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Plan B is terrible

According to David Herszenhorn, if Democrats do break up the health-care bill, the first piece they'll pursue is ending the antitrust exemption enjoyed by the insurance industry. This might be good politics, but let's be perfectly clear: It's useless, or maybe even worse than useless, policy. Trading comprehensive health-care reform for anti-insurer symbolism is not a good trade.

By Ezra Klein  |  February 1, 2010; 10:38 AM ET
 
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Comments

Think of the worst policy you can imagine, and that is what the cowardly, undisciplined Dems will do. And Obama will go along, just to seem to have a "win."

Posted by: AZProgressive | February 1, 2010 10:44 AM | Report abuse

This is hardly the worst policy I can imagine. This seems irrelevant--is there anything that will change, if the anti-trust exemption is ended? But it sounds like an easy win, politically, and something that will garner bi-partisan support because it is irrelevant yet populist-sounding.

I think a simple victory is a necessary start if they want to break up the healthcare bill and pass it in pieces. That's a questionable strategy, but would be guaranteed to fail if they started with the most "controversial" items first. The time to get the controversial items passed piecemeal was at the beginning of the year. Probably could have gotten a public option with a 20 page bill that expanded Medicare and was debated on C-SPAN. Too late for that, now.

Posted by: Kevin_Willis | February 1, 2010 10:54 AM | Report abuse

What I don't understand is why Plan B is more likely to pass than having the House vote on the Senate Bill. Is there really enough party disipline to keep everyone together through both houses on several small pieces of legislation where there isn't enough party dicipline to get a majority in the House for the Senate bill? I mean, I'm taking as a given that the Republican legislators will all oppose everything, no matter what. So don't the Dems lose people that care about deficit reduction on votes involving expanding coverage, and lose people that care about expanding coverage on cost-reduction measures? Isn't the draw of a comprehensive piece of legislation that you can (hopefully) draw together a large swath of legislators with a variety of positions?

Posted by: MosBen | February 1, 2010 11:16 AM | Report abuse

Kevin Willis, how could a 20-page public option plan have gotten through the Senate? Wouldn't it have been blocked by the same conservative Dems that got it stripped out of the Senate bill?

Posted by: MosBen | February 1, 2010 11:19 AM | Report abuse

Kevin,

the point that Austin Frakt makes is a good one. People don't realize that the negotating power of insurers while increased over the years through mergers has been blunted by the mergers of hospitals.

My question would be what "benefit" is derived from ending the anti-trust exemption? Is there some pool of billions of dollars out there they have that this will get us or is it just a political "we're mad at you because we think you ruined reform" thing?

The other point to ending the anti-trust exemption is the following nationalization of insurance regulations which definitely has its very good benefits. While that is good the consequences of increase of costs and mandates to the poorer states and decrease in benefits/mandates to the richer states to meet somewhere in the middle with a standard benefit package has been mainly left out of the discussion.

Posted by: visionbrkr | February 1, 2010 11:23 AM | Report abuse

I liked Nancy Pelosi's explanation of a two-track plan: negotiate a fix to the Senate bill that can pass reconciliation and muster with the House, while setting up individual votes on things that can't get included in reconciliation like ending the insurer antitrust exemption. There are probably 4 or 5 uncomfortable "gotcha" votes such as that anti-trust one that Pelosi could make Republicans take as the ball kept rolling on health care on the other track.

Posted by: flounder2 | February 1, 2010 11:30 AM | Report abuse

MosBen:

"Kevin Willis, how could a 20-page public option plan have gotten through the Senate? Wouldn't it have been blocked by the same conservative Dems that got it stripped out of the Senate bill?"

I'm not saying it's a sure thing, but I think a less ambitious bill that focused on a specific thing that expanded healthcare to a lot of people would have been much more likely to pass. Something that never mentioned abortion of end-of-life counseling? I think conservative Dems would have had less of a problem, and would have had less to worry about regarding what might be hiding in the 1880 pages of bill they never did read. ;)

Do they have any trouble getting extension of unemployment benefits passed? They haven't, as far as I can tell. Well, why not a simple bit of additional legislation--this isn't even healthcare reform--that expands Medicare to cover the unemployed and their spouses and children. The conservative Dems would stand up against Medicare for the unemployed? Maybe they would, but I have a hard time believing that. Much more achievable than a bill that covers much and accomplishes little, that talks about "end of life counseling" and touches on abortion, starts suggesting this gets covered at that not, that ends up with Obama saying on national television that a 100 year old woman by be better of taking a pill and preparing to die than getting a pacemaker . . . not that, statistically, he isn't right (he almost surely is), but there would be no place for that sort of stuff in an expansion of Medicare or S-CHIP or extending Medicare and Medicaid to the unemployed.

Those are not deficit-neutral solutions, admittedly, but I really do believe they could have been passed at the outset. Now, after Mass., I don't think the Republicans are likely to be cooperative unless they get bi-partisan deals that heavily favor the Republicans (tort reform, selling insurance nationally instead of state-by-state, etc). The time for an outright expansion of Medicare has passed.

Posted by: Kevin_Willis | February 1, 2010 11:35 AM | Report abuse

Why is this not /done/ already?

Posted by: adamiani | February 1, 2010 12:16 PM | Report abuse

Kevin, well, frankly I don't think there's any plan or bill that would attract significant Republican support. It's possible that smaller pieces of legislation could have grabbed a few more conservative Dem votes. On the other hand, President Obama was elected with healthcare as one of his big campaign pledges, with public support for healthcare reform, and with the public understanding of healthcare reform being some big change more akin to what Congress worked on than a few incremental pieces of small legislative fixes. And cost containment was a big part of both President Obama's plan and what the public wanted.

I agree that things like "end of life counseling" ended up being politically damaging to supporters of healthcare reform, but 1) it's a real shame that we can't have a serious policy debate without something like "end of life counseling" beign turned into "death panels", and 2) the cynic in me thinks that opponents of reform (and there would be some) would find something to criticize, even in smaller pieces of legislation.

Posted by: MosBen | February 1, 2010 12:22 PM | Report abuse

Awesome, trading in comprehensive health care reform for a minor policy that may well may healthcare more expensive. Your American political system at work!

Posted by: Chris_O | February 1, 2010 12:58 PM | Report abuse

Wow, so that's an actual strategy? Well done, Speaker Pelosi, Sen. Reid. I'll bet that one kept you both up much of the night.

High school cheerleaders across America will memorialize this moment in history..
"Lean to the left, lean further left, stand up, sit down...aw screw it, just quit."

Posted by: riskexcellence | February 1, 2010 2:31 PM | Report abuse

I disagree with the article's suggestion that repealing the antitrust exemption is unnecessary only because it wouldn't lower costs. Does anyone really think that having one company dominate 90% or more of the insurance market (as is the case in some states) is a good thing? Are lower prices really the only goal of competition? What about issues like product innovation, and consumer choice? Would a consumer appreciate the ability to choose plans with different features (a wellness approach, for example, or coverage for something the insured thinks is important, or co-pays vs. deductibles). What incentives are there for an insurer with 90% of the market to ever change (for the benefit of the insureds) what they offer? Competition is about much more than just encouraging price competition.

As for the oft-repeated argument about the need for data sharing among insurers for premium adjustments, I am certain this issue can be dealt with in other ways. For example, what if the state insurance commissions functioned as an aggregator of such data, and made it available to all licensed insurers in the state. All that would be needed then would be a limited law that exempted from certain antitrust allegations any rate-setting action taken by an insurer using the data. Why the original exemption wasn't more narrowly drafted has always puzzled me anyway, if the data sharing issue really did motivate its creation. Insurance companies do a lot more than just rate-setting, and they shouldn't get a free pass from antitrust liability on all of their business dealings.

Posted by: reach4astar2 | February 1, 2010 5:00 PM | Report abuse

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