Health Care Reform Is Done – Time for Health Care Reform

In Budget Politics, Health Care Reform, Liberalism, Political Ideology, Political Parties, Politics, Politics of Policy, Progressivism, Public Policy, Regulation, Social Democracy, Social Policy, Taxes, Welfare State on March 23, 2010 at 9:25 pm

Introduction:

Sunday’s vote by the House to pass the Patient Protection and Affordable Care Act (the Senate Bill) and the Health Care and Education Reconciliation Act (the reconciliation “side-car”), and President Obama’s signature on Tuesday marks the end of a political era that lasted from the early 1970s until Sunday in which the advocates of universal health care were either in retreat or defeat.

However, the enactment of the Senate Bill into law does not mean the end of health care reform.

Certainly, there will be a pause in health care legislation, as the Congress moves on to the countless other critical items of legislation on its pre-election agenda and recovers from the midterms. After that pause begins a new era – similar to the decades between the first calls for national health insurance in 1912 and the passage of Medicare and Medicaid in 1965 – in which advocates for universal health care will continually build on the existing foundations of reform to “finish the temple of freedom, and make it capacious within.”

And there is much building to be done.

Fixing the Patient Protection and Affordable Care Act:

As I’ve stated on previous occasions, one of the most fundamental changes that comes with the passage of the current health reform effort is that Congress begins to get used to passing health care reform bills. This process will be greatly accelerated if Democrats are able to hang onto their majorities in the 2010 midterm elections, thus establishing the conventional wisdom that passing health care bills is not a recipe for electoral defeat, but once the foundation is there, it won’t make much of a difference in the long-term. Laws are continually amended, renewed, overseen, and so on, which generates a process in which health care reform becomes a normalized legislative area, like passing annual appropriations bills.

Through this normal process of amending existing legislation, we can gradually iron out the flaws in current reform – potentially before they even take effect in 2014:

  1. From State Exchanges to National Exchanges: One of the many painful compromises that was made in order to gain acceptance of the overall structure was the agreement to substitute state-level exchanges (even worse, possibly separate state-level exchanges for individual and group plans) for a single national exchange. As many people have noted, this is less than optimal: separate state exchanges are going to lack the bargaining power to get bulk discount rates, and there will be less competition among fewer insurers. We must move to a single national exchange, operated under the supervision of the Department of Health and Human Services, in order to maximize competition and lower prices. Luckily, in the meantime, the Senate Bill does allow for states to form compacts and combine their exchanges, so one possibility for interim action going forwards is to create a Blue State “pooled” exchange with the bulk of the American people inside it to get a next-best level of competition and low prices (incidentally, if I read the legislation correctly, it may be possible for a single-payer option enacted in one state to be spread to other states via this mechanism. Worth thinking about).
  2. Reforming the Insurance Reforms: The health insurance industry played a very complicated game in the battle over health insurance, simultaneously opposing and endorsing legislation (but never doing either with any full weight or concerted effort), and constantly lobbying for exclusions, exemptions, and preferential treatment. Thus, while the worst of the health insurance industry’s worst practices were abolished by the PPAC Act, there’s still a lot that needs to be done. Insurers are still permitted to vary premiums by age; enforcement mechanisms are entirely reliant on state insurance commissioners, and need at the very least to have some oversight by HHS; much stronger anti-cherry-picking requirements (such as more robust risk adjustment); and most of all, more regulatory reforms are needed on the health insurance industry outside of the exchanges.
  3. Fixing Rates and Subsidies: One of the things that was improved by the Reconciliation Bill but still needs some work is to improve the quality of standard health care plans on the exchanges, adjust the premiums, deductibles, and co-pays that count towards “affordability,” and to insure that the subsidies are sufficient to make health care plans genuinely affordable. Beginning with premium subsidies, one of the compromises that was made in the Reconciliation was an adjustment of the premium credits linked to sliding scale premiums: people making 133-150% of poverty would pay about 1.5-2.5% more of their yearly income, people making 150-200% would pay 1-2.3% more, people making 200-250% would pay about .5% more, and so on (it actually gets more generous as you go up the income scale. Likewise, the Reconciliation bill made changes to the “actuarial value of the basic benefit plan” (i.e, how much of medical costs the plan will pay vs. how much you have to pay out-of-pocket) which weakened the value of the plan for folks making 100-150% of poverty by 3%, 150-200% of poverty by 8%, 200-250% of poverty by 12%, and a mix for people between 250-400% of poverty. Now, these reduced levels of subsidies are still pretty good, and result in health care plans that are on average better than existing private-sector health care plans, but they could still leave a hefty burden on individuals and families within the exchanges. It will be necessary to continually adjust these rates – especially to make sure that the subsidies keep up with the rate of medical cost growth – but we should also seek to go beyond the defensive, and expand the generosity of subsidies and the comprehensiveness of health care plans. The more they are improved, the more incentive there is for people to gain access to the exchanges, to see the mandate as an equitable quid pro quo, and the more income can go to boosting the recovery.
  4. Restoring the Right to Choose: There is little question that feminist groups, and women in general, got badly rolled in the legislative negotiations over PPAC and the Reconciliation Bill. While Obama’s executive order is ultimately a paper nullity (although a nullity that continues the Hyde Amendment, which needs to be abolished), the Nelson provisions for abortion in the ultimate bill are still a huge step back for women’s right to choose. I agree with Jos of Feministing that the pro-choice community was stuck in between a rock and a hard place, but was politically weakened nonetheless. A major part of the reason this happened, as Jos points out, is that progressive legislators who normally are pro-choice were committed to passing a health care bill and swallowed a loss on choice to get the underlying bill. One of the advantages of using the regular amendment approach is that you can structure amendments to either make a bunch of changes to many parts of the legislation, or make just one alteration – and when you focus on just that one change, with nothing else riding in the balance, you don’t get the same problems with tradeoffs within your own side. A right-to-choose-only amendment would receive the united support of the progressive elements of the Democratic Caucus, along with many New Democrats (who are neoliberal on economic issues, but unlike the Blue Dogs don’t tend to be socially conservative).
  5. Including Our Immigrant Population: With the passage of this bill, approximately 32 million people who lack health insurance will gain access and coverage. However, there is a further 10-20 million people who will not be covered because they are undocumented immigrants and because the demagoguery of anti-immigrant politicians was successful not merely in denying them Federal subsidies, but access to the health exchanges with their own money. Regardless of what one thinks about the issue of undocumented immigrants in America, the plain truth is that communicable diseases don’t care who has visas and who doesn’t, and neither do infection vectors. Getting undocumented immigrants health insurance is a necessity for our benefit as well as theirs. This is yet another reason why a comprehensive immigration reform bill is necessary. The Comprehensive Immigration Reform for America’s Security and Prosperity Act of 2009 introduced by Rep. Luis Gutierrez, Chair of the Democratic Caucus Immigration Task Force and the Congressional Hispanic Caucus Immigration Task Force, is a critical piece of legislation for many reasons, but one of the implications of the PPAC Act is that we desperately need to find a way for undocumented immigrants to gain legal residency so that they can be covered under health insurance. This in turn will require amendments to existing legislation to provide for the newly-included residents to be covered under the new system, and provisions to ensure that this further expansion is within the means of the system.

Moving Beyond PPAC:

Ultimately, the reforms discussed above are relatively minor alterations that do not change the basic structure of our health care system in the America of 2014. And this structure will need to change – President Obama’s promise to progressive Democrats to go for a second try on the public option, as well as the various public option bills introduced by a number of Representatives, shows that the fight over the ultimate structure of American health care is not over.

The current system of health insurance will eventually have to end – employer-based coverage will eventually need to be replaced by single-payer (one of the unsung effects of the exchange is that it will eventually bring all employer-based health care groups within the exchange, allowing future transitions to occur without the frightening disjunctions that spell political disaster), for-profit health insurance companies will eventually be replaced by more efficient public systems, and we will need to move from a system that emphasizes the quantity of treatment to a system that emphasizes the quality of treatment if we are to rein in the growth of the health care sector and preserve our economy’s stability for the future.

As I have discussed in previous posts, I believe that a single-payer system will eventually emerge from the expansion of existing public programs:

  1. Expanding Medicaid – as you can read about in posts linked above, one of the most significant reforms in the PPAC Act is the expansion of Medicaid to everyone under 133% of the Federal poverty line – at least 15 of the 32 million covered under the legislation are covered under Medicaid (note: 15 million is actually a conservative estimate by the CBO about how many eligible people will actually sign up – this is one reason why a concerted grassroots campaign to get people signed up is crucial). It is hard for people to understand why this (along with the increase of Medicaid reimbursement rates to Medicare rates, and the increase of the Federal contribution to 75%) is so important, in part because most people don’t know very much about Medicaid and tend to think it’s a program that covers all poor people. Until Monday, Medicaid provided health care only to the categorical poor: the disabled poor, the elderly poor, and poor families with children. Single individuals in poverty or families without children were not eligible, and even for the categorical there were huge gaps in coverage created by strict guidelines about income and wealth limits. This expansion firmly establishes income as the sole test of eligibility, and extends eligibility for the first time to the near-poor. For the first time, the neediest of Americans will be covered under what is functionally equivalent to Medicare. One clear route to single-payer is the gradual expansion of eligibility to individuals and families within 150%, 175%, 200% and 250% of poverty. Such expansions would be entirely familiar and comfortable votes for Democratic legislators, directed at providing genuine benefits to a population obviously worthy of assistance who happen to vote overwhelmingly Democratic.
    1. One subsidiary point: one way that we can avoid the situation that the CBO forecasts of having uninsured people who are eligible for coverage but who fail to sign up for it is to make Medicaid coverage automatic for all eligibles, such that people have to affirmatively opt-out. This will make an enormous difference in insuring populations who have difficulty navigating bureaucracy – the homeless, migrant workers, young people who don’t know if they’re eligible, and the recently poor.
  2. Expanding Medicare – one of the actually quite decent compromises that didn’t happen in the PPAC bill thanks to Senator Lieberman’s epic dog in the manger veto of a policy he himself has advocated for was the expansion of Medicare eligibility down the age range from 65 to 55. This is actually a very affordable way to cover people, and has the side-effect of making the overall system work more smoothly. People from 55-64 are generally speaking a much healthier (and thus cheaper to cover) population than those 65 and over, which means that Medicare’s relative financial burden actually goes down as less expensive rate-payers are added into their pool. At the same time, by subtracting the oldest slice of the population from the Exchanges, this makes the pool of people seeking health insurance on the exchanges younger and healthier – which encourages insurers to participate in the exchanges and offer lower rates. Akin to the Medicaid amendments proposed above, this can also be done in a series of gradual expansions from 65 to 60 to 55 to 50 and so on, and can also be made opt-out.
  3. Public Option Take 2 – of the various public option bills proposed by Representatives after it became clear that the public option wasn’t going to make it into PPAC, I like Rep. Alan Grayson’s version the best, which simply allows anyone to buy into Medicare at cost. As political questions go, this bill will be extremely straightforward – should people be able to buy into a beloved program? Moreover, one of the things that it sets up is a very favorable negotiating strategy. By starting at Medicare, it allows us to bargain with conservative Democrats on higher reimbursement rates – Medicare plus 1, 2, 3, 4, or 5 – without departing from the core strengths of the proposal. At worst, this might mean that we end up with the “robust” public option, which shows how important it is to begin negotiations at 200% of what you want rather than 100% of what you want.
  4. A Grand Campaign to Cover the Nation – as I’ve discussed before, one of the crucial “next steps” is a concerted grassroots push by social movements and elements of the Democratic Party to sign people up to go onto the Exchanges and into public plans as they become available. This should become an organic part of our organizing and a concrete expression of our deepest held beliefs: want to register as a Democrat – how ’bout signing up for Medicare at the same time? Want to join a union – ‘how bout getting health care the bosses can’t take away from you? Want to help protest what’s happening in your community – empower yourself to act by signing up for Medicare and showing how we protect each other.

And Ever On:

And even after this, the work doesn’t end. The various pilot programs on cost control will eventually have to be expanded system-wide to bring down the rate of growth in health care costs. After that, the push will be on to shift from health care reform focused on how we pay and for what to health care reform based on outcomes – how well we’re treating people – which is much more fun.

In the end, health care reform is not an event with a beginning or an end; it is a process, by which each generation expands the boundaries of our humanity and renews the values of our society.

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