Home > Health Care, U.S. Senate > Clearing Up a Few Things

Clearing Up a Few Things

December 18, 2009 Leave a comment Go to comments

Ever since liberals and progressives threatened to withhold their support from what remains of the health care reform health insurance company subsidy bill presently stalled in the Senate, which has been stripped down of anything which could meaningfully be called reform, supporters of the Senate compromise have put forth a number of debating points in defense of its final passage. Many of these are misguided at best and outright falsehoods at worst.

For a thorough debunking of a few of these talking points, please follow me below the fold.

Claim: This is the only chance for reform for the next 20 years
Made by: White House Adviser David Axlerod

David Axelrod, Mr. Obama’s senior adviser, began the day by calling in to MSNBC to urge the party to hold together, warning of a “tragic outcome” if Democrats failed to pass a bill that the White House says would expand health coverage while reining in costs.

“I don’t think you want this moment to pass,” Mr. Axelrod said. “It will not come back again.”

[New York Times]

If this were true, then that is all the more reason that the White House should have fought for the best plan they could have achieved, instead of settling for half-measures from the start. Digby has more to say about this:

And as for the idea that insurance reforms are a huge progressive victory that can only be accomplished once in a generation, well that’s a pretty sad comment on our country — and progressivism.

What this huge electoral mandate and congressional majority have gotten us, then, is basically a deal with the insurance industry to accept 30 million coerced customers in exchange for ending their practice of failing to cover their customers when they get sick —unless they go beyond a “reasonable cap,” of course. (And profits go up!) If that’s the best we can expect of progressivism for the next generation then I’m afraid we are in deep trouble.

The real flaw with this argument is that it’s little more than a scare tactic. In essence, the White House is signaling that if they cannot get this bill, they will not fight for another one. Then President Obama turns around and issues another scare threat:

“If we don’t pass it, here’s the guarantee….your premiums will go up, your employers are going to load up more costs on you,” he said. “Potentially they’re going to drop your coverage, because they just can’t afford an increase of 25 percent, 30 percent in terms of the costs of providing health care to employees each and every year. “

The president said that the costs of Medicare and Medicaid are on an “unsustainable” trajectory and if there is no action taken to bring them down, “the federal government will go bankrupt.”

“This actually provides us the best chance of starting to bend the cost curve on the government expenditures in Medicare and Medicaid,” Obama said.

[ABC News]

If the failure to act now will bankrupt the country, then surely a larger measure of political will to actually make meaningful reform can be found sometime before that actually happens. However, according to the Centers for Medicare and Medicaid Services report (PDF), the bill on offer will only “bend the cost curve” by a measly 0.3%, and it will accomplish this by giving employers an incentive to dramatically reduce coverage in the form of an excise tax on more comprehensive insurance plans.

Claim: The public option was never part of Obama’s plan
Made by: Senator Mary Landrieu (D-LA)

Here is Senator Landrieu making this claim on MCNBC’s Hardball, the exchange begins at the 1:00 mark.

Dean: You would not let us choose another program. You forced us into the insurance industry. We don’t want to be forced into the insurance industry. You took away our choice.

Landrieu: You never had that choice to begin with-

Dean: The president campaigned on it, Mary. The President of the United States campaigned for-

Landrieu: No he did not campaign for a public option, he did not campaign for Medicare for all.

[Hardball with Chris Matthews]

Not only is this demonstrably untrue, but in point of fact, a public insurance option is still listed as part of the Obama plan:

Quality, Affordable Choices


  • Creates a new insurance marketplace — the Exchange — that allows people without insurance and small businesses to compare plans and buy insurance at competitive prices.
  • Provides new tax credits to help people buy insurance.
  • Provides small businesses tax credits and affordable options for covering employees.
  • Offers a public health insurance option to provide the uninsured and those who can’t find affordable coverage with a real choice.
  • Immediately offers new, low-cost coverage through a national “high risk” pool to protect people with preexisting conditions from financial ruin until the new Exchange is created.


Claim: The bill will provide coverage to over 30 million Americans
Made by: President Obama

First of all, coverage does not equal care. Millions of Americans already have coverage and their claims are still routinely denied. And if by “covering” he means “forcing people to buy what they cannot afford,” then that statement might ring true. But practically speaking, that simply will not work as a means to deliver health care to people who cannot afford it. I’ll let candidate Barack Obama handle this one, since he says it so much more eloquently than I ever could.

Here’s the concern. If you haven’t made it affordable, how are you going to enforce a mandate. I mean, if a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house. The reason they don’t buy a house is they don’t have the money. And so, our focus has been on reducing costs, making it available. I am confident if people have a chance to buy high-quality health care that is affordable, they will do so. That’s what our plan does and nobody disputes that.

[Barack Obama]

This one is truly disappointing to hear, because anyone who was paying any attention to the Democratic presidential primary should remember the fierce debate between Obama and Hillary Clinton about the feasibility of individual mandates.

Claim: The bill still contains much-needed reforms
Made by: Paul Krugman

At its core, the bill would do two things. First, it would prohibit discrimination by insurance companies on the basis of medical condition or history: Americans could no longer be denied health insurance because of a pre-existing condition, or have their insurance canceled when they get sick. Second, the bill would provide substantial financial aid to those who don’t get insurance through their employers, as well as tax breaks for small employers that do provide insurance.

All of this would be paid for in large part with the first serious effort ever to rein in rising health care costs.

[Paul Krugman]

Far be it from me to take on Paul Krugman, but he is apparently failing to take into account what the insurance companies are able to do to evade these provisions of the bill. In other words, he’s repeating the verbiage of the bill without making any assessment of the glaring loopholes within it.

Yes, it is entirely true that the bill prohibits insurance companies from discriminating on the basis of pre-existing conditions. However, thanks to a little-noticed last minute tweak made by Majority Leader Harry Reid, insurance companies are free to place annual dollar limits on what they are required to pay out, as long as they are “reasonable.” This term is left undefined. In the words of Stephen Finan of the American Cancer Society:

“The primary purpose of insurance is to protect people against catastrophic loss,” Finan said. “If you put a limit on benefits, by definition it’s going to affect people who are dealing with catastrophic loss.” The cost of cancer treatment can exceed $100,000 a year.

Under the health care bills in Congress, the major expansion of health insurance coverage won’t take place until three to four years after enactment. Democrats have touted a series of consumer protections as immediate benefits Americans will secure through the legislation. Both the Senate and House bills, for example, ban lifetime limits on the dollar value of coverage.

But Finan said the change in the Senate bill essentially invalidates the legislation’s ban on lifetime limits.

“If you can have annual limits, saying there’s no lifetime limits becomes meaningless,” he said. A patient battling aggressive disease in its later stages could conceivably exhaust insurance benefits in the course of a year.

A health insurance policy that does not protect against financial catastrophe is no insurance at all. Worse still, a company that is legally required to take on patients who were previously considered uninsurable has that much more incentive to pick and choose. Under this bill, they still have ample opportunity to do so.

To Krugman’s point that the bill will end rescission, the practice of canceling a customer’s policy as soon as they become seriously ill for unrelated reasons, we can look directly at the language of the bill itself to see how this is going to play out.

A group health plan and a health insurance issuer offering group or individual health insurance coverage shall not rescind such plan or coverage with respect to an enrollee once the enrollee is covered under such plan or coverage involved, except that this section shall not apply to a covered individual who has performed an act or practice that constitutes fraud or makes an intentional misrepresentation of material fact as prohibited by the terms of the plan or coverage. Such plan or coverage may not be cancelled except with prior notice to the enrollee, and only as permitted under section 2702(c) or 2742(b).

This section of the bill is window dressing. Why? Because this is precisely the justification insurance companies already use to rescind policies! This is already what is happening right now! Nothing changes under this bill. Adding the word “intentional” to “misrepresentation” does little to stop insurance companies from denying care on this basis, because in order to challenge their assessment of intent, the policyholder must go to court. People who are fighting for their lives, the very ones who are most affected by rescissions, are in no position to engage in long and costly legal battles with their insurance provider.

See Rep. Bart Stupak (yes, that guy) grilling insurance company executives on precisely this point. In June.

Claim: If the reform effort fails, it’s not Barack Obama’s fault
Made by: Everyone who still supports President Obama on health care

For progressives, there is no shortage of bad guys here, and there is plenty of blame to go around: Joe Lieberman, Ben Nelson, the Blue Dogs, the entire Republican caucus, and many others. Regardless of who truly is to blame, whether fairly or unfairly, the success or failure of this enterprise will be hung around the President’s neck. I happen to think this is an entirely fair assessment, and here’s why.

Obama administration officials were not pleased when word leaked out earlier today that the White House was leaning on Senate Majority Leader Harry Reid to cut a deal with Joe Lieberman on a public option alternative–and they gave their counterparts on the other end of Pennsylvania Ave. an earful about it. But in the end, sources are unanimous: The White House wants Reid to hand Joe Lieberman the farm.

An aide briefed on discussions with the White House says that there would be no story if Chief of Staff Rahm Emanuel hadn’t interceded. The aide confirmed an account, reported byHuffington Post, that Emanuel visited Reid personally, telling him to cut a deal with Lieberman.

Then the aide provided more detail.

Emanuel didn’t just leave it to Reid to find a solution. Emanuel specifically suggested Reid give Lieberman the concessions he seeks on issues like the Medicare buy-in and triggers.

[Talking Points Memo]

I’ve spoken to close friends who have made the point that the President no longer has a vote in the Senate. Fair enough. But who is in charge of Rahm Emmanuel? For that matter, who is in charge of Harry Reid? From the very beginning of this debate, the White House has been anything but a silent observer in this process. They have twisted arms, LBJ style — but all the arms twisted belong to the very same people who are advocating for items contained within the President’s original plan.

At some point, compromise becomes concession. Progressives who have consistently supported every single item of the President’s stated health care plan have gone along with every compromise that they were told by the White House was necessary to ensure reform, up to the point that any last possible vestige of reform was stripped out. What concessions has Joe Lieberman made? Ben Nelson? To pretend that the President has not taken an active role in shaping the outcome of this bill is willful blindness.

Ultimately, the buck stops on the President’s desk. At every step of the way, President Obama has adopted a strategy that virtually guarantees defeat of what he himself said he wanted on the campaign trail. He has not used his influence as president to move the Senate bill closer to what he proposed as the centerpiece of his domestic agenda, but rather continually farther away. For progressives to forgive him for this grave error in judgment is itself unforgivable.

Categories: Health Care, U.S. Senate
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  1. December 22, 2009 at 10:55 pm

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