Senate Finance Committee Passes Health-Care Reform Bill
By a vote of 14 to 9, the Senate Finance Committee
the health-care bill largely written by the chairman, Sen. Max Baucus (D-MT).
After sitting on the fence so long that she probably had a pain in her
rear end, Sen. Olympia Snowe (R-ME) voted for the bill, despite the
Republican leadership threatening her with all manner of punishments.
For example, they threatened to
her the post of ranking member on the Senate Commerce committee if this
slot opens up as a consequence of Sen. Kay Bailey Hutchison (R-TX)
resigning from the Senate to run for governor of Texas, something widely
expected. Of course, the Republicans have to be careful about really
annoying her because she could go nuclear and pull a Jeffords--become an
independent and caucus with the Democrats. The Democrats have been trying to
get her to jump ship for years so the Republicans have think twice about
actually punishing her, as opposed to merely threatening to do so.
Why did she vote for the bill, especially after making a speech before the vote saying
it was far from perfect? Basically, President Obama is desperate to have
at least one Republican support the bill so he can claim it is a
bipartisan bill, even with Senate Republicans opposed to it by 39 to 1 and
House Republicans unanimously opposed to it. By voting for the bill in
committee, she will have a place at the table during the upcoming sausage
making when the Finance committee and HELP committee bills are merged in the
coming days. The HELP committee bill has a public option and the Finance
committee bill does not. Snowe is in favor of having a trigger, which means
that if health insurance companies don't meet some as-yet-unspecified target by
2013, then Congress could create a public option. To get her vote on
the final bill, majority leader Harry Reid will be under pressure to give
her what she wants. Had she voted no in committee, Reid would just have
ignored the Republicans and worked with the Democratic committee chairmen.
Another consequence of her "yes" vote is that it provides some political
cover to conservative Democrats such as Sen. Ben Nelson (D-NE) and Sen.
Blanche Lincoln (D-AR). They can tell their constituents: "The bill wasn't
so bad; even a Republican voted for it." On the other hand, they could
condition their support on Snowe's approval of the merged bill, which
would give her more power than even the President to shape the final bill.
Of course, getting Snowe's vote is not the only factor at play in merging
the two Senate bills. Sen. Chris Dodd (D-CT), who wrote the HELP bill while he
was acting chairman of the HELP committee and who will be
at the negotiations, is a strong supporter of a public option, for example.
Also, there are elements of the Baucus bill that the insurance
industry really does not want, especially new taxes on the insurance industry
to pay for subsidies to poor people to buy insurance. In effect, this
forces the insurance industry--rather than the taxpayer--to subsidize poor
people. The industry wants this provision gutted. The sausage making will
take place behind closed doors in Reid's office starting today.
The public and media will
not be invited to watch. Reid has a goal of getting the merged bill to
the Senate floor by the week of Oct. 26.
From a political standpoint, a key issue of the merged bill is when the law takes effect.
The exchanges and public option (if present) are not likely to kick in until 2013, which will
make it very hard for the Democrats to argue in 2010 that they have done something to help people.
On the other hand, if those parts of the law requiring insurance companies to take everyone who
shows up and banning the practice of canceling policies when someone gets sick take effect in
early 2010, the Democrats will have something to crow about during the 2010 campaign.
Of course, Snowe may not want to give the Democrats this ammunition and may insist that no provisions
of the bill kick in until after the 2010 elections. As usual, the devil is in the details.
Speaking of the details, Jonathan Cohn has a good
describing 10 points that are important, most of which get no attention. They are:
- What is the income threshold below which you can get a subsidy to buy health care insurance?
- Is everyone protected against the catastropic medical expenses that lead to 2/3 of all bankruptcies?
- Is there pressure on the drug and hospital industries to lower prices?
- Is there a public option or something like it, possibly with an opt-out provision for states?
- Are the envisioned exchanges national, to give them real bargaining power?
- Will the existing commission that manages medicare be kept?
- Will gold-plated health insurance plans be taxed to discourage wasteful medical spending?
- Will the penalty for not buying insurance be stiff enough that everyone will buy it?
- Will (large) employers be required to buy health insurance for their employees?
- Will people with employer-supplied insurance be allowed to buy private insurance on the exchanges
While everyone, left and right, is focused like a laser on #4 (the public option), in the long run,
#10 (real choice) might actually have a bigger impact. If all health-insurance companies had to compete
for business on national exchanges and anybody in the country could go shopping there, it might put
far more pressure on prices than a weak government-run plan that only a handful of people were eligible
to join. This amendment, proposed by Sen. Ron Wyden (D-OR), might conceivably attract some Republican
votes since it is fundamentally a private-sector solution by forcing the insurance companies to compete
for business. Concurrently, in reality, in most states one or two companies have something close to
a monopoly, which does not put any downward pressure on premiums.
Baucus Bill Requires Members of Congress to Buy Insurance on Exchanges
During the month of August when senators and representatives were holding
town hall meetings, many of them got some negative feedback about the
fact that they had excellent health-care plans when many of their
constituents did not. In response, Sen. Chuck Grassley (R-IA)
an amendment requiring members of Congress and their staffs to buy health
insurance on the exchanges they are setting up. The amendment passed and is
the Baucus bill approved yesterday. Forcing lawmakers to get insurance
the same way some of their constituents will get it may make them more
aware of the experience. In some circles, this is known as "eating your
own dog food."
Harman and Sanchez Break with the Blue Dogs
Getting the health-care bill (or any bill) through the House requires
218 votes. It is expected that every House Republican will oppose the
health-care bill, so 218 of the 256 Democrats will have to vote for it.
However, the 52-member Blue Dog caucus has said it will oppose the bill
if it contains a public option, leaving the bill 14 votes short.
However, two of the Blue Dogs, Jane Harman (D-CA) and Loretta Sanchez (D-CA)
have now said they will
with the rest of the Blue Dogs and support a bill
with a public option. In Harman's case, her change of heart is probably
related to the fact that the health insurance of her 27-year-old son was
canceled in August when he suffered a torn eardrum. As Harman tells her
story to other Blue Dogs, it is entirely possible that another dozen will
be peeled off and a bill with a public option will narrowly pass the House.
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