The Boys Are Back In Town… But Will They Have Much Repeal?

Photo by K3nna via flickr

A week before the election, the  L.A. Times quoted Senator Orrin Hatch (R-Utah) as saying his party “could come up with a healthcare system that American people would not only be proud of, but would actually love.”  That same article reported how Republican and other conservative candidates have been promising to repeal the Patient Protection and Affordable Care Act (PPACA) without proposing a viable alternative.  In fact, the Republican track record for the past decade isn’t anything to trumpet.  Rather than lowering healthcare costs and expanding access to care,

from President George W. Bush’s election in 2000 to the end of GOP congressional majorities in 2006, Republicans failed to pass major healthcare changes despite evidence of an escalating crisis.

American workers saw their health insurance premiums jump 78%, as the average price tag for an employer-provided family health plan surged to $11,480 a year, according to a survey of employer health benefits by the nonprofit Kaiser Family Foundation and the Health Research & Educational Trust.

That took a toll on businesses and employees. In 2000, 69% of employers provided their workers with health benefits, the Kaiser surveys found. In 2006, 61% were offering health insurance.

By the time Republicans lost control of Congress, an estimated 43.6 million Americans did not have health insurance, up from 41.3 million six years before.

Be that as it may.  The election has taken place, the Republicans have regained control of the House, and the country is left to wonder: are the days of PPACA — or any kind of healthcare reform — numbered?  The Washington Post observes that election day “[e]xit polls showed… roughly half the public wants to repeal the bill but that the other half wants to keep or expand it, setting the stage for a potential showdown.”  Prescriptions, a N.Y. Times health blog, interviewed a a portfolio manager and health care strategist, and found that he “‘[didn't] think anybody wants to kiss off 30 million new customers’….  What the health insurers and drug and device makers want is not repeal, he argued, but ‘reform light.’”

Granted, the Democrats still control the Senate, a Democratic president remains in office for at least two more years, and the Republicans didn’t win enough seats to override a presidential veto.  So if an outright repeal isn’t in the cards, then what other options do the Republicans have to scale back this “monstrosity,” to borrow the colorful phrase used by incoming House Speaker and Minority Leader John Boehner (R-Ohio)?

The N.Y. Times suggests that Republicans might direct Congress to chip away at or eliminate the less popular PPACA provisions, such as the tax on manufacturers of medical devices, the requirement for many employers to contribute to insurance for employees, or the mandate that everyone have health insurance.  The article notes that

with Republicans winning control of many governors’ mansions and making gains at the state legislative level, they will be able to determine how the new law is carried out locally.

Republicans in Congress said they would try to give states more latitude and discretion on issues like the design of health insurance exchanges. The law calls for creation of an exchange in each state and says only government-approved insurance plans can be sold on the exchange.

The new rules, though stricter than in the past, may well be less stringent than they would have been if Democrats had not taken what Mr. Obama described as “a shellacking.” In addition, Republicans said they would try to cut the budget for federal enforcement of the law and related rules.

On Wednesday, Rep. Boehner expressed his belief that “the health care bill will kill jobs in America, ruin the best health care system in the world and bankrupt our country.”  In response to these claims, Kaiser Health News asked 3 dozen people across the country,  including physicians, CEOs and Presidents, administrators: ”[i]f you ended up in an elevator with Rep. Boehner, what single thing would you urge him to do about health care in this country?”  (Click here to read their responses.)  I’d urge him to repeal his stance.

Obama, Health Reform, Plan B

Photo by acf

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.

The House’s Proposed Surcharge on the Rich: Not Progressive Enough

Poster for the "War of Wealth" by Charles Turner Dazey, a play that opened February 10, 1895.

The usual suspects are alarmed by the House Tri-Committee Health Reform Bill’s proposed surcharge on high income earners. As the NYT explains with some examples, “Starting in 2011, a family making $500,000 would have to pay $1,500 in additional income tax to help subsidize coverage for the uninsured. A family making $1 million would have to pay $9,000.” The surcharge rises with income, and over time, to hit 5.4% (by 2013) for households earning over $1 million annually. Households making between $280,000 and $500,000 per year would only face a 2% surcharge by 2013.

Beneath all the sturm und drang about soaking the rich, the press should focus on three underlying realities. First, income and wealth vastly increased at the top of the distribution over the past thirty years–in part because of corporate cost savings that included denial of health coverage to millions of workers. Second, inequality itself exacerbates the health care crisis, by fueling the allocation of medical care according to profit potential, not need. Third, inequality causes health problems, because societies grow “more dysfunctional, violent, sick and sad if the gap between social classes grows too wide.” The surcharge on the rich is not some random resentment inflicted by Frenchified Madame DeFarges on America’s John Galts. The surcharge will itself help address some of the problems health reform is designed to solve. I’ll unpack these thoughts in a series of posts this week.

Nevertheless, the surcharge is not progressive enough, and this should be the main message of liberals commenting on the House bill. As David Leonhardt has observed in another context,

Today . . . the very well off and the superwealthy are lumped together [in the tax code]. The top bracket last year started at $357,700. Any income above that — whether it was the 400,000th dollar earned by a surgeon or the 40 millionth earned by a Wall Street titan — was taxed the same, at 35 percent. This change [from the past] is especially striking, because there is so much more income at the top of the distribution now than there was in the past.

The House’s top bracket for the surcharge is one million dollars, a slight improvement. But it is very hard for me to see why those who make that amount should be treated identically to those in the “Fortunate 400″–the 400 highest earning households which made, on average, more than $263 million apiece in 2006. As a Wall Street Journal article reports, “the group’s average income tax rate — calculated as income taxes paid as a percentage of adjusted gross income — fell to 17.2%. in 2006 from 18.2% the prior year. That’s down from a high of 29.9% in 1995.” The health care surcharge makes up less than half of that decline in taxes from 1995 to 2006.

In short, the next time a pundit screams “class warfare” at a surcharge like the one proposed by the House, I’d recommend calmly agreeing, and pointing out that those at the very top of the income scale do indeed appear to be shirking their fair share of the fiscal burden. I’d also ask the pundit to take a look at these figures from Charles Morris’s The Trillion Dollar Meltdown:

Between 1980 and 2005, the top tenth of the population’s share of all taxable income went from 34 percent to 46 percent, an increase of about a third. The changing distribution within the top 10 percent, however, is what’s truly remarkable. The unlucky folks in the 90th to the 95th percentiles actually lost a little ground, while those in the 95th to 99th gained a little.

Overall, however, income shares in the 90th to 99th percentile population were basically flat (24 percent in 1980 and 26 percent in 2005). Almost all the top one-tenth’s share gains, in other words, went to the top 1 percent, or the top “centile,” who doubled their share of national cash income from 9 percent to 19 percent.

Even within the top centile, however, the distribution of gains was radically skewed. Nearly 60 percent of it went to the top tenth of 1 percent of the population, and more than a fourth of it to the top one-hundredth of 1 percent of the population. Overall, the top tenth of 1 percent more than tripled their share of cash income to about 9 percent, while the top one-hundredth of 1 percent, or fewer than 15,000 taxpayers, quadrupled their share to 3.6 percent of all taxable income. Among those 15,000, the average tax return reported $26 million of income in 2005, while the take for the entire group was $384 billion.

A truly progressive health surcharge would take that fractal inequality into account. But we may as well support the small step towards fairness that the House Bill represents.

Las Vegas Health Care Practices Prompt State and Federal Concerns

Photo by BaLLYoOo via Flickr

This week MSNBC covered special hearings held by the health committees of both the Nevada Senate and Assembly.  The hearings aimed to reform certain state laws as a response to last year’s hepatitis C outbreak in Las Vegas, NV.  The outbreak required over 60,000 Las Vegas surgical center patients to be notified of possible infection– the largest patient-related notification effort in U.S. history– after improper injection of anesthesia resulted in several cases of hepatitis C.

According to MSNBC, proposed reforms in state law would offer stronger whistle blower protection for nurses, more frequent inspections of health facilities, and a streamlining of the reporting and investigation of future major patient problems.

In addition, Las Vegas is among a handful of regions at the center of federal concern over Medicare spending.   Yesterday, the Las Vegas Sun reported that a new study by the Dartmouth Atlas Project finds Las Vegas hospitals to be among the top ten percent most expensive in the country for Medicare spending costs.  Dr. David Goodman, co-principal investigator of the report, tells the Las Vegas Sun that these costs do not necessarily reflect a high level of care, but may actually be a product of “greedy” Las Vegas doctors billing for services beyond what they provide.  In the same interview, Goodman expressed fear that such practices may lead to the bankruptcy of Medicare– a program that some argue will be deficient by over 660 billion by 2023.

Such practices have not gone unnoticed in Washington.  House Representative Henry Waxman (D-Ca), Chair of the Energy and Commerce Committee, sees the recent Stimulus as an opportunity to establish needed oversight, according to CQPolitics.  In addition to monitoring state spending of Stimulus funds designated for health care, Waxman’s committee has crafted an oversight plan that looks out for “Medicare waste and fraud” in general.