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The 19.5 Years Test

"[E]ven if getting any bill called 'health care reform' passed would be good short-term politics," writes political scientist Scott Lemieux, "it's worth further emphasizing that signing a bill without (at a minimum) a public option would be a substantive disaster." Elsewhere, he says, "the public option is the core of the reform; a Blue Dog bill isn't so much half a loaf as a few meaningless crumbs." And, finally, "a bad bill would be worse than no bill."

The public option, as it exists in any bill moving through Congress, is not the core of reform, nor anything near it. It is, for one thing, limited to the Americans who buy into the Health Insurance Exchanges, and the exchanges are in turn limited to the unemployed, the self-employed and small businesses. In the House bill -- which is the strongest of the bills -- the Congressional Budget Office estimates that 27 million Americans would be in the exchanges by 2019. That's not nothing, but it's not much. Imagine half choose the public option (CBO estimates many fewer than that). You now have 13.5 million Americans in a public insurer with no substantive advantages over private insurance. That's not a gamechanger, it's a tweak.

But it's also worth offering a more general reality check here: The public option is not now, and has not ever, been the core of the argument for heath-care reform. It is the core of the fight in Washington, D.C. It is an important policy experiment. But it was not in Howard Dean or John Kerry or Dick Gephardt's plans, and reformers supported those. It was not in Bill Clinton's proposal, and most lament the death of that. It is not what politicians were using in their speeches five years ago. It is a recent addition to the debate, and a good one. But it is not the reason were are having this debate.

Rather, what has kept health-care reform at the forefront of liberal politics for decades is moral outrage that 47 million of our friends and neighbors are uninsured. That medical costs are one of the leading causes of bankruptcy in the United States. That an unemployed machinist gets screwed by fly-by-night insurance schemes while a comfortably employed banker need never worry. That the working class ends up in emergency rooms with crushing chest pains because they didn't have health insurance and didn't get prescribed cheap blood pressure medications five years before.

There are many themes in the sad and frustrating history of health-care reform. But one of the central ones is that there were many points when Democrats could have accepted a compromise and did not. Richard Nixon, for instance, proposed a plan that could have passed Congress but that liberals thought comically inadequate. It was more comprehensive than anything we will get this year. George H.W. Bush also offered a pretty good proposal but got no support among Democrats.

Opportunities at health-care reform do not happen frequently. The average between major attempts is 19.5 years. That's 19.5 years in which the uninsured stay uninsured and their ranks grow. Where a situation that is already bad gets a lot worse. This year, Barack Obama is popular, and there are 60 Democrats in the Senate and huge majorities in the House. There is no reason to believe that Democrats will be in a stronger position anytime soon. It is not like when a weakened Nixon, or a fading Bush, offered a compromise.

If reformers cannot pass a strong health-care reform bill now, there is no reason to believe they will be able to do it later. The question is whether the knowledge that the system will not let you solve this problem should prevent you from doing what you can to improve it. Put more sharply, the question should be whether this bill is better or worse than another 19.5 years of the deteriorating status quo.

By Ezra Klein  |  July 28, 2009; 4:52 PM ET
Categories:  Health Reform  
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Comments

Ezra klein to got the CBO report wrong. It said the House bill will result in 30 million get individual insurance through the exchange in 2019. But it would also include 6 million getting employer coverage to purchase plans on the exchange.

That is a total of 36 million getting insurance on the exchange. Of course that is only if the exchang is not expanded. But the house and the HELP bill allow it to be expanded without congressional action.

Posted by: JonWa | July 28, 2009 5:19 PM | Report abuse

The core of reform is the elimination of private for profit insurance with its perverse incentive to reduce Medical Loss Ratios so as to improve its stock price and reward stockholders as all well run corporations must strive to accomplish.

Posted by: lensch | July 28, 2009 5:28 PM | Report abuse

"moral outrage that 47 million of our friends and neighbors are uninsured."

"You now have 13.5 million Americans in a public insurer with no substantive advantages over private insurance. That's not a gamechanger, it's a tweak."

As any number of analyses have shown, the number of uninsured who want coverage but aren't eligible for any is actually only about 10-15 million. So if you can get those people into the exchanges, that's not a tweak, that's a solution to the core issue.

Posted by: tomtildrum | July 28, 2009 5:44 PM | Report abuse

But what do any of these bills do about insuring the uninsured? Requiring it for citizens without requiring it for employers?

I agree that passing health reform is critical now -- we have votes for something and we have to get rid of pre-existing condition bs and the fact that people pay for health insurance that is voided if they actually get sick.

Posted by: evietoo | July 28, 2009 6:01 PM | Report abuse

Be careful up there on the policy high horse. All the points you refer to as core to the debate (accessability, affordability, quality care and coverage) are addressed through a strong exchange/public health insurance plan option. It really is okay for people to conflate terms here.



Posted by: eRobin1 | July 28, 2009 6:09 PM | Report abuse

I don't think Ezra really understands how this plays out at the user end of the stick.

Pass "reform" without a public option, and you've got nothing. Oh sure, everyone in the industry and Congress will talk about how they're "innovating" and saving money and making basic reforms.

But the people who are uninsured will remain uninsured in reality, even though they may have some kind of "insurance" that doesn't really mean they can go to the clinic or afford prescriptions.

The latest rightwing meme has been that there are people who are not really uninsured because they are eligible for Medicaid but aren't enrolled. Why do you think this is? Well, it is because the Medicaid means test, and the demands for prepayment of 'all charges' when you visit the doctor, and the run-around you get from the state, and the lack of facilities where you live.

And none of this is going to change if we don't draw a line in the sand and say "Everyone is insured and they can check in and get treated before any demands for payment are made". Let all the quarreling and bickering start after the patient is seen and treated, and leave the patient out of it.

If the people who run this country think we can go another 19.5 years with no real reform, we're all doomed anyway. If that's the case, some halfway 'pragmatic' effort to look like reform is nothing more than a bandaid. It might help legislators feel good about themselves, but the chances are they already feel a lot better about themselves than is healthy for any of us.

Face it, without major, maybe revolutionary change, we just don't have another 19.5 years in us.

Posted by: serialcatowner | July 28, 2009 6:51 PM | Report abuse

People need to understand that all the different protections we're fighting for are important to everyone, even those who already have insurance.

See, e.g., this funny video:

http://www.youtube.com/watch?v=dqd0XiNvtI0

sp

Posted by: simonpaul2000 | July 28, 2009 7:25 PM | Report abuse

What serialcatowner said at 6:51

This is not about getting everyone quality healthcare, and Ezra knows it.

This is about making everyone buy insurance.

The mandates. This is about making the working poor and lower middleclass, and all above, and anyone who could sell their cars and pay a little something instead of just walking into a emergency room impoverish themselves just a little further. I really don't see how Medicaid survives.

With a really strong public option the people might have had a chance. Without it, with these weak co-ops...Ezra, please distance yourself from this atrocity.

Obama isn't worth your honor & reputation.

Posted by: bobmcmanus | July 28, 2009 7:40 PM | Report abuse

reform without reform is not reform.

Many elements of the various plans are 'new', not just the public option. The public option grew out of trade-down on single payer. The Exchange is borrowed from the way the government employees choose which FEHBP plan they want.

Without an employer mandate (something that also grew out of compromise on maintaining 'if you like your plan, you will see no change'), employers are free to withdraw health insurance, throwing their workers into the maelstrom of non-group private insurance at much higher prices. Medicaid for the very low income is not viable insurance (state's control the plans and costs, many can't qualify for various reasons, and many MDs will not accept Medicaid because of lower rates than even MediCare.

So, to say that we can let the public option be taken down and we can still have reform is to make the word reform meaningless.

Yes, it is a fact that many of today's proposal items weren't in Clinton-care, but so what? The entire dynamic is different and 20 years have passed with this national healthcare scandal unaddressed. Incremental improvements later are a fantasy: things get weaker over time, with more loopholes, cutbacks because of costs, and political vote-buying by special interests. They don't get better: the original plan is the high-water mark. Look at MediCare. It is basically the same as 1965, with add-ons to make even greater profits for insurance corporations in Part B (via subsidies to the insurers, and characterization of their plans as "Medicare Advantage"), and a Part D that was the result of GOP sausage-making at the direction of the industry lobbyists after it became clear that the popular call for drug coverage couldn't be resisted any longer. And Part D has not gotten better over time.

Progressives are leading each other down the primrose path of capitulation thinking that "any bill" is better than no bill. "Any bill" will be the de-facto future, with warts, cancers, and diabetic amputations included for another 20 years until courage asserts itself again, or the populace "just won't take it anymore".

Posted by: JimPortlandOR | July 28, 2009 7:55 PM | Report abuse

I agree with much of what is said in comments, except that the health care plan will get weaker over time. That's just not true as an absolute.

When social security was passed under FDR, it covered approx 50% of the population. But it was an important start, and now everyone gets a check.

Posted by: evietoo | July 28, 2009 8:17 PM | Report abuse

Serialcatowner: Subsidies for families up to four times the poverty line that cap premiums at rates that go from 1.5% of income for those at 133% of poverty to 11% at 400%, limit out of pocket expenses, and guarantee a certain level of coverage. Prevent health care providers from basing coverage on preexisting conditions and some other kinds of demographic information. So that's how people would be able to afford health care. Seems pretty straightforward.

Also, the public plan is just another health insurer. One which would have increased incentives to not screw with consumers, so it's a good idea to try, but it wouldn't magically turn the rest of the industry into sunshine and rainbows, and it wouldn't magically turn us into the Soviet Union either. I honestly don't understand on either side why people care so much about it.

Posted by: usergoogol | July 28, 2009 8:37 PM | Report abuse

I don't think Ezra Klein understands how this 19.5 year cycle works. Any bill, on any substantive subject, that passes Congress, contains, in effect, a lot of blank pages. Oh, sure, there are lots of words, but many are generalities and good intentions, framed out by quirky, but momentous little rules and details. But, mostly, it is a framework, with most of the details to be filled in later, by agency commissioners and technocrats, plying the 19.5 years of politics between Congressional enactments.

For reform to "work", some doors have to be left open for politics to continue in favor of reform, after the bill passes Congress.

Enthusiasm for the public option rests on the insight that the public option provides an Ace of Spades, that can be played in many, many ways over the next 19.5 years, to favor a positive evolution of the health care system.

There's a good chance that the destructive, corrupt "center" of American politics will produce a useless bill, that will just continue the catastrophic course of the last 50 years. Proponents, advocates and entrepreneurs of positive reform and innovation will be left just as powerless after, as before.

The public option has gained salience. The lobbyists live for the esoteric little restrictions, that castrate government agencies. Reactionary opponents thrive on scary, paranoid assertions, but, for them, lies work as well as, or better than facts. Well, supporters of reform need salience, too. They need to know they are getting something, that can and will be made into something beneficial to their interests. Esoterica won't work -- no one can spare the attention, and lies, of course, don't work, if you are sane and minimally intelligent and in earnest.

What are the markers of a good bill? Open doors and open windows to a better future, and a better dynamic -- some institutional features that provide a focus for effective politics for the next 19.5 years.

Public option.

Posted by: brucew07 | July 28, 2009 9:28 PM | Report abuse

Ezra, don't be silly. You know full well why the public plan is viewed as the core of healthcare reform by it's liberal supporters. It's the only thing left to cling to for those who would have preferred a direct move to single-payer. Without it they will be fully exposed as sell-outs in trusting and backing the President's strategy. And the bitter reality as you have noted is that even if something resembling a public plan is passed as part of the final legislation, it will be a far cry from what was initially envisioned.

Although I am personally in favor of market-focused reforms, I think the principled single payer advocates have a point when they say that it was a strategic mistake to start with the public plan strategy. By trying to hide what the real long-term agenda was, they made it that much easier for conservatives and moderates to chip away at the plan based on (legitimate) concerns that it would drive insurers out of business.

And by not staking out a principled, morals-based position on this, the Administration ceded ground to opponents who didn't have to spin or hide their principles. You may not agree with these principles because they include concepts such as free enterprise, consumer choice, and profit. But the average American understands them. (Which is why "choice" and "competition" were transparently used as false selling points for the public plan).

I think they should scrap the whole thing and start over...

Posted by: morgen-vs | July 28, 2009 11:49 PM | Report abuse

I think perhaps the best possible national outcome at this point would be for Obama and Congress to drag health care reform out for years so that all the ideological demons are finally worn out in the light of day.

There's only so long that intentional misrepresentations, etc., can hold up.

I'm thinking a few more national speeches, a few more months...and many of the calculated misrepresentations will fold, leaving the rational options still standing.

Posted by: HalHorvath | July 29, 2009 1:36 AM | Report abuse

Erza writes "Compared with the crazy-quilt system we have now, the idea behind the health insurance exchange is almost weirdly simple: It's a single market, structured for consumer convenience, in which you choose between the products of competing health insurers (both public and private). This is not a new idea. It is how we buy everything from books to socks to soup."

Which, incidentally, is not how we buy books and socks and soup, not from the federal government. Hell, we've only been buying cars from them for a few weeks now.

I would like to know how this guy got hired to write about Economics and Politics. Politics, I understand. You can bs most of it. Economics you can't. Clearly Klein has no understanding of basic economics. He supports Obama's plan, which if implemented would make a huge mess out of our troubled HC system. In economics, suddenly increasing Demand without increasing supply causes the price to go up. That means the costs would go up. If Obama wants to put on price controls, then that leads to shortages, and rationing. Rationing leads to black market care, where people will pay two to three times the set price to avoid standing in line. If want to make US health care like trying to get a U2 Concert ticket, then by all means follow Klein and Obama and do yourself a favor and buy a speed dialer.

Posted by: HayeksHeroes | July 29, 2009 1:53 AM | Report abuse

Hello, wake up! In comfortable Washington DC, you may not have noticed this, but our country's economy is collapsing.

Look, it's really quite simple: we no longer can afford to piss away 20% of our national income, year in and year out, on hidden taxes and disastrous policies. We could do that when we were the richest nation in the world, but now we're the world's greatest debtor.


It must start with health care. And your proposal of insurance for all, under our current rules of guaranteed profits for all, is the worst of socialism and the worst of crony capitalism.

So stop fooling around with the little things. We need single payer with cost controls, but I'll settle for the strongest damn public plan around. We need to spend less, and we'll never get there with Full Insurance For All. We just get poorer. And we need to end the employer mandate. Now. The auto companies employ more people in Canada because the employers don't pay for health care there. It's a huge international competitiveness problem. Stop it. Now.

Next, we need to stop pissing away $800B a year on Homeland Security, whatever that is, and Defense, which we know is offense. Cut it 5%/year until the next Bush is elected.

Next, we need to stop pissing $700B/year away on foreign oil. We need real, aggressive mileage targets. Oh, did I mention that it owuld make our cars more competitive in international markets? And lower pollution? Why are we pissing around?

Finally, we need to save all this money because we need to spend it on EDUCATION. The only way we will compete in the world economy is to raise our collective education level. In one generation.

Oxen need to be gored, Ezra. Get the hell out of the way.

Dollared

Posted by: Dollared | July 29, 2009 9:41 AM | Report abuse

I still don't understand why the US is not going the "Dutch" or the "Swiss" route. Especially the Dutch-system could be a perfect match for the US.
In the NLD, the "public" option is provided by private healthinsurers. Government, Healthcare Providers and Insurers, Healthcare specialists and economists, and Consumers together have deviced a *basic* plan which all insurers have to provide and it is capped at a maximum price. That basic plan is adapted annually to incorporate new treatments and developments.
Private insurers can supplement that basic healthcare package with additional options and add in frills and luxuries and quack-treatments (like homeopathy) that some people want.

Basic plan covers everything you need (and which healthcare providers can deliver), supplementals cover things you might like or want.

To overcome differences in risk pools in the basic coverage, insurers are being compensated. For example when they have on average more older people than other insurers. For the supplementals, insurers are on their own. Insurers are incentivized to do more about preventative care, seeking cheaper alternatives for treatments. Because, apart from selling supplemental packages, that's the way they can make more profit. Consumers can switch insurers or plans annually, pre-existing conditions or denying people basic plans is not an option.

Posted by: wimprange | July 29, 2009 12:32 PM | Report abuse

Addendum. In the end, you want insurers to be able to make a profit for how Healthy you are, not for denying you coverage as much as possible.

That's why in the Netherlands for instance, some healthinsurers will reimburse you for going to the gym or paying your membership for a sportsclub.

Posted by: wimprange | July 29, 2009 12:41 PM | Report abuse

As currently described the plan has no obvious advantages when compared to the previous 20 years. It appears to let the prices float as high as possible through private control while forcibly increasing the size of the pool by mandate, reducing their need to compete on price. It proposes to require poor but healthy individuals to pay for insurance that they cannot afford and may not need. Worse still, it puts the IRS in the position of being a collection agency for private insurance companies. The precedent of the IRS becoming an agent of private industry is serious. Forcing those who can ill afford expensive insurance to purchase is a potential catastrophe for some. Forcing people in extremely rural parts of the US to join has the potential for farce.

So they will force people to get insured, whether they can afford it or not, and we won't have a public option for those without resources. In some alternate universe this will help cut costs one might suppose. In this one, once the insurance companies are so stuffed with cash that they can't move they might feel guilty and reduce premiums on those that have no money but must purchase health insurance anyway. But of course that is not how the medicine for profit industry works.

On the plus side maybe the insurance companies will let the people that have no little money left over to pay for food get via food prescriptions from their doctor.

"But doctor I really want the broccoli option. "
"Sorry, I can only prescribe cabbage with your plan."

Jokes aside, this plan, without a public option, is worse than flawed. It is a huge profit boondoggle for the sickness for profit industry.

As was stated by others earlier, reform without reform is not reform.

Posted by: temptingfate | July 29, 2009 1:49 PM | Report abuse

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