Today the Senate Finance Committe (made up of both republicans and democrats) released their long-awaited “compromise” healthcare bill.  Since Obama’s healthcare speech last week (Read or watch the speech here) this seems to be the bill everyone’s been looking to as the hope for the future.  Some of that may be warrented but there’s still a long road ahead.  I’ve provided details and links after the jump

Links

For the full text of the bill (which seems to be formatted in an odd paragraph format) see here:

http://finance.senate.gov/sitepages/leg/LEG%202009/091609%20Americas_Healthy_Future_Act.pdf

For a brief but thorough official 18 page summary see here:

http://finance.senate.gov/press/Bpress/2009press/prb091609.pdf

For the Congressional Budget Office’s always excellent and always non-partisan analysis see here:

http://www.cbo.gov/ftpdocs/105xx/doc10572/09-16-Proposal_SFC_Chairman.pdf

For a summary of the CBO analysis, from their blog see here:

http://cboblog.cbo.gov/?p=354

And for CNN’s description of the bill, which seemed to me to be the most balenced and informative of the major news outlets articles see here:

http://www.cnn.com/2009/POLITICS/09/16/health.care/index.html

Summary

So what does it contain?  Well it’s similar to many of the bills completed in the last few months in that it contains subsidies for those who can’t afford insurance, a mandate for individuals to purchase insurance, new regulations preventing insurance companies from dropping patients mid coverage or denying them insurance due to pre-existing conditions, mechanisms for eliminating waste from medicaid, and it creates a health insurance exchange.  But it’s also clearly designed to appeal to republicans and thus has some important differences from previous bills, specifically:

-It does away with the “public plan” (read more about the public plan) and replaces it with a series of co-ops (read more about healthcare co-ops)

-It includes more detailed provisions against providing funding for illegal immigration, adding stronger enforcement mechanisms

-It discusses abortion explicitly, reinforcing the old capp’s amendment, making clear that no tax dollars would be used to pay for abortions, except in cases of rape, incest, or immediate threat to the life of the mother, as it has always been in medicare and medicaid.  It also allows all state abortion regulations to stay in place

-Encourages tort reform, the details of which are to be decided by individual states

It’s also important to note that the CBO analysis was also released today and on the two big statistics everyone’s looking for the bill does decently well.  Ten years out the CBO predicts that the projected number of uninsured will be reduced from 54 million, to 25 million (pg 16), and the federal deficit will be REDUCED by 49 billion (pg 3)! That second number is significant because while Obama has always maintained that he would not sign a bill that wasn’t at least deficit neutral, this is the first completed bill I’m aware of that actually is.

Reception

The bill was received with optimism by the president, and by democratic leaders of the senate, but some democrats there have expressed concerns, namely Jay Rockefeller, who has come out in open opposition to it, and fellow finance committee member Ron Wyden.  In fact, as of right now, nobody on the Senate Finance committee aside from Baucus has endorsed the bill, and no republicans are committed to support it.  Not even the moderate Republican Olympia Snow who the white house has been working with extensively.  But the markup process will proceed for the next several weeks and it’s quite likely that a few republicans will be on board by that time.  Acquiring the support of at least a few senate republicans is a necessity since democrats do not have the majority necessary there to pass the bill on their own.  But moderating the bill wasn’t motivated purely by a desire to attract republicans, several moderate democrats were also somewhat uncomfortable with some of the provisions of the house bill and their support should also be more reliable with the Baucus Bill.

Unfortunately, widespread republican support on this, or any bill, cannot be expected.  Upon the Senate Finance Committee Bill’s release today, Mitch McConnel (R-Kentucky) released a statement saying “This partisan proposal cuts Medicare by nearly a half-trillion dollars and puts massive new tax burdens on families and small businesses to create yet another thousand-page, trillion-dollar government program.”  With all due respect to Mr McConnell, the first concern about cuts to medicare has already been widely debunked, there are new taxes for very few Americans but I think anyone looking at the numbers would say massive is a gross overstatement, the bill is not a thousand pages but is only 223 pages (almost half of which is just describing existing policies) and the CBO clearly predicts a gross cost of a bit over 800 billion dollars over ten years and a net cost of -49 billion.

But this kind of response was to be expected.  I tend to agree with Obama’s assessment in his speech last week that there are

“those who have made the calculation that it’s better politics to kill this plan than improve it”.

Back in July, Sen. Jim DeMint (R-SC) said in a conference call, “If we’re able to stop Obama on this it will be his Waterloo. It will break him”.  And since that time, I think, many republicans have committed themselves firmly to the idea that killing reform in the hopes that it will destroy Obama and get them more congressional power in 2010 is the best course of action.  The fact that republicans have yet to submit a proposal that is even halfway serious seems to support this theory.  Not that this is new behavior for congress.  It’s unfortunately common for one party to oppose good, moderate proposals simply for strategical reasons, especially when that party is the party out of power.  But I guess I had just hoped that with a healthcare crisis immediately looming, and with this being a subject that deals with the very life and death of American citizens, everyone would be putting forth a good-faith effort.

Anyway, this is important because it means that Democrats can really only hope to pick off a handful of republicans to support this bill, and they risk losing a corresponding number of liberals at the same time.  It’s a difficult task to balance.  And it’s beginning to upset liberals, Like Rockefeller and Wyden, who feel that Democrats “are being asked to support a bipartisan bill that doesn’t have bipartisan support.”  The compromise without the cover.  This same concern was present back in Stimulus days when extensive bipartisan talks resulted in a strikingly conservative final bill (with the final product being 42% tax cuts and 58% spending, nearly equaling Rush Limbaugh’s stimulus proposal in the WSJ of 48% tax cuts and 52% spending), but it still passed on a nearly party-line vote.

In the end will liberals say, “enough is enough” and push through a bill using a public plan with no republican support?  Will they use the controversial budget reconciliation method to do it?  Or will they stay on board with a compromise bill as it continues to be modified to meet republican needs to draw those precious few to their side?  Time will tell.  Personally, as much as I think a public plan would be a better choice, I think budget reconciliation is the wrong way to go at this point.  I think Americans prefer a bi-partisan bill, even if that bi-partisanship amounts to 57 democrats and 3 republicans.  And while I’ll reserve my final judgement for when mark-ups are finished, I think baucus’s bill looks decent so far.  Frankly, if it weren’t for the possibility of securing something “better” I think democrats would be thrilled with it.  I hope the liberal democrats realize that it would be silly if we took 0 steps forward because people were upset about taking 3 steps forward instead of 4.

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As the battle for healthcare reform rages on, many of the myths that I once expected to quietly die have instead become stronger and more entrenched. In particular, the degree of misunderstanding surrounding the “public plan” portion of healthcare reform proposals continues to astound me, both on the Right and the Left. I addressed some of those concerns in a post last week entitled “All About the Public Plan” and I think some of the misconceptions I discussed in that article have pertinence to the discussion of alternate reform mechanisms as well. Especially in regards to Co-ops, I think misunderstandings on the part of the Left have hobbled any chance at real discussion of this viable public plan alternative. So hopefully this will help clear some things up:

What is the Healthcare Co-op?

First off, it’s important to know that when we’re talking about co-ops, we’re not talking about the local health insurance co-operatives found in states like Wisconsin. CNN recently wrote an entire article while apparently operating under this misunderstanding, and pretty much all of the statements deriding co-ops that have come from Gov. Tom Pawlenty recently also fall into this category. We are talking about a single, national co-operative or small group of cooperatives, given special permission to compete nationally across state lines to provide competition to the overly-consolidated private health insurance markets. To fully understand this type of co-op, you should first go back and read “All About the Public Plan” if you haven’t already. Seriously, you won’t understand this article without it. I’ll wait… Okay, are you done? Do you understand what the Public Plan is? The Co-op is exactly the same, except administered by elected board members rather than government appointed officials. Literally, that is the only difference I have been able to come up with.

Disadvantages of the

Healthcare Co-op

Now I should clarify that the Co-op idea has the potential to be exactly the same as public plan proposals, and would likely function almost exactly like the public plan, but since no bill has actually been written up with a co-op component, we can’t say for sure yet exactly what it would be like. Sen. Kent Conrad, one of the first to propose co-ops in the context of the current healthcare reform debate has said that they could operate on a state level, a regional level, or a national level. It’s a national healthcare co-op that would function like a public plan. State or regional co-ops would probably be beneficial but would not have nearly the same strength in bargaining power as a national co-op or a public plan and thus would be a less formidable competitor to private insurers. So this remaining ambiguity is certainly one disadvantage to dumping the public option in favor of a co-op.

The only other reasonable argument I’ve heard against the healthcare co-op is that since administrators would not be appointed by the government, it’s not a guarantee that the co-op would remain dedicated to its original mission of lowering America’s insurance premiums. There’s not much to prevent the administrators of the co-op from pursuing the interests of their organization over those of the American people should they ever come into conflict. The primary situation in which that might occur would be if the co-op became too successful and threatened the fabric of our private insurance industry. In that situation, those not participating in the healthcare co-op would not have any direct input into its operations, while those who are members would have only an incentive to increase the size of their organization to grow their risk pool. Of course we’d still have some control over the co-op through legislation, but as we’ve seen that can be a slow and arduous process. In other words, a government administered program would theoretically give the American people (through our elected officials) somewhat more direct and time-sensitive control over how the plan operates.

Advantages of the

Healthcare Co-op

While I’ve stated several times in the past that I believe it to be very unlikely that a public plan would bankrupt private industry, it’s impossible to say that it could never happen. With that in mind a state or regionally based healthcare co-op plan would essentially eliminate that risk, which should ease the minds of conservative reform opponents.

But I think the primary advantage is political. It’s clear that, due to unfortunate naming, insurance company smear tactics, and the white house’s perplexing decision to sit back and let the wings define the debate for the first several months, the public plan has become a very, very controversial proposal. To many conservatives it has become synonymous with “Socialized medicine” and a “government takeover of healthcare”. If a strong, national, healthcare co-op would give us nearly the same result without the controversy then it seems like the logical choice.

I know some are frustrated with that option because they see it as a sign of giving in to misinformation. Yes it’s true that the Public plan has been unfairly smeared and is almost universally misunderstood. Yes it’s true that if it were abandoned, healthcare reform opponents would trumpet from the hilltops that they were clearly right all along and that their protests and screaming had succeeded in averting socialism. The liars would be gratified and the screamers would not learn their lessons, and that would be frustrating. But there will always be liars and there will always be screamers. One win or loss on one item of policy will not change that. Are we willing to accept no reform at all in place of a healthcare system with a strong national co-op, or even strong regional co-ops, for reasons that essentially amount to pride?

Unfortunately I’ve found that this is a frequent occurance in politics. Idealogues often get their way because they’re loud and more than willing to lie their faces off. But if anything is going to be accomplished then somebody has to compromise, and it won’t be them. And in the end, I think it’s less about who believes they won or lost and more about the end result for the American people. I think the most noble policy makers are those who pragmatically seek the best result for their constituents. They’re rarely anyone’s hero, they don’t often make the news, and they don’t have a rabid fan base since they’re not out there boldly and defiantly waving some ideological banner. But they’re the one’s we can thank for most of the positive change that has actually been enacted over the years.

Conclusion

So is the co-op the way to go? If that’s what we have to do to get a bill passed, then I say yes. And all signs from the Senate say that the public plan is a no-go there. I’m all in favor of a public plan, I think it’s the superior choice. But not by so much that healthcare reform is worthless without it. I think it’s wise to push the public plan as much as we can and fight the misunderstanding that’s out there. But when it becomes clear that it will not succeed, we need to accept the co-op and move forward as quickly as possible, before the next smear campaign has time to gain momentum. I really liked what Pres. Obama had to say about this subject in his healthcare address last week actually. and I’ll let his words close out this article.

“It’s worth noting that a strong majority of Americans still favor a public insurance option of the sort I’ve proposed tonight. But its impact shouldn’t be exaggerated – by the left, the right, or the media. It is only one part of my plan, and should not be used as a handy excuse for the usual Washington ideological battles. To my progressive friends, I would remind you that for decades, the driving idea behind reform has been to end insurance company abuses and make coverage affordable for those without it. The public option is only a means to that end – and we should remain open to other ideas that accomplish our ultimate goal. And to my Republican friends, I say that rather than making wild claims about a government takeover of health care, we should work together to address any legitimate concerns you may have.

For example, some have suggested that that the public option go into effect only in those markets where insurance companies are not providing affordable policies. Others propose a co-op or another non-profit entity to administer the plan. These are all constructive ideas worth exploring. But I will not back down on the basic principle that if Americans can’t find affordable coverage, we will provide you with a choice. And I will make sure that no government bureaucrat or insurance company bureaucrat gets between you and the care that you need.”

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