By Merrill Matthews CAHI Executive Director
Since Congress Wont Return Until After Labor Day
Former Democratic Senator Bill Bradley has an idea: If President Obama and the Democrats really want some bipartisan support for their health care reform bill how about they include some of the Republicans (and conservatives) proposals in it? Its astounding that anyone would really have to make that suggestion but thats where we are in todays political world.
Writing in The New York Times Bradley says: In the end the (1986 Reagan) tax bill passed because each party got something it wanted: Republicans got a lower marginal tax rate and Democrats eliminated special- interest loopholes."
It doesnt have to be everything the Republicans want but it should be some things. Thats also what happened when Congress passed the Health Insurance Portability and Accountability Act in 1996. Both parties thought they were getting something they wanted -- and needed for the upcoming election -- and so passed the bill.
I heard a commentator last week say that Democrats had reached out to Republicans and cited the efforts to exclude the importation of drugs from other countries as an example. Of course Republicans are nearly as divided on that issue as the Democrats -- presidential candidate John McCain actually supported importing drugs. Besides if importation is left out of the final bill that will be a result of an Obama-PhRMA backroom deal not a nod to Republicans.
Were the Democrats to say include tort reform or build on the growing consumer driven health insurance options they might get some support. But health reform has been all about capitulation not compromise.
The Legislation:
- Congress is now down to two choices: pass a smaller bill or pass no bill.
- Forget about passing health care under the nuclear option (i.e. the reconciliation process). It wont happen because it would be a political and public relations nightmare for the administration and the Democrats.
- Speaker Pelosi and other Democrats have suggested that Congress needs to pass health care legislation to honor Ted Kennedy. No one is buying that line.
- Sen. Grassley (one of the three Republicans negotiating a health care bill) has said that he may reach an agreement with the other negotiators but he may not vote for that bill because he may not be able to sell it to Republicans.
- For the time being Democrats have lost their filibuster-proof margin.
The Current Environment:
- Members of Congress always act in their self- interest. They spent lots of time and money getting elected are risk adverse and dont necessarily want to give up their jobs.
- Most members of Congress dont understand our current health care system cant explain it and dont know how all the pieces of the puzzle interact with each other. And they might have to explain how a new health care system works.
- President Obama now projects the countrys deficit will be $9 trillion which is $2 trillion more than he told us in the spring.
- Unemployment is now at 9.4 percent and trending higher.
- Members of Congress are up for reelection in 2010 and projected Democratic losses in the House range from 20 to 100.
What does all this mean for health care legislation? I am not going to predict how this health care battle will conclude but always look at the self-interest of those who get to vote.
You Heard It Here First (as Always)
A new study on health insurance administrative costs from the Sherlock Company for the Blue Cross and Blue Shield Association finds that average admin costs across all products was 9.18 percent of premiums. Of course a 2006 CAHI study Medicares Hidden Administrative Costs" based on an analysis from CAHI member Mark Litow of Milliman found that admin costs were 8.9 percent.
We had it nailed … three years earlier. But its nice to get a second opinion.
And while were on health insurance admin costs lets mention the profit issue. To hear the Obama administration and congressional Democrats tell it health insurers are making outrageous profits. Senator Kent Conrad (D-ND) boasts that his co-op idea would be a nonprofit. But that same Milliman study found that insurance company profits run in the 2 percent to 3 percent range.
Any government plan will lose more than that in waste and fraud -- in the first few months. We know because thats what happens in Medicare and Medicaid.
