The Senate HELP (Health Education Labor and Pensions) Committee has released the full version of their health reform bill, and pundits are applauding the cost savings scored by CBO.
In a piece published last night, Jonathan Cohn noted:
“CBO says the net outlays are around $600 billion. But that’s based strictly on what’s in the bill. It doesn’t appear to include the cost of the Medicaid expansion…if you want the true cost of reform, you have to account for that Medicaid expansion, too. If my back-of-the-envelope calculations are correct, that puts real price tag somewhere between $1 and $1.3 trillion. Again, that’s a rough guess, based on just a few conversations, although it is is more or less what the experts have predicted all along.
(On the plus side, also outside HELP’s jurisdiction–and thus not part of the CBO estimate–are Medicare/Medicaid savings. Those would offset some of the price tag, even before factoring in new revenue.) ”
That’s good – HELP’s bill is about $400 billion less expensive than the one authored in the Senate Finance Committee.
But it is still far too expensive and does not cover all Americans (leaving about 13 million without coverage, or three percent of citizens/documented workers). And most troubling it does little to reduce health care cost inflation.
The details are here; key provisions include:
– a strong public option (the Community Health Insurance Option) accessed via a health insurance exchange
– maintains current employment-based insurance system
– requires all employers (including ones with >25 workers) that don’t offer heath insurance to pay a $750 annual fee per FTE ($350 per PTE) to help pay workers’ health insurance costs.
(the employer mandate got a big boost yesterday from WalMart’s announcement that they would support a requirement that employers provide insurance for workers)
The public option all but ensures this bill will be voted on along party lines as GOP Senators continue to hold that the public option is a non-starter. There may be a couple of cracks in the united front, as Maine Sen. Olympia Snowe signaled that she may be open to the public option.
The big difference between the trillion dollar plus cost of the Finance bill and the $600 billion for the HELP bill looks to come from the public option. While I’m not sure exactly how the public option would result in a $400 billion differential, the CBO seems confident that it would.
I’d suggest the HELP bill is best characterized as ‘less unaffordable’. I don’t see how we can afford either version; deficits are growing dramatically, revenues are down, and further tinkering with monetary policy looks increasingly dangerous.
The American health care problem is straightforward – we cannot afford our current system, and must reduce the rate of inflation if this country is going to have a hope in hell of competing with other developed countries who spend half what we do on health care.
A third of what we spend on health care is waste. Playing with employer contributions and public plan options amounts to deck-chair rearrangement and nothing more; they do nothing to attack that waste.
Note to Republicans – there’s an opportunity staring you in the face – get serious about health reform by cutting waste instead of meme-ing on about the threat of big government. Alas, their needle seems stuck in that groove.
Jul
2
The real reform may be going on under the radar.
Sen. Jay Rockefeller has introduced a bill, The MedPAC Reform Act of 2009, or S. 1110, that would turn MedPAC — the Medicare Payment Advisory Commission, an independent agency that currently only has an advisory function to Congress on Medicare policy — into the “healthcare Fed” that Daschle and others think will take healthcare out of the hands of Congress, and therefore the lobbyists, and undertake real cost containment.
Under Rockefeller’s plan, MedPAC — which would gain the authority to set Medicare provider reimbursements and become part of the executive branch (while remaining solidly independent) — would produce a rate package every year after considering public input, and submit it to Congress for a simple-majority up-or-down vote. No amendments and no filibusters allowed. Rates would automatically take effect in the absence of a Congressional override.
What I find so cool about S. 1110 is that no one seems to understand what it means. Most Congressmen don’t even know the difference between Medicare and Medicaid (no, I am not exaggerating), and even quite a few well-informed people, have no idea what Rockefeller’s bill means. People can’t oppose what they don’t understand. And it’s terribly un-sexy. A bureaucracy is going to shift from one branch of the government to another. Yawn, right?
But you’re right, Joe. The public-option debate is a dog and pony show. All the introduction of a public option does is change who writes the check, when us health wonks all know that “It’s the costs, stupid.” So if we get a public option (and I still think it’s a chip to be bargained away so we can have guaranteed-issue and community rating), at best we get a one-time savings on 5 percent of admin. We’re still left with an unsustainable cost curve. A fortified MedPAC would have the power to change rein in costs, using evidence-based information rather than lobbying-based information.
See Rockefeller’s boilerplate on the bill here: http://rockefeller.senate.gov/press/record.cfm?id=313334
And here is probably the best analysis you’ll find of it anywhere, from Maggie Mahar: http://takingnote.tcf.org/2009/06/medpac-on-steroids.html
If I could ask for just one thing out of healthcare reform, I’d bargain away everything else except S. 1110, the MedPAC Reform Act of 2009.