Tuesday 8 September 2009

before the speech: triggers, coops and other stuff

The House liberals are signaling that they might, like Nelson, accept a trigger if it is clear and well-designed, with a hair-trigger that is likely to be pulled; with guaranteed access, quality and low cost; and possibly linked to Medicare reimbursement rates --“robust” and very close to a public option. My other questions would be:

--When and how does the trigger go into effect?
--If there is a market penetration threshold, does it refer to insurers offering plans or people actually buying them?
--Is there a coverage threshold (like the Baucus plan) that controls deductibles, caps, and services offered?
--Is there a guarantee that the trigger can’t be untriggered later, possibly by Congressional Republicans?

In other words, we can’t simply accept the Snowe trigger plan, which was lousy. A particularly sticky feature of that plan is that her public options would only kick in state by state.

Meanwhile Baucus’ newly-unveiled plan is built around coops with these features:

--serving one or more states
--current insurance firms can’t apply to be coops
--coops governed by members
--HHS prescribes rules on accountability to consumers
--HHS will ensure at least one coop in every state
--Coops can collectively bargain for services
--not government sponsored (that will get some Republicans off their backs)
--(Remember that Grassley endorsed coops – back when there was no serious discussion of them.)

My two concerns regarding Baucus’ coops:

--According to the plan, the coops would be government funded: federal loans start them up, federal grants ensure they’re solvent. The federal money will be handed out by board with Democratic majority, starting January 2012, ending December 2015. I have problems with both of those dates. If we’re waiting three years just to get anything started, why not wait for a triggered public option instead? And who guarantees the existence of the coops after 2015? If there isn’t a coop in every state, HHS has authority to use “planning grants” to get them going, but where does that money come from, and will that ensure that everyone has permanent access to a coop?

--Doing it state by state will make it easier for the private insurers to crush them one by one – at the very least we should have regional coops.

In other words, a coop should be national, perpetually guaranteed, and start right away.

Other things that are good about the Baucus plan:

--state ombudsmen
--requirement that insurers report the amount of money not spent on health care
--insurers must cover you and can’t drop you
--premiums can’t vary beyond a certain point, so prices won’t skyrocket
--three tools to prevent adverse selection -- risk adjustment, reinsurance and risk corridors
--starting in 2015 states can allow interstate policy sales, so insurers can sell in more places (but more competition)
--catastrophic plan for young adults
--all plans must provide “basic services” including prescription drugs
--lifetime caps banned
--some help for families in the 66,000-88,000 range
--small business tax credits
--Expanded Medicaid to include mandatory drug coverage
--states are required to maintain current CHIP levels
--efforts to link payments to quality outcomes in Medicare
--reducing inefficiencies in current care systems to include patient-centered outcomes research and simplifying the administrative process
--bonuses for primary care and general surgery
--35 percent tax on policies above $8,000 single and $21,000 family
--Small business tax credits
--Part D drug discount
--insurance exchanges would allow small groups and individuals to buy policies at lower rates.

Things that are not so good:

--state exchanges must be self-sustaining after a year
--2013 begins tax credits for those under $66,000 salary, but the tax credit scale slides upward, so that at the $66,000 level you only get credit once the premium is more than 13 percent of your income (so these folks will be paying premiums the size of mortgage payments)
--by 2013 all must have coverage unless there’s no policy at less than 10 percent of income
--employers must offer coverage or pay part of the employees’ tax credits (they’re getting off a bit easy)


Reid will soon take over for Baucus in the Senate: Reid may not be quite the fighter we want, but at least the foot-dragging and appeasement under Baucus will be over. One reason why Reid has hung back and let Baucus take the lead for so long, is that the last time somebody tried to bypass the Finance Committee on health care (Daschle) it led to disaster. Reid will let Finance finish its business (if they can; otherwise Obama may write his own bill), and then Reid will step in and reconcile the two Senate bills. He gets on well with centrists; he is okay with tort reform, but he is also okay with budget reconciliation and with ending the anti-trust exemption for insurers.

So we need either the public option, which Obama likes and could pass via reconciliation if he wanted; or a trigger that is on a hair-trigger to go right to the public option; or coops that are national or regional, with perpetually guaranteed coverage that starts right away.

A key difference between the trigger option and the coop option, is that Obama has done the prep work for the trigger option, selling it to House liberals and negotiating with Snowe herself. It remains to be seen whether Obama is willing to do the same for Baucus’ coop plan which, unlike the trigger option, does not lead to the path Obama wants, the public option.

And whatever Congress does pass, even if it involves a trigger or a coop – either way, it will be a bill that the Clintons would have killed to have in 1994. So let’s not boohoo too much.

Remember two years ago when the whole world thought that Hillary Clinton would win not only the nomination but the election? Obama beat her because he knew the primary rules and she didn’t. By the same token, his staff he running through the Senate rules with a fine-tooth comb, so they can fine-tune their strategy. And they’ve been doing it for months: that’s how they succeeded in sneaking that reconciliation instruction into the budget bill this spring without anybody noticing. I’m thinking that Obama doesn’t want to waste that card – get the instruction inserted and then not use it. It moves the threshold by 10 votes. And there is always the option of passing two imperfect bills and then fixing it in conference. As Obama will say Wednesday, his metrics are – does the plan cover everyone, cut costs, prevent insurers from cutting you off at the knees at their pleasure?

And what are the insurers doing, during all this? Blue Cross Blue Shield of Michigan jacked up rates 22 percent. The folks in Michigan are already in an honest-to-God Depression, hanging on by their fingernails, and the insurers are publicly sticking it to them just before Obama’s speech, just because they can. So Obama has even more ammo to use.

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