Community Catalyst Health Reform Insider

October 26, 2009

What’s Goin’ On: Untangling the debate on public option
The big story of the week was undoubtedly the political resurgence and maneuvering around the public option – a resurgence we’re glad to see. But with legislative leaders keeping their cards close to the vest and pundits spinning the news based on what they hope is true, it is hard to untangle what is really going on (Good mainstream media coverage in the New York Times and the Washington Post.)

So here’s a special Insider devoted (mostly) to trying to get the story right. (With the caveat that it could change by the time you read this).

Housewarming
There are over 200 votes for the “robust” public option, the one with rates based on Medicare, but the magic number is 218 and it’s still not nailed down. House leadership is trying both to round up a few more votes and to test out other possibilities. But whether a different approach, e.g. a public option with negotiated rates, does any better is open to question, since such a proposal may lose more support from progressives than it gains from more conservative members of the caucus. 

The upshot? Progressives need to continue their big push this week to find those last few votes.

The revival of public option in the Senate
Ever since polling revealed that a public option wasn’t a deal breaker to members of the Blue Dog caucus, the question in the House has been not whether a public option would be included, but what version. 

It’s a different story in the Senate.  Olympia Snowe’s vote in Finance initially seemed to seal the deal against inclusion of a public option in the Senate, but a number of factors have kept it alive.  Persistence from both organizing groups such as Health Care for America Now, among others, and champions in the Senate such as Sen. Schumer, who has worked to find a version of public option that would secure support from conservatives, has been instrumental. 

The self-inflicted wounds of the insurance industry also factored in.  By squarely attacking the Senate Finance proposal—the most industry-friendly of any of the bills on the table—the insurers convinced some members that they were trying to kill health reform, and no accommodation would be possible.  Another factor that has flown mostly below the radar is the ripple effect from the President’s insistence that a bill clock in at under $900 billion. And here’s where the public option and affordability story lines start to run together.

While the SFC proposal was scored under $900 billion, the relatively skimpy benefits and high premiums were concerning to the Democratic caucus and many reform supporters.   Without adequate affordability provisions, the underlying structure of health reform—insurance reform coupled with an individual mandate—is unworkable. 

Fixing the affordability problem requires not only additional revenue, but cost-effectiveness measures in order to create enough “head room” under the $900 billion ceiling to find that revenue, and there, the public option is an important part of the solution.  By reducing the price-tag of reform, inclusion of a public option becomes a “two-fer”—a proposal that enjoys broad support within the caucus and that also addresses cost issues.

Senate Democratic leaders seem to be leaning toward inclusion of a public option that gives states the ability to opt out.  This way, leaders give Democratic conservatives a chance to vote to strip the provision but protect it by setting up the vote so that 60 votes are required to delete it instead of add it.  (It’s a strategy Ezra Klein says made the White House and Sens. Baucus and Snowe none too happy.)

This strategy works if and only if all the members of the Democratic caucus agree to at least stick with the party to break a filibuster – even if they vote no on the underlying bill. 
That’s because they will almost certainly lose Sen.Snowe (and fail to pick up Sen. Collins) with this strategy.  As the failed cloture vote on a permanent fix for Medicare physician fees last week demonstrated, there is no guarantee that the Senate leadership can hold all 60 members. If a cloture vote on a bill with a public option fails, leadership might have to go back to a trigger or some other option, but only as a last resort if all else fails.

Insurance industry hopes third time is a charm
The recent PriceWaterhouseCoopers report commissioned by America’s Health Insurance Plans (AHIP) seemed to produce nothing but a combination of scorn and political blowback.  A second report, released by Wellpoint, sank with barely a ripple.  Undaunted, the insurance industry is unleashing yet more attacks on reform. 

When you boil it down, the basic claim of all these reports is that good coverage costs more than bad coverage.  At the same time, they continue to ignore inconvenient aspects of the reform proposals that will lower costs – or they assume that certain provisions, such as the individual mandate, will be ineffective. Here’s hoping that the new round of attacks meets the same fate as their forerunners.

Coming up (as always subject to change)
Both the Senate and House are expected to send bills up to CBO for scoring this week.  The House could begin debate by the second week in November, but with the Veteran’s Day recess approaching, a vote in the slower-moving Senate appears unlikely before Thanksgiving.