Rational Arguments

The final bill is reviewed.  I’ll have more when the release the actual analysis:

Comprehensive health care reform will cost the federal government $940 billion over a ten-year period, but will increase revenue and cut other costs by a greater amount, leading to a reduction of $130 billion in the federal deficit over the same period, according to an analysis by the Congressional Budget Office, a Democratic source tells HuffPost. It will cut the deficit by $1.2 trillion over the next ten years.

The source said it also extends Medicare’s solvency by at least 9 years and reduces the rate of its growth by 1.4 percent, while closing the doughnut hole for seniors, meaning there will no longer be a gap in coverage of medication. The CBO also estimated it would extend coverage to 32 million additional people.

Well, it’s more expensive than the other bills, but it also has larger offsets.  That means it’s bringing in more money (taxes) and making more cuts (savings).  These make it deficit reducing.  And, for those of you who still buy into the “more years of taxes than benefits”, it’s WAY more deficit reducing in the second decade, when there are 10 years of taxes and 10 years of benefits.

It’s also going to help trim Medicare (which fiscal conservatives would love in a rational world), close the donut hole (which seniors would love in a rational world), and cover 32 million more people (which liberals would love in a rational world).

Legislation is about compromise.  This isn’t the bill I would write if I were king of the world.  But that’s not the way the world works.  This is better than what we’ve got.

So pass the bill.

I was at the gym yesterday, and a friend asked me what would happen to his insurance premiums under health care reform.  He didn’t seem too thrilled when I told him that many people would see no difference.  Part of keeping what you like means… keeping what you have.  But don’t take my word for it.  The CBO released a report on what would likely happen to insurance premiums under reform.  Here’s the gist:

Group coverage from employers

• This is what most people who get insurance through their jobs have.  The CBO says that in 2016, the average small group market premium would be around$7,800 for an individual and $19,200 for a family.  Without reform, these numbers would be about $7,800 and $19,300. In the large group market, it’s about$7,300 for an individual and $20,100 for a family with reform, and about $7,400 and $20,300 without.  Not much difference at all.
• Additionally, some people (about 12 percent) with coverage in the small group market would get a small business tax credit.  For them, insurance would be about 8 percent to 11 percent lowerthan without reform.

Nongroup (individual) policies

• These are the policies people would get on the exchange.  In 2016, the average individual policy under reform would be about $5,800 and a family policy would be about $15,200, compared to about $5,500 for an individual and $13,100 for a family without reform.
• Most of those people (about 57 percent) would get subsidies, which would cover about two-thirds of the total premiums.
• Now that’s an increase without the premiums, but most people would see a significant increase int he quality of their insurance.  That increase in quality is more than the increase in the cost.  So they still reported it’s a reduction in cost overall.

Se here’s the recap.  For most people there is going to be no difference in the cost of premiums.  Some will benefit slightly from the small business tax credit.  For people in the individual (nongroup) market, actual premiums might rise, but less than the increase in value of their insurance.  Moreover, most of them will be getting financial assistance, so that even so – the cost to them will go down.

Yes, it’s confusing, but likely good news for the administration.

The bad part, however, is that they estimate that the average premium for a family employer-provided plan will be over $19,000 in 2016.  Now it’s just over $13,000.  That’s a big increase.  And it’s still a huge amount of money.  This bill will do very little to contain costs.

As we all obsess over CBO scores and the cost of reform, it’s important to remember that the CBO only cares about federal expenditures.  That’s all.

What that means is that as CBO scores come down, it doesn’t mean that health care is cheaper.  It just means that the federal government is paying for less.  Making changes to the bills that lower the CBO scores do NOT make health care cheaper.

A lower CBO score may mean that states will have to pick up more of the cost.  That’s probably not a good thing.

A lower CBO score may mean that employers have to pick up more of the cost.  That’s potentially not a good thing.

A lower CBO score may mean that individuals have to pick up more of the cost.  That’s really not a good thing.

Know what a lower CBO score does NOT mean?  It doesn’t mean that health care got cheaper or easier to get.  And expensive health care is positively a bad thing.  Think about that the next time politicians are bragging about lower CBO scores.

Were they listening to me?  I don’t care.  The CBO granted my wish and scored the Republican health care reform “bill”.  Let’s hit the high notes.

You remember how Rep. Boehner said that the Democratic plans would “bankrupt America“?  Well, then, I’d assume that his plan would do much more to reduce the deficit that is causing him such concern.  To the CBO!

According to CBO and JCT’s assessment, enacting the amendment would result in a net reduction in federal budget deficits of $68 billion over the 2010–2019 period. That estimate reflects a projected net cost of $8 billion over 10 years for the provisions directly related to insurance coverage; that net cost reflects a gross cost of $61 billion that is partly offset by about $52 billion in additional revenues associated with the coverage provisions. Over the same period, the other provisions of the amendment would reduce direct spending by $49 billion and increase tax revenues by $27 billion.

Ok, not too shabby.  It’s deficit reducing to the tune of $68 billion over a decade.  But remember that plan that was going to bankrupt us?  It will reduce the deficit by $104 billion over the same amount of time.

Well, so it won’t be as good financially.  We can all be assured, then, that it must be covering more people.  Right?

By 2019, CBO and JCT estimate, the number of nonelderly people without health insurance would be reduced by about 3 million relative to current law, leaving about 52 million nonelderly residents uninsured. The share of legal nonelderly residents with insurance coverage in 2019 would be about 83 percent, roughly in line with the current share. CBO and JCT estimate that enacting the amendment’s insurance coverage provisions would increase deficits by $8 billion over the 2010–2019 period.

You’ve got to be kidding me.  The percent of non-elderly people without insurance is going to be “roughly” the same?  What’s the bill for?

So this is the proposal? You want us to throw away the bill currently being debated for one that does “roughly” nothing about uninsurance and would save less money?  Really?

Do you know how frustrating it is to be forced to defend the Democrat’s bill (which I don’t really like)?  I’m mocking you, Rep. Boehner, not because conservatives have no ideas, but because you won’t present them.  Tort reform is not health care reform, and it won’t save that much money.  Deregulating insurance further will not lead to coverage for people with pre-existing conditions.  High risk pools are not going to make things better.  These are old, tired talking points, and you know it.

Come to me with a bill that covers more people than this one and we’ll talk.  Come to me with a bill that improves quality of care significantly and we’ll talk.  Come to me with a bill that actually contains costs and we’ll talk.

But come to me with a bill that does none of the three?  That’s not a sign of someone who takes this seriously.

I’m with Ezra.  I can’t do this.  I tried, mostly because some of you asked.  But I can’t bring myself to treat this as an actual piece of legislation:

The difference is clear from the first page. The bill released by House Democrats states that the legislation is meant “to provide affordable, quality health care for all Americans and reduce the growth in health care spending, and for other purposes.” The “amendment in the nature of a substitute” by John Boehner says, “The purpose of this Act is to take meaningful steps to lower health care costs and increase access to health insurance coverage (especially for individuals with preexisting conditions) without –

(1) raising taxes;
(2) cutting Medicare benefits for seniors;
(3) adding to the national deficit;
(4) intervening in the doctor-patient relationship; or
(5) instituting a government takeover of health care.”

You can hate the Democratic bills, but they are at least thorough enough to say what they are going to do and then tell you how they are going to do it.  You may think it costs too much, or has too much regulation, or is unfair to the insurance industry – but at least it’s there.

This plan promises the impossible.  It will lower costs and increase access without collecting any more money, making any cuts to anything, or changing anything about the way we practice medicine.  Right.  I mean, who knew it was going to be so easy?  We should have done this years ago!

I wish Speaker Pelosi would call their bluff.  I’d like to see a CBO score of this “proposal”.  Tell me how many more people will actually be covered.  Tell me how much their insurance will cost.  Tell me how much this bill will reduce the deficit.

People can make fun of the length of the other bills, but one of the reasons they are so long is that they actually say something.  As I said before, there are serious conservative ideas for health care reform.  This “bill” contains few of them.

I’ve said before that the opt-out public option was politically savvy.  I still believe that.  We get a reasonably robust, nationwide public option.  Politicians on the fence get political cover.  It will will difficult for states that opt out to justify their decision if the public option does cost less for the same product.

I’m still in shock that Senator Reid decided to go this route.  Evidently, he has decided to go with a bill with such a public option.

Moreover, according to some reports, they aren’t even going to ask the CBO to score the “trigger” option.  If they don’t do that, I’m not sure it’s going to be even considered.

I sure hope Senator Reid knows what he’s doing.  But this should be good news to those that support a robust public option.  If they can get this through the Senate, it’s going to be in the final bill.

UPDATE: Fixed some grammar!

I’ve been claiming forever that tort reform does not equal health care reform.  But I am willing to be swayed by good research.  Today the CBO released a report on the economic impact of tort reform on health care costs:

Tort reform could affect costs for health care both directly and indirectly: directly, by lowering premiums for medical liability insurance; and indirectly, by reducing the use of diagnostic tests and other health care services when providers recommend those services principally to reduce their potential exposure to lawsuits. Because of mixed evidence about whether tort reform affects the utilization of health care services, past analyses by CBO have focused on the impact of tort reform on premiums for malpractice insurance. However, more recent research has provided additional evidence to suggest that lowering the cost of medical malpractice tends to reduce the use of health care services…

Enacting a typical set of proposals would reduce federal budget deficits by roughly $54 billion over the next 10 years, according to estimates by CBO and the staff of the Joint Committee of Taxation. That figure includes savings of roughly $41 billion from Medicare, Medicaid, the Children’s Health Insurance Program, and the Federal Employees Health Benefits program, as well as an increase in tax revenues of roughly $13 billion from a reduction in private health care costs that would lead to higher taxable wages.

How much?  $54 billion over 10 years?  What’s that…  $5.4 billion a year on average, compared to $2.4 trillion a year in total health care costs? Let me know when you’re serious about cutting costs.

Do I need to make you a chart?

Last night I spoke as part of a panel on health care reform.  The main point I tried to get across was that our health care system is a mess.  It’s the costliest in the world, it gets nowhere near universal coverage, and it is surprisingly disappointing in terms of quality.  This is not news to readers of this blog.  Because it’s so bad, we need real reform.  Massive.  It needs to be big and it needs to be comprehensive.

If you listen to politicians on both sides of the aisle, you’d think we were getting that.  Those on the right claim this is a total government takeover of health care the likes of which have been seen only in their worst socialist nightmares.  Those on the left claim it’s going to revolutionize the system by covering everyone, reducing costs, and realigning the delivery system so that we get quality over quantity.

Not so much.  On either side.

I’m reading over the CBO report for the new and improved Senate Finance Committee bill.  Here’s an actual projection on how the bill will change insurance coverage over the next ten years:

Here’s what I want you to notice.  See the Employer line?  There are currently about 150 million people who have employer based insurance.  This plan will, after a decade, result in a net three million fewer people on employer based insurance.  We will expand Medicaid and SCHIP by 14 million.  We’ll get 23 million people into the insurance exchange.

The number of uninsured will drop 29 million, leaving another 25 million people under the age of 65 still uninsured.

This is socialism? This is comprehensive, massive reform?  Hah! Don’t get me wrong.  This is still a good thing; 29 million fewer uninsured people is better.  I imagine that the tighter regulations will help prevent underinsurance as well.

But let’s not kid ourselves.  A lot of those newly insured are getting coverage from safety net programs.  And the rest are going into the exchange to buy private insurance.  There is no massive government takeover.  Nor, however, is this comprehensive reform.  We will only have reduced uninsurance by about half and will still have more uninsured people than any comparable country.  Or costs will still be massive and rising fast.  And our quality will still likely hover around where it is now.

Yes, this is the most that any administration has ever gotten in terms of health care reform for the country at large.  But is this is really the best we can do?