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The core of the White House proposal

Igor Volsky has a helpful table showing the difference between the House, Senate and White House proposals. The biggest substantive difference is that the White House's bill has better subsidies than the Senate bill, and subjects unearned income to a 2.9 percent payroll tax. The biggest political difference is that the White House proposal has gotten rid of some of the distractions that were hurting the Senate bill (namely, the Nelson and union deals), and added this rate regulation authority, which is essentially a distraction that's meant to help the bill.

But the real story of the bill is as it's always been: This is an effort to build a working health-care system in this country, and though people talk about the bill's complexity, it's really based on four simple elements: hundreds of billions of dollars in subsidies so people can afford insurance; regulations so that insurers can't deny people insurance and create a situation where only the healthy have coverage; a mandate so that people have to purchase insurance and can't create a situation where no one purchases coverage until they're sick; and exchanges so that there's a working market where people can buy their insurance and be confident in the product's quality.

Because these elements of the bill aren't changing very much, they're not going to be a big part of the story going forward. But they are the core of this legislation.

By Ezra Klein  |  February 22, 2010; 12:02 PM ET
 
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Comments

well at least you're finally admitting (by omission) that there's little or no cost controls. Where will we be when we can't afford the ever growing subsidies anymore? You want an example? Look at the states and how they're going to be scrambling over the next several years to meet a combined $130+ billion annual shortfall.

But sure let's add another entitlement to the system. This is as bad as the Medicare Part D cost boondoggle perpitrated by Republicans yet you're too blind to see it yet. Just wait.

Posted by: visionbrkr | February 22, 2010 12:17 PM | Report abuse

Har, "vision." Which one was paid for, and which one was added right to the deficit?

Idi-ot.

State-based exchanges instead of national.
:-(

Posted by: AZProgressive | February 22, 2010 12:19 PM | Report abuse

Who cares what this snotnosed kid thinks about anything?

Posted by: ravitchn | February 22, 2010 12:20 PM | Report abuse

State-based exchanges = more incentive not to live in states with corrupt governments. Are there any?

Posted by: janinsanfran | February 22, 2010 12:29 PM | Report abuse

AzProgressive,

If you actually read my post you'll see I refer to the Part D as a "boondoggle" too.

Also paid for by who? The taxpayer that's who. If you really think this will be defecit neutral I've got some oceanfront property in Kansas to sell you.


The only difference is that Part D only dealt with prescriptions while this fiasco deals with the entire system which will only increase the costs.

And if this will reduce costs like they say then why do they need to increase the threshold on the excise tax? Kind of sounds like they KNOW it won't.

Don't worry, I won't stoop to your level and call you names.

Posted by: visionbrkr | February 22, 2010 12:31 PM | Report abuse

If there isn't an exemption for the middle class on the payroll tax on unearned income, this proposal will be hung around the Dems' necks as a tax increase on those least likely to be able to afford it.

Posted by: rich_in_nj | February 22, 2010 12:34 PM | Report abuse

State-based exchanges = more incentive not to live in states with corrupt governments. Are there any?

Posted by: janinsanfran | February 22, 2010 12:29 PM | Report abuse


You know its funny you mention that because my state's government is corrupted beyond belief but its the unions and organzied labor that's corrupting it. We've now got a Republican govenor who is trying to address our ever destructive pension system and healthcare mess by making sure scams aren't run, and government employees pay 1.5% of their income (not 10-20% but 1.5%) and yet the unions are looking to keep up the "payola" to keep themselves (er, uh, I mean Democrats in power).

http://www.nj.com/news/index.ssf/2010/02/christie_and_unions_poised_to.html

I especially like this from Bob Master, spokesman for the CWA Union, "Democrats will have to start acting like Democrats"


Thank God Govenor Christie seems to this point to be getting his way.

Posted by: visionbrkr | February 22, 2010 12:40 PM | Report abuse

Christie is a joke. He's cutting money for education, while being willfully blind to the fact that education is financed by property taxes, which will have to be raised if the state cuts aid. So much for lower taxes.

Posted by: rich_in_nj | February 22, 2010 12:56 PM | Report abuse

Wait.... isn't the free-rider provision bad?

And no employer mandate?

Why in heaven's name would you go with THAT?

Posted by: adamiani | February 22, 2010 1:05 PM | Report abuse

People who think it's going to cost more to cover everybody that it already costs NOW, are out of their minds. You're already paying, baby.

Posted by: Lee_A_Arnold | February 22, 2010 1:11 PM | Report abuse

I would prefer the national exchange, but there may be some advantages to state exchanges:

It will be hard for the Republicans to dismantle them. All we need is a few to survive and thrive, and the concept will spread. I guess the Republicans could easily sabotage a single national exchange before it gets rolling.

Having different experiments with exchange rules/structures could yield a more optimal solution.

Posted by: HuckFinn | February 22, 2010 1:18 PM | Report abuse

Hi Ezra,

What policies are not based on a couple of simple elements? The devil is in the details when it comes to effective governance. The complexities of the bill should be the story as they will determine whether the bill successfully meets its core objectives.

Posted by: questioning2 | February 22, 2010 1:20 PM | Report abuse

People in NJ are already having buyer's remorse about Christie.

Guess they somehow didn't think the first thing he would do was raise already high property taxes. This is just what republicans do -- lie.

Posted by: drindl | February 22, 2010 1:23 PM | Report abuse

Health care reform would also be a boon to small business and the self-employed and encourage entrepreneurship.

Posted by: drindl | February 22, 2010 1:25 PM | Report abuse

and the NJ union apologists are out in full force today!

drindl,

buyers remorse? nj.com hears differently.

http://www.nj.com/news/index.ssf/2010/02/most_nj_voters_expect_gov_chri.html

52% said too early to judge but of the other 48%, 33% approved and 15% disapproved.

I'm betting if we looked further the 15% has a majority of their membership in a union.

Posted by: visionbrkr | February 22, 2010 1:36 PM | Report abuse

and if he can't reduce property taxes it'll be because DEMOCRATS in the state legislature and senate were paid off just as Bob Master asked them to.

You know they're kind of like the obstructionists to reform that currently habitate the Republican part of Congress.


Lee,

You know you're right. The government has NEVER been taken advantage of by the private market when free money's been handed out. Medicare cost well less in 1991 than what it was predicted when it started (oh wait, NO IT DIDN'T) Did you hear about the money the census for 2010 has already lost? Government works real well in theory but unfortunately we don't live in theory.

Posted by: visionbrkr | February 22, 2010 1:41 PM | Report abuse

you know drindl and rich its the sick days that really gnaw at me. In private business more often than not sick days END at the end of a calendar year meaning you can't carry them over and this is becoming more and more common practice. While in government its what makes people rich. See the below article on two crooks in public service in NJ. This is who Christie is targeting.

If you're not one of these people how can you advocate for them? Please don't come to me with sob stories of policemen or firemen that will be let go (which is the normal liberal retort) because if people like the below were GONE and stopped abusing the system then we wouldn't be in the crisis we are in.

http://www.nj.com/hudson/index.ssf/2010/02/jersey_city_honchos_receive_hu.html

But I'm sure that Assistant business Administrator Grego EARNED his 127 unused vacation days for a total of $238,000+. Multiply this example by the thousands in NJ and you'll see why we're at where we are. If we got rid of these crooks and put reasonable CURRENT benefit, pension projections in place you'll see all costs and property taxes come down.

Posted by: visionbrkr | February 22, 2010 1:51 PM | Report abuse

visionbrkr, I see you are conflating vacation days and sick days. You are going on a rant about sick days and then using an example of someone who received payment for *vacation* days. Vacation days are paid days off just like anything else. You get those payments for unused vacation days when you walk off the job.

For public employees, unused sick days allow them to take large amounts of time off when they get cancer or other serious conditions requiring long term treatment or hospitalizations. Most public employees are accorded a sort of "token" payment for unused sick days at the end of their service as an incentive not to use them when they get near retirement, but it doesn't typically amount to a lot of money.

It's kind of funny that one of the main complaints that right-wing New Jerseyans have is that the public employees want to be as prosperous as the rest of the people in the state rather than being treated as serfs. Oh, know, they make decent salaries commensurate with their responsibilities and expertise! What a tragedy!

Posted by: constans | February 22, 2010 2:10 PM | Report abuse

I see you have lots of time to post, vision. On welfare? I find the biggest rightwing whiners always are on some kind of public dole -- or lving on daddy's money.

Posted by: drindl | February 22, 2010 2:12 PM | Report abuse

I should mention that most private sector employees have replaced "large amounts of sick day rollover" with "short term disability" to handle people who get serious medical conditions, but I don't hold a grudge against public employees for their system. I used to have it myself back when I worked for the federal government. Employees were willing to pitch in to donate their unused sick days when someone else had a serious illness but not enough sick days to cover treatment. I suspect that handling these things via disability insurance is preferable, but I am not one to hold a grudge about it. I make more money than the public employees I used to work alongside.

Posted by: constans | February 22, 2010 2:14 PM | Report abuse

drindl,

actually my father owns a business but I chose to start my own in a seperate industry. If I was actually on welfare do you really think I'd advocate for reforming systems like that? I can multitask, sorry if you don't get what that is.

constans,

you don't think that same example happens thousands of time over for sick days? THe problem is that the private sector has never accumulated those "personal" days as most of us have them now to the extent that public employees do. And does $1870+ PER DAY sound like a "TOKEN" payment to you? Sorry I dont' live in that income level and don't know many (outside of public service) that do.

And to that end I LOVE the fact that they claim to be public servants but when the "deal" the got before starts to look like it'll have to change or the state pension system will go bankrupt they BAIL out on the system they've served. Maybe they were just in it for the money.

And i have no problem with them being as well paid as the private sector is. I just have a problem that they make 2x what the private sector makes and then get heaping bonuses and pensions on top of that while the private sector is struggling. Sorry but if we all need to cut back then THEY need to cut back too.

Posted by: visionbrkr | February 22, 2010 2:21 PM | Report abuse

* And does $1870+ PER DAY sound like a "TOKEN" payment to you?*

Not for vacation days, which are earned and to be compensated at the rate of your salary. Every time I've left a job, I've received payment for unused vacation days at the full rate of my salary. You're flipping out on a rant about "sick days", but when you read the article, you find that he's being compensated for unused vacation days and some other amount for unused sick days (it doesn't say). Now, personally, I think that saving up several months worth of vacation days is stupid by the time you retire, but that's what some people do.

But you just can't. stay. on. the. topic., now can you?

Posted by: constans | February 22, 2010 2:27 PM | Report abuse

constans,

many employers don't have STD benefits and only 5 states require it or have state provided benefits that cap at a ridiculously low figure (NJ is currently $500+) I believe. Not only that but STD benefits for every insurer that I've ever worked with caps at normally $750 or $1000 at most so this example of a public employee would be taking a HUGE pay cut if he was in the private sector.

But hey, he doesn't have to worry. If you read the article closely (I had to read it at second time to catch it) He was given a cushy job at the Jersey City public library as a "consultant" so he gets to keep getting paid a ridiculous salary!

Like one of the commenters on nj.com's website posted he looked like a guy just being handed one of those big lottery checks. All while we have $34 billion in unfunded pension liabilities.


And your excuse for the serious medical conditions holds no water. How about advocating that they can keep those days but they only equate to pennies on the dollar if unused? That way if they're sick they're taken care of but they don't get to use them as an additional windfall on the burden of the taxpayer?

Posted by: visionbrkr | February 22, 2010 2:30 PM | Report abuse

*How about advocating that they can keep those [sick] days but they only equate to pennies on the dollar if unused?*

That is the way it works in Virginia for sick days: you want to incentivize not burning them up at the end of your career while at the same time (logically) not compensating them at full-salary when you leave. Depending on which division of the public employ you work in (eg, the public University sytem), that is the same way it works in NJ, as well. But once again, you're on a tear about "sick days" when it is quite clear that the bulk of this man's compensation came from unused vacation days.

Posted by: constans | February 22, 2010 2:35 PM | Report abuse

constans,

my apologies. I didn't seperate out the figures when calculating the per day costs.

It was $486.99 per day. Still an outlandish figure that multiplied over the entire system puts us in the mess we're in.

Sorry, the system needs to change.

Posted by: visionbrkr | February 22, 2010 2:36 PM | Report abuse

Ezra writes: "a mandate so that people have to purchase insurance and can't create a situation where no one purchases coverage until they're sick"

A completely toothless and ineffective mandate. $700/year is a joke.

Posted by: ab13 | February 22, 2010 2:44 PM | Report abuse

$700 is the cost of one doctors visit in NYC. Exactly. A joke of a mandate that will make California look like a walk in the park.

And constans you never answered two of my points.

1-the individual in the article was STILL on the public's dime

2-STD benefits for those lucky enough in the private market are 50-60% benefits and end after a short period of time. They're not 100% that you and your former compadres in government.


Your advocating for them is like if I advocated for the status quo in healthcare. You're short-sighted if you can't see that it must change and change dramatically.

Posted by: visionbrkr | February 22, 2010 2:57 PM | Report abuse

*the individual in the article was STILL on the public's dime*

And? Is there a reason that the fact that he's a public employee should mean that he can't get paid for vacation days? As I said, you seem pretty resentful that state employees aren't acting as your serfs.

Any employer that does not provide short term disability benefits is basically screwing over their employees, so I would expect that public employees should have them. I'm not going to hold a grudge against someone for having their sick days covered at full salary *when they are sick.* Anything else is unfair. You seem pretty worked up about this. My long term disability benefits only cover a fraction of my salary, which is also as it should be.

The important thing is pension reform: save pensions for inexpensive, low-level employees. The federal government has already made this transition for high-level professionals: since their private sector competitors offer 401(k)s, the federal government has a similar system.

But you're missing the forest for the trees: you're upset about one-time payouts made to retirees who never took a vacation rather than the pension system in general.

Posted by: constans | February 22, 2010 3:17 PM | Report abuse

constans,

oh i'm upset about the pension system as well. And I don't have a problem with them getting vacation time paid for to a reasonable level. Sorry what this guy got and the thousands of others like him is not reasonable.

I have no problem with them getting their sick time at full salary "WHEN THEY ARE SICK" but when they "cash out" like this I've got a problem with it.

Private sector jobs long ago got rid of the sweet deals because of costs that these state employees still get. I'm sorry if I'm concerned about how much I pay in taxes but I am. It goes with being one of if not the highest taxed state in the nation.

It has nothing to do with "serfdom" as you put it. It has to do with having an even playing field and it hasn't been so for some time.

As i've said, the average public sector employee makes twice what the private sector does.

Posted by: visionbrkr | February 22, 2010 3:26 PM | Report abuse

Obama needs to hammer on Thursday over and over again that republicans are absolutely not interested in extending coverage to any uninsured or under-insured, even if it is causing hardship and bankruptcy. He should also emphasize that passing a health care bill was a core campaign promise that he must keep. He should be ready to include some republican ideas and drop some current ideas that republicans object to right there by modifying the document on live TV. Then he should openly seek support from the republicans. It is a given that the republicans will not agree to anything because they have nothing to gain politically if the bill passes even with their own ideas. When it becomes clear that republicans are not acting in good faith, Obama should declare that his last-ditch effort for bipartisanship has failed, but also state that democrats need to keep their campaign promise and so he has to ask the congress to pass the modified bill.

Posted by: achena | February 22, 2010 4:08 PM | Report abuse

The extra tax provisions on capital gains looks bad for me personally. I am hoping there is an exemption in there for S Corps that participate in the business. If not I might have to lose money for a few years and chip away at my basis.

I still haven't figured out if it keeps Whole Foods type plans legal. (HSA + insurance). If we ran more plans like that, we would have a much smaller problem to deal with.

Posted by: staticvars | February 23, 2010 12:50 PM | Report abuse

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