Rational Arguments

Politico reports that Speaker Pelosi and Majority Leader Reid are in talks for the House to pass the Senate bill if the Senate will tweak it in reconciliation:

Struggling to salvage health reform, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi have begun considering a list of changes to the Senate bill in hopes of making it acceptable to liberal House members, according to sources familiar with the situation.

The changes could be included in separate legislation that, if passed, would pave the way for House approval of the Senate bill – a move that would preserve President Barack Obama’s vision of a sweeping health reform plan.

They also go on about the risks of doing this.  Yes, it will upset all the people who oppose reform, but that’s nothing new.  They also talk about the new “calls to slow down/pare back/etc.” but I don’t put much stock in those.  They won’t work.

There’s just as much risk, and arguably more, for them to just fail.

Moreover, I agree with Nate Silver that there is a big difference between hating the bill, and hating misinformation about the bill.  I think we may be seeing much more of the latter.

(h/t Paul Krugman)

A number of people have spent the day noting that those in opposition to reform are arguing by making stuff up instead of constructing legitimate arguments against reform.  That’s frustrating.

What’s even ore frustrating (at least to me), though, are arguments by people who genuinely thing they are correct, but are totally wrong.  Especially when they pervert good work that should be cited often in debate.

Last month, I had the pleasure of meeting T. R. Reid.  I asked him how he felt when people use his book to make an argument in exact opposition to what his book actually says.  He was far more polite than I would have been.  That practice hasn’t stopped, unfortunately:

Today, though, Conrad went on Dylan Ratigan’s MSNBC show. Ratigan’s hobbyhorse for weeks (months?) now has been to complain that the health reform bill isn’t dramatic enough in its impact on most people. He wants to see something more Ron Wyden-style that would sever the employment-insurance link more rapidly. I think this is a fair point, but it’s not practical and in the long-term it’s not going to matter since the bills in congress do head in that direction. Either way, Ratigan had Conrad on this morning to harass him about this, resulting in a dialogue in which Conrad asserts that Germany, France, Japan, Switzerland, and Belgium all have great employer-based systems. Ratigan points out once or twice that this is wrong, but Conrad insists, Ratigan seems to lose his confidence and pivots to Singapore, then Conrad comes back to his claim about Europe and Japan and says everyone should read T.R. Reid.

I think it’s fair to say that Ratigan had this right the first time. Employment isn’t totally irrelevant to French health care, but it works nothing like our employer-based system and most French people are covered by what amounts to a single-payer system. In Germany employers have a big role in financing people’s insurance premiums but, again, that’s not the same as what America’s employer-based system does. In America what happens is that the cost of your premium is split between you and your employer, but your choice of insurance options is determined by your employer’s HR department. The German system is more like a payroll tax that funds government subsidies for you to sign up for the “sickness fund” of your choice. In Switzerland “individuals — not employers or the government — choose from a broad array of health plans, sold by private insurance companies.”

This isn’t the first time Senator Conrad has misunderstood T. R. Reid’s book.  Since Mr. Reid is too polite to ask him to stop, I will.

Please, Senator Conrad, stop using T. R. Reid’s book in your arguments.  Even better, go read it again.

I had not one, but two school functions for my kids this morning.  I just got to work.  This means, of course, that everyone has beaten me to the punch in describing the highlights of the Senate Health Care bill.  So I’m going to brazenly steal from them (and give you the links, of course).

Knowing that the bills have more similarities than differences, I’m going to stick to the ways in which they are different.

The numbers:

The health care bill–which includes an opt-out public option–will require $849 billion over 10 years in new spending, to be paid for with cuts to Medicare, while reducing the deficit by $127 billion.

In that time it will extend coverage to 31 million Americans–94 percent of citizens will be covered by 2019.

Over the second 10 years, CBO projects even greater cost savings–up to $650 billion, with the caveat that after 10 years, their analyses become highly uncertain.

The subsidies appear to me more generous (which is a surprise to me):

That, at least, is the early impression of most wonks I’ve talked to. The subsidies hold steady or are very slightly reduced on the low end, but they become more generous than the Finance Committee’s proposal as you travel up the income ladder.

There are two main reasons for this. First, the bill spends a bit more on subsidies than the Finance Committee spent. For instance, in 2019, the Senate Finance bill spent $98 billion on subsidies, while the Senate bill spends $106 billion. That doesn’t sound like much in one year, but extended to the 10-year window where we normally talk about health care and it’s a difference of $80 billion.

The second piece gets to that 10-year window more directly: The bill shifted implementation to 2014, as opposed to 2013, which means its money only has to stretch from 2014 to 2019, not from 2013 to 2019. That means the bill has a bit more money to play with once it does get off the ground.

It has an excise tax on “Cadillac” plans, which I still think may be better than an income tax.

Reid’s bill has an excise tax that lays down a 40 percent charge on premium dollars beyond $23,000 for families and $8,500 for individuals. The threshold is higher for people in high-risk jobs, people who are older than 55, or people who are in high-cost states, though the allowance for states ratchets back after three years. It raises about $150 billion, as opposed to the $200 billion raised by Finance’s proposal.

The CBO thinks it may actually do more to contain costs:

One actual surprise is that the Senate bill doesn’t just pay for itself. It balances itself out. That is to say, the bill is not deficit neutral because it costs a billion dollars and then the government raises a billion more dollars in taxes. In that scenario, the government is spending more, but paying for it. Rather, “CBO expects that, during the decade following the 10-year budget window, the increases and decreases in the federal budgetary commitment to health care stemming from this legislation would roughly balance out, so that there would be no significant change in that commitment.”

In the first 10 years, in other words, the bill improves the deficit a bit, but the government is spending $160 billion more on health care than it otherwise would have. In the second decade, however, that ends: The savings from Medicare and Medicaid, paired with the excise tax (which CBO says “is effectively a reduction in the existing tax expenditure for health insurance premiums”) and a handful of other changes, leaves the government spending no more on health care than it otherwise planned to. That’s impressive stuff given that some 94 percent of the country has health insurance. And it implies, of course, that in the third decade, the federal commitment actually goes down relative to expectations. The curve, as they say, is bent.

I’m going to have to think about that and read the whole bill before I totally buy into that.

There’s an exchange and an opt-out public option:

The public option will serve three or four million people and have slightly higher premiums than private insurance. The co-ops will have such an insignificant effect that the CBO didn’t both to estimate their impact. The exchanges will serve 25 million people in 2019, and Medicaid and CHIP will see a 15 million-member increase.

I still can’t see what all the hooplah’s about on that one.  Weak sauce.

Overall, though, I think you’re going to see people who are pleasantly surprised by what’s in the bill; that is if they supported health care reform as such.  Others will, of course, be horrified.

Now we have to see if Senator Reid has 60 votes.

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!