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What now? Options for health reform after Massachusetts

scott brown

The election of Republican Scott Brown in Massachusetts has left the future of health care reform in serious doubt.  One reason is logistical: Republicans now have enough votes to filibuster the final health care bill.  That in itself doesn’t mean that health care reform is dead though- there are a number of ways to get around a Republican filibuster.  The bigger question is what Brown’s win says about the way Democrats have handled health care reform.  Voters are clearly unhappy, but the way forward is less clear.  Democrats have a few options for health care:

1.  Give Up
Believe it or not, a number of Congressional Democrats are saying that in the wake of the Massachusetts election, Democrats should drop health care for now to focus exclusively on jobs and the economy.  Political theorist Bill Galston, who argued against Obama tackling health care at the start of his administration, explains why giving up now would be a bad idea:

First: At the most basic political level, turning tail and running for the tall grass is bound to fail. Democrats who have already voted for health reform (and that’s most of them) can’t take their votes back. Whatever they do between now and November, they’ll be called on to defend what they’ve done. Are they going to say that they’ve changed their minds? Who would believe them?

Second: The American people won’t support representatives they don’t respect. The people respect sincerity, consistency, and strength of purpose. It is often the case that constituents will respect positions with which they disagree—if they think their representatives really mean it. One thing is clear: They won’t respect vacillation and weakness. Does anyone?

Third: The president and congressional Democrats have spent the past year arguing that health reform is in the national interest—that it will broaden coverage, begin to contain costs, increase disposable income, and help improve the government’s long-term fiscal outlook. Which of those arguments ceased to be true between Monday and today?

2.  Try to pass a smaller bill
This idea seems to be gaining traction- passing a smaller bill including just the elements of reform that the public supports, like preventing insurance companies from denying coverage based on pre-existing conditions.  The problem is that the main parts of the bill don’t work without all the other parts.  Let’s say you’re a lawmaker.  The number one people have with insurance companies is pre-existing conditions, so:

  • You pass a law that prevents insurance companies from denying coverage to people with pre-existing conditions.  This is called guaranteed issue– when people apply for insurance the insurance company has to offer them coverage.  But, people with pre-existing conditions are expensive to cover, so insurance companies will just jack up the cost of their premiums to the point where almost no one can afford it.
  • So then you say, ok- you have to charge people with pre-existing conditions the same rate as everyone else.  (This is called community rating: everyone in the community pays the same rate.)  Insurance companies say, “Fine,” and then jack up premiums for everyone to make up for this sudden influx of sick, expensive-to-cover customers.
  • You think you’re stuck until you notice that there are a ton of people without insurance that don’t have pre-existing conditions and would be cheap to cover.  If those people all buy insurance too, it won’t be only expensive-to-cover, sick people suddenly buying insurance— premiums won’t go up.  So you add an individual mandate which says everyone has to buy insurance or pay a tax penalty.
  • Then you have a new problem: the reason most people don’t have insurance is because they can’t afford it.  So you need to give them subsidies– money to help cover the cost of their premiums.  Unfortunately this costs a lot of money.
  • Also, it would be nice if there was one place where people could go to buy insurance that is regulated, with limits on how much people have to pay out of pocket if they get sick.  So you create health insurance exchanges– places where people can go buy this insurance.

And that’s basically the bill we have in Congress now.  If you get rid of any of those parts, the whole thing falls apart, so it’s a little unclear how a smaller bill would work.  Ezra Klein compares it to buying a house: if you go to buy a house and find out at the last minute that you lost a bunch of money and can’t pay for it, you can’t ask the owner to tear out the walls, or the foundation, or the plumbing and wiring to make it cheaper.  All those things work together to make it a functional house.  If you need to save money, you have to find a totally new, smaller house.  For health care, a smaller bill would probably mean starting from scratch.

As Sen. Claire McCaskill (D-Mo.) told Politico:

“Smaller packages are hard because they are all so interrelated.  You can’t do pre-existing conditions unless you do a mandate. And you can’t do a mandate unless you make insurance affordable. So someone has to explain it to me. Do you think everybody around here wanted a bill this big?”

In a private meeting in the Capitol just now, a dozen or more House liberals bluntly told Nancy Pelosi that there was no chance that they would vote to pass the Senate bill in its current form — making it all but certain that House Dems won’t opt for this approach, a top House liberal tells me.

“We cannot support the Senate bill — period,” is the message that liberals delivered to the Speaker, Representative Raul Grijalva (D-Arizona) told me in an interview just now.

There are serious concerns with the Senate bill, but they’re things that could be fixed, and it would only take 50 votes in the Senate to do it.  How?

3.5  Have the House Pass the Senate Bill, with a promise that the Senate Will Fix It Later

The Senate has a process for passing bills where opponents aren’t allowed to filibuster- this is called reconciliation.  Votes done through reconciliation only require a 50 vote majority to pass.  Unfortunately the Senate can only use reconciliation to vote on things that are directly related to the federal budget.

For health care, that means that the Senate couldn’t use reconciliation to keep insurance companies from dropping people with pre-existing conditions. But they could use it to fix much the Senate bill.

Creating one national exchange instead of state-based exchanges, adding better subsidies for people with low incomes, changing the Cadillac tax so that it doesn’t hurt middle-class families… all of those things directly affect the federal budget so they could be passed in reconciliation.  Heck, since they would only need 50 votes they could also reintroduce the Medicare buy-in or the public option.

This is the approach that 47 leading health reform experts endorsed in a letter to Congress last week.  Will Congress listen?  Stay tuned…

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