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What Olympia Snowe Got for Her Vote

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The list of senators charged with merging the Finance and HELP bills into the legislation that will actually come to a vote on the Senate floor is vanishingly small, and every participant is there for a reason. Harry Reid will preside. Max Baucus, chairman of the Finance Committee, will be one of the chief negotiators. Chris Dodd, who led the HELP Committee's health-care efforts, will be the other. And that's about it. Oh, except for one other person:

Jim Manley, a spokesman for Mr. Reid, said that Senator Olympia J. Snowe of Maine, the lone Republican on the Finance Committee to vote in favor of the bill, would be invited to future sessions. And Mr. Manley said the Democratic leader was prepared to go to substantial lengths to keep Ms. Snowe’s support.

"He is prepared to do what he can to keep her on board while putting together a bill that can get the 60 votes necessary to overcome a Republican filibuster," Mr. Manley said.

Democrats really want this bill to be bipartisan -- to the point that they're giving the Republican a space in the negotiations equivalent to the chairmen of the two relevant committees. Indeed, I wouldn't be shocked if this perk had been negotiated in advance of Snowe's vote yesterday.

This shifts the room's balance of power substantially: The negotiations were previously confined to one liberal Democrat and one centrist Democrat. Now they'll be between one liberal Democrat, one centrist Democrat, and one moderate Republican. In practice, this is likely to mean that Baucus will have something of a trump card against Dodd. If there's a particularly thorny dispute, and Snowe weighs in strongly alongside Baucus, it's hard to imagine Reid siding with Dodd, except in the most extraordinary of cases.

There will also be issues that Snowe brings to the table herself. For one thing, she wants to make sure the bill is affordable, but that just means that people can afford the fees, not necessarily that what they're buying will be good insurance. One of her ideas, actually, is to make the minimum benefit package less generous. She also wants to open up the exchanges and push for her public option trigger. Suzy Khimm has more details.

Photo credit: Marvin Joseph -- The Washington Post.

By Ezra Klein  |  October 14, 2009; 11:08 AM ET
Categories:  Health Reform  
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Comments

i honestly do not get why they think one republican vote is worth it.

Posted by: howard16 | October 14, 2009 11:14 AM | Report abuse


since Snowe is a little trigger happy (ha!) do you think it'll come out without a public option and that'll get proposed on the floor? I don't think I've seen anything on her openness to state-run public options.

Posted by: ThomasEN | October 14, 2009 11:16 AM | Report abuse

Susan Collins has to be kicking herself.

Honestly, I wouldn't be surprised to see another Republican or two sheepishly return to the table as the bill becomes more and more likely to pass and they watch the extraordinary privileges Snowe is getting.

Posted by: CarlosXL | October 14, 2009 11:20 AM | Report abuse

nice that we'll have two Senators running this show that may not have a job in the Senate come the end of 2010.

Posted by: visionbrkr | October 14, 2009 11:22 AM | Report abuse

I guess the calculus for Reid is who he needs more to ensure his reelection--activists and union members or lots of money from insurers, hospitals and high-income individuals. Maybe he ought to think more about his legacy.

Posted by: Mimikatz | October 14, 2009 11:36 AM | Report abuse

Well, that's nauseating.

Posted by: colby1983 | October 14, 2009 11:45 AM | Report abuse

I hope everyone watched Ezra Klein on Charlie Rose last night. If not, watch online:
http://www.charlierose.com/

As for Olympia Snowe...if she manages to improve the bill in any substantial way, she may manage to singlehandedly take the Republican Party out of the hands of the wingnuts. As Obama said on a different subject, "know that your people will judge you on what you can build, not what you destroy."

That would be a good thing.

Posted by: TomJx | October 14, 2009 11:55 AM | Report abuse

Snowe is focused on the most crucial aspect: just plain and simple being able to afford to pay the premiums in say 2014 or 2016.

Supporters of a Public Option should think about "medical loss ratio" regulation as a very good alternative point to work for instead.

This would fit together what the Public Option was really about, and what Snowe and Baucus can do.

The medical loss ratio (or "health benefit ratio") is the portion of total premium revenues an insurer then pays out in health claims. The average in the U.S. is about 80% now. It was well above 90% in the 1990s.

Reform proposals at the moment suggest regulating this up to 85%.

That is not high enough.

The insurer lobby bit the other day about premiums going up isn't all smoke and mirrors. Premiums will go up for simple reasons -- like closing loopholes, for instance. When you pay less out-of-pocket, then you pay more in premiums, even if you could pay the same overall costs in total (neglecting health inflation).

When I think about the trade offs between insurance reform versus costs (costs of health insurance premiums and federal subsidies), I keep coming back to the implication that 2 kinds of cost-reduction *must* happen for reform to succeed.

Even politically.

1. Near Term Cost Reduction:
Either
A) "health benefit ratios" (medical loss ratios) must go *much* higher in exchange for the individual mandate -- such as 90% instead of only the meager 85% currently on the table.
OR
B)some other method of relatively quick (a few years) cost competition such as a national public option that states can opt out of, etc.

2. Longer term cost reduction: the type of reform I've focused on in my blog, such as how to get to more "integrative" (Mayo clinic) medical practice to lower cost by changing how treatment is paid for.

But the near term cost reduction is key to the Congressional quandary I think. Insurers must basically give to get.

In exchange for continuing have their dominate position, they will have to change their payout ratios much more sharply than only from the current 80% up to 85%.

We should be talking about 92%, and possibly settle for 90%, at a absolute minimum. (One analysis suggests about 94% is optimal (on my blog: http://findingourdream.blogspot.com/ )

Posted by: HalHorvath | October 14, 2009 12:30 PM | Report abuse


I'm fine with a medical loss ratio in theory but damn, that'd be hard to enforce. I don't often go to the well of 'slippery insurance companies will out-maneuver regulations' as I've seen insurance companies effectively regulated in a pro-customer manner as Medicare and Medicaid HMO's. But firm regulations on medical loss ratios, on the other hand, would require legions of essentially forensic accountants to serve as auditors.

Posted by: ThomasEN | October 14, 2009 12:44 PM | Report abuse

every other bit of legislation out there in HCR had MLR's at 85% so 90-94% is a pipe dream and completely unreasonable.

oh and mimikatz,

neither high income individuals and insurers or union members will have a say in if Reid gets re-elected.

It'll be the people of NV that have that say and they're already showing him behind in the polls to "phantom" competitors. The Democratic leadership will come to his rescue but the question is will it be enough?

Posted by: visionbrkr | October 14, 2009 12:52 PM | Report abuse

ThomasEN,

many states already have MLR's so its not that hard to enforce. What's hard to enforce is ensuring that only medical costs are included in MLR and what exactly constitutes a medical cost.

THe idea is that insurers currently can make a profit in one state that doesn't have an MLR or a low MLR while actuarily figuring out how to remain at the MLR in another. Its not that hard to do. Once you have an MLR that is national you by-pass the insurers ability to do this and you get the same benefits of a public option without the messy government takeover and bureaucratic waste that comes with it.


Posted by: visionbrkr | October 14, 2009 1:01 PM | Report abuse

Again, her invitation to participate in the merging of the HELP and Finance bills is meaningless...UNLESS she is also invited to participate in conference report, which melds the House and Senate versions of the bill, and she's given the same deference.

Something tells me, though, that Nancy Pelosi would be none too happy in letting another woman be more powerful than she (thinks she)is.....

Posted by: boosterprez | October 14, 2009 1:33 PM | Report abuse

Well I didn't read the story to mean that 'future' sessions would be limited to just the participants of the first session plus Snowe, only that she would be included when the group widened. Or perhaps Wydened.

It may be that Reid is really forming a Gang of Four that includes Snowe, Baucus, himself and Dodd while excluding voices like Rockefeller and Wyden but I would think such a move would backfire when the time comes for floor action. Rockefeller as Chair of the Finance Comm Health Care Sub-Committee by rights should have been at the table of the Gang of Six, an effort to continue to marginalize the majority of the caucus is I think unsustainable.

Posted by: BruceWebb | October 14, 2009 1:36 PM | Report abuse

So this senator whom everyone knows is a RINO votes for the bill and that's supposed to be a big deal? Why is that? The democrats already had all the votes they needed to get the bill passed out of the committee..they didn't need any other votes at all. But for some stupid reason, this person's single vote is sooooooo important. Is it because the democrats want to say it was a bipartisan effort? Why? Are they afraid to take responsibility for it on their own? What difference does ONE vote from ANY other party matter if it is the only vote received from outside the democrat majority?

One vote, particularly from a RINO, does not make this bombasm of a bill a bipartisan effort, no matter what the dimocrat party and its complicit media goons might say. Don't be fooled.

Posted by: flintston | October 14, 2009 1:37 PM | Report abuse

Thank goodness for lawyers.

At least the bill will be struck down later through its own absurdity.

Impossible to even claim that a FORCED PURCHASE OF GOODS could be required under the constitution.

Impossible, like going to MIT and claiming 1+1=3. You should be escorted from the building.

FORCED PURCHASE OF 5000/year, roughly!?!? Really? Gonna have to rewrite the constitution for that one.

Posted by: docwhocuts | October 14, 2009 1:45 PM | Report abuse

Who is left out of the entire DC show?
The people enmasse as a majority saying NO.

Like the bales of snail mail on the floor of Congress ignored during bailouts and stimulous the abusers are abusing again.

The response:
CAN YOU HEAR ME NOW???

falls on deaf ears.

Posted by: dottydo | October 14, 2009 2:02 PM | Report abuse

The loony-left d-crat socialists bought her off long ago - even before she voted for pelosi's PORKULUS (same is true for collins - Maine deserves better.)

Now we know it's true for kerry and snowe - but are all those with a horse's face also a horse's A?

Posted by: LoonyLeft | October 14, 2009 2:03 PM | Report abuse

HalHorvath wrote:

"The average in the U.S. is about 80% now. It was well above 90% in the 1990s."

Hal, can you provide source for 80%? The stats I've seen have average of 70%. AETNA policies I've been offered were down in 55% +/- range.

I also assert there is a lot of padding of expenses and calling them medical related. Kaiser, which has been touted as the tops for large insurers with 95%, has severely padded its data center operations with hundreds of millions a year in gold plating, and booked those as medical costs. (I know people who work in as well as sell systems to the IT organization.)

MORE IMPORTANTLY, exactly what value is being delivered for that 10-20-30%? NONE. In short, of the $1.4 trillion a year paid to private insurers, that 20-30% represents - $280 BILLION to $420 billion a year in useless costs.

Why should we continue allowing that kind of rip-off?

Posted by: boscobobb | October 14, 2009 2:11 PM | Report abuse

HalHorvath....

Check out some of the proposals from California in fall of 2008 to set 85% loss rate and the squealing from insurers. Sheila Kuehl, who is very sharp, had some great ideas.

Posted by: boscobobb | October 14, 2009 2:16 PM | Report abuse

Snowe sold herself too cheaply.

Posted by: concernedcitizen3 | October 14, 2009 3:06 PM | Report abuse

boscobobb,

what exactly fits your definition of something that "fits" as under MLR? disease management programs? wellness benefit programs?? The IT you speak of if it helps in streamlining systems helps to contain costs so it really could be looked at either way. If you're going to use a strict definition of just what is paid in claims then you won't find anyone INCLUDING medicare that does it for 90 cents on the dollar. But then again Medicare doesn't have to account for its costs either does it?

Posted by: visionbrkr | October 14, 2009 3:07 PM | Report abuse

All I hear about is Health Care ... But if we all starve to death from no jobs & the "GREEDY banks force us all into bankruptcy with their loan-shark interest rates what good is a doctor that over charges us ?

Posted by: wasaUFO | October 14, 2009 3:16 PM | Report abuse

Yesterday (10/13/2009) my mother received a letter from General Motors. GM sent out a letter to retired/former employees and announced they will no longer provide medical coverage to people who worked over 20 years of their lives at GM.

My mother and her husband no longer have insurance.

My mother and her husband are extremely worried. He put in 38 years at GM and now sees a major part of his retirement package gone. My brother-in-law faces the same fate, and retired from the same factory.

My mother has had 3 cancer operations (lost both breasts), quadruple bypass surgery, and 2 major strokes; he just had a rectal cancer operation a few months ago; the brother-in-law had a major heart attack on the shop floor 3 years ago and my sister has had 5 hip operations over the course of her life.

Where are these people going to get health insurance?

Mom is in a panic. Just one medication they bought yesterday and had to pay out of pocket cost $155 for a month supply (they each take about 10 pills a day). He came home and told her they need to speak to the doctor about all the meds they need and how to reduce the cost.

These are hardworking Americans who spent their lives working for a company they trusted and saving to enjoy retirement in their paid for home. They are freaking out.


This is my family and we are scrambling. What was that CEOs salary?

Posted by: morenews1 | October 14, 2009 4:07 PM | Report abuse

Snowe's defection has already allowed the Democrats to proclaim a "bi-partisan" breakthrough. If Collins also defects it will be termed a bi-partisan triumph. Both of these ladies need to make it official and pull a Specter. Someone in an earlier post spoke of the "extraordinary priviledges" Snowe was receiving since her defection. I'm anxious to see what, if any, priviledges her constituents will eventually revoke. The Republicans have it hard enough already without constantly wondering who can - and cannot - be counted on in these perilous times.

Posted by: ddnfla | October 14, 2009 4:09 PM | Report abuse

Sen. Snowe's yes vote is no big deal. If the bill passed by the finance committee contains public option version, that would be different story. i.e. not only Snowe but also some bluedog senators would vote no, because of the fear of rejection by the conservatives in their home states.

Posted by: ypcchiu | October 14, 2009 4:54 PM | Report abuse

Visionbrkr wrote:

"what exactly fits your definition of something that "fits" as under MLR? disease management programs? wellness benefit programs?? The IT you speak of if it helps in streamlining systems helps to contain costs so it really could be looked at either way. If you're going to use a strict definition of just what is paid in claims then you won't find anyone INCLUDING medicare that does it for 90 cents on the dollar. But then again Medicare doesn't have to account for its costs either does it?"
.....
You don't sell health insurance do you?

I'm an inventor entrepreneur who has worked on medical payment platforms, reimbursement, class II devices for chronic care as well as class III medical devices for oncology, so I have a pretty broad perspective.

I think EMR/EPR, choose your acronym, have significant value if properly integrated. Kaiser has great technology that everyone in their system can use that provides value to patient. I also have seem them blow through huge amounts of money at year end to justify their premiums. From my perspective Kaiser markets relative to for-profit insurers, not a zero budget baseline, so they can look like heros with less than double-digit annual premium growth.

I have major issues with insurers who claim their rescission and review IT and staffing is a medical benefit. I have seen the hoops insurers devise to prevent reimbursement, especially for GPs and Pediatricians who are presented with a wide range of conditions. I've seen resubmission ratios of 600%, with the obvious insurer goal of wearing out the doctor's billing staff until the doc eats the cost.

As to wellness programs, I spent a fair amount of time on a team developing class II devices for chronic illnesses which included dirt cheap data integration to wellness. We could not find a single for-profit insurer that would bite, despite huge ROI benefits ranging from 50-200:1 depending upon stage of disease. For-profit insurers privately revealed they merely raise the premiums to the employers which keep employees with chronic conditions until the employer realizes the benefits of a selective layoff. I'm not fabricating this, we heard it from several candid insurers.

Finally, I've been re-reading Adam Smith's "Wealth of Nations," the seminal book on capitalism. If capitalism is predicated upon adding value, how do we categorize a medical insurer? What value do they add for their 10-20-30% vigorish? With anti-trust protection and the proposed new demand legislation, are they not sinecures?

Posted by: boscobobb | October 14, 2009 5:46 PM | Report abuse

Oh good Lord, Ezra.

Passage of a bill with one little bitty Republican does not make it "bipartisan," and if you let the Bamboozler-in-Chief convince of that, you're more naive than I thought you were.

Besides, if the PO is included, Snowe will vote no. So will many Blue Dogs.

So the Baucus bill, a huge giveaway to the insurance companies, is what Obama will get, if he gets anything at all.

All the rest is noise.

Posted by: auntmo9990 | October 14, 2009 7:02 PM | Report abuse

If the insurance companies are against the bill, then the bill is obviously a good thing.

Posted by: beenthere3 | October 14, 2009 7:05 PM | Report abuse

One Republican does not make it bipartisan.

Posted by: mike85 | October 14, 2009 8:15 PM | Report abuse

beenthere3: "If the insurance companies are against the bill, then the bill is obviously a good thing."

Too much Obama Kool-Aid beenthere3. What business wants to be the tax collector for one of the largest middle class tax increases in history (the excise tax)? That's why they're freaking out.

Posted by: bmull | October 15, 2009 6:33 AM | Report abuse

boscbobb,

as i've said on here plenty of times (mainly to my detriment as i'm scolded by the left for it and my good friend pseudo) I do sell health insurance in its current form in NJ (a guaranteed issue state with very limited pre-ex and NO individual mandate and the lack of a mandate is what is driving our costs higher than states like MA for example).

There are many reasons why insurers would have passed on your company's platform of wellness. Maybe they found a more cost effective option out there elsewhere. Maybe they built the systems themselves. But you can't deny the fact that wellness has been prevalent for years with private insurance and Medicare (as the standard for single payer adovcates) does not even cover annual physicals for its seniors. YOu get one when you turn 65 and that is it.

As far as your claims of insurers denying claims up to 600% until providers give up that seems to be bogus when looking at the below document provided not by an industry group or a paid study like PWA but the American Medical Assocation. Insurers in their study denied less and paid quicker than Medicare.

http://www.ama-assn.org/ama1/pub/upload/mm/368/reportcard.pdf

As far as individual instances you may have seen one thing in isolated examples but its not the norm as that study shows. And there's many reasons for those isolated incidents. Providers many time submit claims multiple times even after claims are paid because the payments have crossed in the mail. Many times pharmacies will submit to any drug plan they have on record if one was denied for coverage not being in effect. In fact I've seen isolated incidents where pharmacies billed for one prescription to three different insurers when one wasn't cancelled timely and the spouse had coverage and all three paid when only one should have.


I've said many times the only value they provide is a potential for cost containment (as the only entity that has ever contained costs (in the 90's)). They are also basically just a payer of claims in many instances and i'd say that you're 10-20-30% argument of what you expect their admin costs/profit margins are, are just an example of you borrowing talking points from the left. You really should stick to facts otherwise you can easily be called out for being wrong on them.


And I've gladly said I'd be in favor of ending the anti-trust exemption. All that would do is allow coverage over state lines. In fact my state of NJ has stricter regulations on insurers than any national entity would plus closer enforcement.

YOu'll have a lot of explaining to do to NJ's Autism Speaks community for example when that happens and they just fought to get Autism treatment covered and the new federal guidelines don't include that and it usurps the state's power in that regard. Not to mention the other mandates on states that poorer states couldn't afford.

Be careful what you wish for, you just may get it.

Posted by: visionbrkr | October 15, 2009 8:07 AM | Report abuse

I needed my morning laugh. Someone said Harry Reid has a LEGACY!

Posted by: Penazoid | October 15, 2009 8:55 AM | Report abuse

Now we're hearing Snowe will not be part of the merge. Reid's office is apparently not even able to stay on top of his own decisions.

Posted by: bmull | October 16, 2009 5:57 AM | Report abuse

Klein is an idiot. Bayh of Indiana is a definite NO vote as well and Byrd wont and cant travel. So why does it come down to snowe to break a fillibusteer? It doesn't.

And, if he's contemplating a vote on a bill containing a "public" "option" Chris matthews had it right yesterday when he said there are not even 30 votes in the senate for anything that contains the public plan.

Just more flatulence from a liberal prole.

Posted by: fidel305 | October 16, 2009 8:39 AM | Report abuse

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