Saturday, February 27, 2010

Post-Summit Health Reform: What a Mess

Everyone agrees our health care system is unsustainable and too often unfair. At the White House health care summit, that was the only common ground between Democrats and Republicans.

Many Americans are either left-brain liberals or right-brain conservatives, with the remainder somewhere in the middle. These left- and right-brain types look at the same facts but come to different conclusions—no matter what.

This past election, something unique occurred. The independents were so frustrated with the Republicans about the Iraq war, the financial meltdown and the spendthrift ways of Congress that they swept liberals into power and apparently gave them a mandate to pass health care reform.

The liberals set about doing just that. No false advertising was involved—they crafted health care bills consistent with their campaign promises. But when conservatives erupted over the legislation last summer, they reminded many of those independent voters about their more-moderate political instincts.

You can read the rest at Kaiser Health News.

Thursday, February 25, 2010

The White House Health Care Summit--Democrats: 0 Republicans: 0 -- The Republicans Win

There is politics and there is policy.

On the policy front what we saw today was the same exchange of the old talking points we have watched for a longtime. No progress was made toward any kind of health care bill. That is no surprise--this was never going to be the place to fashion any kind of compromise.

At the end the President asked the Republicans if it was worth it to spend another month or six weeks trying to come to some agreement. I am glad he did that. I am not optimistic but a "yes" from the Republicans would be the right answer for the country.

On the political front this was a win for Republicans because it was a draw. Granted, they have a very thin health care agenda but all they had to do was hold their own over the course of the day. Politically, if not on policy, they did that. No minds were changed in the room and likely none out in the country. The left will still say get on with passing this, those on right will say kill it, and the majority of critical swing voters will still be concerned that the Democratic bills are going too far too fast in the face of the Great Recession. This is the biggest reason I don't hold out a lot of hope there will be a lot of Republican willingness to come to the table--at least before the November elections.

Ironically, this "bipartisan summit" may have just increased the political cynicism in the country because it went off so predictably.

Most importantly, I don't see the President and the Democratic leadership having accomplished their real goal: To "stiffen the spines" of the moderate Democratic votes they need to ram their health care agenda through using reconciliation rules.

A week from now, I expect the polls will still show only about the same 40% approval rating for the Democratic health care agenda and the moderate Democrats won't have the political cover they need to vote for a reconciliation strategy.

Unless the President gets a positive response from the Republicans on his offer to spend a few weeks trying for a bipartisan bill, it will be on to "Plan B" for the Democrats.

Recent post regarding "Plan B":
Obama to Uneasy Democrats: Please Walk the Plank for Me But If It Doesn't Work Out Here's Plan B

Live Blogging During the Health Care Summit

I am blogging live with a number of others at the NewsHour site.

Obama to Uneasy Democrats: Please Walk the Plank for Me But If It Doesn't Work Out Here's Plan B

The President and the Democratic leadership have been pushing hard on the idea that the Democrats should ram their unpopular health care bill through by using reconciliation--no matter how many Democrats in swing districts lose their jobs over it this November.

But Laura Meckler had an important story in the Wall Street Journal yesterday that is bound to give many of the nervous moderate Democrats some real insecurity about walking that plank for their leader:
President Barack Obama will use a bipartisan summit Thursday to push for sweeping health-care legislation, but if that fails to generate enough support the White House has prepared the outlines of a more modest plan.

His leading alternate approach would provide health insurance to perhaps 15 million Americans, about half what the comprehensive bill would cover, according to two people familiar with the planning.

It would do that by requiring insurance companies to allow people up to 26 years old to stay on their parents' health plans, and by modestly expanding two federal-state health programs, Medicaid and the Children's Health Insurance Program, one person said. The cost to the federal government would be about one-fourth the price tag for the broader effort, which the White House has said would cost about $950 billion over 10 years.

Officials cautioned that no final decisions had been made but said the smaller plan's outlines are in place in case the larger plan fails.
So much for all of this confidence they have the votes to pass their big health care bill.

Monday, February 22, 2010

The President’s Health Care Plan—Not a Game Changer

It is hard to see how the health care plan the President released this morning changes anything.

There is nothing new in it save a health insurance rate regulatory board that is an awkward political proposal at best. What powers would it really have and how would it operate in conjunction with the states already charged with insurance company oversight are just two of the first questions it does not answer.

Fundamentally, what good would insurance rate regulation do if the President’s plan has only tepid cost containment built into it in the first place?

There are not the votes in the House right now to pass this new proposal—or the Senate bill. There are not likely even the votes in the Senate under a 51-vote rule for the President's new plan.

That could change if the President scores a game changer on Thursday at Blair House that finally moves the polls from the 40% approval rating Democrats have had on health care to something over 50%.

But there is nothing in the White House health care proposal that was released this morning that will do that.

If the President thinks he can do it alone on the back of his “communication skills” then all the adulation on the part of his supporters, like his Nobel Peace Prize, has gone to his head.

If Obama wants to score a real game changer on Thursday, when the Republicans call for starting over on health care, I will suggest, the President ought to say, “Deal.” Then call on the Republicans to join he and the Democratic leadership in 60 days of intensive negotiations to get a bipartisan deal. That would really put the Republicans on the spot—and Democrats as well.

If what both sides want is bipartisan health care reform then what they should be agreeing to do is achieve that in a time certain with no preconditions on the table.

Then let’s see who comes to the table in good faith.

The outcome of that exercise, successful or not, would give us a real health care issue to take to the polls in November.

Tuesday, February 9, 2010

Wellpoint and Their “39%” Rate Increase

Wellpoint is getting killed in the press over a “39%” rate increase for their individual health insurance block in California.

HHS Secretary Sebelius has pointed to the Wellpoint individual rate increases demanding an explanation. The President even brought it up in his interview on Sunday. At a time Democrats are fond of calling insurance executives “villains” this story just adds more fuel to the fire.

No less than five reporters have called me in the last day asking me to explain it all.

Falling back on my industry experience it is probable:
  • The “39%” headline is anecdotally the biggest increase the press has found—the average is probably less albeit in the high 20% range.
  • This is likely driven by a combination of increasing medical cost trend, a bad economy, and anti-selection as healthier people disproportionately drop their coverage leaving a sicker group in the pool.
  • The rate increase is probably “defensible,” at least actuarially, based upon the actual experience in that block.
When the day is done this probably says more about why systemic health care reform is so critical than about any one company’s behavior. Last week we heard national health care spending skyrocketed to 17.3% of the economy. This is a real life example of what that macroeconomic statistic really means.

But I am not about to defend Wellpoint having been burned once. A few years ago Lisa Girion of the Los Angeles Times called me to say Wellpoint was retroactively rescinding health insurance policies for inadvertent and immaterial mistakes people had made on their health insurance applications. Falling back on my years of industry experience, I said that couldn’t be true—only the sleazy insurers pulled that sort of thing, Blue Cross of California would never do that.

Of course, Lisa was right and it was the beginning of the California rescission controversy. Not what I would call the best example of public relations at a time the country was debating the industry’s future.

So, what Wellpoint needs to do, and do yesterday, about these increases is to be transparent. Put all of the facts on the table.

Is this another symptom of a health care system run amuck or the actions of a “villainous” insurance company?

Just what is it that Wellpoint is waiting for?

****

Update

Perhaps this is what they were waiting for. Here's what happens when you stand there like a deer in the headlights and let events take over.

From the LA Times today:
Congress opened an investigation Tuesday into Anthem Blue Cross' rate increases in California as President Obama cited the company's premium hikes -- some as high as 39% -- in his bid to pass national healthcare legislation.

The House Committee on Energy and Commerce and its Subcommittee on Oversight and Investigations announced they are examining the increases, which are set to take effect March 1. Anthem is the state's largest for-profit insurer and a unit of Indianapolis health insurance giant Wellpoint Inc.

Committee Chairman Rep. Henry Waxman (D-Beverly Hills) and subcommittee Chairman Rep. Bart Stupak (D-Mich) asked WellPoint's chief executive, Angela F. Braly, to appear at a Feb. 24 hearing of the subcommittee in Washington. They requested that she provide a detailed explanation of the reasons for the rate increases, which have enraged policyholders.

Monday, February 8, 2010

The Health Care Summit—Who’s Gonna Win the Photo-Op?

Getting Democrats and Republicans to constructively engage on health care is the best way to make progress.

To date, the Democrats have blown health care reform once again by being too arrogant in thinking they could just ram their version through.

The Republicans have no health care proposal. Their “black book” list of ideas they handed the President in Baltimore is a collection of second and third tier proposals at best.

So, what is the Blair House meeting about?

Well, I am not optimistic that it will be about real bipartisanship and a good will attempt to change the game.

It will more likely end up being an opportunity for each side to simply continue the petty bickering and once again try to convince a majority of voters their ideas really aren’t so bad.

Obama hopes his health care details will finally appeal to viewers as they realize he holds the only real plan. The problem with that logic is that the Democratic health care reform “well” has already been irretrievably “poisoned”.

The Republicans would like voters to believe their list of ideas will appeal to voters but the reality is that all of the attention they will now get will likely lead to a consensus, particularly among independent observers, that the Republicans, save for their tort reform proposals, aren’t holding any real cards.

I doubt either side will end up winners here.

The Democrats will only reinforce the sense they just don’t get it and Republicans will continue to come across looking like they think voters have forgotten that they were the bums who lost the last two elections.

When the day is done, I will suggest the Republicans are right about this: They all need to start over.

When Baucus and Grassley were in the midst of their Senate Finance negotiations last summer, I said I didn’t see them being able to accomplish anything—not because they couldn’t have. To me, the real problem was that the talks were taking place at the far out edges—left and right. Republicans were being told that bipartisanship was the same thing as capitulation—“Our bill is the only way.”

Republicans, including the Republican members of the “gang of six” in Finance last summer, had and have no plan. But, in Finance, they were quite willing to agree to a far-reaching bill that would have covered tens of millions of those presently uninsured. Things got a lot closer than most people realize. I do think the Democrats can eventually—although not likely in this election year—bring lots of Republicans onboard a new initiative that first takes the current bills off the table.

Real bipartisanship will occur when both sides find common ground in the middle and begin to work their way as far out toward both the left and right as they can and still hold the needed votes. It is about starting in the middle where they agree.

It's my sense that Blair House will be about the same old here’s my plan and if you want to be bipartisan you will come on board with my ideas. It will not be middle-out and it will fail to jumpstart anything for that reason.

Presuming that is the Obama strategy, the best thing the Republicans could do is call for new negotiations with no preconditions and let the Democrats just continue defending the plan that has already been roundly rejected.

They really do have to scrap it all and start over.

Sunday, February 7, 2010

A Way Out of the Health Care Wilderness?

I just came across an interview that I will suggest we all may have missed and perhaps charts the way out of this health care reform wilderness we now seem to be in.

It was on February 2nd and was between the Washington Post’s Ezra Klein and rising Republican House star Paul Ryan (WI).

Ezra asked Ryan about the bipartisan Wyden-Bennett bill as a place for both sides to find common ground. It’s a bill that blends the Democratic notion that everyone needs to be covered sooner rather than later with the Republican idea that we use tax credits to make people better consumers. And, the bill pays for itself on the front-end.

Ryan responded, “I have a lot of respect for that plan. If I were a Democrat, it’s the bill I’d be on. He’s got more mandates than I’d like. But if Ron Wyden and I were in a room, we could hammer out a deal by tomorrow.”

“If Ron Wyden and I were in a room, we could hammer out a deal by tomorrow”?

Well if all you guys need is a room there are plenty of those on Capitol Hill.

I suggest Ron Wyden give Paul Ryan a call and get to it!

Thursday, February 4, 2010

“Plan B” Has Begun

With word that the House is likely to take up the repeal of the health insurance industry anti-trust exemption it is now clear the Democratic leadership has begun Plan B.

It is also clear that this is much more a part of a political Kabuki dance then any substantive effort at even piecemeal health care reform.

The House probably has the votes to pass the repeal. The Senate does not. I doubt that even all of the 59 Senate Democrats will vote for it if and when it does come up on the floor of the Senate.

The base of the Democratic Party, as well as many “progressive” Dems in the House and Senate, are rabidly mad about not being able to ram their health care bill through. That is why you continue to hear all of the talk about reconciliation options even though there is no chance such a scheme would pass either the House or Senate.

But what to do?

The apparent answer is to bring up a few smaller health care bills the Democratic leadership views as popular back home and expect the Republicans will vote against them. Right now health care is a big negative issue for the Dems given the unpopularity of their effort to date. But if they can be seen trying to pass a few smaller measures “we can all agree on” only to be thwarted by Republican opposition their hope is they can turn the table on this issue to their advantage—well before they get to November.

Interesting politics but no hope for any real progress while these games play out.

**********

When the Democrats say they believe they can still pass a health care bill are they bluffing? That's my opinion.

Here is a first rate story from Politico on their options and the dismal political reality each faces.
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