts comparing the differences between the two bills. Below is a reproduction of Professor Jost’s chart, which can be viewed by clicking on the thumbnails.

Both the House and the Senate bills would create new health insurance exchanges that would help consumers and employers navigate the purchase of health insurance. Though the common thread of a regulated marketplace runs through both bills, all three panelists noted the stark difference in the vision and implementation of the exchanges under the respective bills.

Below are some of the key distinctions between the two bills.

The House Bill — Public Option with Opt-Out Possibility

The House’s bill, H.R. 3962 (click here for entire pdf) provides for a federal exchange that would essentially eliminate the individual marketplace for health insurance going forward. A public plan would be offered that would reimburse providers at negotiated rates between those of Medicare and commercial rates. The applicable section of the House’s bill is Title III, entitled Health Insurance Exchange and Related Provisions.

Title III of the House Bill would create the Health Choices Administration with a Commissioner who would oversee the exchange. Citing Section 301 and 308 of the Bill, Professor Jost notes on page 17 of his paper:

The exchange operates at the national level, established within a new Health Choices Administration. The Commissioner of the HCA can, however, permit individual states or groups of states to administer an exchange within their territory in place of the national exchange if specific requirements are met, subject to revocation if the state ceases to meet the requirements of the bill. Even if the HCA delegates exchange authority to a state, the Commissioner retains enforcement authority and can further specify functions retained by the Commissioner and not delegated.

Thus, the House’s bill would create an exchange system that is fairly centralized and regulated, but with added flexibility. If the states fail to implement their own exchange then HHS will implement an exchange for them. Only those policies considered “grandfathered” could be sold outside of the exchange, and such “grandfathering” can only occur in the individual market. (See Section 202). Insurance offered inside the exchange would fit into one of four tiers: basic, enhanced, premium, and premium plus. (See Section 303). These tiers would correspond to different actuarial values of the plans. Subsidies would be provided on a sliding scale that is determined by the purchaser’s income.

The House bill would also limit the medical loss ratio of plans offered in the exchanges to 85 percent, largely prohibit the rescission of contracts, eliminate lifetime coverage limits, eliminate pre-existing condition exclusions, as well as require guaranteed issue and renewal of plans. Variations in premiums based on the age of the insured could only vary by a maximum of 2:1.

Not all of the panelists agreed with every provision. For example, Mr. Vogel took issue with the dependence on the medical loss ratio in regulating the market, instead arguing for a greater reliance on the “claim dollar” as a guide post.

Whether offered inside the exchange or grandfathered, all plans must meet certain requirements in terms of essential benefits, which would be determined by HHS, and would be based on the recommendation of the Health Benefits Advisory Committee–a public/private hybrid entity.

• Click here to jump to section 223 outlining the Health Benefits Advisory Committee

These benefits would include hospitalization, outpatient care, prescriptions drugs, equipment, and a host of other benefits.

• Click here to jump to the section 222 which details the essential benefits.

The House bill would also impose rules regarding the transparency of the plans offered in the exchange by requiring certain information about the plans to be disclosed.

The Senate Approach — No Public Option; Multistate Substitute Would Exist

For whatever reason, the Senate crafted a more complicated framework of exchanges.

A crucial point of divergence from the House bill is the Senate bill’s lack of a federally financed public plan offered through the exchange. However, as discussed below, part of the Senate plan attempts to act as a substitute. Another area of divergence is that existing individual and group plans may continue alongside newly created exchanges, in addition to any grandfathered plans. This is in stark distinction to the House bill that would eliminate some existing policies. Though as noted, the House bill would allow for some grandfathering.

The Senate’s exchange framework is based on section 1001 of the bill which provides that HHS will, with the help of the National Association of Insurance Commissioners (NAIC), craft standards regarding the minimum benefits and other aspects of the plans sold through the various exchanges.

In terms of the Senate’s framework for exchanges, it is as follows. The Senate bill will allow for a number of exchanges that would exist on variety of different governmental levels. Whereas the House bill envisions a more federal exchange system, the Senate bill would instead allow for state-based exchanges, multistate exchanges (i.e. regional), or substate exchanges.

• Click here for a pdf version of Senate bill, as passed.

State-based Exchanges
For the individual and the small group markets, the Senate bill would require each state to create a American Health Benefit Exchange for individual purchasers of insurance, and a Small Business Health Options Program (SHOP) for small businesses purchasers. HHS would regulate these exchanges (See section 1321(a)(1)). These exchanges would be governed by regulations promulgated by HHS, unless the states adopt alternative standards that the HHS finds acceptable.

The state may combine the individual market exchanges with the small business (SHOP) exchanges. Additionally, states have the flexibility to establish regional exchanges or smaller subsidiary exchanges that target specific geographic areas within the state. (See Section 1311(f)). If the states do not create a system of either separate exchanges for individuals and small business, or some combination, HHS will establish an exchange or utilize a non-profit insurer to fill the void. See 1321(c).

The multistate exchanges are important, as they may mollify those who have been touting the idea of interstate health insurance offerings as a panacea for the woes of U.S. health insurance.

Regardless of how any states’ exchange(s) plays out, many of the important provisions of the Senate’s bill such as certain minimum benefits, the ban on lifetime or annual dollar limits, the ban on rescission, and medical loss ratio requirements would apply across the landscape of exchanges.

State Opt-Out Possible
Under the Senate bill, the states would be eligible in 2017 to opt-out of the federal requirements listed above if they can demonstrate that they are providing affordable coverage that is at least as affordable and comprehensive as the Bill requires. Alternatively, the state may be allowed to create a “public health plan” for those under 200% of the federal poverty level. Under this arrangement, the federal government would compensate the state for 95 percent of what would have been provided through premium tax credits as well as cost-sharing reduction payments. (See Section 1331).

Multistate plans: A Compromise?
One major amendment passed on December 24th was section 1334 which amended section 1333 which dealt with multistate exchanges. Under section 1334, The Office of Personnel Management (OPM)–the agency that governs the federal employees health benefit program (FEHB)–will enter into contracts with insurance carriers to offer at least 2 multistate plans through each exchange in each state. (See 1334(a)(1)). These plans will cover the individual and small group market. At least one of those plans must be a non-profit insurance plan, and must be in accordance with the general standards set forth for health insurance plans.

Though there would be a minimum level of benefits and protections required for all plans, the States would be entitled to offer multistate plans with more substantial benefits. However the state will have to defray the costs of the additional benefits.

Unlike the House bill which eliminates the state-based individual market, the Senate bill envisions exchanges that would co-exist with both the individual and small-group markets, and operate under the same rules. Though the Senate bill allows for flexibility, the subsidies provided by the federal government could only apply to insurance plans sold through the exchange.

One of the most important and controversial sections of the amended Senate bill is section 1334(a)(4), which specifies that, in administering the multistate plan, OPM will have the same bargaining power as they currently have for plans offered in the FEHB. Thus, OPM would be able to negotiate for a specified medical loss ratio and profit margin, as well as specified premium rates and any other terms in the “interest of the enrollees.” The goal is for these plans to be offered nationwide. Whether the OPM-run exchange will succeed is obviously yet to be determined, but some like Professor Timothy Jost are worried that the Senate’s plan to allow some plans to operate outside of the exchange complicates the federal government’s job in risk adjustment.

New Jersey Legislature Passes Medical Marijuana Bill

Yesterday, the last day of its 2008-2009 legislative session, the New Jersey legislature voted to legalize the use of medical marijuana by New Jersey residents suffering from debilitating medical conditions.

The version of the New Jersey Compassionate Use Medical Marijuana Act passed yesterday represents a compromise between the version that the state Senate passed in February of 2009, which Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy endorsed in a position paper distributed to key lawmakers, and the Assembly version, which included a number of amendments intended to bolster the Act’s already strict safeguards against abuse and diversion.  (The differences between the Assembly and Senate versions are outlined here; a summary of the changes made in the final legislation is posted here on the Legislature’s website.)   Governor Corzine is expected to sign the Act into law before he leaves office next week.

Among other changes, the final legislation:

• revises the definition of “debilitating medical condition” to specify that severe or chronic pain, severe nausea or vomiting, and cachexia or wasting syndrome qualify a patient to use medical marijuana if they are symptoms of cancer, HIV/AIDS, “or the treatment thereof.” The new definition also adds inflammatory bowel disease, including Crohn’s disease, muscular dystrophy, and terminal illnesses expected to cause death in 12 months or less to the list of debilitating conditions;

• deletes the Assembly provision that allowed patients to designate an individual to transport marijuana to them in an emergency, and reverts to the Senate language allowing patients to designate a primary caregiver to assist them with their use of medical marijuana on an ongoing basis; and

• preserves the Assembly version’s requirement that patients obtain their marijuana from “medical marijuana alternative treatment centers,” i.e., that they not be allowed to grow their own, but increases the amount of marijuana that patients can be dispensed in a 30-day period from one ounce to two ounces.

Interestingly, the final legislation also requires that the system the Division of Consumer Affairs in the Department of Law and Public Safety establishes to monitor the dispensation of marijuana for medical use must “serve the same purpose as, and be cross-referenced with” the Division’s system for monitoring the dispensation of certain prescription drugs with the potential for abuse.  This is further evidence that marijuana is slowly but surely, as Fordham Law Professor Kimani Paul-Emile writes, “migrating from the criminal regulatory regime into the public health regulatory regime.”

Reconciliation Without Conference: The Health Reform Bill Moves Closer to a Vote

[Ed. Note: Health Reform Watch is very pleased to welcome Corey Klein to the blog. Corey is both a journalist and a law student here at Seton Hall Law. As a reporter, Corey garnered numerous awards from both the New Jersey Society of Professional Journalists and the New Jersey Press Association. We look forward, as we're sure will you, to his contributions to HRW.]

Congressional Democrats have been attempting to iron out a final health care reform bill behind closed doors this week in order to avoid delay tactics by Republicans, according to media reports.

The House and Senate passed two versions of the bill. Typically, an official public conference would be held to resolve differences between the two versions, but Democrats want to keep Republicans from extending the debate in an effort to stall the bill. President Barack Obama has not been critical of this move, stating that he is eager to sign a health care bill into law as soon as practical, according to Reuters.

A few key differences between the House and Senate versions are how the bill will be financed and whether the bill will include a public health care option.

Congressional Republicans have stated that they would block the bill by any means necessary. In response, Democrats decided to finalize the bill behind closed doors.

If the bill had gone to a public conference, a number of Senators and Representatives would meet together to work out differences between the two bills. The members of the conference committees, known as managers, cannot substantially change the bill, but they could keep provisions in one version of the bill or drop amendments in another. They cannot add any new amendments.

Each house of Congress has several managers. For example, the House may have seven and the Senate may have four. The numbers do not need to be equal.

After reaching a decision, the managers return to their respective houses of Congress and tell their fellow Congressmen and Senators if they were able to agree on all or part of the bill or if they were not able to agree on the bill.

If they were able to agree on the entire bill, the bill is revoted upon in both houses. If they were not able to agree on the entire bill, or if they were only able to agree on parts of it, the bill returns to the conference committee. If the differences are too vast, the bill could just die out.

The members of these conference committees are usually senior members of standing committees. These conference committees would have been made up of members of both parties and high-ranking Republicans vowed to block efforts to let the bill leave their respective committees to go up for a final vote.

Also, the House and Senate support the bill by slim margins, with some Democrats opposing certain aspects of the bill. By negotiating informally and out of the public eye, Democrats can bring a final version of the bill to a vote without a formal conference.

Democrats responded by negotiating with their own party behind closed doors. The decision to finalize the bill behind closed doors was met with some criticism. CSPAN has issued a letter to Democrats urging them to make the negotiations public.

Republicans seized on CSPAN’s letter as evidence that Democrats were not being transparent, but Democrats dismissed these criticisms as further efforts to kill the legislation.

Dollars and Sense & Health Care Reform

With health care reform approaching its culmination point, like all things most memorable of the past year, the overarching question remains, “How much will this cost us?”  As it currently stands, the House version of health reform will cost an estimated $1 trillion over a decade, while the Senate version comes in at $871 billion.  Next, comes the obvious second question, “How will the government pay for it?”  As Kaiser Health News summarizes in its recently released guide to health reform:

Both bills hit up the wealthy, but in different ways. The House would impose a 5.4 percent income tax surtax on individuals who earn more than $500,000 a year and couples that earn more than $1 million. The Senate would increase the Medicare payroll tax rate from 1.45 percent to 2.35 percent for people who earn more than $200,000 a year and families that earn more than $250,000.

To raise money to pay for the legislation, the Senate would impose a 40 percent tax on the portion of most employer-sponsored health coverage that exceeds $8,500 a year for individuals and $23,000 for families. The Senate also would raise the threshold for deducting medical expenses to 10 percent of income, up from 7.5 percent.

Overall, the financing provisions could spur a pitched battle; the House hates the Senate tax on high-cost policies, while the Senate opposes the House’s income-tax surcharge.

In addition, many Americans worry that efforts to contain costs within the bills will lead to decreased standards of care.  As a New York Times piece reveals, however, this may not be the case.  The article examines the health system in Richmond, Virginia, where there are stringent state infrastructural expansion guidelines placed on health care practices and hospitals to contain costs.  The state requires large medical infrastructural expenditures by health care providing institutions– in the form of hospital expansion or even major equipment purchases– to be approved by the state through a “certificate of need.”  Neither of the House or Senate bills  includes such a provision, but there is a great deal of speculation that the oversight and cost-cutting measures in both will have a deleterious impact on the quality of health care.

While Richmond spends less than average per capita on Medicare than other metropolitan areas, patient outcomes are better than average. The Times reports

The quality of care in Richmond is better than in most American metropolitan areas, according to various measures, and it continues to improve. Medicare data, for example, shows that Richmond hospitals do a better-than-average job of treating heart attacks, heart failure and pneumonia.

But perhaps the most interesting aspect of the Times’ analysis relates to those states that do not police their health care infrastructure expenditures– or, as in South Dakota, had done so formerly, but ceased to do so.  When South Dakota “scrapped” its certificate of need program, one chief operating officer reported going on an expansion binge. In such cases, the number of patients that providers treat is said to correspond proportionally to the level of health care resources available.  One medical officer found this “supply-sensitive” phenomenon to mean that the more hospital beds a hospital has, the more patients it is likely to see.  Build it and they will come– or perhaps more to the point– they will be sent. At our expense.

The Filibuster, Supermajority and the Constitution

Ezra Klein has published an engaging  series of  interviews regarding the filibuster, and the prospects and shape of reform for the Senate’s  much maligned rule of procedure. The prospects for reform don’t look particularly bright. And as we come to reckon with one of the final products of the filibuster floor, the Senate’s health reform bill, we may want to take a moment to consider the filibuster itself– this need for 60 votes.

Klein writes

According to UCLA political scientist Barbara Sinclair, about 8 percent of major bills faced a filibuster in the 1960s. This decade, that jumped to 70 percent. The problem with the minority party continually making the majority party fail, of course, is that it means neither party can ever successfully govern the country.

It should also be noted that unlike today, a filibuster in the early 60’s required the arduous (and, it would seem, daunting) physical task of continued speech and an inability to consider other legislation during the pendency of the filibuster. A set of circumstances which at times brought sleeping cots onto the Senate floor and may have served to limit the filibuster’s use.

The Health Reform bill has served to highlight the dysfunction of the filibuster in modernity. The filibuster is not enshrined in the Constitution, it is merely a rule of the Senate.

The United States Senate requires a supermajority of three-fifths to move to a vote through a cloture motion, which closes debate on a bill or nomination, thus ending a filibuster by a minority of members. In current practice, the mere threat of a filibuster prevents passing almost any measure that has less than three-fifths agreement in the Senate. Since there are 100 members, three-fifths is sixty Senators.

The need for a supermajority is not unknown to the Constitution, but to say it is used sparingly and for matters of great import is not to engage in hyperbole. A quick glance at the Great Document bears this out. The original Constitution contains only five instances which require a supermajority; the Amendments two. A supermajority of two-thirds of both houses of Congress is required for Congress to propose a constitutional amendment and to pass a bill over a presidential veto; two-thirds concurrence of all members of the Senate present is necessary to convict under Impeachment; two-thirds concurrence of all members of the Senate present is requisite to consent to a treaty. The Constitution also requires the concurrence of two-thirds of the Senate to “expel a member.” The Fourteenth Amendment forbids those who formerly held office, either civil or military, and had engaged in “insurrection or rebellion” from holding any office–either civil or military– unless two-thirds of both the House and Senate  acted to “remove such disability.”  The Twenty-Fifth Amendment requires a two-thirds majority of each house to determine that an Acting President “is unable to discharge the powers and duties of his office.”

Constitutional amendment, over-ride a presidential veto, convict under impeachment, expel a member, ratify a treaty, remove a punishment for rebellion, and judge a president incompetent. These are fairly characterized as “exceptional situations,” not the everyday stuff of a legislature doing business. But because of the Senate’s filibuster rules, the need for a supermajority of 60 has become a part of the everyday stuff of a legislature attempting to do business.

Under Article 1, Section 5 [2] “Each House may determine the Rules of its Proceedings….” And the filibuster is very much a rule of the Senate’s proceedings. But at a certain point, the procedural rule can be said to have overtaken the substantive– I would suggest we begin considering whether or not we are at that point.

In U S v. BALLIN, 144 U.S. 1 (1892) the Supreme Court looked at the rule making power of Congress and had this to say

The constitution empowers each house to determine its rules of proceedings. It may not by its rules ignore constitutional restraints or violate fundamental rights, and there should be a reasonable relation between the mode or method of proceeding established by the rule and the result which is sought to be attained. But within these limitations all matters of method are open to the determination of the house, and it is no impeachment of the rule to say that some other way would be better, more accurate, or even more just. It is no objection to the validity of a rule that a different one has been prescribed and in force for a length of time. The power to make rules is not one which once exercised is exhausted. It is a continuous power, always subject to be exercised by the house, and, within the limitations suggested, absolute and beyond the challenge of any other body or tribunal.

There are at least a few things to consider in this regard. Perhaps foremost is the ability of the Senate to change the filibuster rule (”The power to make rules is not one which once exercised is exhausted.”). Also, it may well be a stretch, but I find it interesting nonetheless: does the present form and practice of the filibuster (a defacto supermajority requirement for the passage of legislation in the Senate) “ignore constitutional restraints or violate fundamental rights?” (i.e., does it, as described in INS v. Chadha, offend the “framers’ decision that the legislative power of the Federal government be exercised in accord with a single, finely wrought and exhaustively considered, procedure.” (See also Powell v. McCormack, where the Supreme Court ruled unconstitutional  a House resolution to not permit the duly elected Adam Clayton Powell, Jr. to take his seat in the House of Representatives (”Moreover, it would effectively nullify the [Constitutional] Convention’s decision to require a two-thirds vote for expulsion.”).

Which is to say, in this matter, does the filibuster, as practiced currently, effectively nullify the simple majoritarian requirement for the passage of legislation in the Senate? Of course, the Constitution lacks an explicit textual commitment to majority rule. But the argument in favor of majority rule is a powerful one, hinged upon that venerable canon of statutory construction, expressio unius est exclusio alterius, ‘the expression of the one is the exclusion of the other.’ Which is to say, that by listing these five supermajority exceptions in the original constitution that I have listed above, the drafters made simple majority in all other cases the default position. To appreciate the power of this argument (and this canon of construction) on need not look any further than the Bill of Rights. Madison balked mightily at the proposal for a Bill of Rights as being “dangerous” because the act of listing certain rights  would, under black letter principle, ‘the expression of the one is the exclusion of the other,’ negate the existence of others. The solution to Madison’s fear– the anti-expressio unius est exclusio alterius– is contained in the Ninth Amendment:

“The enumeration in the Constitution, in certain rights, shall not be construed to deny or disparage others retained by the people.”

The textual analysis regarding majority and supermajority goes something like this: Article II, Section 2 [2] regarding the powers of the President reads

He shall have Power, by and with the Advice and Consent of the Senate, to make Treaties, provided two thirds of the Senators present concur; and he shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law…. (emphasis added)

The presence of the requirement that two-thirds of the Senators concur in the ratification of a treaty, shows that when the drafters wanted to provide for a supermajority requirement they knew how; that they failed to include the clause requiring a two thirds majority appointment for “Ambassadors… and judges of the supreme Court” is strong evidence that they did not want to as it regards “Ambassadors… and judges of the supreme Court.” Furthermore, had they not provided for a two-thirds supermajority for treaties, one might argue that a supermajority applied to Treaties and Ambassadors and supreme Court judges– as the question may have remained open. But by expressing the requirement in the one instance (”Treaties”), they excluded, or closed the door on, the others (”Ambassadors… and supreme Court judges”).

Similarly, the various (but few) provisions scattered throughout the Constitution  show that the drafters knew how to create a supermajority requirement when they wanted to, and by virtue of simply being, these supermajority requirements show themselves to be exceptions to the unstated rule. In this case, the unstated rule being that a simple majority is necessary for the passage of legislation.

In addition, it should be noted that the Constitution gives a vote to the Vice-President only in instances where the Senate is “equally divided.” The presumption of course is that in doing so it will allow the Vice-President to break the tie and, by a one vote majority, allow for the legislation to either pass or fail. Importantly,  an “equally divided” Senate is rendered meaningless in the light of  a supermajority requirement.

The argument in favor of the 60 vote requirement to invoke cloture and end a flilibuster largely rests upon the premise that the Constitution grants to the Senate plenary power under Article 1, Section 5 [2] “Each House may determine the Rules of its Proceedings….” That within that clause lay the ability to proscribe the numerical meaning of the requirements for Senate procedure. But what happens when the rule of procedure swallows the law?

One might also ask if there is a constitutional argument that can be made if one can point to the concrete harm in a particular bill effectuated? Not effectuated? (But See Raines v. Byrd (1997) for the standing difficulties for Federal Senators bringing a claim against diminishment of Congressional power wrought by the Presidential line item veto, dismissed on standing grounds by the Supreme Court and characterized as “a type of institutional injury which damages all Members of Congress equally.” But, importantly, especially considering the disparate financial impact on states regarding Medicaid funding in the Senate bill, See Clinton v. New York (1998), where the state of New York did have standing and successfully challenged the same presidential line item veto after the use of the same resulted in the loss of $955 million to New York for the payment of expenses related to the medical care for the indigent).

The balance of power in Congress between large and small states was hotly contested at the Constitutional Convention. The compromise, in which members of the House of Representatives would be apportioned through population and members of the Senate would be limited to a flat two members per state, could certainly be characterized, like the process of legislation itself, as being a “single, finely wrought and exhaustively considered, procedure.” So much so in fact that the compromise which gave birth to the form of the Senate and its particularized distribution of power is, in a sense, a distinct creature within the Constitution. An anomaly, if you will. When Alabama attempted to implement such a plan in 1964, patterned closely after the Federal Legislature, for the configuration of its State Legislature, it was deemed unconstitutional as repugnant to the Equal Protection clause. The Court in Reynolds v. Sims, 379 U.S. 870 (1964) stated:

“We hold that, as a basic constitutional standard, the Equal Protection Clause requires that the seats in both houses of a bicameral state legislature must be apportioned on a population basis.”

The Court distinguished the federal construct of the Senate as “ingrained in our Constitution as part of the law of the land” and “conceived out of compromise and concession indispensable to the establishment of our federal republic. Arising from unique historical circumstances….”

In the Free Exercise religion case,  Employment Division v.  Smith, 497 U.S. 872 (1990), Justice Scalia speaks of the increased weight and power of “hybrid” rights–rights in which the Free Exercise clause is coupled with other constitutional protections “such as freedom of speech or  the press.” What then is the result of a Constitutional scheme that outside of the Constitution is actually repugnant to a fundamental right?   Considering the offensiveness of the scheme to the Equal Protection Clause, at least when applied to putative state action to effectuate such a scheme, one wonders if a tighter leash isn’t appropriate? Perhaps somewhat akin to the strict adherence we require of “granfathered” zoning usages? This may be a bit afield, but so also may be a Senate rule which de facto requires a supermajority to pass legislation.

It is also worth noting that the Constitution jealously protects a state’s stake in the power of a Federal Senate seat. It protects the legislative power of states in the federal government by forbidding the creation of new states “formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.” (Article IV, Section 3, Clause 1).

The fear addressed being that a state such as New York could create within it’s borders– or with the help of a bordering state– “New York. West,” thereby increasing its number of Senators by 2 (and if the population of the newly created state was less than 30,000, a House member as well). In doing so, a state such as New York could thereby increase its own senatorial power and diminish the senatorial power of the other states. The Senate, particularly, is a zero sum game. But the clause in Article IV, importantly, essentially prohibits the diminishment of a state’s Congressional power–especially senatorial power–by forbidding an action which would do so– unless Congress, both the Senate and House, agree. One could argue that the filibuster as practiced accomplishes a similar diminishment of  senatorial power–but does so without the consent of the House (or, for that matter, the State Legislators).

And the point is this:

“According to UCLA political scientist Barbara Sinclair, about 8 percent of major bills faced a filibuster in the 1960s. This decade, that jumped to 70 percent.”

I loved “Mr. Smith Goes to Washington” as much as the next fellow; but this isn’t that. And although I’m not saying that the filibuster, as presently configured, is unconstitutional, I am saying that we may seriously wish to begin looking to the Constitution to formulate answers regarding the modern problem of the filibuster. The Constitution is not a suicide pact, but the Senate rules may be.

Senate Passes Health Reform Bill, Republicans Challenge Constitutionality

The Senate has passed its version of a Health Reform bill, 60-39. The votes were cast, with Vice President Joseph Biden presiding, at 7:00 am on Thursday, December 24th. The Washington Post reports that

Sen. Robert C. Byrd (D-W.Va.), who is 92 and ailing, bellowed when his name was called: “Mr. President, this is for my friend Ted Kennedy. Aye.”

Aye indeed.

Washington Monthly notes that a number of Republican Senators, many of whom in recent months had formerly brushed aside the issue of constitutionality for the provision for insurance mandates, have experienced a change of direction– if not heart– and have openly challenged that which they formerly embraced.

For an explanation of the mandate’s constitutionality, Washington Monthly cites this article, “Is it Unconstitutional to Mandate Health Insurance?” by Professor of Law and Public Health, Wake Forest University, Mark Hall–which originally appeared here on Health Reform Watch, and was later cited by the Washington Post’s Ezra Klein among numerous others.

The Price of Sausage in Nebraska (and elsewhere)

“Laws, like sausages, cease to inspire respect in proportion as we know how they are made.” The quote, and a number of variants thereof, is most often attributed to Otto von Bismarck. The Boston Globe/A.P. does a nice job taking us through the cost– the spoils, if you will– of the votes requisite thus far to have taken the Senate’s Health Reform bill to its present status. The picture is not particularly pretty– with sizable benefits inuring to the holdout Senators and their constituents. The cost of 60 votes– filibuster-proof critical mass– is, one might say, the cost of doing business. But it is a risky business. By virtue of being so, the 60th vote,  Senator Ben Nelson of Nebraska, brought home the following pieces of bacon home for his constituents:

the federal government will pay the full cost of a proposed expansion of Medicaid, at an estimated cost of $100 million over 10 years; Blue Cross Blue Shield of Nebraska will be exempted from an annual fee on insurers; supplemental Medigap policies such as those sold by Mutual of Omaha are exempted from the annual fee on insurers; and a physician-owned hospital being built in Bellevue, Neb., could avoid a new ban on referrals from doctors who own such hospitals.

And what does the 23rd vote tell his constituents who will have to shoulder the costs of their state’s expansion of Medicaid?

The Boston Globe/A.P.  list is partial but telling. You can see it here.

For a more thorough look at the cost control and program implications of the bill, Professor Timothy Jost’s latest article in Health Affairs is a must read. In addition to a wealth of other information, Jost provides the following:

…the bill provides a cures acceleration program” to fund research for “high need cures” for which incentives in the commercial market are unlikely to result in timely development.  The Food and Drug Administration, the National Institutes of Health, and a new Cure Acceleration Network Board are supposed to work together to facilitate the discovery of such cures and to translate them from bench to bedside.  Grants can be made under the project of up to $15 million a year to eligible entities such as academic medical schools, biotech companies, and drug companies, who need only meet a $1 to $3 matching requirement.  $500 million is appropriated for this program for 2010.

This is all well and good and a great idea.  But nothing that I can see in the legislation gives the taxpayer any stake in this investment.  A drug or biotech company that in fact discovers a blockbuster drug or biologic through the federal government’s investment (perhaps for an off-label use) owes nothing in return.  Shouldn’t we the taxpayers get some return on  our investment, or at least the promise of reasonable prices?

Bismarck also is said to have said,  “Politics is the art of the possible.” To see that, you’ll want to read the rest of Professor Jost’s article.

The Tragic Sense of Health Insurance Reform

It looks like there are now 60 votes behind the “The Patient Protection and Affordable Care Act”, and the set of amendments to it released today. For the sake of this post, I will assume that this Senate bill will basically be the template for health insurance reform.

Given all the twists and turns of this debate, I’m sure there still will be some important changes (even though holdout Sen. Ben Nelson has been promised a “limited conference” in exchange for supporting it). But today’s announcement does strike me as a turning point in the debate. It’s time to reflect on a growing divide between “realists” in the Democratic party and more idealistic progressives.

Democratic Divisions

Ed Kilgore of The New Republic describes the divide over the Senate bill as follows:

[O]n a variety of fronts (most notably financial restructuring and health care reform, but arguably on climate change as well), the Obama administration has chosen the strategy of deploying regulated and subsidized private sector entities to achieve progressive policy results. . . . [T]his is not the same as the conservative “privatization” strategy, which simply devolves public responsibilities to private entities without much in the way of regulation.

[I]n the health care reform debate, the Obama administration pursued legislation that utilized regulated and subsidized private for-profit health insurers to achieve universal health coverage. This approach was inherently flawed to “single-payer” advocates on the left, who strongly believe that private for-profit health insurers are the main problem in the U.S. health care system. The difference was for a long time papered over by the cleverly devised “public option,” which was acceptable to many New Democrat types as a way of ensuring robust competition among private insurers, and which became crucial to single-payer advocates who viewed it as a way to gradually introduce a superior, publicly-operated form of health insurance to those not covered by existing public programs like Medicare and Medicaid.

Now that the public option compromise is apparently no longer on the table, and there’s no Medicare buy-in to offer single-payer advocates an alternative path to the kind of system they favor, it’s hardly surprising that some progressives have gone into open opposition . . . . To put it more bluntly, on a widening range of issues, Obama’s critics to the right say he’s engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector.

Glenn Greenwald is one of the most forceful progressive voices on the issue, offering a multifaceted indictment of dominant Democrats’ coziness with a series of corporate interests:

The health care bill is one of the most flagrant advancements of . . . corporatism yet, as it 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 (even with some subsidies). 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, many of whom will be truly burdened by having to turn their money over to these corporations — and is thus a truly extreme advancement of this corporatist model.

One finds this in far more than just economic policy, and it’s about more than just letting corporations do what they want. It’s about affirmatively harnessing government power in order to benefit and strengthen those corporate interests and even merging government and the private sector. In the intelligence and surveillance realms, for instance, the line between government agencies and private corporations barely exists. Military policy is carried out almost as much by private contractors as by our state’s armed forces. Corporate executives and lobbyists can shuffle between the public and private sectors so seamlessly because the divisions have been so eroded. [links omitted]

If one judges the bill purely from the narrow perspective of coverage, a rational and reasonable (though by no means conclusive) case can be made in its favor. But if one finds this creeping corporatism to be a truly disturbing and nefarious trend, then the bill will seem far less benign.

Chris Hedges concurs (in his book Empire of Illusion), dismissing “proposals to require insurance companies to use more income from premiums for patient care or link payment with reported quality” as “unworkable.” He favorably cites physicians John Geyman and Steffie Woolhandler, who think health reform as it now stands is a doomed effort to keep a failing system on life support. Yet many on the left are standing behind the Senate bill, embracing it as what Sen. Harkin called a “starter home” with a good foundation for future additions.

Realism and Idealism in an Increasingly Ungovernable Nation

There has been a lot of talk about a Niebuhrian “Christian realism” in Obama’s foreign policy–a willingness to deploy force and otherwise questionable means to accomplish worthwhile ends. The health reform bill strikes me as another iteration of these endlessly complex, ethically ambiguous moments. The political opposition to the public option has been so intense that those pursuing universal coverage have been forced to bargain with (and even become identified and intertwined with) the very entities they are trying to force to act responsibly. In this topsy-turvy world, where an anti-system opposition refuses to responsibly deal with problems that most developed nations addressed decades ago, Democrats and the Obama administration must cut deals with moneyed interests (whose influence over politics grows apace as a “conservative” judiciary continues to gut campaign finance regulation).

But abstractions can only go so far in describing this bill. I just want to give a counterintuitive spin to two bits of journalism on health reform, to prefigure what I’m sure will be months and years of unintended consequences (some good, some bad) flowing from this bill.

1. Pilot programs: Atul Gawande has pointed to a hodgepodge of pilot programs in the Senate bill as one of the best reasons to support reform efforts. Like many physicians, Gawande is attracted to the organic development of “best practices” in cost control, instead of top-down imposition of a general theory:

Where we crave sweeping transformation . . . all the current bill offers is those pilot programs, a battery of small-scale experiments. . . . The bill tests, for instance, a number of ways that federal insurers could pay for care. Medicare and Medicaid currently pay clinicians the same amount regardless of results. But there is a pilot program to increase payments for doctors who deliver high-quality care at lower cost, while reducing payments for those who deliver low-quality care at higher cost. There’s a program that would pay bonuses to hospitals that improve patient results after heart failure, pneumonia, and surgery. There’s a program that would impose financial penalties on institutions with high rates of infections transmitted by health-care workers. Still another would test a system of penalties and rewards scaled to the quality of home health and rehabilitation care.

Other experiments try moving medicine away from fee-for-service payment altogether. A bundled-payment provision would pay medical teams just one thirty-day fee for all the outpatient and inpatient services related to, say, an operation. This would give clinicians an incentive to work together to smooth care and reduce complications. One pilot would go even further, encouraging clinicians to band together into “Accountable Care Organizations” that take responsibility for all their patients’ needs, including prevention—so that fewer patients need operations in the first place. These groups would be permitted to keep part of the savings they generate, as long as they meet quality and service thresholds.

The bill has ideas for changes in other parts of the system, too. Some provisions attempt to improve efficiency through administrative reforms, by, for example, requiring insurance companies to create a single standardized form for insurance reimbursement, to alleviate the clerical burden on clinicians. There are tests of various kinds of community wellness programs. The legislation also continues a stimulus-package program that funds comparative-effectiveness research—testing existing treatments for a condition against one another—because fewer treatment failures should mean lower costs.

There are hundreds of pages of these programs, almost all of which appear in the House bill as well. But the Senate reform package goes a few . . . steps further. It creates a center to generate innovations in paying for and organizing care. It creates an independent Medicare advisory commission, which would sort through all the pilot results and make recommendations that would automatically take effect unless Congress blocks them.

None of this is as satisfying as a master plan. But there can’t be a master plan. That’s a crucial lesson of our agricultural experience. And there’s another: with problems that don’t have technical solutions, the struggle never ends.

I agree with all of this, but I want to add one more dimension to the “neverending struggle”–the very interest groups that are supposed to be reined in by pilot programs are likely to do their best to alter, influence, or limit those programs over the coming years. One need only look at the sad and convoluted history of gainsharing pilot programs (merely adumbrated here) in order to get a sense of how, as the “rubber hits the road,” various lobbies will be storming veto points in order to undermine experimentalists’ efforts. This is not to say that pilot programs are a sham–I am about to publish a book chapter with the subtitle “A Plea for Pilot Programs as Information-Forcing Regulatory Design.” I just want to temper the technocratic optimism at the heart of Gawande’s worldview with a touch of the skepticism driving progressives like Greenwald and Markos Moulitsas.

2. Cuts in Medicare Home Health Care: Now here is an aspect of the bill that I at first felt offended by. Doctors, insurers, hospitals, and pharmaceutical companies all appeared to be making at most modest concessions in the final bill. But home health care, staffed by some of the most vulnerable workers, was to be slashed. If anything appeared to fit the Greenwald storyline of rapacious private interests shifting public burdens onto the unfortunate, it seemed to me, these cuts would fit the bill.

Yet once one digs in a bit to this story, more complexity emerges. According to one of the speakers on this podcast of the Diane Rehm show, over half of the “extraordinary patient” payments in the program are made in Miami-Dade County alone. It’s hard to get upset with a long overdue crackdown in the Ponzi State. Many other apparent abuses were mentioned in the podcast, as well as in this discussion on the NYT website. After sorting through all the commenters’ underlying empirical data, I may still come back to my original diagnosis of brutal, bareknuckle pluralism as the driving force behind home health care cuts. But I can’t justify that level of cynicism currently.

Concluding Thoughts on the Tragic Dimensions of Moving Forward

The personal is always political, and rarely is this more the case than in health policy. As with abortion and the draft, the law of health care financing directly impinges on the body of the citizen, determining fundamental opportunities for individuals. Despite all of my reservations and disappointments, in the end I am for this bill for a very personal reason: I cannot imagine how my family would have afforded treating my mother’s ailments over the past decade without the private and public insurance she has continually been covered by.

Earlier this year, I had hoped to be a larger part of the academic legal debate on health reform. But my mother broke her back in early September after falling off a scale in her bathroom, and I am her primary caregiver. Attending to her has taken up much of my free time since then. It’s hard to explain how much pain this incident has caused her, and how it has disrupted her life. All I can say is that I cannot imagine how stressful this incident would have been if she were one of the 46 million uninsured. Without question, her 3 weeks in the hospital, four weeks in rehabilitation, and related care, would have bankrupted her (and nearly bankrupted me). Millions of people may end up in such a situation–without coverage, battered by fate, and broke–if progressives in Congress stand on principle (or dubious constitutional arguments) and torpedo the bill.

Nevertheless, I also realize that this immediate victory, like 2009’s stabilization of the financial system, may be a Pyrrhic one for the Democratic Party. It entrenches the power of one more sector of America’s overweening FIRE industries (finance, insurance, and real estate). I’ve recognized the potential of private insurers to rationalize health care, but that potential is rarely realized. I am very worried that just as “GM hired a thousand lawyers, and Toyota hired a thousand engineers” in response to the Clean Air Act, private insurers will plow new revenues attributable to an individual mandate into endless lobbying to hollow out the terms of “minimum creditable coverage.” They will certainly devise clever tricks designed to drive away the 5% or so of the population that accounts for 49% of medical expenses. If pervasive regulatory capture occurs, the “reform” will be an albatross around the necks of Democrats for years.

“In their determination to avoid Harry and Louise, they’ve become Thelma & Louise.” That’s the verdict on the Obama Administration from a Democratic strategist tweeted by horserace reporter extraordinaire, Chris Cillizza. Although it’s a characteristically snide and smug observation from The Village, I think this bon mot has some chance of coming true. Like most of the conventional wisdom excrudescing from Beltway pundits, it’s less a reflection of reality than a narrative our entrenched political class enacts. The “politics of reform” will be endlessly refracted in DC media celebrities’ halls of mirrors, where a 24-hour news cycle is always hungry for “backlash.” The lazy conventional wisdom has already coalesced around a narrative of Obama-as-Icarus, perpetually mistaking his cautious incrementalism as a seamless web of socialism.

The real tragedy here lies in a struggle for the soul of the Democratic party–between idealists like Greenwald, Hedges, Woolhandler, and Kos, and the DLC/Brookings “realists” who’ve dominated the official Democratic response to the financial and health care crises. The sclerotic Senate’s supermajority rules have put the realists in the driver’s seat, and idealistic progressives have been left with little more than the power to refuse the bill that Reid & Co. craft. Idealists want an FDR-style rejection of what TR called the “malefactors of great wealth,” and they also want to see the millions of Americans without health care coverage given some semblance of a safety net beyond the bankruptcy courts. But we cannot have both. As Martha Nussbaum writes in The Fragility of Goodness (speaking generally about such quandaries),

We are considering [a] situation[], then, in which a person must choose to do (have) either one thing or another. Because of the way the world has arranged things, he or she cannot do (have) both. . . . He senses that no matter how he chooses he will be left with some regret that he did not do the other thing. . . .

Aristotle speaks of a captain who throws his cargo overboard in a storm in order to save his own and other lives. The man sees all too well what he must do, once he grasps the alternatives. . . .And yet he was also attached to that cargo. He will go on regretting that he threw it into the ocean–that things turned out so that he had to choose what no sane person would ordinarily choose, throw away what a sane person would ordinarily cherish.

By passing this reform bill, Democrats will jettison whatever “populist” credentials they once had, opting instead for an early-twentieth-century “progressive” vision of technocratic alliance between corporate and government experts. However many disastrous missteps the FIRE industries make, this is the only arrangement that the media will credit as responsible governance. We’ll commence an endless argument (read: notice and comment rulemaking and subsequent administrative adjudications) over what constitutes an adequate baseline of coverage, what is the fair share of revenue for middlemen like insurers, and what regulatory infrastructure can best vindicate the entitlements (and impose the burdens) specified by the bill. But the fundamental victory of reform–the national commitment that no one should have to choose between death or bankruptcy when confronted with a serious illness–will also endure. The tragic paradox is that the Democrats can only achieve this great cultural and ideological victory by becoming identified with the very interests that only they are willing to confront.

Supporting Family Caregivers

Many of our hardest-working caregivers are not professionals, but parents, spouses, and children of people with serious chronic conditions, limited in their ability to engage in activities of daily living (ADLs) or instrumental activities of daily living (IADLs).  A new report from the National Alliance for Caregiving and the AARP opens up this informal, but absolutely essential, world of unpaid caregiving (h/t: Howard Gleckman ).

Some basic facts on the caregivers:

• They’re usually (66%) women;
• On average, they provide over 20 hours of care each week;
• They’re of all income levels, with an average income of about $60,000
• About one-third care for more than one person.

Some basic facts about those receiving the care:

• They’re mostly over 50 years of age, and 44% are over the age of 75;
• Most (51%) live in their own homes;
• Most (69%) require care due to long-term physical condition;
• 34% receive informal caregiving for 5 years or more.

In many cases, informal caregivers enable people with significant care needs to avoid nursing home or other institutional care.  Patients are better off, and so is the health budget: the avoided costs of expensive hospitalizations and nursing home care are enormous.   I have previously described the reform bills’ provisions that would support in-place care for people with chronic illness and disabilities.  Medicaid amendments would expand home care services, including such Cash & Counseling programs that give consumers substantial control over the mix of home services, and permit support for kinship caregiving.  And the Senate bill incorporates the Community Living Assistance Services and Supports Act (the “CLASS Act”), which provides for a new source of funding for personal assistance services for those not Medicaid-eligible.  A move supported by the insurance industry to strip it from the reform bill was narrowly defeated on December 4^th.

The insurance industry, of course, is vigorously trying to protect its own nascent long term care insurance business.  The long term care insurance industry has faced its share of horror stories about bureaucratic double-talk, denied claims, high prices, and limited benefits. The CLASS Act would provide an optional source of coverage, creating a voluntary program of member-supported public insurance for home care costs.  Like Medicaid’s Cash & Counseling system, it provides consumers with flexibility to choose the mix of supportive care when his or her health status triggers eligibility for coverage.

Why do we need such a program?  After all, there are many willing attorneys ready to help people spend down their assets — achieving “Medicaid impoverishment” — in order to qualify for Medicaid’s richer coverage.  Georgetown scholar Judy Feder was asked just that question for a recent Time Magazine article on the CLASS Act.  Her response was dead-on:

“Medicaid is invaluable,” says Judy Feder, a health policy expert at Georgetown University and a senior fellow at the Center for American Progress. “But it’s not insurance. It doesn’t protect you from catastrophe. It takes care of you after catastrophe.”

The long-term care financing mix in the Senate bill is far from perfect.  As a panel of experts surveyed by the Commonwealth Fund overwhelmingly agreed last year, the best solution would be to add a premium-financed long-term care component to Medicare, allowing the cost to be shared by government and consumers, without the trouble or expense of creating a new programmatic structure.  In the alternative, Congress could cobble together a better integrated “system” of long term/home care financing.  Such a system could virtually integrate a long-term care financing continuum, including Medicaid, Medicare, and voluntary insurance (such as that created by the CLASS Act) that could support consumers with chronic illness in the most appropriate setting for supportive care, reducing the discontinuities in coverage, perverse incentives for institutionalization, and counterproductive limits on services.  Either actual integration of all long term care services in Medicare, or the virtual integration (through smooth eligibility and service interfaces) in Medicare, Medicaid, and CLASS Act coverage could improve care and reduce costs.  But that won’t happen this year.

Instead, the best hope for expansion of access to personal assistance services will be the strengthening of Medicaid’s home care provisions and the creation of the CLASS Act program.  The overwhelming reform focus has been on very traditional “medical” insurance run through private, risk bearing insurance companies.  Only at the margins will the reform address the growing need for financing  appropriate health care for chronic illness.  Keeping the CLASS Act is a small step, but it at least acknowledges the obligation to support the personal assistance needs of those with serious chronic illnesses or disabilities, who are not (yet) impoverished, and who prefer to remain in their communities.  The CLASS Act will provide a new funding source for patient-directed personal assistance services.   Family caregivers will continue to devote themselves to their loved ones, but they need help.

Senator Joseph Lieberman “Regrets Any Misunderstanding”

Senator Joseph Lieberman says that he “regrets any misunderstanding.” Lieberman, who according to NPR’s All Things Considered “has angered a lot of people,”  also said  “I thought I made myself clear all along.”

All Things Considered characterized Lieberman’s rejection of the Senate’s Gang of Ten Compromise as follows: Lieberman “rejected both an expansion of Medicare to cover uninsured people down to age 55, as well as its revamping of a Public Option so that users would be covered by private rather than government insurance.”

Joe Lieberman “regrets any misunderstanding.” All Thing Considered noted “But as critics were quick to point out, this was the same Joe Lieberman who told the Connecticut Post just three months ago that he’d been a supporter of expanding Medicare to age 55.”

Lieberman said, regarding the video we posted yesterday,

“I finally got to see that on TV last night and it looked to me like I was referring back to things I had supported in the past to make the point that though I was against the Public Option, I was not against health reform.”

And there you have it– just a big, “regrettable,” misunderstanding.

In addition, Senator Lieberman said: “I haven’t received any pressure from Insurance Companies. I mean it!”

And I believe him. One rarely pressures a man who does everything one wants.

Next Page »