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Pelosi's game runs deep

M1X00089_9.JPG

Even if Nancy Pelosi does get 218 votes for a public option with Medicare rates plus five percent, there's virtually no way any such bill gets signed into law. The Senate probably doesn't have the votes for a straight "level-playing field" trigger, much less one using Medicare rates. The White House will probably kill any such attempt themselves, as they don't want to face the combined fire of the doctors, hospitals, device manufacturers, pharmaceutical companies, and insurers, all of whom will flip out in response to the version of the public option that will cut their reimbursement rates.

This isn't a controversial take, of course. Pelosi wants the strongest possible public option in order to go into House-Senate negotiations with the strongest possible hand. In general, people have assumed that this is all about negotiating for the final public option. But it's not, really.

The part of Pelosi's approach that people haven't really picked up on is that she's paired the stronger public option with more generous subsidies and benefit packages, rather than leaving it on its own to dramatize the potential savings. There's a reason for that: If the Senate wants to weaken the public option, this gives her leverage to demand that they put money on the table to maintain the benefit levels that the strong public option made possible. In other words, the strong public option also gives her leverage to bargain for more affordability and better subsidies.

Photo credit: Brendan Hoffman/Bloomberg.

By Ezra Klein  |  October 23, 2009; 11:42 AM ET
Categories:  Health Reform  
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Comments

Ezra, can you tell me why I should want subsidies to kick in at 400% of the poverty line? If we are trying to reduce the costs of insurance, and improve the amount of money paid -> health care received, shouldn't people be able to foot the bill themselves? I ask, not because I am a heartless bastard but because I'm miffed that those making a decent wage don't have to be responsible for paying for insurance.

Posted by: PaulW99 | October 23, 2009 12:00 PM | Report abuse

Once people start to understand how much better Medicare+5% is than negotiated rates, there's no telling what might happen.

Without the robust public option, the only thing which might reduce premiums is the universal mandate. But it's a catch-22 because even the most generous subsidies are inadequate so the mandate will not be enforceable. It will be interesting to watch them try to square this circle.

Posted by: bmull | October 23, 2009 12:26 PM | Report abuse

Maybe Pelosi is the honorable successor to Phil Burton's seat. If you've got this right, Phil would be proud.

Posted by: janinsanfran | October 23, 2009 12:32 PM | Report abuse

Perhaps from playing chess at times, this possible strategy doesn't seem "deep" to me. What's "deep"? Probably Putin (and even Putin was sincere about joining NATO during that window of opportunity Bush blew). It's easy to think people are playing cards. I've seen over and over that people are usually saying exactly what they think. I think that Pelosi is just trying to put forward the best overall plan she can according to what she thinks is best.

Posted by: HalHorvath | October 23, 2009 12:37 PM | Report abuse

Pelosi gets a lot of hell, much of it deserved. But she's a pretty good legislative wheeler-dealer. However much of the Obama agenda is passed, she deserves a huge part of the credit.

Posted by: colby1983 | October 23, 2009 12:37 PM | Report abuse

"In other words, the strong public option also gives her leverage to bargain for more affordability and better subsidies."

Eggsactly, batmen. As I said in an earlier thread, the House doesn't want to go into conference with a public option that is virtually the same as the one in the Senate bill. That's one fewer chip you can use for bargaining.

"Pelosi gets a lot of hell, much of it deserved. But she's a pretty good legislative wheeler-dealer."

She's terrible on camera/with the press. And as Speaker, she can't avoid those encounters. But she's tough and she can whip the votes. I often cringe when I see her address the cameras but it's moments like this that allow me to forgive those faults. Let Obama be the face of the Democratic Party and let Nancy do her job off camera.

"I ask, not because I am a heartless bastard but because I'm miffed that those making a decent wage don't have to be responsible for paying for insurance."

Until we have concrete proof that costs are coming down and are going to stay down, I don't think subsidising up to 400% poverty is too much...not at all. Remember, as you move up the subsidies grow smaller so while folks at 400% poverty would receive some goverment assistant, a chunk of what they would have to pay would be out of pocket. I don't have the numbers or the math but I believe a family of four at 400% poverty would be making about $80,000/year in gross income...net income would obviously be less. A reasonable family plan would like cost that family at least $12-15K per year, maybe more. That's a lot of cash to dish out even for a family making $80K/year, perhaps enough that the family will say, "I still can't afford it and the fine (if there is any) for not having coverage is actually cheaper."

Now, when costs go down and stay down, I thnk it would be find to revisit the subsidy levels. But right now, they really aren't all that rich, even the most generous ones being proposed in the House.

Posted by: shamey73 | October 23, 2009 12:53 PM | Report abuse

I think none in Congress really fool anyone, and they all realize soon enough that they have to just play it straight, and they do. There's no game here, and not even mostly bargaining -- they just end up voting for what seems possible or acceptable or not I think. We see games or bargaining because that's a meme. It's a matter more of changing perceptions and conceptions in my estimation. Everyone's ideas are constantly evolving since that's the way human minds literally work.

Posted by: HalHorvath | October 23, 2009 2:04 PM | Report abuse

Ezra, I'd much rather prefer the structure of a successful (meaning, Carper's compromise at the very least) than worrying about subsidies. This is because I'm worried about the GOP slashing the subsidies in the name of the deficit once the economy starts to recover and they are in power. It'd be much more difficult to cut people off the PO, especially if the middle class has started signing up. Is this a valid concern?

Posted by: Chris_ | October 23, 2009 2:48 PM | Report abuse

The Senate will shut up and take what's given to them, because all sixty democrats will suffer horrible political losses if this doesn't go through.

Posted by: adamiani | October 23, 2009 5:21 PM | Report abuse

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