The Final Sprint for Health Care Has Now Begun, and Where the White House is Placing Its Bets
The real political race for health care has just begun. The significance of the President's speech to Washington insiders was its signal about where the White House is placing its bets and its support. More on this in a moment. First, let's be clear about who's racing and why. Think of the speech as the starting gate of a two-month sprint between two competitors -- and they're not Democrats and Republicans.
On one side are America's biggest private insurers and Big Pharma. They're drooling over the prospect of tens of millions more Americans buying insurance and drugs because the pending legislation will require them to, or require employers to cover them. The pending expansion of Medicaid will also be a bonanza. Amerigroup Corp., UnitedHealth Group Inc. and other companies that administer Medicaid are looking at 10 million more customers. Healthcare Inc.’s Medicaid enrollment is expected to jump by 43 percent, according to its CEO. WellPoint Inc., the largest U.S. insurer, is also looking at big gains.
But the big insurers hate the idea of a public option because it will squeeze their profits. A true public option will force private insurers to compete in markets where there's now very little competition, and also have the bargaining power to force drug companies to offer lower prices. Big Pharma also wants to prevent Medicare and Medicaid from having the power to negotiate lower prices, for the same reason. Private insurers and Big Pharma would rather fudge the question of where the savings will come from or how all this will be paid for. They certainly don't want to pay for wider coverage with a surtax on the rich, because, hey, their executives and shareholders are mainly rich.On the other side lies the Democratic base (organized labor, grassroots progressives, leading activists) whose main goal is to make health care more affordable for a hundred million American families who are now paying through the nose (higher and higher co-payments, deductibles, and premiums, not to mention wages that are depressed because of employer-provided health insurance), and affordable to the tens of millions who can't get it now. To this end, the Dem base wants a public option and wants Medicare and Medicaid to have negotiating power. That's because every dollar that's squeezed out of the private insurers and Big Pharma is a dollar saved by average Americans on their health care -- or a dollar saved by taxpayers who otherwise end up footing the bills for Medicare and Medicaid. There's simply no more direct way to control costs. And the Dem base isn't at all reluctant to put the burden of paying for wider coverage on the wealthy.
Private insurers and Big Pharma are being represented in this race by Max Baucus and his Senate Finance Committee. Senate Finance is on the verge of reporting out a bill that requires that just about every American have health insurance and just about every business provide it (or else pay a fee). But the bill will not include a public option. Nor will it change current law to allow Medicare to negotiate low drug prices. Nor will it include a surtax on the wealthy. The Committee's only real nod to cost containment is a small tax on expensive insurance policies, which doesn't worry the private insurers because its cost is so easily passed on to the beneficiaries. The Democratic base is being represented by Nancy Pelosi and House Dems, who have reported out a bill that includes a public option, want Medicare and Medicaid to have negotiating power, and will pay for universal coverage with a surcharge on the rich. The Senate's Health, Education, Labor, and Pension Committee, formerly chaired by Ted Kennedy, also represents the Democratic base, and reported a strong bill that parallels the House.
Where's the White House? For months now, it's been straddling the fence -- reassuring the Dem base that the President is with them (he did it as recently as Monday with a rousing speech to organized labor), while at the same time nodding and winking in the direction of the private insurers and Big Pharma. Last spring the White House agreed to Big Pharma's demand that Medicare not be permitted to negotiate low drug prices in return for Pharma's agreement to support the health care bill emerging from the Senate Finance Committee. Since then it has quietly told private insurers that it will work with Senate Finance to find less potent alternatives to the public option, such as Kent Conrad's "cooperatives" or Olympia Snowe's "trigger" mechanism, in return for the private insurers' support of the compromise. And it has told the private insurers and Big Pharma that it will not support a surtax on the wealthy.
Obama's Wednesday night speech reassured the Democratic base that the President is deeply committed to getting universal coverage. But the speech also made clear that the White House has decided to side with the Senate Finance Committee and against the Democratic base on the details. The President was careful to note that a public option is only a means to an end and he remained open to other ideas (read: Conrad's cooperatives or Snowe's trigger). The speech included nothing about Medicare bargaining leverage, thereby letting the drug deal stand. The President clearly sided with Senate Finance on the funding mechanism of a tax or fee on high-end insurance rather than a surtax on the wealthy. And his promise to limit the costs of universal coverage to $900 billion put the President directly in league with the Senate Finance Committee rather than than the House, whose bill is projected to cost more than $1 trillion.
The Dem leadership got the message. Yesterday, Senate majority leader Harry Reid said that while he favored a strong public option, he could be satisfied with establishment of nonprofit cooperatives. And Nancy Pelosi, who as recently as two weeks ago said the House would not support a bill that didn't include a public option, passed up a chance to say it was a nonnegotiable demand. When pressed, she said that as long as legislation makes quality health care more accessible and affordable, "we will go forward with that bill."
But, again, the race has just begun. Your input is still important -- in fact, more important now than before. The Senate Finance's bill will be reported out next week and voted on by the entire committee in the following week, then go to the floor of the Senate for a vote in mid October. The House bill will go to the floor at about the same time. Each side is now counting noses. Pelosi knows she won't have any Republicans with her, so will need to keep 40 Dems from bolting. If Reed can't get 60 votes by October 15, he'll add health care to a reconciliation bill, which will need only 51.
The more you can make your voices heard, the more likely it is that the race will be won by the public rather than the private interests.
Let's see how the Obamaphiles triangulate THAT.
September 11, 2009 11:45 AM | Reply | Permalink
Excellent post.
I think you have this correct. This is the battle at hand ans where it stands.
September 11, 2009 3:14 PM | Reply | Permalink
The starting gate was left over a month ago and the Health Insurance Companies left the reformers at the starting blocks.
.
September 17, 2009 4:55 PM | Reply | Permalink
I hate to play the role of Cassandra but IMHO it appears momentum toward a severely watered down health care 'reform' bill is building. The President's speech has given everyone, including himself, political cover.
After a weak bill with subsidies for private insurers to 'cover' working poor with flimsy 'minimum standards'and some sort of weak co-ops(with a ridiculous trigger 4-5 years out) passes, the Prez and the Liberal caucus can say,"We did our best with the votes attainable."
Centrist/Blue Dogs plus, maybe, one or two 'moderate' GOPers will say,"We kept the cost down and expanded care."
All the other GOPers will say,"Our tactics(fear, screaming) worked, let's use them on the next issue."
Healthcare stocks are up and the NY Times says their execs and lobbyists are happy with the speech(see below).
http://www.nytimes.com/2009/09/11/health/policy/11insure.html?_r=1&ref=us
September 11, 2009 3:16 PM | Reply | Permalink
again, I must that I appreciate your comment and this excellent link.
September 11, 2009 3:29 PM | Reply | Permalink
sorry for all the typos.
-this should just be my tagline.
September 11, 2009 3:49 PM | Reply | Permalink
"The fact that the public plan was not thrown under the bus keeps our expectations that we'll be able to work with at least the House leadership to pass a strong public plan," said Rep. Grijalva (CPC).
Thanks for the insightful article Mr. Reich; that about sums it all up quite nicely... I might add that it also follows standard "game theory" to a "T".
Lastly, would there be any objection to re-printing this article for dissemination?
Respectfully,
Don JD
September 11, 2009 3:52 PM | Reply | Permalink
Where's the White House? For months now, it's been straddling the fence -- reassuring the Dem base that the President is with them (he did it as recently as Monday with a rousing speech to organized labor), while at the same time nodding and winking in the direction of the private insurers and Big Pharma.
whether health care, the war, the economy, torture, etc - that pretty well sums up obama's governing style. he wants to give the impression of straddling the fence, just to appease the democratic base while behind the curtain he is cutting deals betraying what he says publicly.
September 11, 2009 5:45 PM | Reply | Permalink
And not a dime to be added to the deficit.
Spoken like a true DLCer. And who's to decide the most important social legislation in a generation?
Who else! The CBO -- which hasn't gotten one estimate of future health costs right in more than a generation.
But so what. Goodbye public health insurance option. Obama never did think much of you.
September 11, 2009 8:52 PM | Reply | Permalink
Reich: "Where's the White House? For months now, it's been straddling the fence -- assuring the Dem base that the President is with them (he did it as recently as Monday with a rousing speech to organized labor), while at the same time nodding and winking in the direction of the private insurers and Big Pharma."
and
Blue Pearl: "whether health care, the war, the economy, torture, etc - that pretty well sums up Obama's governing style. he wants to give the impression of straddling the fence, just to appease the democratic base while behind the curtain he is cutting deals betraying what he says publicly."
The Senate Majority Leader, Harry Reid, has already jettisoned the 'public option' and suggested a 'trigger' to it instead, without so much as a whimper (and that is the 'kiss of death' - just like it was for prescription drug importation from Canada, in past legislation); and although giving 'lip-service' to the Progressives/Liberals, in his Joint Address to Congress, the President obviously agrees to this same strategy... (At least he didn't run us over WITH the bus, he just politely offered us to EXIT, before the bus moved on...)
So let's be clear about this stunning strategy:
1. The Republicans will not support this Bill, so they must go it alone... and
2. Since the Republicans won't support the Bill in the first place, the Democrats must give up everything that was fought for in the election campaign, which were the fundamental under-pinnings of Obama's election campaign, to appease the Republicans, who aren't going to support it at all, anyway...
Wow - That's a tough one to digest... !!!"
1. Wouldn't it be more honest to just say that Big Pharma and the Health Insurance Industry have never lost a Bill in the U. S. Congress before, and there's no need to change THAT, IS THERE???.. (this just gives them a greater profit margin with the addition of 42 million more potential clients, with the majority paid for by the federal government)
AND
2. The conservative/'blue dog' democrats, led by Senator Bauchus, still get to keep their millions in contributions from the health care industry, and seek re-election to the same seats again, so that they can continually uphold these very same positions in the next political cycle, to vote exactly the same way in the future...
And when all is said and done:
As trblmkr says:
"The President's speech has given everyone, including himself, political cover.
After a weak bill with subsidies for private insurers to 'cover' working poor with flimsy 'minimum standards'and some sort of weak co-ops(with a ridiculous trigger 4-5 years out) passes, the Prez and the Liberal caucus can say,"We did our best with the votes attainable."
Centrist/Blue Dogs plus, maybe, one or two 'moderate' GOPers will say,"We kept the cost down and expanded care."
All the other GOPers will say,"Our tactics(fear, screaming) worked, let's use them on the next issue."
And the Senate Democrats can sit around the table and sing 'kumbaya' and pat themselves on the back for the FINE LEGISLATION they just accomplished, all the while knowing that Medicaid still goes bankrupt in eight (8) years because the cost curve is now unaffected...
NOW THAT IS CHANGE THAT I CAN BELIEVE IN !!!
Respectfully,
Don JD
September 11, 2009 10:13 PM | Reply | Permalink
An aside: For more information on "legislative triggers" and how they are used to deceive their true purpose, you might be interested in the following article showing its negligible effect on importation of Canadian Drugs into the United States...
http://www.openleft.com/diary/15053/progressive-caucus-should-know-the-peril-of-health-care-triggers... Compliments of the Rachel Maddow Show, MSNBC.
Respectfully,
Don JD
September 11, 2009 11:59 PM | Reply | Permalink
It's unfortunate that many people choose to push this fallacy of the health care debate being Democrats vs Republicans or Progressives vs Pharma. This is delusional. The fight is between the left and the Democratic rank and file vs conservative Democrats.
Again, the majority of people in Arkansas oppose the public option, and so do both of their DEMOCRATIC Senators. A plurality of Nebraskans oppose the public option, and so does its DEMOCRATIC Senator Ben Nelson. If there was a poll for Louisiana and South Dakota, it is likely that the opposition of its DEMOCRATIC Senators would reflect the will of the people.
Again, reconciliation is a dead option, or at least the very last option where you get a bill that is Swiss cheese or moth eaten, and bogged so down by legal challenges that it is crippled. See the Senate Majority Whip's (Dick Durbin) remarks on this, as well as the Former Chief of Staff to the Senate Finance Committee on this (Lawrence O'Donnell).
We need 60 votes to pass this thing through the regular procedures in the Senate, so stop ducking the real goal here by avoiding this.
---------
Senate reconciliation is dead. Lawrence O'Donnell revealed on Hardball tonight that the 50 + 1 votes for reconciliation only counts for the FINAL vote on the bill in the Senate. It does not include that an infinite number of amendments may be raised about the bill and each one may be filibustered.
"Reconciliation requires 50 votes plus the Vice President for final passage only. During the process of reconciliation on the Senate floor there are countless votes that require 60 votes because it requires you to waive the rules of reconciliation - that's done constantly in every single reconciliation process that goes to the Senate floor. They can't think about going to the Senate floor without 60 votes whether they're doing it in reconciliation or outside of reconciliation."
- Lawrence O'Donnell
Former Democratic Chief of Staff of the Senate Committee on Finance and blogger at the Huffington Post
Source: http://www.msnbc.msn.com/id/3036697/#32696599
Time Index on Video 3:30
---------------------
"Reconciliation. Do you think this bill can pass in a reconciliation process?" - Lawrence O'Donnell
"No, I think that what you can pass in the reconciliation process are some important elements but a comprehensive health care reform bill requires the regular procedure - the regular business of the Senate. If we can't get 60 votes, which is the threshold vote for the regular procedure, then of course we have to consider reconciliation."
- Majority Whip Dick Durban
Time Index 2:20
http://www.msnbc.msn.com/id/3036697/vp/32765132#32765132
September 12, 2009 5:10 AM | Reply | Permalink
Smooth Jazz: "We need 60 votes to pass this thing through the regular procedures in the Senate, so stop ducking the real goal here by avoiding this."
Your position is predicated upon the theory that the Senate MUST attain sixty (60) votes to move forward on the Health Care Debate - and that is actually not what the Senatorial Rules mandate...
The reality is only fifty-one (51) votes are required for final passage of any legislation.
Because of a fear of a 'phantom' filibuster, the mere THREAT of it, what actually does get done is so compromised and toothless, to make it "filibuster-proof", that it fails to solve the problems for which the legislation was originally created.... And that is exactly what you will end up with when the dust clears - PERIOD...
Why are Democrats so afraid of this ancient, and rarely used dinosaur - THE FILIBUSTER?
If your Majority Leader, Harry Reid, would just stop compromising BEFORE any substantive debate even occurs, this 'phantom filibuster' could be eliminated once and for all... (But that would require a REAL LEADER, who actually stood firmly behind something wouldn't it???)
I post the following article for review:
DAVID E. RePASS
Published: March 1, 2009
PRESIDENT OBAMA has decided to spend his political capital now, pushing through an ambitious agenda of health care, education and energy reform. If the Democrats in the Senate want to help him accomplish his goals, they should work to eliminate one of the greatest threats facing effective governance — the phantom filibuster.
Most Americans think of the filibuster (if they think of it at all) through the lens of “Mr. Smith Goes to Washington” — a minority in the Senate deeply disagrees with a measure, takes to the floor and argues passionately round the clock to prevent it from passing. These filibusters are relatively rare because they take so much time and effort.
To reduce deadlock, in 1917 the Senate passed Rule 22, which made it possible for a super majority — two-thirds of the chamber — to end a filibuster by voting for cloture. The two-thirds majority was later changed to three-fifths, or 60 of the current 100 senators.
In recent years, however, the Senate has become so averse to the filibuster that if fewer than 60 senators support a controversial measure, it usually won’t come up for discussion at all. The mere threat of a filibuster has become a filibuster, a phantom filibuster. Instead of needing a sufficient number of dedicated senators to hold the floor for many days and nights, all it takes to block movement on a bill is for 41 senators to raise their little fingers in opposition.
Historically, the filibuster was justified as a last-ditch defense of minority rights. Under this principle, an intense opposition should be able to protect itself from the tyranny of the majority. But today, the minority does not have to be intense at all. Its members have only to disagree with a measure to kill it. Essentially, the minority has veto power.
... The founders required a super majority in only five situations:
1.veto overrides,
2.votes on treaties,
3.constitutional amendments,
4.convictions of impeached officials, and
5.expulsions of members of the House or Senate.
The Constitution (nor any Senatorial Rule) certainly does not call for a super majority of sixty (60) before debate on any controversial measure can begin.
And fixing the problem would not require any change in Senate rules. The phantom filibuster could be done away with overnight by the Senate majority leader, Harry Reid. All he needs to do is call the minority’s bluff by bringing any challenged measure to the floor and letting the debate begin.
Better to risk a filibuster — an event that, because of the great effort involved, would actually be rare — than to save time and accomplish little or nothing.
It also happens to make a great deal of political sense for the Democrats to force the Republicans to take the Senate floor and show voters that they oppose Democratic initiatives. If the Republicans want to publicly block major legislation, let them do it. And if the Republicans feel that the basic principles they believe in are worth standing up for, let them exercise their minority rights with an actual filibuster.
It was up to Mr. Reid, as Senate Majority Leader... (But we know how that is going already don't we...)
Further, if the consensus is: "just get those 60 votes" than what have you really accomplished with a watered down bill that doesn't solve the seminal problem?
1. When you eliminate the "public option" please tell me how the 'cost curve' is reduced overall if this is compromised for "60 vote" legislation? (Paying a 35% administrative fee to private insurers versus 4% under Medicare).
2. What sense is it to "freeze for 10 years" the price adjustment policy agreed between Big Pharma and the White House, and thereby NOT negotiate for lower drug prices?
3. And who will end up paying for this bill, in the end, when you finish gutting the public option, in a spirit of compromise for 60 votes for passage?
And for future reference, I actually do live in the State of Louisiana... Concerning Senator Mary Landrieu - she is, and has been, in the pocket of the oil companies and insurance companies for years, so spare me please... -- (Most of her positions are so pro-Republican that there really is little difference in her political stance with her Republican counter-part, Senator Vitter.)...
As for the opinion of the majority of voters in Louisiana -- They really, really, dislike President Obama - (Period)...
It doesn't matter to them that potential Democratic legislation would benefit them, but only that Obama is in the White House AT ALL, and therefore anything he supports is BAD (however illogical that may be, but true...) --
May I refer you the the 'Birthers', 'Deathers', and '10ers' for further analysis, and, when you heard the Minority Response after Obama's Speech to Congress, remember it was delivered from the 7th District, Representative, from the State of Louisiana, and he is a publically avowed 'Birther'... (You may infer whatever reasons for these positions you may like... (the REAL REASON is un-worthy of debate...)
It has been said that Louisiana has the best politicians that money can buy... Therefore to suggest that the political contributions from Big Pharma and the Insurance Lobby have no bearing in reaching this magical 60 vote goal is really quite innocent, but wrong...
Those who oppose a public option "just happen" to be the biggest receivers of political contributions from Big Pharma and the Health Insurance Industry... If you don't believe that this money influences their votes, I have several acres of swamp-land down here I just would love to sell you...
Respectfully,
Don JD
September 12, 2009 11:43 AM | Reply | Permalink
An aside:
Currently, forty-five (45) Democratic Senators have agreed to vigorously advance the 'public option' within the Senate... Therefore, only six (6) 'blue-dog'/conservative Democrats were opposing truly historic change when a final vote was to be cast to reach the elusive number of fifty-one (51) for passage...
But hey, with Majority Leader Senator Reid, 'taking over the wheel' concerning health care legislation, who just threw away our best bargaining chip, before anything is even out of committee, the public option has been 'driven into a ditch'...
Great driving Senator Reid !!! - And please do me a favor and just stop negotiating before you even have a BILL !!!
Respectfully,
Don JD
September 12, 2009 12:29 PM | Reply | Permalink
Face it, Health Insurance and Health Care reform is dead in the water.
The Health Insurance Industry has bought enough Senators, through massive "Campaign Donations" to insure that any reform bill is not reform, but actually makes things worse for Americans.
Health Insurance and Health Care reform was never intended to pass. It was solely a form of "Protection Racket" along Mafia lines.
Congress:
"Hey insurers, you all have a great, profitable business here. You need protection (from us) to continue to get all those profits. Donate massive amounts of money to our campaigns or we will pass legislation which will cut into your profits."
Insurers:
Hey Max, Bank of America donated $3 Million and got $30 Billion. How about we give you $3 Million for your campaign coffers and you arrange to get us $30 Billion in insurance premiums. Also include provisions that all Americans must be insured or pay massive fines.
Max Baucus:
Sounds great to me. $3 Million goes a long way toward getting me re-elected and the $30 Billion isn't my money anyway.
Sad, but this scenario fits the facts released as well as any other.
.
September 17, 2009 4:48 PM | Reply | Permalink