Johnson To Banking?

I don't want to sound insensitive to the disabled, and Tim Johnson appears to have all of his mental faculties with him. But Johnson is two years out from a debilitating stroke, and chairing a committee in the Senate is demanding work. Robert Byrd lost his gavel because he was physically incapable of performing the chairmanship on Appropriations. I would just be very surprised to see Johnson get the chair of the Senate Banking Committee if Chris Dodd moved over to run the HELP Committee to replace the late Ted Kennedy.

There's the other matter that Johnson clearly is a total shill for corporate banking interests, many of which are hid away in his low-regulation state of South Dakota. With consumer protection legislation coming up, absolutely nothing of worth would get through a Banking Committee under Johnson. But it would be simply terrible optics to have someone who may not be able to handle the job up there trying to put together this high-profile legislation. I just can't see it.

Next in line on Banking after Johnson would be Jack Reed, which would be a major improvement over Johnson and Dodd. If Reed gets it, we're seeing some serious change. If Dodd stays put and Barbara Mikulski takes over HELP, it's the status quo. If Johnson really gets that seat, the country is seriously ruled by corporate whores and sellouts.

Maybe I shouldn't be so unequivocal in my prediction.

HELP Committee Gets A Good Score

Reformers in the health care debate have a right to be pleased by the latest release of the CBO score for the bill coming out of the Senate Health, Education, Labor and Pensions (HELP) Committee. The baseline numbers are that 97% of the population would be covered for a total cost of $611 billion over 10 years. That sounds too good to be true! A better plan than the Senate Finance Committee's, including a public option, at a fraction of the cost! Only this number, like the previous HELP Committee score, is a bit incomplete. The news remains good, however.

The short version is this: CBO estimates that by 2019 the bill will cover 21 million people at a cost of $597 billion. But -- and this is important -- the HELP Committee's bill doesn't include the Medicaid expansion, because Medicaid is under the sole jurisdiction of the Finance Committee. But if Medicaid is expanded to 150 percent, it will cover an additional 20 million at a cost of about $1 trillion. Add in the savings that Finance is expected to get from reforming Medicare and you're looking at a bill that will cost $1 trillion to $1.3 trillion and cover 42 million people (which would mean 97 percent of the legal population in 2019 would have health insurance) by 2019.

Jon Cohn has a fuller explanation. But this gets us back to basically where reformers expected the score to be in the first place - a successful plan with a cost that remains a fraction of overall health care spending and, if offset properly, would not raise the deficit at all. The "down payment" of funding that the President put down previously would get you 50%-65% of the way there, which is much better than expected considering that this covers practically everyone.

The question then becomes, why did the HELP Committee write such a better bill? I think the working assumption has always been that the HELP Committee is more liberal than the Finance Committee, and that health care is one of those issues where more reform aligns with cheaper overall costs and better effectiveness. Think Progress attributes the new score to the inclusion of a public option, but Ezra says it's because of the employer mandate:

The June 15th proposal didn't include an employer mandate. And without one, the news was grim: Employers would drop coverage for 15 million employees and send them to the Health Insurance Exchange where they would need government subsidies to afford health insurance. That meant costs exploded and coverage contracted. Health reform looked like a bum deal.

But oh, what a difference a mandate makes: The new version of the HELP bill includes an employer mandate for firms with more than 25 workers. Every full-time worker who isn't given health-care coverage triggers a penalty of $750. Every part-time employee not given coverage costs $375. Doesn't seem like very much, does it? But it's enough. In Massachusetts, the employer mandate has been a success with a piddling $295 penalty. Indeed, the evidence we have suggests that the small penalty creates a massive change in behavior.

And you see the result in CBO's latest score. The June 15 report estimated that 15 million Americans would lose their employer-based coverage under HELP's bill. Today's report estimates that a mere 150,000 will lose their coverage. That's nothing. And it means that a lot more Americans end up insured and the government spends a lot less in subsidies.

The HELP Committee document highlights both the public insurance option and the employer mandate, so they obviously feel comfortable that both elements explain the more favorable score.

I personally think the employer-based system has flaws (and I'd think employers would want out of it), but a mandate combined with generous subsidies for those who have no job could combine to jury-rig a decent system, especially with cost controls.

For a few reasons, this really helps those supporting a public plan in the debate. Even if you understand the CBO scoring mechanism, it's a cheaper solution that covers more people than the Finance Committee's. And the baseline numbers will be distorted IN THE DIRECTION of reform, rather than away from it, which happened with the first HELP Committee bill. The point is that we now know what a comprehensive health care reform would look like and cost, based on best estimates. And since this public plan is more akin to Chuck Schumer's and somewhat weaker than, say, the House Tri-Committee version, potentially even more savings could arise from THAT CBO score. At that point, the public option becomes the fiscally responsible option. And while that hasn't stopped the fiscal scolds before, the momentum for inclusion would be hard to stop.

...This, from a WaPo chat with Ezra, sums up my feelings:

Ezra Klein: I think the real problem with a system built around an employer mandate is that it's still a system built around employers, which means that it's still crazily inefficient and patchwork. What you're basically seeing here is tension between the politics and policy of health reform. The politics say leave what everyone has alone. The policy says change everything because what we have now doesn't work. And the politics are winning.

...worth posting the President's reaction:

For decades, Washington has failed to act as health care costs continued to rise, crushing businesses, families and placing an unsustainable burden on governments. Today the Senate HELP committee has produced legislation that lowers costs, protects choice of doctors and plans and assures quality and affordable health care for Americans. The Congressional Budget Office has now issued a more complete review of this bill, concluding that it will cost less and cover more Americans than originally estimated. It also contains provisions that will protect the coverage Americans get at work. When merged with the Senate Finance Committee’s companion pieces, the Senate will be prepared to vote for health reform legislation that does not add to the deficit, reduces health care costs and covers 97% of Americans.

The HELP Committee legislation reflects many of the principles I’ve laid out, such as reforms that will prohibit insurance companies from refusing coverage for people with pre-existing conditions and the concept of insurance exchanges where individuals can find affordable coverage if they lose their jobs, move or get sick. Such a marketplace would allow families and some small businesses the benefit of one-stop-shopping for their health care coverage and enable them to compare price and quality and pick the plan that best suits their needs.

Among the choices that would be available in the exchange would be a public health insurance option. The public option would make health care affordable by increasing competition, providing more choices and keeping the insurance companies honest.

The legislation also improves the quality of patient care, improves safety for patients and strengthens the commitment to preventive health care – preventing people from getting sick in the first place.

I thank chairman Kennedy, Senator Dodd, and all the members of the HELP Committee for their hard work on health reform.

Slightly Less Queasy On Health Care

The House health care bill has been received favorably by advocates and, more importantly, the President:

Today, the Chairs of several Committees in the House of Representatives unveiled their health care reform proposal. This proposal would improve the affordability, availability, and quality of health care and represents a major step toward the our goal of fixing what is broken about health care while building on what works.

Jon Cohn has more. At some point, Obama needs to stop giving favorable nods at the Congress and step hard into this debate. But I feel better about this today than yesterday. Doctors are nodding toward working with Obama, and they are the most respected constituency on this issue. Just getting the AMA to back off and not follow the Chamber of Commerce, wackjob Betsy McCaughey (it's amazing she's running the same shtick from 1993 all over again) and other right-wing groups who want to keep the status quo would be positive.

Igor Volsky has a great comparison of the three bills - the House tri-committee bill, the Senate Finance Committee and the Senate HELP Committee. If we can get it through HELP, two of them will include a public option. Basically it comes down to a freshman Democratic Senator fulfilling Ted Kennedy's lifelong dream:

With Ted Kennedy too sick to come down to DC and make the committee vote, Democrats will need every Senator on the HELP committee to produce a strong bill, a bill that fights for what Teddy Kennedy has been fighting for his entire life. The last holdout is Kay Hagan, who represents a state (NC) that is one of the worst in the country in terms of percent of people without health insurance. The insurance companies are lobbying Hagan against the bill, because they don't like having to compete with a public option. My simple question is this: Teddy Kennedy is too sick to be there, Senator Hagan, so he is relying on your vote for the issue that he has fought for passionately his entire life. Will you betray him to help the insurance companies? You need to make up your mind now.

Sounds like a simple question for Kay Hagan.

HELP's Health Care Bill

Ted Kennedy's committee will try and influence the debate on health care with the release of their comprehensive legislation, which includes some pretty solid proposals.

Sen. Edward M. Kennedy (D-Mass.) is circulating the outlines of sweeping health-care legislation that would require every American to have insurance and would mandate that employers contribute to workers' coverage.

The plan in the summary document, provided by two Democrats who do not work for Kennedy, closely resembles extensive changes enacted in the senator's home state three years ago.

In many respects it adopts the most liberal approaches to health reform being discussed in Washington. Kennedy, for example, embraces a proposal to create a government-sponsored insurance program to compete directly with existing private insurance plans, according to one senior adviser who was not authorized to talk to reporters.

The draft summary also calls for opening Medicaid to those whose incomes are 500 percent of the federal poverty level, or $110,250 a year for a family of four.

If you're looking for the left-most counterpart to whatever happens in Max Baucus' Senate Finance Committee, this is it. MassCare is doing decently, but not getting the job done on its subsidies because a small state has no chance to drive down costs in any meaningful way. The cost controls - and how to pay for the subsidies - are the two keys here.

But it's notable that Kennedy includes a robust public option. Howard Dean today painted Chuck Schumer's compromise public option as the limits of where he would allow the conversation to go.

As a sticking point, he's insistent that any reform effort include a public plan. The public entity would provide insurance that, by avoiding the demands of the private market, could help control cost and expand coverage. Cognizant that such a proposal will engender stiff -- if not universal -- opposition from Republicans in the Senate, Dean said he had no objection to Schumer's modified version.

"If we can get Schumer's proposal out of the Senate, I think that would be a very good thing," he told the Huffington Post. "It can't be any weaker than that though. We don't want what would be a fake public option."

As one of the leading progressive voices on health care reform, Dean's endorsement of the Schumer proposal is no small thing. The New York Democrat has envisioned a plan for insurance coverage that, while run on public funds, is self-sustaining and subject to private market rules. Money would come from the payments and premiums of consumers. The same officials who ran the plan would be forbidden from regulating it. And a reserve fund would be set up to handle a potential influx of claims.

The stipulations, Dean said, would assuage critics without actually diminishing the public option itself.

"[Schumer's proposal] is still run by the public," he added. "But it is subjected to insurance rules that are there in order to protect the public from for-profit institutions, which is obviously not necessary if you are running your plan on the public side. Because the consumer needs the protection because of the profit-motive, but they don't need protections from a non-profit or the government. So Chuck has those things in there to level the playing field. I understand that. And I don't think we need to be doctrinaire about this. But I think, the bottom line is a public option is run by the public and financed by the public, it is not administered by the private sector."

I'm not quite as sanguine as Dean about Schumer's public option because it would act much like a nonprofit, without getting the Medicare bargaining rates needed to drive down costs. It would represent an improvement, but only a slight one. However, framing the conversation as a choice between Schumer's version or Kennedy's, not Schumer's version or nothing, is crucial. That's the importance of the Kennedy bill.