Health Reform Clears Finance
Real-time reporting from the Senate finance committee vote on health reform.
Click here for a guide to following the health care reform story online.
2:50 p.m.: At long last, a roll call vote is taken on final committee passage.All the Democrats and Republican Sen. Olympia Snowe vote aye. The other Republicans vote no. The final tally is 14-9.
The single payer advocates rise as soon as the vote is over to shout that it isn't enough. No one throws them out because it's over.
2:45 p.m.: Time for Rocky 2, the second half of Sen. Rockefeller's statement. He says he will vote for the bill "because I think that in spite of a lot of problems that I have with it, I think that the dialog now is for real." But "I do think the insurance industry gets too sweet a deal. They get half the money and yet no real responsibility to put it into medical care." He will fight on the Senate floor to force health insurers to spend at least 85 percent of what they take in on health care.
"I do think a public option is necessary," he says, because "the insurance industry does not know how to stop itself." He compares them to a runaway train. The co-ops created in the bill as an alternative to a public option "won't slow the train down."
Rockefeller says he and his wife dined last night with six or seven hospital administrators. "They cried out to me to say why do you let us keep on doing what we have to do." He replied: "Why is it our responsibility to stop you from doing what you're doing?" They answered: "Because you give us the opportunity to do that."
2:05 p.m.: Sen. Chuck Schumer, D-N.Y., says, "To cut costs we must have a public option in the final bill." Amen, brother. He also says he will work on the Senate floor to alter the tax on "Cadillac" health insurance plans to ensure it contains "appropriate safeguards for the middle class" and for people in dangerous professions.
Sen. Ron Wyden, D-Ore., says, "Health reform is like an ecosystem. The organisms are hardly independent ... you cannot do health reform piecemeal. You've got to find a way to fit all the pieces together." He then says, "I do have an enduring concern that more has to be done to fit the pieces together." He says he will continue to try to expand access to the health insurance exchange created under the bill. I think that means he's voting yes.
It occurs to me that I haven't been reporting much on what the Republicans are saying. I suppose that's because I've been tuning them out. I've heard it all before and besides, it's a foregone conclusion that Snowe is the only Senate Republican whose vote Democrats have even a chance of securing on the Senate floor. (When she stated earlier that she would vote for the bill in committee, she made clear that didn't mean she'd vote for final passage.) For the record, my favorite committee Republican is Sen. John Kyl, R-Ariz. This is a little perverse, I know, because he is the committee's most partisan (he's minority whip) and also its most ideological opponent of health reform. He's also the member who's been made to look like the biggest fool during these proceedings (by Sen. Debbie Stabenow). But he usually makes his arguments pithily, and he appears to have a sense of humor.
1:20 p.m.: Today is the 51st birthday of Sen. Maria Cantwell, D-Wash. The committee pauses to sing "Happy Birthday," just as it serenaded Sen. Blanche Lincoln a few weeks ago on her birthday. In her statement in support of the bill, Cantwell challenges its Republican opponents: "I'd like to see more comprehensive proposals from the other side about controlling the explosive costs of Medicare." C'mon, fellas. It's her birthday!
1 p.m.: Sen. Olympia Snowe stops singing "Keep a-Knockin' (But You Can't Come In)" long enough to state unambiguously that she will vote for the bill in committee. "But I do it with reservations. … My vote today is my vote today. It doesn't forecast what my vote will be tomorrow." While "I have shared my fellow Republicans' concerns" about the bill, "when history calls, history calls."
Thank goodness nobody took me up on my $5 bet saying she was a no.
12:45 p.m.: The vote of Sen. Jay Rockefeller, D-W.Va., has been in some doubt (or rather, it was until the health insurers pissed into the punch bowl this past weekend; see earlier item, below). He does not show his hand in what he says is the first half of his statement. He will read the second half later. "The bill before us still falls short of what people need and what people expect from us," Rockefeller says. "It's a step in the right direction but it is not enough." That sounds like a man who is going to vote no. More likely, Rockefeller will state his reluctant support in Part 2.
12:25 p.m.: The vote of Sen. Blanche Lincoln, D-Ark., has been in mild doubt. Now she says: "This is the future and it is going to take us time and devotion." The bill is "not perfect," she says, but she is "very encouraged" by the favorable score from the Congressional Budget Office. "The cost of doing nothing is too high." The bill is "a great step in the right direction." So ... that's a yes vote. But "my support today" does not guarantee "my support for the final product."
12:10 p.m.: The vote of Sen. Robert Menendez, D-N.J., was never really in doubt, but for the record he says he will vote yes.
There's a handful of single-payer advocates in the audience. Will they disrupt the proceedings and get thrown out, as they did during earlier committee hearings? So far all they're doing is holding up signs. One says "SINGLE PAYER NOW!" Another says "Half Measures are NOT ENOUGH." As always, they have a point.
11:27 a.m.: The senators keep addressing Elmendorf as "Dr." Elmendorf in deference to his Harvard Ph.d. in economics. The "doctor"-ing of people who are not medical doctors is an annoying convention under any circumstance. Under this one, though, doesn't it give Elmendorf an added authority that he doesn't really deserve? It hangs a figurative stethoscope around his neck.
11 a.m.: Here we go again. The Senate finance committee's final vote on health reform will be taken today. First the senators want to quiz Douglas Elmendorf, director of the Congressional Budget Office. One of the things they're curious about is a study released this weekend by the health insurers alleging that the bill will cause health premiums to skyrocket. Sen. Jay Rockefeller, D-W.Va., says it's a waste of time to worry about the financial health of "the profit-driven health insurance companies" because they've "been laughing all the way to the bank while people suffer." Rockefeller asks Elmendorf whether it's a given that insurers will pass new costs on to their policyholders. Elmendorf answers that while it's impossible to know for sure, that is what tends to happen.
(Price Waterhouse Coopers, which did the insurers' study, issued a statement last night acknowledging that its analysis did not include all provisions in the bill: "We have not estimated the impact of the new subsidies on the net insurance cost to households. Also, if other provisions in health care reform are successful in lowering costs over the long term, those improvements would offset some of the impacts we have estimated." Sen. John Kerry, D-Mass., goes to town on this.)
Rockefeller's vote was previously in some doubt, largely because the health care reform bill lacks a public option. I can't help suspecting that the health insurers—who, as Rockefeller has noted more than once, will receive a half-trillion dollars of taxpayer money as a result of health reform—waged their eleventh-hour assault in the spirit of Br'er Rabbit begging not to be thrown into the briar patch. I think there can be little question now that Rockefeller and Sen. Ron Wyden, D-Ore., who both had misgivings from the left, will vote for the bill. On the other hand, the insurers' bellyaching may have put the vote of Sen. Blanche Lincoln, D-Ark., in question.
Shortly before the hearings began the swing-voting Sen. Olympia ("Fundamentally Flarred") Snowe, R-Maine, was swarmed by reporters (not me; I was fiddling with my laptop to get an Internet connection). Apparently, she said that after much thought she … remains undecided. Five bucks says she'll vote no, but that the bill will clear committee anyway.
Oct. 2, 2009
11:10 a.m.: Your faithful correspondent left his desk immediately after filing the previous blog item so he could attend back-to-school night. Three hours later, he tuned in on the car radio while driving home to the Virginia suburbs, feeling a bit like Elliot Gould in The Long Goodbye, who can't go anywhere—his car a restaurant, a supermarket—without hearing some version of that film's theme music. Then he—that is, I—went to bed. The finance committee, meanwhile, kept on working and finally finished amending the bill at what is variously described as 2:08 a.m. (Washington Post), 2:15 a.m. (New York Times), and 2:18 a.m. (CNN). The bill now goes to the Congressional Budget Office, which apparently will deliver an estimate of the bill's cost before a final committee vote next week on the whole ball of wax. (I earlier reported that CBO would not have time to do and that the estimate would come instead from the finance committee staff.) [Update, Oct. 3: A full text of the amended bill has been posted online.]
Don't miss Uwe Reinhardt's online New York Times column today about health insurance "medical loss ratios" that have Sen. Rockefeller—but not, alas, the rest of the Senate finance committee—in a (justifiable) swivet. (See previous item.)
Here endeth the finance markup blog.
Oct. 1, 2009
5:52 p.m.: Sen. Rockefeller introduces an amendment requiring all insurers participating in the government-created health insurance exchange to demonstrate (to the secretary of health and human services) a so-called "medical loss ratio" of 85 percent. That means the insurers must show that they spend at least 85 percent of the money they collect in premiums on medical care. I can't find Rockefeller's amendment on the list made public last week, but a similar amendment was introduced by Sen. Ron Wyden.
I love Rockefeller's anger against the health insurance companies. It doesn't seem worked up for the cameras, because it isn't remotely theatrical. His attitude seems to be: I have seen up close how rich people treat everybody else in this country, and I think it stinks. At one point he says he can understand why insurers would want to pull a fast one on their policyholders: "I had a great-grandfather who was pretty good at that." The 85 percent he demands "is only 2 percent less than what the insurance industry claims they're already doing." Later he repeats that and says: "I don't believe that."
Grassley denounces the amendment as "an administrative nightmare." He also says there's some question whether medical loss ratios are a proxy for quality. Rockefeller answers: "Eighty-five percent is already the law in California. I don't see insurers fleeing there." Amen.
But the amendment can't pass. Rockefeller doesn't have a Congressional Budget Office estimate on its cost. Even if he did, he probably wouldn't have the votes. Rockefeller withdraws it.
4:50 p.m.: The Cantwell amendment, which stirred much excitement when it passed an hour ago, was based on her state's Washington Basic Health program, a so-called Medicaid managed care program. This innovation from the other Washington is described by David Herszenhorn in the other Prescriptions column (in the New York Times; Slate used the rubric first, incidentally).
4:42 p.m.: It's affordability time.Sen. Charles Schumer, D-N.Y., introduces an amendment exempting from the individual mandate (i.e., the bill's requirement that everyone obtain health insurance) people for whom premiums would represent more than 8 percent of income (No. 262). Once again, Republicans are dismayed by the lack of a Congressional Budget Office estimate. On the one hand, the exemption prevents the protected group from joining the health insurance exchange. That raises the bill's cost. On the other hand, it prevents the protected group from collecting a federal subsidy to purchase insurance on the exchange. That lowers the bill's cost. Schumer points out that CBO said an earlier amendment of his with a 5 percent income threshold would save $30 billion. Sen. Baucus announces that at 4:26 p.m. he received an e-mail from CBO saying "it's probably it's a saver."
The bill is set aside for further discussion.
4:07 p.m.: Sen. Maria Cantwell, D-Wash., introduces an amendment giving states the option to take individuals earning between 133 percent and 200 percent of the federal poverty level (currently about $22,000 for a family of four) out of the health insurance exchange and instead dedicate federal funds to the purchase of private health insurance for this group (No. 296). In an interview earlier today with Ezra Klein of the Washington Post, Cantwell said this would cover "about 75 percent of the uninsured." Cantwell's amendment has created a great deal of excitement among finance committee Democrats, in part because (Sen. Baucus says) it's "structured in such a way as to save money." I don't understand how, but apparently it has something to do with the states being able to negotiate rates directly with doctors, hospitals, and drug companies. The Cantwell amendment seems to be either a smart fallback to the public option or a shrewd con job. I can't tell which, and neither can committee Republicans, who are reduced to complaining that it hasn't been scored by the Congressional Budget Office. The Democrats, meanwhile, seem ready to parade Catnwell around Hart 216 in a sedan chair. Sen. Rockefeller, the committee's most steadfast defender of the poor, asks to be a co-sponsor. Baucus: "People in Washington [state] should be very proud of you for what you're doing here."
The amendment passes, 12-11. All the Democrats vote for it except Sen. Blanche Lincoln. All the Republicans vote against, including Sen. Olympia Snowe, R-Maine.
1 p.m.: Lunchtime. The committee's on break until 3 p.m. Use that time to read my Slate colleague June Thomas's excellent series "The American Way of Dentistry," which begins with a riveting description of the British-born Thomas' gruesome clinical history and proceeds to describe a medical and social crisis that's hiding in plain sight. Don't miss the accompanying slide show about dentists' image problem in the movies.
12: 30 p.m.: Sen. Orrin Hatch, R-Utah, introduces an amendment creating an expedited procedure for court challenge to health reform's constitutionality. I can't find this amendment among the 47 that Hatch submitted prior to markup. Hatch says health reform is vulnerable to constitutional challenge on two points.
The first concerns "transition relief" that the chairman's mark grants 17 states from the proposed tax on so-called "Cadillac" (i.e., unusually generous) health insurance plans. (In retaliation, Hatch has proposed an amendment granting the same relief to "any state with a name that begins with the letter 'U.' ") Hatch says any tax "that differs by state … raises an obvious constitutional question."
Hatch's second point is more familiar and concerns the individual mandate, which would require all Americans to obtain health insurance. As I have written previously ("Can Obama Make You Buy Health Insurance?"), there's a rough consensus that Congress has the power to do this under the Constitution's commerce clause and/or its constitutional power to levy taxes. But Hatch says the individual mandate is different from other activities covered under the commerce clause because "rather than regulate what people have chosen to do it would require them to do something they would not have chosen to do," i.e., purchase health insurance. "If we have the power to simply order Americans to buy certain products, why did we need a Cash for Clunkers program?" The purpose of that program, Hatch points out, was to get Americans to own more environmentally sound automobiles. Under the logic of health reform, Congress could instead "simply require Americans to buy certain cars."
In answer to the taxation argument, Hatch says that the penalty levied for not obtaining health insurance is not like other taxes because it is levied "not when there has been the sale of something but when there has been no sale of anything at all."
Chairman Baucus rules the amendment out of order on the grounds that the finance committee lacks jurisdiction over the courts. In effect, he says: Hey, professor, tell it to the judiciary committee.
10:40 a.m.: Here's a tip for those following the proceedings by video stream (as I am today, from Slate's D.C. office). If you log onto the finance committee's stream, you have to stare at a picture of the allegorical statue of Freedom that sits atop the Capitol until moments before Sen. Max Baucus bangs the gavel to begin. If you log onto C-SPAN's stream, you get to watch the crowd, cinéma vérité style.
Baucus opens the proceedings by noting the committee has considered 107 of the 564 amendments proposed by committee members. That isn't as bad as it sounds because, as my Slate colleague Christopher Beam has pointed out ("Markup Hell"), the committee won't consider all of them. Baucus says the committee may finish "late today." If not, "certainly we'll be finished by tomorrow." A final vote on the overall bill, however, will have to wait until next week while the committee staff calculates the bill's cost. Ordinarily the Congressional Budget Office would do this, but the CBO has said it can't produce an estimate that quickly.
Baucus has expressed confidence that the bill will pass the finance committee, but that isn't a foregone conclusion. It seems increasingly unlikely that the swing-voting Sen. Olympia Snowe, R-Maine, will vote for the bill in committee, and not all committee Democrats may support it. Mary Agnes Carey and Eric Pianin have posted a smart committee whip count on Kaiser Health News. They classify as Democratic "wild cards" Oregon's Ron Wyden, Florida's Bill Nelson, and Arkansas' Blanche Lincoln. Assuming the Republicans vote together, losing any two of these Democrats will kill the bill.
Sept. 30, 2009
4:55 p.m.: Back from volleyball. Our team played a better game, but their team won.
One problem that Sen. Baucus' chairman's mark sidesteps involves Medicare's sustainable growth formula, which annually dictates deep automatic cuts in doctor fees that Congress, since 2002, has chosen to override. Sen. John Cornyn, R-Texas, introduces an amendment (No. 166) that would toss out the SGR and start over again. Committee Democrats make apologetic noises about their failure to address the problem but mumble that they lack sufficient offsetting revenue and don't like the cuts Cornyn proposes. The amendment fails.
Sen. Orrin Hatch, R-Utah, introduces an amendment (No. 507) requiring that the bill's new fees levied on drug companies, medical device companies, health insurers, and clinical labs not be implemented until the General Accountability Office has certified that they won't be passed through to consumers. Sen. Baucus says that's unconstitutional because the GAO is an arm of Congress. OK, then, Hatch replies, let the Treasury do the certifying instead. Baucus answers that there's no precise way to calculate whether the costs will be passed through. That's true. But it's also almost certainly true that the costs will be passed through. The amendment fails.
The committee adjourns until early evening.
I'm grateful to the New Republic's Suzy Khimmand the Washington Independent's Mike Lillisfor informing me that last night, while my attention was focused elsewhere, Sens. Kent Conrad and Blanche Lincoln gave the Republicans the two votes necessary to reinstate abstinence-only education, which President Obama eliminated in his first budget, at a cost of $50 million annually. Abstinence-only education has been shown not to work, but anyone who votes against it risks being tagged a degenerate by twice-born Christians. That's inconvenient when you're in a tight re-election race in a Southern state. Plus, it isn't especially pleasant to spend your birthday being denounced by Promise Keepers (see previous entry).
The amendment was Sen. Hatch's (No. 351). He's one to talk about abstinence! Hatch has proposed 47 amendmentsto the chairman's mark. (My personal favorite is No. 497: "Add transition relief for the excise tax on high cost insurance plans for any State with a name that begins with the letter 'U.' ") Is there a more promiscuous legislator in Congress than this madly indulgent Mormon?
12: 45 p.m.: Grassley's photo-ID amendment fails on a party-line vote. Sen. Baucus then announces a noteworthy "actuarial event": Today is the birthday of Sen. Blanche Lincoln, D-Ark. Baucus and Grassley lead a charmingly off-key singing of "Happy Birthday" ("Happy birthday, dear Blaaaaanche ..."). To maintain senatorial comity, the chairman and ranking member do not mention the lady's age. She is 49 today.
Then we break for lunch. I'm skipping out this afternoon to watch my daughter play middle-school volleyball. Don't tell my boss.
12:35 p.m.: More stupid grandstanding. Sen. Grassley introduces an amendment requiring presentation of photo ID when applying for health benefits under Medicaid or the State Children's Health Insurance Program to ensure that illegal immigrants absolutely, positively won't receive health insurance from the federal government (No. 333). Sen. Robert Menendez, D-N.J., points out that if you're too poor to pay for your own health insurance there's a decent chance you're also too poor to own a car, in which case you may not have a valid photo ID, which in most cases means a driver's license. You already have to present a Social Security number and a birth certificate when applying for these benefits. Sen. Jeff Bingaman, D-N.M., calls it "a solution without a problem."
Perhaps Grassley and Hatch could blend their amendments to require any Medicaid recipient who wants an abortion to present a photo ID of the fetus.
11 a.m.: I'm back at the office today, watching via the finance committee's video stream. We begin with Sen. Kerry discussing his amendment reducing the committee's tax on so-called "Cadillac plans" (No. 469), i.e., unusually generous health insurance plans. He then withdraws it, saying he is still pondering how to pay for it. Among other things, Kerry wants to exempt plans resulting from existing collective bargaining agreements.
Anti-abortion demonstrators took over a small park near the Hart Senate office building the other day to protest the health reform bill, displaying the subtlety for which their movement is famous: the waving of disgusting photographs, angry chants about killing, and, for good measure, a hooded, scythe-bearing figure shouting into a megaphone, Vincent Price-style, "I'm pro-choice! Bring all your babies to me! Mwahahahahaha!" The eagerness of the pro-life movement to use abortion as a pretext to oppose the entire health reform bill is a nice illustration of Rep. Barney Frank's famous observation that this group believes life begins at conception and ends at birth.
Some might wonder whether Hatch's amendment was mooted by yesterday's vote against creation of a public option. If we aren't going to get a government agency to provide health insurance, how could public money pay for abortions? Answer: only in the most attenuated, logic-torturing way.
The health reform bill already prohibits the government from including abortion coverage among the benefits that insurers must include in health plans sold on the newly created government health insurance exchange. The worry is that government subsidies to private insurance premiums might somehow end up paying for abortions because participating private insurers may have decided on their own to cover abortions. (About half of all employer-provided policies do.) Even this dire possibility is prohibited under the bill's current language, because insurers are required to segregate public subsidies from the money they use to pay for abortions. As the New Republic's Jonathan Cohn has pointed out, a similar idiotic requirement is currently imposed on the Medicaid program, which is funded jointly by the federal government (long prohibited from spending money on abortions) and states (which aren't). Hatch even goes so far as to suggest the prohibition should be applied to federal subsidies for reinsurance or risk adjustment payments, taking things yet another step away from reality. To include abortion coverage, a health insurer participating in the health exchange would require the policyholder to pay an additional fee. This, Sen. Baucus points out, discriminates against women.
Sen. Debbie Stabenow, D-Mich., whom I'm liking better and better, says, "As a woman I find it offensive" that Hatch's provision could have the effect of prohibiting anyone buying through the exchange from acquiring abortion coverage, even if that person wasn't receiving a federal subsidy. "This is an unprecedented restriction on people who pay for their own health care insurance," she says. (For a different take, see my Slate colleague William Saletan's "Human Nature" column "Keep Your Subsidies Off My Ovaries.")
The amendment fails, 10-13. The swing-voting Republican Sen. Olympia Snowe votes against; Democratic Sen. Kent Conrad votes for.
Sept. 29, 2009
3:50 p.m.: The Schumer public-option amendment fails, 13-10. All Republicans vote no, along with three Democrats: Kent Conrad of North Dakota, Max Baucus of Montana, and Blanche Lincoln of Arkansas. Schumer's compromise version wins over two Democrats who voted against the Rockefeller version: Bill Nelson of Florida and Tom Carper of Delaware.
If health reform is to include a public option, it will have to be added after the finance committee completes its markup.
3:32 p.m.: Sen. Charles Grassley, R-Iowa, says he opposes the Schumer amendment because the history of Medicare shows that the government's promises not to control costs by setting doctor's fees can't be trusted. "Congress could easily undo" safeguards in Schumer's bill. It might decide that it wanted to run the public option more thriftily! Others would call this laudable fiscal conservatism. Grassley calls it reprehensible "price-fixing."
The GOP can't decide whether the public option would cost taxpayers a fortune because medical spending is so out of control or whether it would do far too much to bring medical spending under control through intolerable limits on doctors and hospital fees.
Sen. Rockefeller said it earlier today. I'll say it again: Doctors overwhelmingly support the public option.
3:15 p.m.: Sen. Schumer introduces his "level playing field" version of the public option (No. 260), which, unlike Rockefeller's, does not tie initial doctor and hospital payments to Medicare rates. Schumer emphasizes that it will be self-sustaining: "There will not be another infusion of federal dollars into the private option if it cannot make it the first time around." The New York senator acknowledges, indirectly, that he expects his amendment to fail. But "we are going to keep at this and at this and at this until we succeed, because we believe in it so strongly. … This isn't the first word on the public option and it won't be the last."
2:50 p.m.: Sen. Rockefeller's public option amendment fails 15-8. All the Republicans vote no, along with five Democrats: Sen. Max Baucus of Montana, Sen. Kent Conrad of North Dakota, Sen. Tom Carper of Delaware, Sen. Blanche Lincoln of Arkansas, and Sen. Bill Nelson of Florida.
2:45 p.m.: Sen. John Kerry, D-Mass., points out that the public option would not be an entitlement program like Medicare or Medicaid. An entitlement program guarantees government benefits to be received automatically; once benefit levels are set, no congressional appropriation is necessary. The public option would not be an entitlement because it would require an initial appropriation. Thereafter it would charge premiums and would be self-sustaining.
No sooner is Kerry done than Sen. John Cornyn, R-Texas, starts droning on about how it makes no sense "adding a new entitlement program on top of the ones we have now."
2:15 p.m.: Sen. Jim Bunning, R-Ky., just showed us a chart demonstrating the comparatively paltry profits enjoyed by the insurance industry (about 3 percent) compared with the beer industry (about 18 percent) and various other industries. That's true; Princeton economist Uwe Reinhardt made a similar point in a recent online New York Times column. But I don't see how that's an argument in favor of private health insurance. If private health insurers can barely eke out a profit while engaging in barbaric bottom-line practices like rescission and operating as near-monopolies, that suggests to me that we shouldn't count on the private sector to supply decent health care. Ergo, we need a public option.
1 p.m.: Sen. Ensign now makes an argument borrowed from the famously dishonest health reform opponent Betsy "Death Panels" McCaughey: The United States kicks socialist Europe's ass on cancer survival rates! I thought I put this urban myth to rest two years ago ("Would Universal Health Care Wreck Cancer Treatment?"). The United States does not kick socialist Europe's ass on cancer survival. It kicks the United Kingdom's ass. The rest of Western Europe does extremely well on cancer survival. Eastern Europe, not so much. But that's because a huge predictor of cancer survival rates is, as you might expect, the prosperity of the country where you receive treatment. Why the prosperous United Kingdom is an exception is a matter for concern about the United Kingdom. It is not a matter for concern about socialized medicine, or single-payer, or any of the other statist variations that Congress isn't considering anyway. The public option doesn't come close.
Debbie Stabenow, D-Mich., sort of makes this point. Then we break for lunch.
12:35 p.m.: While I was writing the blog post below, I became vaguely aware that Sen. Schumer was delivering a wonderfully cogent defense of the public option. He did this on behalf of Rockefeller's amendment, not his own. Sadly, I didn't take notes. I'll try to retrieve it later.
12: 20 p.m.: Sen. Kent Conrad, D-N.D., sings an aria about his preferred alternative to a public option, which he calls "the public interest option." It is what Baucus has substituted for a public option in his chairman's mark. "It's a useful exercise to look around the world," Conrad says, setting the stage for yet another cockeyed summary of T.R. Reid's excellent new book, The Healing of America.
Blue charts are produced.
In one column we see "the British model," i.e., straight-up socialized medicine. In the second column we see Sen. Conrad's preferred option, adopted in France and Germany and Japan. (Reid calls it the Bismarck model, but Conrad wisely eschews that pointy-headed terminology.) The Bismarck model is "not a government-run system," Conrad says, but rather is paid for by private employers and the government and run through "not-for-profit insurers." Correct.
More blue charts. France and Japan rank No. 1 and No. 2 in preventable deaths. The U.S. ranks 19th. The implication is that if the United States adopted Conrad's public interest option, we would nose our way up in the rankings. Also correct.
Where Conrad goes off track is in believing the Bismarck model bears much resemblance to his public interest option. Conrad would encourage creation of nonprofit co-ops to compete with private, for-profit insurers. But virtually all the Bismarck countries forbid insurers in most instances from providing basic health care on a for-profit basis. (The sole exception I know of is Holland, but Holland's health system also includes a huge straight-up socialized medicine component. Also, in Holland market economics have not done much to control costs.)
Get back to us, Sen. Conrad, when you're ready to outlaw for-profit health insurance for the most essential health benefits.
Sen. John Ensign, R-Nev., objects to Conrad's preventable-deaths comparison because it doesn't take into account that the United States has a lot more deaths than European countries do from traffic accidents and gunshot wounds. Does this conservative legislator know he's making an argument in favor of gun control and a return to the 55 mph speed limit? No, he probably doesn't
11:37 a.m.: I have noted before that Sen. Rockefeller is the conscience of health reform. Throughout this markup, he's had his eye on the ball more than any other finance committee member—including the policy wonks' favorite, Sen. Ron Wyden, D-Ore. But he is not a great orator, and he makes his case in fits and starts.
"I think Adam Smith would have cooked up this amendment if I hadn't," he says, by way of underscoring that the public option is meant to spur competition. Too cerebral! "People are nervous about it because the word public is in it," he says. Too late—a public option is what it's called. "More than half the cost of the bill goes to subsidizing private insurance." Good line!—one we'll probably hear again. It's also a great opening for stirring oration that never materializes. "You want to bet the farm on the idea that insurance companies are going to change their behavior … their whole livelihood is based on getting around the rules." Better.
Sen. Charles Grassley, R-Iowa, a much worse orator than Rockefeller, gives a weak rebuttal. He starts with a long, tedious answer to White House aides who said this past summer that he never raised his objection to a public option in private White House meetings. Who freakin' cares? He calls the public option "a slow walk toward government-controlled, single payer health care. … [A] government-run plan will ultimately force private insurers out of business." If so, what does that say about the ability of private health insurers to compete? Is this a bill to improve access to health care or is it a bill to rescue private health insurance?
Things get livelier when Schumer starts quizzing Grassley. The following is somewhat condensed.
Schumer: "Do you think Medicare's a good program?"
Grassley: "I think that Medicare is part of the social fabric of America after 40 years."
Schumer: "But it is a government run plan"
Grassley: "If we had to do it over again, we'd do it other ways even if it were a government run plan. … [Y]ou would be leading us to would be a system where there isn't choice."
Sen. Bill Nelson, D-Fla., gets into the act.
Nelson: "You just made a statement that it will lead to a single payer. How in the world do you make that leap?"
Grassley cites studies from the Heritage Foundation and the Lewin Group that put the number of people forced out of employer plans between 83 million and 120 million. Neither estimate is based on the highly circumscribed versions of the public option that have emerged from the House and from the Senate health committee.
But Nelson takes another tack. He points out that with the current trend toward private-health-insurance monopolization in local markets, you're already getting something close to single payer. Good point!
Sen. Orrin Hatch, R-Utah, then weighs in with the weird argument that Medicare was supposed to create a "level playing field," just like the public option, in doctor payments. But ultimately it ended up paying doctors 20 percent less than the private market. Funny, I thought that was an argument in favor of socialized medicine, not against. Paying doctors less would be a problem only if it meant doctors stopped taking Medicare patients. But that hasn't happened. Meanwhile (as Rockefeller has already noted), a strong majority of doctors favor a public option!
10:05 a.m.: It's public option day. Sens. Chuck Schumer, D-N.Y., and Jay Rockefeller, D-W.Va., walk into the committee room together, looking conspiratorial. They will be leading the fight to restore a public option to the bill. They will probably lose, but this won't be their last shot at it. The finance committee bill will have to be blended with the Senate health committee bill, which includes a public option. It will then proceed to the Senate floor, where it can be amended. And ultimately, whatever the Senate passes must be reconciled in conference committee with the House version, which includes a public option.
Chris Harris, in a Media Matters blog, reports today that more Americans believe in the existence of UFOs (34 percent, according to a 2007 Associated Press poll) than oppose a public option (26 percent, according to a a recent New York Times poll). He might also have noted that that same New York Times poll showed more Republicans favor a public option (47 percent) than oppose it (42 percent). A less encouraging poll finding that I noted yesterday ("The Medicare-Isn't-Government Meme, Part 4") is that more Americans think "the government should stay out of Medicare" (39 percent) than oppose a public option or believe in UFOs.
"It has been 15 years since this committee took up a markup that lasted more than five days," Sen. Max Baucus observes shortly after banging the gavel. Within minutes, Sen. Jay Rockefeller is introducing his amendment to restore a public option to the bill (No. 187).
Rockefeller begins his case by noting that the Baucus bill includes "over half a trillion dollars in subsidies to private health insurers." Yet it does little, he argues, to regulate private insurers' behavior. It does not, for instance, require private insurers to spend any particular amount of that half-trillion on medical benefits. Rockefeller also says that the bill does not outlaw so-called "limited benefit plans" that put a ceiling on payouts. Indeed, he says, the "young invincibles" policy created under the bill for people aged 25 and younger (and which, to my mind, undermines the logic of health reform itself) is itself a limited benefit plan. "Who comes first, the insurance companies or the American people?"
Sept. 25, 2009
11:56 a.m.: Sen. Baucus departs a few minutes early, leaving the gavel with Sen. Rockefeller. Rockefeller thanks the finance committee staff for its hard work: "We get to go home at night. They don't." Then he pronounces the committee in recess until 9:30 a.m. Tuesday, when he will lead the fight for the public option. Be there aloha!
11:37 a.m.: We're going through a dull patch right now, so I'll take a moment to flag Neil King Jr.'s excellent story in today's Wall Street Journal, "Overhaul Divides Business and Its Traditional GOP Allies." This phenomenon has been underreported. In 1994, health insurers were instrumental in killing off Hillarycare with their highly effective "Harry and Louise" ads. But in 2008, the health care industry, including insurers, is mostly either supporting Obamacare openly or sitting quietly on the sidelines. This time, the opposition is led not by industry but by the GOP. It is motivated less by dollars and cents than by ideology and partisan advantage.
The health care industry's disinclination to oppose health reform is both good and bad. It's good in the practical sense that it makes health reform easier to pass. It's also good to whatever extent it demonstrates that everyone now agrees the status quo is unacceptable. It's bad, however, to the extent that it reflects excessive deference on the reformers' part to commercial interests. The White House's agreement with drug manufacturers not to negotiate volume discounts for Medicare (upheld yesterday in a finance committee vote) is the best-known example. Sen. Baucus' reluctance to alienate health insurers by giving strong support to a "public option," i.e., creation of a government health insurance plan, is the most distressing example.
10:45 a.m.: I'm at home today with the sniffles, watching C-SPAN's video feed on my laptop. The finance committee starts a little late this morning (around 10) and, Sen. Baucus says at the start, will end early (around noon). That won't leave time today to take up the public option (sorry, New York Times!). Instead, Baucus says, they'll take it up Tuesday (no Monday meeting because of the Yom Kippur holiday).
What is there time for? Stupid stuff! The morning's first amendment is introduced by Sen. John Ensign, R-Nev. It's called the Transparency in Czars amendment (No. 409,) but it could also be called the Who Does Nancy-Ann DeParle Think She Is? amendment. DeParle is the White House health reform director. Under the amendment, she couldn't keep her job unless the Senate confirmed her. There ensues an unedifying argument between Democrats and Republicans about whether DeParle really is a czar. (Don't they mean czarina?) The amendment fails on a party line vote. Once again, swing-voting Sen. Olympia Snowe, R-Maine, votes for an idiotic partisan Republican amendment.
Sept. 24, 2009
8:58 p.m.: The health reforms in the revised chairman's mark do not cover Puerto Rico and the territories. Whoops! They do in the Senate health committee bill (text, summary). Sen. Charles Schumer, D-N.Y., offers an amendment to include them in the finance committee bill, too (No. 267). Or rather, he describes the amendment and then withdraws it, pending a cost estimate from the Congressional Budget Office. Sen. Robert Menendez, D-N.J., who co-sponsored the amendment along with Sen. Jeff Bingaman, D-N.M., states indignantly that he's had members of Congress ask him whether they need a passport to go to Puerto Rico.
(For an explanation of Puerto Rico's peculiar status as the world's oldest colony, see my May 2009 Chatterbox column, "Why Are We In Puerto Rico?")
8:35 p.m.: Earlier today, Sen. Charles Grassley, R-Iowa, offered his amendment replacing the bill's "individual mandate" requiring all Americans to purchase health insurance with a reinsurance scheme (No. 331). He sounded almost apologetic. All he really wanted to do, he said, was invite states to dream up their own ways to achieve the bill's ends. Sen. Ron Wyden, D-Ore., told Grassley that language he inserted into the revised chairman's mark already does that ("allow a State to be granted a waiver if the state applies to the Secretary [of health and human services] to provide health care coverage that is at least as comprehensive as required under the Chairman's Mark"). Grassley agreed to put his amendment on hold until he could verify whether his amendment was superfluous.
Right now the finance committee staff are droning on about what the bill's Medicaid expansion might require financially from the states. It's extremely difficult to follow, which may be the point.
6:20 p.m.: Sorry to be out of touch. I've been away from both the Senate Hart office building and my office, and when I finally logged onto my home laptop the committee had gone into recess until 7 p.m. I'm just now catching up.
Several committee Republicans held a press conference to crap all over the health reform bill. I find this a little redundant, given that they've been running the clock at markup by ... crapping all over the health reform bill. At the press conference, they didn't have to punctuate it with insincere displays of senatorial courtesy. Sen. John Cornyn, R-Texas: "What we have been hearing about over the last two days is nothing short of a Washington takeover of our health care system." (If only that were true!) Swing-voting Sen. Olympia "Fundamentally Flarred" Snowe, R-Maine, did not attend.
Meantime, Sen. Max Baucus, D-Mont., scored. No, I don't mean he picked up some strawberry-blond muffin at the Hawk 'n' Dove. I mean that since the Congressional Budget Office has said it lacks the time to provide cost estimates for Tuesday's revised chairman's mark incorporating various proposed amendments and/or snippets thereof, Baucus got the finance committee's majority staff to "score" it "based on oral and written estimates" from CBO. Their finding: The revised chairman's mark will reduce the deficit by $23 billion over 10 years. The original chairman's mark was projected by CBO to reduce the deficit by $49 billion over the same period.
1:05 p.m.: The trouble with watching at work is that Jack Shafer walks into your office to talk about something he's writing and you get really interested and have lots of ideas for him and then suddenly you realize something important is finally happening over at the Hart building and you can't figure out what it is.
The committee is discussing one of several amendments Sen. Bill Nelson, D-Fla., has offered requiring that drug companies rebate to Medicare the difference between what the government pays under Medicaid, its program for poor people (which is permitted to negotiate volume discounts), and what it pays under Medicare, its program for old people (which, insanely, is not). * The rebate would be given on behalf of so-called "dual eligibles," i.e., people who are eligible for both programs because they're poor and old but receive their coverage through Medicare (which makes more sense because its benefits are more generous).
I think the amendment under discussion is No. 91. There's a lot of Republican opposition, but the real elephant in the room (so to speak) is a stupid deal that the White House and Sen. Baucus struck with drug companies not to allow the government to make use of its buying power under Medicare. The Nelson amendment (as Nelson points out) would allow it on behalf of only a small portion of all Medicare beneficiaries.
Most committee Democrats vote for it, but it still fails, 13-10.
10: 35 a.m.: Did you know that the House energy and commerce committee, which passed health reform back in July, conducted a supplemental markup on the bill yesterday? Me neither. Apparently this was something that the chairman, Henry Waxman, D.-Calif., agreed to before committee passage. Fifteen amendments were offered. Three passed, none of them significant as far as I can tell. Click here to watch the morning session, here to watch the afternoon session.
The Hatch amendment fails on a party-line vote. Once again, the swing-voting Sen. Olympia Snowe, R-Maine, votes with her knuckle-dragging fellow Republicans.
10:10 a.m.: Today, appropriately enough, I'm feeling a little under the weather. (Just a cold, thanks.) I'm not in the Hart Senate hearing room. Instead, I'm watching on my computer. This is, of course, a more typical blogger's approach, and if I weren't at the office I'd strip down to my boxers.
The first amendment of the day is Sen. Orrin Hatch's amendment ensuring Americans that they can keep the coverage they have (No. 343). The purpose is to embarrass Democrats over the fact that although President Obama has repeatedly assured Americans that they can keep the coverage they have, the health care bill may lead to benefit cuts under the Medicare Advantage program (though more likely it will lead to premium increases for Medicare Advantage instead). Medicare Advantage is a privately run Medicare program created in 2003 to mollify market fundamentalists who believe the government can't spend money efficiently. The program somehow ended up sucking down extra taxpayer dollars to pay for benefits above and beyond what Medicare beneficiaries receive through the regular Medicare program.
Hatch is continuing the granny-baiting that Republicans engaged in all day yesterday. The amendment will fail. When will this committee get down to serious business?
Sept. 23, 2009
5:45 p.m.:Sitting here watching Republicans introduce amendment after amendment whose sole purpose is to portray their opposition to health reform as ardent protection of the Medicare program is bad for my health. The latest is Sen. Kyl's amendment prohibiting creation of a federal rationing board, which is what he believes the bill's proposed Medicare commission (which would be granted power to compel Congress to address future cost increases in the program) to be (No. 130). Kyl believes this even though the bill states: "The commission would be prohibited from presenting proposals [to Congress] that would ration care. ..."
Baucus says the amendment is not germane. It fails. Now Sen. Grassley is presenting his amendment to "improve governance of patient-centered outcomes research" by preventing the secretary of health and human services, the director of the National Institutes of Health, and other high-ranking government officials from participating in it directly (No. 110). Baucus likes this one, so it passes. But my health insurer does not cover exasperation with petty Republican anti-government posturing. Therefore, I'm going home.
4 p.m.: Nothing interesting is happening, so here's a thought experiment that occupied me through the lunch break:
Sen. Charles Grassley, R-Iowa, after initially supporting an "individual mandate" requiring everybody to purchase health insurance, subsequently decided to oppose it. I take seriously Grassley's late-breaking qualms about an individual mandate (as I did during the presidential primaries when Barack Obama opposed it). I've since learned that, contrary to my initial belief, the individual mandate is probably constitutional. I understand the economic logic behind it. If the government forces insurance companies to stop rejecting certain customers based on pre-existing medical conditions and to charge all customers roughly the same in premiums, then the insurers need some protection against "free riders" who won't purchase health insurance until they get sick. Still, there's a real danger the government won't provide sufficient subsidies to low- and moderate-income people. If that happens, these people may find their legal requirement to obtain health insurance less a blessing than a curse.
Instead of an individual mandate, Grassley proposes a government-financed reinsurance program. Reinsurance is (I borrow here from Thomas Buchmueller of the University of Michigan) "a high-deductible insurance policy for insurance companies." In essence, what Grassley proposes is that the Treasury make insurance companies whole whenever they get screwed by free riders. The problem with this approach is obvious: It rewards bad behavior. To refrain from buying health insurance until you need medical care is unfair to all the responsible private policyholders who were paying for health insurance all along. It is also bad for the free riders themselves, because it denies them preventive care and early detection of medical problems that will become harder to treat over time.
But Grassley's approach has some advantages, too—none of them appealing to political conservatives. For starters, it's more blatantly socialistic than an individual mandate, because it requires the government to pick up health care costs that would otherwise fall on private-insurance policyholders. For another, Grassley's reinsurance substitute could serve as a pathway to single-payer (i.e., Medicare for everybody). As more and more private-insurance policyholders decided they were suckers to pay for health insurance when they could defer its purchase until they incurred large medical costs, more and more of them would, in essence, receive their health insurance from the federal government (by way of their insurers). Eventually taxpayers would realize it would be cheaper to eliminate the middleman. Instead of paying premiums, we'd all finance health care through taxes.
Canada, here we come!
Grassley's amendment to eliminate the individual mandate (No. 331) does attempt to avoid the scenario I describe above. It would ostensibly pay for reinsurance by allowing insurers to level penalties against latecomers who failed to enroll during a specially designated 90-day enrollment period. The penalties would rise to a maximum seven years after the bill's enactment. How on earth would you decide what that maximum should be? If it were punitively high, then many free riders would find it uneconomical to buy health insurance even after they got sick. That would result in something pretty similar to the (unacceptable) status quo. If it weren't punitively high, then the free riders would be rewarded for their bad behavior, as I describe above. In that instance, it's doubtful the insurers could maintain sufficient funds in their reinsurance kitty to cover claims. The feds would have to bail the insurers' reinsurance fund out. Socialism would reign supreme.
Yesterday I asked White House health reform director Nancy-Ann DeParle what she thought of Grassley's reinsurance alternative to an individual mandate. She said, "That's not a comprehensive health care plan that gets everybody covered and lowers costs." I wish I'd thought to ask her whether it was a stalking horse for single payer.
12:45 p.m.: More Claude Pepper-style amendments from committee Republicans demanding that Medicare not be cut. The gavel's coming down a little faster now. At the moment the committee is discussing an amendment from Sen. Orrin Hatch, R-Utah, requiring that health reform not lead to any cuts in "Medicare Advantage" plans (No. 117). These are privately managed plans, created in 2003, that use public funds to subsidize additional benefits not ordinarily covered by Medicare. Any sensible health reform will scale back or eliminate Medicare Advantage, which began as an experiment in market economics and ended up being an example of corporate welfare. Baucus says his bill may cut Medicare Advantage benefits but that it won't cut the basic package of (statutorily mandated) Medicare benefits.
"There is a substantial slow walk taking place in this committee," Sen. Rockefeller observes as his fellow senators argue over Hatch's amendment. (It eventually fails.)
11:50 a.m.: Bunning's "transparency" (read: delaying) amendment is dispensed with on a party-line vote. Next the committee takes up Sen. Jon Kyl's keep-your-mitts-off-Medicare amendment (No. 124). This is naked and hypocritical Claude Pepper-ism according to the GOP playbook, and the committee rules it out of order.
11:10 a.m.: The committee is still arguing over whether it's OK to vote on amendments without scrutinizing the actual legislative language. Just to be clear: The finance committee always votes based not on legislative language but on "conceptual language" that states in plain English what a given bill does. But Sen. Jim Bunning, R-Ky., has introduced a "transparency" amendment (No. 397) requiring that the committee review the technical legislative language before it votes. That's what the committee is discussing. The amendment is, as Sen. Kerry noted, a delaying tactic. Regrettably, Sen. Olympia Snowe, R-Maine, the committee's sole GOP swing voter, is taking Bunning's side, in spite of her observation yesterday that today's health care system is "fundamentally flarred." I'm starting to think Sen. Baucus' reluctance to bang the gavel down on such partisan shenanegans is fundamentally flarred. The Bunning bill is only one of many, many monkey wrenches the GOP plans to toss into the proceedings. (Igor Volsky of Think Progress' The Wonk Room provides a helpful catalog.)
9:45 a.m.: Two down, 562 to go. Last night the finance committee passed two noncontroversial amendments. One, sponsored by Sen. Kent Conrad, D-N.D., would require the Centers for Medicare and Medicaid Services to promote quality improvement and efficiency (No. 13). The other, sponsored by Sen. Debbie Stabenow, D-Mich., would increase by 5 percent Medicare reimbursements to hospital emergency rooms, to be funded by increasing an existing tax on brand-name drugs (No. 72).
This morning, committee members are arguing about whether it's OK to vote on amendments without scrutinizing the actual legislative language, which in most instances is not yet written. Sen. John Kerry, D-Mass.: "This is fundamentally a delay tactic." If you'd like to watch, click here or here.
Sept. 22, 2009
4:45 p.m.: Sen. Baucus is roused from his torpor after Sen. Mike Enzi, R-Wyo., grouses to Elmendorf that this bill will cause people to lose what health insurance coverage they have by taxing it away. "The fact is," Baucus answers, sounding sincerely annoyed, "you can't keep what you like in many, many cases without passing any law. And that's because employers are changing plans all the time." I don't think I've ever seen Baucus display irritation before. It's especially gratifying (given Baucus's bipartisan-to-a-fault outlook) to see him tell off a Republican.
Perhaps we're starting to get somewhere. The committee will continue meeting, perhaps late into the night. It may even hold a few votes. But your correspondent is done for the day.
4:15p.m.: Congressional Budget Office Director Douglas Elmendorf is trying to field questions about the bill's cost. But because the chairman's mark now includes lots of modifications, he can't really state its current cost. The senators are annoyed that he won't. Elmendorf says they should have thought of that before they hit him with 564 amendments at the last minute. OK, he doesn't say precisely that. But that's what he means when he says his staff is currently busy trying to calculate the cost of the committee's individual amendments. When he asked for a priority list, he says, he was given a list of 200 amendments! "The prioritized list of amendments turned up in our e-mail box less than 48 hours ago," he growls. Elmendorf obviously didn't get much sleep last night, and if they push him much further, he may just lose it. That would be fun to see.
3:30 p.m.:"You don't have to go over every single line," Sen. Baucus said. "Let's hit the high points." Thank you, senator.
3:30 p.m.: The witness table is filled with finance committee staffers who are now explaining to members Sen. Baucus' various changes to his chairman's mark. Except what they mainly seem to be doing is reading them. Nobody's asking any questions. It's pretty dull. Nearly all the big news outlets have left the hearing room. I may soon follow them.
3:10 p.m.: Lunchtime's over. Sen. Pat Roberts, R-Kan., is saying something about riding a horse into a box canyon. I have no idea what he means, either literally or metaphorically, but it's some sort of reply to Sen. Rockefeller, who said, "I'm grateful that we will have this week or more to propose, debate, and vote on amendments. This is sacred work. And frankly, I have a lot of amendments."
Rockefeller, who more than anyone else on the finance committee is the conscience of health reform, said he still didn't think the bill does enough to make health premiums affordable to low- and moderate-income people (I think that's a polite way of saying the changes Baucus made to the chairman's mark remain inadequate), but that he was encouraged by a meeting Baucus held on the matter last week.
1:15 p.m.: For news to occur, it is necessary that the finance committee adjourn for lunch. As it does so, committee aides pass out a series of modifications to Baucus' chairman's mark ( text, summary) incorporating certain amendments offered by finance committee members.
The most significant of these address the so-called "affordability" issue by increasing the federal subsidy to low- and moderate-income people, who (like everyone else) would be required under the Baucus bill's "individual mandate" to obtain health insurance. Those at 100 percent of the federal poverty level would now pay no more than 2 percent of their income in health insurance premiums. Those between 100 percent and 300 percent would pay up to 12 percent of their income in premiums.
That still seems pretty high; it was 13 percent before. But maybe I'm missing something. Those between 300 percent and 400 percent would have their health insurance premiums capped at 12 percent through a tax credit. The legislative language is attributed to amendments submitted by Sens. Menendez, Kerry, Bingaman, Schumer, and Stabenow.
White House health reform director Nancy-Ann DeParle, on her way out of the committee room, tells several reporters, "We're pleased with what they've done so far" on affordability, although she hasn't had a chance to examine the modified chairman's mark.
Another change that may be significant: The modified chairman's mark incorporates an amendment from Sen. Jay Rockefeller, D-W.Va., eliminating annual and lifetime limits for all plans participating in state exchanges, and precluding group health plans from imposing "unreasonable" annual or lifetime limits.
Timothy Noah is a former Slate staffer. His book about income inequality is The Great Divergence.
Photograph of the Senate finance committee markup on health reform by Alex Wong/Getty Images.