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Posted at 10:28 AM ET, 02/ 8/2011

Mitch Daniels proposes a deal on health care

By Ezra Klein

danielsandpapers.JPGThis op-ed by Gov. Mitch Daniels includes an introductory critique of the Affordable Care Act that's so overstated that it borders on comedy. (I mean, "all claims made for it were false"? Really? Every single one?) But once you get past that, it's exactly what I've been hoping to see from a major member of the Republican Party: It's a list of changes that Congress could make to the Affordable Care Act in order to make it acceptable to Republicans, or at least to Mitch Daniels.

• We are given the flexibility to decide which insurers are permitted to offer their products.

• All the law's expensive benefit mandates are waived, so that our citizens aren't forced to buy benefits they don't need and have a range of choice that includes more affordable plans.

• The law's provisions discriminating against consumer-driven plans, such as health savings accounts, are waived.

• We are given the freedom to move Medicaid beneficiaries into the exchange, or to utilize new approaches to the traditional program, instead of herding hundreds of thousands more people into today's broken Medicaid system.

• Our state is reimbursed the true, full cost of the administrative burden to be imposed upon us, based on the estimate of an auditor independent of HHS.

• A trustworthy projection is commissioned, by a research organization independent of the department, of how many people are likely to wind up in the exchange, given the large incentives for employers to save money by off-loading their workers.

According to Daniels, these changes would transform the program from an "impending disaster" into a system where "customer choice would be dramatically enhanced" and "health care would be much more affordable." I don't agree on the impending disaster part, but the rest of it is true, though with a few big catches: There'd be more choices because there'd be fewer standards, and there'd be cheaper coverage options because insurers would be allowed to offer extremely limited products.

Most of the list is composed of small tweaks. Daniels doesn't think the bill sufficiently reimburses the states for administrative costs, or worries the legislation is insufficiently welcoming to high-deductible plans, or wants another estimate of take-up in the exchanges? Fair enough. Those concerns should be addressed.

The bigger-ticket items are Medicaid and the mandates. I don't see anything wrong with allowing states to move Medicaid-eligible populations into the exchanges -- at least so long as they're committed to giving them access to high-quality insurance once they're in there (remember, Medicaid is much cheaper than equivalent private insurance products). This is actually a compromise I mentioned explicitly in my piece envisioning the health-care system in 2030.

But I wonder what Daniels really means when he calls for "all the law's expensive benefit mandates [to be] waived." Does he mean the categories of care that the bill directs insurers to cover? Does he mean that the bill should throw out protections from preexisting conditions and limits on annual caps? I'm on the side of more, not less, flexibility in this area, but that's not the same as getting rid of standards entirely.

That said, this is a worthwhile debate to be having. Whether the law excludes innovative insurance products that could help bend the cost curve is a much more productive debate to be having than whether we should be making a major move to cover our citizens and bend the cost curve at all. And there's no doubt that the legislation's actual implementation would benefit from the buy-in of conservative governors like Mitch Daniels.

Daniels, of course, doesn't have a vote in Congress, and it's not even clear he has many friends there. But I wouldn't be too quick to dismiss the deals he offers. Back in September, Daniels called for a second stimulus centered around a payroll tax cut and full expensing for business and investment. Both were part of the deal that congressional Republicans struck with the administration a few months later.

Photo credit: AP/Indianapolis Star, Frank Espich.

By Ezra Klein  | February 8, 2011; 10:28 AM ET
Categories:  Health Reform  
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Next: The 111th Congress was the most polarized ever -- in graphs

Comments

No Ezra

No no no

This is not a worthwhile debate.

Daniels comments and plan is targetted to voters to get them to be against ACA in an effort to repeal ACA.

His comments are not meant as a serious proposal for negotiation.

His comments are intentional lies, intended to sabotage, not to build.

As Obama said, correctly, he does not want to debate the issues of the last two years. And this is Daniel's purpose exactly.

Posted by: lauren2010 | February 8, 2011 10:38 AM | Report abuse

Don't you have to watch out for adverse selection problems when you start varying the plans a lot?

Posted by: jduptonma | February 8, 2011 10:42 AM | Report abuse

What will occur with the limited plans is not much of an improvement over current conditions. CA did a study in 2004 and found the following effects of Walmart's health plans to the state.
Main Findings:
• Reliance by Wal-Mart workers on public
assistance programs in California comes
at a cost to the taxpayers of an estimated
$86 million annually; this is comprised
of $32 million in health related expenses and $54 million in other assistance.
• The families of Wal-Mart employees in
California utilize an estimated 40 percent
more in taxpayer-funded health care than the average for families of all large retail employees.
• The families of Wal-Mart employees use
an estimated 38 percent more in other
(non-health care) public assistance programs (such as food stamps, Earned
Income Tax Credit, subsidized school
lunches, and subsidized housing) than
the average for families of all large retail
employees.
• If other large California retailers adopted Wal-Mart’s wage and benefits standards, it would cost taxpayers an additional $410 million a year in public assistance to employees.
This is all just another instance of indirect corporate welfare.

Posted by: jharris99 | February 8, 2011 11:12 AM | Report abuse

I'm betting that (assuming he's not entirely playing lucy-with-the-football) that his comments about more flexible benefits mean exactly what you think no reasonable person would mean. Remember the whole GOP push to let companies sell stripped-down plans across state lines?

Posted by: paul314 | February 8, 2011 11:19 AM | Report abuse

what it sounds as if Governor Daniels is concerned about (and he has a good right to be) has little to do with pre-ex or lifetime caps. I'd suspect it has to do with as he said, MANDATES for coverage. A mandate for example that required all plans in the exchanges to cover say in vitro fertilization would be a boon to the IVF industry (as it was in my state of NJ) when/if its required to be covered on plans in the exchanges but if we do that then we increase costs substantially because of that.

The question is will we hear about all these "requirements" for coverage and who determines (HHS??) what is medically necessary and what is not? Its those types of costs and how "consumer friendly" they are that will determine a lot of the increased costs that no one thinks of or cares about until its time to complain about an insurance premium increase and to blame someone else for it.

Posted by: visionbrkr | February 8, 2011 11:43 AM | Report abuse

Wow! Absolutely agree with Mitch Daniels on one thing: "move Medicaid beneficiaries into the exchange..."

Get rid of Medicaid and use the exchanges for everyone.

Posted by: steveh46 | February 8, 2011 12:10 PM | Report abuse

Allowing states to move Medicaid-eligible residents into the exchanges could also address the problem of having people who will switch back and forth between eligibility categories (Medicaid and subsidized exchange coverage) repeatedly because their income is variable.

Sommers and Rosenbaum highlight this problem in the latest issue of Health Affairs:
http://content.healthaffairs.org/content/30/2/228.abstract

Posted by: Liz_B | February 8, 2011 12:39 PM | Report abuse

But I wonder what Daniels really means when he calls for "all the law's expensive benefit mandates [to be] waived."
_____________________

I believe he's referring to the Monty Python "no pay" policy.

Posted by: suehall | February 8, 2011 1:12 PM | Report abuse

Obie better do something as the SCotUS is going to tank the law anyway.

Posted by: illogicbuster | February 8, 2011 1:40 PM | Report abuse

My god are some of these Republicans nuts!!! Let the Supreme Court hear the cases coming up; they will be heard on an expedited basis I'm sure. Quit trying to make a horrible overreaching bill into something that is 'sort' of palatable. Leave it alone and let the Constitutionality issue be litigated!

Posted by: nancycrichton | February 8, 2011 2:40 PM | Report abuse

"GOP Health Care Law?"

What happened to BoehnerCare? Let's stick with what people are used to!

Posted by: kishorgala | February 8, 2011 2:53 PM | Report abuse

Great!

As if one were not enough, Here's another MITCH!

Posted by: kishorgala | February 8, 2011 2:58 PM | Report abuse

The first issue on the list makes their proposals very questionable. "We are given the flexibility to decide which insurers are permitted to offer their products". Does we mean republicans? Which insurer(s) would they favor? It would undoubtably be their biggest donors. That issue alone smacks of discrimination and it the first on the list.

Posted by: questioner2 | February 8, 2011 3:04 PM | Report abuse

Let's find out how real this problem actually is: First, get everyone who is Medicaid-eligible into the program. Next allow all employers to provide high-deductible"cafeteria" plans with every employee participating. Then quit counting the illegals. Once the gov stops distorting the numbers, out the remaining 9 million or so, let's find out how many of those who have pre-existing conditions can actually afford the coverage that they could now purchase. I'm guessing that there are very few who can. The answer, then, is not the program as it now exists, but a high deductible program for them, with everyone being able to buy from whatever company they chose. Can't anyone in Washington think this far????

Posted by: lou4747A | February 8, 2011 3:06 PM | Report abuse

The GOP version is so much simpler than what has been presented here.

It is to implement Junior's simple solution to the complicated health-care mess. Cut out all insurance benefits and make us go to the emergency room for treatment.

Look at the money it would save the government.

Posted by: chamateddy | February 8, 2011 3:07 PM | Report abuse

The more options offered, the more complex the plan becomes and the more difficult it is for people to understand it. One of the strengths of Medicare is its limited number of options.

Part A (hospital) has one choice. Simple enough. Part B is an option -- one option. Also, simple.

Then, you have some standardized choices if you want a Medicare supplement. All the insurance companies offer the same list of coverages. My guess is most people opt for coverage "F," but I may be wrong on this.

The point is, adding options is not necessarily beneficial. It can be confusing and harmful, and if you select the wrong option, you can be left without coverage for an unexpected problem.

My suggestion: Just begin lowering the accessible age for Medicare, down to 60, then 55, then 50, etc., until everyone in America is covered.

Rodger Malcolm Mitchell

Posted by: rmmadvertising | February 8, 2011 3:16 PM | Report abuse

Let's find out how real this problem actually is: First, get everyone who is Medicaid-eligible into the program. Next allow all employers to provide high-deductible"cafeteria" plans with every employee participating. Then quit counting the illegals. Once the gov stops distorting the numbers, out the remaining 9 million or so, let's find out how many of those who have pre-existing conditions can actually afford the coverage that they could now purchase. I'm guessing that there are very few who can. The answer, then, is not the program as it now exists, but a high deductible program for them, with everyone being able to buy from whatever company they chose. Can't anyone in Washington think this far????

Posted by: lou4747A | February 8, 2011 3:22 PM | Report abuse

Ezra's mind "ist klein"!!!!

He obviously understands little, if anything, of "ObamaCare". Ezra's claim that "Finally a republican wants to tweak ObamaCare" is really too bad. MOST republicans want ONLY REPEAL!!!

The best thing that government could EVER do is to get out of the way of both the health care industry and the insurance industry. Federal government interference in those two industries brought us to a (Obama) crisis and Obama had to fix it, but in reality Obama exasperated the "crisis" to the point that neither industry can function properly. If "ObamaCare" is allowed to stay the "Law of the land" in ANY form there will not be any "affordable health care" that is still "good health care".

BaO is POISON!!!

TBC ~:>{)

Posted by: TheBlackCherokee | February 8, 2011 3:23 PM | Report abuse

"All the law's expensive benefit mandates are waived, so that our citizens aren't forced to buy benefits they don't need and have a range of choice that includes more affordable plans."

Oh yeah, that's a good idea. I want the cheapo high deductible plan that only pays half of everything after that. So when I suspect a problem, all I have to do is put off going to the doctor and getting tests and MRI's or whatever, which could cost many hundreds of dollars, until I definitely know I have cancer or heart disease or something that will cost ten times more to treat at that point.

Or maybe I don't need the expensive joint replacement coverage. My joints are good forever. Besides, if they give out I'll probably be on Medicare and everyone else can pay for them, not me. Pregnancy coverage? I'm a woman but I'll never get pregnant so I don't need that coverage, and if I do, I'm sure there won't be any problems.

I get something that I can't afford? No problem. Bankrupcy, and I'll blow off all my medical debts and all you suckers can pay.

And that's why there are coverage mandates and no shopping for some cheap cracker state insurance without good coverage mandates.

Posted by: emjayay | February 8, 2011 3:27 PM | Report abuse

Ezra,

Are you really suggesting that the law should "[more sufficiently welcome] high-deductible plans?"

That is a horrible idea.

Who would buy the high-deductible plans? People who can't afford better. Are those people likely to spend that high deductible on preventative care or care at the onset of symptoms? Of course not, and that is bad for all of us. To bring down costs across the system, we need to get rid of disincentives for preventative and early care. We need people to avoid disease or to treat it early when treatment is far less expensive.

High-deductible plans are bad not only for those who get stuck with them, they're bad for all of us.

Posted by: commentator_number_1 | February 8, 2011 3:32 PM | Report abuse

• We are given the flexibility to decide which insurers are permitted to offer their products.

I though the GOP was all in favor of competition. but only some times it appears

• All the law's expensive benefit mandates are waived, so that our citizens aren't forced to buy benefits they don't need and have a range of choice that includes more affordable plans.
well affordable plans are also called useless plans as they don't do any thing, but this was intended to waste more of the consumers money by buying useless products.

• The law's provisions discriminating against consumer-driven plans, such as health savings accounts, are waived.
HSA are usless, always have been always will be. unless you know in advance that you will be spending a lot of money on health care, you can't budget this to work out right

• We are given the freedom to move Medicaid beneficiaries into the exchange, or to utilize new approaches to the traditional program, instead of herding hundreds of thousands more people into today's broken Medicaid system.
what makes you think any insurance company will take Medicaid beneficiaries? they will have pre-existing conditions which will make the insurance companies decline to insure. and they don't have 100% of the premium to boot.

• Our state is reimbursed the true, full cost of the administrative burden to be imposed upon us, based on the estimate of an auditor independent of HHS.
you mean you want the FEDs to pay for your state's wasteful spending?

• A trustworthy projection is commissioned, by a research organization independent of the department, of how many people are likely to wind up in the exchange, given the large incentives for employers to save money by off-loading their workers.
employers had more of an incentive before the new health care law passed. they could stop the benefit. and did. now they will pay a 'tax' bonus to get out of it.

Posted by: willid3 | February 8, 2011 4:07 PM | Report abuse

Ezra notes that Medicaid is cheaper than private health insurance, mainly because its rates are significantly lower. That point deserves some elucidation. Because of the difference in rates, it is cheaper to provide the same set of services to a particular population in Medicaid than in private insurance.

However, at present, Medicaid doesn't serve a heterogeneous population. Most children and most parents on Medicaid are pretty cheap, although there certainly are access problems with finding providers willing to take the low rates. However, Medicaid serves a lot of elderly and/or disabled individuals. Those folks are expensive. Disabled folks who don't have Medicare are expensive because they have very extensive healthcare and long-term care needs. Disabled folks with Medicare are still expensive for Medicaid, because Medicaid pays for their long-term care.

It would not be unacceptable to me to put relatively healthy individuals with low incomes in the exchange rather than Medicaid. This could indeed be less costly to the states (because the Feds pick up most of their tab, whereas the Feds pick up about 57% of the total Medicaid tab). However, for low-income people with multiple chronic illnesses, deductibles and copayments found in private insurance can really add up. You would have a different access problem with people forgoing care due to cost. In contrast, Medicaid's cost sharing is a lot lower. In fact, I believe Medicaid is prohibited from charging cost sharing to children.

The Republicans really hate Medicaid, but the fact is that private health insurance would not serve the needs of many of Medicaid's present enrollees. As to the new enrollees under health reform, the young and healthy ones could probably do fine on the exchanges. The older and sicker ones might have a much harder time.

Posted by: weiwentg | February 8, 2011 4:11 PM | Report abuse

This guy is Governor of where? Fantasyland? Just another corporate-butt-kissing Republicon trying to screw over the poor, the elderly, and the infirm - so what else is new.

Posted by: Bushwhacked1 | February 8, 2011 4:41 PM | Report abuse

I agree with auren2010. The devil is in the details. I want to add that Obama and the Democrats outlined the current Affordable Care Act in very broad terms just like Daniels has. However, unlike Daniels they wanted to pass legislation not try, to kill it. Look what happened to House and Senate Democrats! Congressional Republicans who had previously talked about and supported parts of the health care reform that was passed in MA by Romney. Parts of the ACA are based on the MA plan. Republicans jumped off the train while it was running when they saw the Tea Party. Republicans do not see any political upside by passing anything that will make the ACA better for individuals and/or States. Let’s see how many congressional and State Republicans jump on Mitch Daniels ship. The Democrats do not have the votes to pass anything in the House or the Senate that will make the ACA better.

The House and Senate Democrats leadership just cannot withstand or out-position their counterparts on the Republican side. Old timers like Hoyer do not realize (if he does its worse than I think it is) that Republicans want Democrats to go from A-to-Z and make them defend every step of the way. Hoyer and many other Democrats in my opinion believe that it is the final product not how you get there. That’s how we ended up with the way the debate went on the ACA. Progressives are just as much at fault. They did not or would not recognize that you have to have the votes in your caucus if you are in the majority and make sure the bill works.

Posted by: rdw1260 | February 8, 2011 4:42 PM | Report abuse

New Public Policy Polling poll - only Republicans favor repealing Obamacare entirely.

http://www.dailykos.com/weeklypolling/2011/2/3

Posted by: angie12106 | February 8, 2011 4:50 PM | Report abuse

It is all about referencing yourself with others. That is what the Teapublicans are all about.

Without the poor, there wouldn't be rich to represent.

Without the uninsured, they wouldn't be able to claim to be insured.

Without the sick, they wouldn't be able to call themselves healthy.

So you have to keep the poor and sick around. Uninsured.

Posted by: kishorgala | February 8, 2011 4:53 PM | Report abuse

Republicans complained about the unemployment rate for 2 years while voting "No!" on every bill to create jobs.

Now that they control the House - they STILL have NO PLAN to create jobs.
Instead, they play around by repealing healthcare for children with pre-existing conditions WHILE grabbing their own taxpayer funded government run healthcare!

And now they're working to decrease women's rights.
Where are the JOBS?!?
chirp, chirp

Posted by: angie12106 | February 8, 2011 4:56 PM | Report abuse

Daniels, et.al. are so badly indoctrinated by people like Palin, Gingrich, Rove, Limbaugh and Beck that the truth is stranger than the fiction that they live on. We all know that their rhetoric is pure bull and they are doing this to keep their handlers and the party happy. They get paid mightily for making fools of themselves. The problem is that the folks back home see them now for what they are, wholly owned subsidiaries of special interests and shills of the worst kind. We can only pray that sanity will strike the electorate and these buffoons will be dispatched to the hinter lands, for a long stretch, maybe slaying salmon in Alaska or stalking moose. They would be in proper company with Palin, the half of whatever governor who abandoned Alaska in mid-term to go buck-hawking on her association with McCain - the loser.

Posted by: ronjeske | February 8, 2011 5:11 PM | Report abuse

2,000 pages of loops and dupes. The American Muslims population is exempt from having to purchase insurance. Exempt means their care would flow back to the tax payer for their care.
The mass means every individual to be in the system, president down to the minions. The military should also be a part of the same system where by they may seek help and care without having to travel across the country for care. Federal, State employees, unions all organizations to be insured. Mass is a large populous to insure. The president, VP, Congressmen/women and Senators, Representatives, Governs, etc. would mean a policy for all. They would get it right if they had to have the same provisions and programs.
The liberals like the fines, penalties and the tax loop holes to ride over the American tax payer.
Obama Care is fraud upon the United States and Citizens, if they want health care stop all foreign aid to other countries, end the two wars with a victory, send illegals back across the boarder and cut government's excessive spending...Do something to pay for health care. If the government has no way of paying for it, drop it and don't give us your false accounting of rubber stamps.

Posted by: famousfatman | February 8, 2011 6:01 PM | Report abuse

What happened to the blind faith of conservatives that the PPACA is unconstitutional? Let's find out about the constitutionality, as expeditiously as possible, before we make changes. Moreover the GOP is apparently trying to make the PPACA even more complex.

I wonder if Christian SCientists have to buy health insurance.

Posted by: ptgrunner | February 8, 2011 6:41 PM | Report abuse

Sheesh, you would have to be a complete moron to buy any of the crap that Republicans are peddling nowadays.


Most people call the Teabaggers slack jawed yokels. Republicans call them their base.


.

Posted by: DrainYou | February 8, 2011 7:11 PM | Report abuse

famousfatman: Your "facts" about Muslims are fictions. Do some more research, please. What does need to be added to this bill is the complete repeal of the McCarran-Ferguson bill, along with the FTC regulations that prevent the government from even investigating insurance fraud by the insurance companies. Matt Taibbi, in GRIFTOPIA, cites several examples from a hospital in NJ, in which insurance company denied coverage for a man who needed surgery but was on Coumadin, a blood thinner. The reason: The surgery was not performed "in a timely manner." (He had to be weaned off the Coumadin before surgery so he wouldn't bleed to death.) Another denied claim for a woman who was hospitalized to receive IV antibiotics while suffering from pneumonia. Reason: She was a retired nurse and should have been able to administer her own treatment at home. Other patients, admitted to the hospital for atrial fibrillation, were called in the hospital, told to disconnect their IV lines and get up and leave because they were "well" and staying any longer would cost them thousands of dollars out of pocket. THERE IS NOTHING THE LAW CAN DO TO PREVENT THIS KIND OF BEHAVIOR.

Posted by: beth-wade | February 8, 2011 7:41 PM | Report abuse

"Get rid of Medicaid and use the exchanges for everyone."

Why stop there? Get rid of private medical insurance and use Medicare for everyone. It's the only plan whose subscribers aren't scared to death of it. And getting young, healthy people into the pool would be great for the taxpayer.

Posted by: westomoon | February 8, 2011 7:47 PM | Report abuse

All the liberals here fail to acknowledge the obvious problem.

Medicaid is singlehandedly the largest deficit creating program passed in the history of the united states.

Posted by: krazen1211 | February 8, 2011 8:47 PM | Report abuse

"And now they're working to decrease women's rights.
Where are the JOBS?!?"

Ignoramus. Job growth in this Congress has already outdone the last Congress.

Posted by: krazen1211 | February 8, 2011 8:50 PM | Report abuse

According to his henchmen, the 'effing retards' on the 'professional left' had nothing to worry about over Obama's reneging on the meat of reform (i.e.,"Any plan I sign must have a robust public option" became "Public option? What public option?")because the plan as passed would evolve and grow as Medicare and Social Security had.

But the first semi-serious discussion of its future comes from a GOPer intent on further weakening the pale, compromised thing we got and Ezra Klein wants to play nice? Well, I say not no, but hell no! Any revisions should be toward greater coverage of more people with a goal of a single-payer system and the inevitable demise of the American insurance cartel.

MEDICARE FOR ALL!

Posted by: cdmomega | February 9, 2011 2:21 AM | Report abuse

According to his henchmen, the 'effing retards' on the 'professional left had nothing to worry about over Obama's reneging on the meat of reform (i.e.,"Any plan I sign must have a robust public option" became "Public option? What public option?")because the plan as passed would evolve and grow as Medicare and Social Security had.

But the first semi-serious discussion of its future comes from a GOPer intent on further weakening the pale, compromised thing we got and Ezra Klein wants to play nice? Well, I say not no, but hell no! Any revisions should be toward greater coverage of more people with a goal of a single-payer system and the inevitable demise of the American insurance cartel.

MEDICARE FOR ALL!

Posted by: cdmomega | February 9, 2011 2:23 AM | Report abuse

More affordable plans? Right, the more affordable plans that won't pay for anything.

The insurance companies have already jacked their rates in anticipation of a captive market. But why should Ezra worry--he's got his WaPo ins.

Posted by: kmblue | February 9, 2011 3:07 AM | Report abuse

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