Why not ditch the excise tax?

by: Jay Stevens

Fri Jan 15, 2010 at 14:35:47 PM MST

But here's the paragraph I want to talk about:

But if you think that the administration will simply give up on the excise tax -- which does them virtually no good in the first 10 years anyway -- why is it in there at all? It's unpopular with their allies and wins them no friends among their enemies. Indeed, it's easy to see why so few presidents attempt cost control: You get hammered by the people who usually like you and dismissed by the people who usually like cost controls but don't fundamentally trust you. That leaves you with, well, virtually no one.

First, the excise tax has nothing to do with cost control. It will not cut costs. Causing consumers to ditch good insurance plans will have two effects: One, they will pay more out-of-pocket for health care. Two, they will avoid seeking medical care when possible and in the long run, as a direct result, will consume more health care and more expensive health care than otherwise.

Second...it does beg the question, why is the administration so devoted to the excise tax?

Maybe they do believe, like Ezra, who's apparently here internalized private insurers' profiteering logic, that it will control costs. (Although, from experience, we know it doesn't.) More likely, IMHO, they need a funding mechanism for the bill they're passing, and are justifying it as a cost-control measure. And it's aimed at unions because they're easier to disappoint than deep-pocketed private insurers.

Klein's take on the Baucus bill

by: Jay Stevens

Wed Sep 16, 2009 at 14:02:41 PM MST

CBO score? Swoons! "According to the CBO, the bill covers 94 percent of legal residents and actually reduces the deficit. More to the point, it keeps reducing the deficit as time goes on." (A robust public option would only make the score better.)

Health insurance exchange? Surprisingly progressive. "In other words, by 2022, the Health Insurance Exchanges will be open to all businesses of all sizes." (All the more reason to include the public option into the bill!)

Coverage? Comprehensive, but... "This is much better than what many people get now. But given the insufficiency of the total funding, the question is how much cost-sharing is allowed in these plans."

State regulation? Possibly transformative. States could form "compacts" with other states with a similar regulatory environment to allow insurers to sell policies across state lines. National plans meeting certain regulatory standards could be created. "Presumably, that plan would also have more bargaining power and substantial efficiencies of scale, as it will be national, rather than confined to a single state. This could prove seriously transformative in the private insurance market." (I am not optimistic as to believe states' attempts to regulate insurers won't be undercut by federal officials; nor is bargaining power a sure way to lower costs when there's still the inefficiencies and profits of private insurers propping prices up.)

Individual mandate? The fine is logical. "This is, on some level, paying for services that will be rendered. It's not a penalty as much as it is a charge, as the uninsured actually do use care, and the rest of us actually do pay for it." (Doesn't justify the morality or cost of forcing individuals to purchase private plans, though.)

Insurance cost variation? High. The variation cushions the impact to profits of the implementation of the community standard - forbidding insurers to discriminate against customers based on pre-existing conditions. It's a ratio of how expensive a policy for a certain risk category can be compared to the lowest offered price. Insurers can charge more for age, tobacco use, family situation, or geography. "At the end of the day, the maximum variation, which is to say the plan for the most expensive risk as compared to the least expensive risk, is 7.5:1, which is quite high."

Affordability? Bleh. Subsidies for folks making up to 300 percent of poverty level are "pretty good." And if you get sick? "...pretty much that people making more than 200 percent of the poverty line will be less ruined than they'd be under current law, but still facing tens of thousands of dollars in out-of-pocket expenses a year."

Co-ops? Neutered.  "As I understand it, they have to bargain with each provider and drug manufacturer and hospital and so forth separately, meaning they're denied one of the main advantages of size. The insurance industry is, in other words, being protected from not just public competition, but co-op competition."

Free-rider provision? Hates it. "This isn't just the worst policy in the bill. It's one of the worst policy ideas I've ever seen. It creates a huge incentive to build a workforce that entirely excludes low-income workers." Was it intended to compel big corporations - like Wal-Mart - to offer its employees health insurance?

What's the goal of reform, anyway?

by: Jay Stevens

Tue Aug 25, 2009 at 07:02:48 AM MST

Let's start with why folks support a public option. Matt Yglesias:

...the main constituency for health reform consists of people who don't think the present system is fundamentally sound. That's a big part of the reason the public plan element of Obama's proposals has become such an emotional touchstone for the left. The public plan is a fairly modest part of a fairly modest package of reforms, but it's the slice of the package that holds out the prospect of eventual transformation of the system into something quite different and less driven by corporate profits.

The spoken corollary in Yglesias' post is that most folks, while not thinking the system insurance is necessarily sound, are more comfortable with the status quo than with the idea of sweeping and comprehensive reform. That is, there's a real and sizable constituency against, say, single-payer health care (and I'm not talking about Tea Baggers, who are a fringe group of quasi-violent obstructionists). Which also explains why younger politicos - who are more sensitive to consensus-building - readily support the public option, not single-payer health care.

The most interesting observation - at least for the purposes of this post - was from Ezra Klein:

The primary constituency for health-care reform has a political attachment to it, and in particular, to the public option portion of it. This is not, however, the most obvious constituency for health-care reform. That honor goes to the uninsured, the underinsured, the unemployed and others lower on the income ladder who are likely to directly benefit from the bill, rather than abstractly benefit from seeing their ideological preferences included in the bill.

They, however, are not in the streets or at the town halls. Broadly speaking, they're politically marginalized: They don't vote or march or yell.

Klein, for me, has been one of the more frustrating voices in this debate. He's always dismissed the more ambitious elements of reform as unimportant. What gives?

I think the answer is there in his opinion of who's the "constituency" of health care reform: the dispossessed, the indigent, and the sick. Essentially for Klein et al, it appears they see reform as a kind of assistance program for those that are shut out of the system. Reform addresses the marginalized, drawing them into the status quo, while seeking to curb the worst excesses of the insurance system. It's not transformational. It' doesn't fundamentally alter how we deliver and pay for health care.

It's easy for us to scoff at Klein's limited view of health care reform. But I don't think any of us should overlook the obvious benefits this limited reform would bring to millions. Sure, real and comprehensive reform would benefit these folks more, but even this limited reform is something. The goals of the "incrementalists," or the "insurance reformers," or the "cowardly un-progressives" - or whatever the slur du jour is - are good. Isolated from cost, politics, efficiency, etc & co, it might even be worth supporting.

That's still a long way from saying that this limited reform is acceptable.

For one, as I've argued before, I can't help but think these reforms are, at best, a temporary brake on the degradation of private insurance coverage, and no brake at all on health care costs. The insurance industry has a motive (profit) and the means ($$$) to sidestep regulation. (So they can't discriminate against preexisting health conditions - but what about denying a policy to someone because of their zip code, say?) The public option would act as a brake on this degradation, and an escape outlet for consumers.

For another, implementing an insurance mandate without the public option would be politically disastrous for Democrats, progressives, and future reform. Read JC's post about his broken ribs. Here's a guy who's been jerked around by private insurers for years: what feelings do you think he's going to experience when he wakes up one morning, suddenly required by law to buy a private insurance policy? There's the rub: most of those who'd benefit from Klein's limited reform will have been dropped from private insurance rolls because of preexisting conditions or age or general health or because they, you know, once used insurance money for a catastrophic event, and I'm guessing pretty much all of whom feel like they've been misled and cheated by their insurers - and you're going to compel these people to buy private insurance again?

That's not even considering the political fallout of an individual mandate (bandied about by the Senate Finance Committee), which would give employers an incentive to drop their benefits programs for employees. Imagine, then, how those voters will feel when they wake up one morning without insurance and compelled by law to purchase an individual policy at a much higher price?

And I don't even bring in all the other arguments - efficiency, cost, the idea of implementing a reform that essentially bribes the private insurance industry to take on the people who are the biggest risks.

Which is the long way of saying that what divides the left on reform isn't knee-jerk and simplistic dichotomies of "true" progressive vs. "false" progressive, or the courageous vs. the faint of heart, or "pure" vs. "corrupt," but in the difference in the way we define the problem to which we're applying a solution.

To kill the bill, or not to kill the bill...

by: Jay Stevens

Fri Aug 07, 2009 at 08:27:24 AM MST

Washington D.C.: As a progressive who strongly wants a public healthcare option (I've given up on advocating for single-payer, which would be my ideal world situation), should I be content with a plan that has no public option but has co-ops instead? How important is it for progressives to fight for a public options? Should we be willing to sacrifice it if necessary for passage of a bill?

Ezra Klein: Content? No. You should try to get the best bill you can and be content with nothing less. Should you kill a bill that will cover 40 million Americans and stop insurers from ever again rescinding coverage or discriminating based on preexisting conditions? Definitely not.

There are two things happening here. One is that reformers are trying to make people's lives better. The other is that reformers are trying to get the best bill they can. If the former condition is met and the latter condition is not, that's still progress.

Discuss.

Is the proposed benefits tax progressive?

by: Jay Stevens

Mon Jun 15, 2009 at 15:48:00 PM MST

...research shows that those people tend not to be wealthy highfliers with gold-plated insurance plans, as advocates assert, but those who have to pay high premiums just for basic coverage -- the old, the sick, women of childbearing age and residents of high-cost urban areas. Elise Gould, director of health policy research at the liberal Economic Policy Institute, found that a similar cap suggested by a 2005 tax reform panel would have raised taxes mainly on workers with family coverage, many of them in smaller firms with high concentrations of older, female or unionized workers.

Klein:

Gould's research showed that 32 percent of families making between $17,000 and $30,000 have health-care benefits above $11,500, which is where Gould assumed the exclusion would be capped. But 47 percent of workers making more than $46,000 had benefits above that cap. And though Gould didn't break the data down, I can almost guarantee you that that number would be much higher if you examined workers making more than $100,000. The cap is progressive, and sharply so.

Max Baucus, meanwhile, is only considering taxing benefits above $15,000. Which makes it significantly more progressive than the policy Gould is evaluating.

I'm not sure how progressive this tax would be. First, that the tax would kick in for half of wage earners making $46K seems absurdly low. Those are the very families that are being slaughtered by health care costs. Second, the assumption that the cost of health plans for people making more than $100K rises sharply is faulty; at some point, health care premiums top out. You can only spend so much on a health insurance policy. To me, this cap looks like a burden shouldered disproportionately by middle-class to upper-middle-class families.

Still, the $15K cap seems doable. While the EPI study tells us that "gold-plated" policies are held by people who are paying exorbitantly high rates because of age or demographics or history, there's legislation being mulled in Congress that would impose "community rating" on insurance companies:

Community rating would render it illegal for insurers to price discriminate based on the demographics of the applicant. In the draft bill released by the Senate's Health, Education, Labor, and Pensions Committee, for instance, "premium rates may not vary by health status-related factors, gender, class of business, claims experience." They can vary by age and geography, but the amount they can vary is actually capped.

If passed, that would ensure that high insurance premiums would correspond directly to the services received, not be a insurer-defined judgment of risk. Those that need it should still be able to afford it.

Still, and as I've said before, we need to encourage more people to spend more on policies, not the other way around. That's the whole basis of mandatory coverage after all. If those that don't need the health care...now....pay more into the system, it makes prices for all lower.

But give me a strong public option, and I'd gladly agree to a cap...

Ezra defines the types of public options...

by: Jay Stevens

Mon Jun 08, 2009 at 15:12:42 PM MST

Read the whole thing. It describes well the meaning of the public option in this battle for health care reform.

The full text of Klein's description of the three types of public option plans as he sees them are below the fold...

Ezra Klein on Health Care (in Missoula)

by: Matt Singer

Sat Apr 25, 2009 at 15:41:50 PM MST

The short version (2:33)

The long version (58:50)

Ezra Klein Joins Us Wednesday Night

by: Matt Singer

Mon Apr 20, 2009 at 12:32:59 PM MST

He's a smart guy and he's done a ton of health care analysis and reporting over the last couple years. In addition to a short talk, he'll be taking questions for a while.

The Badlander - 208 Ryman St., Missoula
Doors Open 5pm | Speechifying at 6pm
Free

Brought to you by Forward Montana, Health Care for America Now, SEIU, and Blue Mountain Clinic, along with a bunch of other excellent people.  

HillaryCare, the Pursuit of Truth, and the Clintons

by: Matt Singer

Sun Oct 14, 2007 at 09:43:09 AM MST

Sullivan at the time was the editor of TNR where he oversaw the publication of "No Exit" a piece long on misreporting written by a right-wing hack that helped doom the Clinton plan.

Sullivan responded by

1. attacking Ezra's age;


2. saying Ezra lacks intellectual integrity and risks becoming an "activist;" and


3. states flatly that he is "proud" that he helped kill Hillary Clinton's health care plan.

Now, the first argument is an ad hominem, but possibly a fair one -- if experience is any argument at all. Still, on its own, it could also be a simple dodge; invoke the experience card because you can't demonstrate better judgment.

So the second argument, the one accusing Ezra of becoming an activist and of stifling discussion is far more interesting. It, too, is basically an argument by ad hominem -- that Ezra's attacks on Andrew should not be believed because Ezra is a modern-day brownshirt who would shout down all foes.

But what's the dividing line between Sullivan's ideal -- the independent writer -- and his foe -- the activist? By Sullivan's own standard, it appears to be that the independent writer pursues truth first, while the activist pursues results and their team's own success.

Strange, then, that Sullivan, in defending his own publication of a lying piece, ultimately falls back on the results of the piece, rather than its merits regarding truth.

Look -- long story short, it doesn't matter whether Sullivan's other attacks on the Clintons are fair or not. Did Hillary Clinton botch the effort by being too secretive, too anti-private sector, too this or too that? Who knows? I certainly don't (although James Fallows, a writer whose integrity I trust greatly, certainly made a strong case against much of that line of attack).

The simple truth is that it is possible to both believe that Hillary Clinton's efforts in 1994 were tragically flawed and that people like Andrew Sullivan clearly acted more as activists, whatever the faults of that stance, and less as independent writers.

I long ago chose to cast my lot with the activists who work to change the world and think it is possible to do so without sacrificing intellectual integrity (similarly, it is possible to be malicious while hiding behind the journalistic pen).

That's fundamentally because Ezra was correct in this post, where he pointed out that all the pretty thoughts of all of us pretty people with our pretty little minds who are pretty much out of power matter for pretty much nothing when the ugly people in charge refuse to listen.

In other words, so much of writing is intellectual masturbation that, handled incorrectly, can prop up regimes that even the author would agree are failing. The choices are so rarely what we wish them to be -- and so few writers have learned the first lesson of Alinsky: that we must live in the world as it is, not as we want it to be.