Health Care Reform – The Day After

Slide_5497_75106_large Last night, the House passed health care reform. The Senate and the presidential signature are soon to follow. Some commentary from the blogosphere and opinion pages:

Megan McArdle describes the House passage of the bill as tyranny of the majority. It passed despite 100% Republican disapproval and mixed support in public opinion polls. She hopes "the Democrats take a beating at the ballot box and
rethink their contempt for those mouth-breathing illiterates in the
electorate." 

Not everything that gets passed in Congress needs to be bipartisan. This vote represents a major failure of the Republican party to come up with a better idea for how to deal with rising healthcare costs and how to deal with the millions of uninsured Americans waiting in line in emergency rooms across the country. With the lack of policy imagination, all they had left was a "no" vote and that's what they did. It was the cowardly way out of this problem.

Also, compromise occurred. Maybe too much compromise. The compromises may not have been with the Republicans, because who can compromise with someone who just says no. The compromise occurred within the Democratic party.

Andrew Sullivan compares Obama with Ronald Reagan. He also has a mega-post with health care reactions.

Matt Yglesias says that Pelosi is the best Speaker that we've ever had. He also writes that Republican pig-headedness was responsible for last night's victory. "But the right wing, by invariably indicating that it would settle for
nothing less than total victory, inspired progressive forces to march
on and win their greatest legislative victory in decades."

The New York Times discusses the immediate impact of the reform and provides an interactive graphic.

538 crunches the numbers and finds that the vote among Democrats was correlated with how well Obama did in their district. The Monkey Cage talks the implications for the next election. 

Ezra Klein writes, " It is the most sweeping piece of legislation Congress has passed in
recent memory, but it is much less ambitious than the solutions that
past presidents have proposed. It is routinely lambasted for being too
big and comprehensive, but compared to the problems it faces, it is too
small and too incrementalist…
But it's a start"

A Guide To the Health Care Process.

UPDATE: Russell and Henry respond to Megan's post. Megan had 688 comments on this post.

39 thoughts on “Health Care Reform – The Day After

  1. Something did need to be done and the Dems did have the only plan only the table. Which does not exclude the possibility that the only plan can’t be worse than doing nothing. My guess is that the cost controls will be stripped (I assume they were only there to get a good CBO score and that’s why they don’t take effect for so many years) and that the main effect will be a huge increase in the structural portion of the budget deficit. I suppose we’ll see.
    While I agree that not everything needs to be bipartisan, passing a law that will affect everybody with a four vote margin is, at the very least, something that will make the midterm elections interesting.

  2. As Jon Stewart says “I think you’re confusing tyranny with losing.”
    I thought Frum’s column today was spot on in many respects in regards to the next election and bipartisanship.
    Also I read something yesterday that over half of the amendments on the bill were Republican generated. Have no idea if it’s true, but it was said on Twitter- so that must make it so.😉

  3. I’m disappointed that Megan is blowing her top. She was my go-to person for rational defenses of the anti-position (on HCR, and on other issues), but the last column on the “tyranny of the majority” was just an over the top explosion.
    I’m glad they proved they could get something done in the house, and have found a new respect for whatever Pelosi does. I’d given up, to be perfectly honest, accepted that nothing really gets done.
    I’m looking forward to hearing analysis of what’s in the bill, and not fulminating about the polls.
    I don’t know what will happen in October, but I’m suspecting the time has come again for progressives to start holding our noses and sending some money in the way of Democrats who made hard choices (and, yeah, my in box is filling with those requests).

  4. I don’t know what will happen in October
    I think you mentioned that you can vote early by mail in your state. So, while the “October” makes sense for you, I find it disconcerting.
    Anyway, of the two Dem house members with districts that have part of Pittsburgh, one voted against. He has a challenger with name recognition and money (she put Tommy Chong away for 2nd degree selling bongs). The other one voted for, but he hasn’t had a challenger (excepting the Greens) in all the time I’ve been here.

  5. So, are you telling this so that I don’t need to send my money to Pennsylvania?
    I think Michigan and Illinois are at the top of the list right now.
    (Oh, and October was a weird typo, not a plot to remind everyone of absentee voting).

  6. So, are you telling this so that I don’t need to send my money to Pennsylvania?
    I have no idea about the other parts of the state. I expect at least two big battles locally, one for Altmire (the Dem who voted no) and the other out in the hills for Murtha’s old seat. The Altmire race is interesting because of the huge push local progressives made to get the guy elected. Then, he voted no. I don’t know who is willing to help him at this point. He has protestors (in favor of HCR) outside his house.
    I’m assuming that Altmire knows his district well enough and that he only voted ‘no’ because he thinks a ‘yes’ would have doomed him. I’d guess he’s betting the progressives in his district are going to hold their nose and vote for him to keep the seat.

  7. He has protestors (in favor of HCR) outside his house.
    Eh, paid union protesters. Not sure that it’s indicative of much other than the unions (still) don’t like him.

  8. Dave, that’s why there is a mandate to buy insurance or face a penalty. Which seems very sensible to me since many people to just that right now (only they have to get sick enough not to work in order to get Medicaid). That mandate is also going to go to court.

  9. MH, this is the nut of Perry’s claim:
    “The average cost of an insurance policy with family coverage in 2009 is $13,375. A married couple with a median family income of $75,000 who choose not to insure would be subject to a fine of 2.5 percent of that $75,000, or $1,875. So the family would save a net $11,500 by not insuring. If a serious illness occurs–a chronic condition or a condition that requires surgery–they could then buy insurance. Since fewer than one family in four has annual health-care costs that exceed $10,000, the decision to drop coverage looks like a good bet. For a lower-income family, the fine is smaller, and the incentive to be uninsured is even greater.”
    Sounds like a good bet to me! Big savings, and jump to the Blues if you get cancer.

  10. Dave, I know, but I’m hoping people are so angry about the mandate that they don’t notice how low the fine is. Or so frightened of the IRS.

  11. “I’d think about going bare and then buying a policy if/when someone in my family got seriously sick”
    Um, perhaps you should talk to somebody who has a clue as to how the health insurance business works. That’s precisely when you can’t get a policy.

  12. Um, perhaps you should talk to somebody who has a clue as to how the health insurance business works. That’s precisely when you can’t get a policy
    Um, perhaps you should read the very nice NYT graphic in the post. After 2014, insurance companies in the high risk pool cannot deny based on pre-existing conditions. Per family, annual out of pocket costs for those in the pool cannot exceed $11,900.

  13. “Um, perhaps you should read the very nice NYT graphic in the post. After 2014, insurance companies in the high risk pool cannot deny based on pre-existing conditions. Per family, annual out of pocket costs for those in the pool cannot exceed $11,900.”
    That’s what I’ll tell my uninsured parents to do when the time comes–pay the fine and sign up for insurance only in case of major illness. I’m sure that their very smart accountant will tell them to do the same thing. Depending on what the penalties are for non-insuring employers (their employees are mainly seasonal or part-time, which might not count), they may need to cut back on employees and work more hours themselves.
    The people who wrote this bill didn’t have a lot of foresight.

  14. I don’t think the biggest chunk of the moral hazard problem is going to come with people your parents age. The people I know who were closing in on Medicare age but without employer-sponsored coverage would have been delighted to pay $12,000 dollars for the policy. Most of them I know were paying close to that for a policy with a four digit deductable. It’s the younsters that will cause the moral hazard problem. The oldish people, for the most part, just expensive to provide health care for.
    The people who wrote this bill didn’t have a lot of foresight.
    They had enough foresight to make all the big changes happen far enough down the road that they stand a good chance of shifting the blame to whoever had to make the fixes needed to keep the costs from swallowing the whole budget.

  15. People have been comparing mandatory health insurance to mandatory car insurance, and this particular provision is the equivalent of allowing uninsured people to drive, as long as they pay a fine that is only a fraction of the cost of actual insurance. (Interestingly, in Texas you don’t need car insurance to drive. You just need to prove that you have a certain amount of cash available to cover liability.)
    “They had enough foresight to make all the big changes happen far enough down the road that they stand a good chance of shifting the blame to whoever had to make the fixes needed to keep the costs from swallowing the whole budget.”
    Here’s how my crystal ball says things will develop:
    1. Health insurance is too expensive! Insurance companies make too much money!
    2. HCR passes.
    3. The insurance companies start pining for the fjords/going blue at the gills/going belly up/[insert favorite idiom here].
    4. The federal government starts dumping cash into health insurance companies to keep them alive.
    Repeat step 4 until no one will lend us money.

  16. The insurance companies start pining for the fjords/going blue at the gills/going belly up….The federal government starts dumping cash into health insurance companies to keep them alive….Repeat step 4 until no one will lend us money.
    Do you really think that’s likely, Amy? Because if so, awesome! That would mean that the financial wizards who want to keep making money through and off of the American economy–and who don’t want to lose their perch–would, with America’s solvency on the line, push to examine every option for health care that would be less expensive than propping up a bunch of insurance companies…and they would realize, of course, than single-payer is cheaper in the long run. Thus, the political support to achieve genuine reform would finally, truly exist!
    I fear, however, that instead what we’ll see is these insurance companies flourishing, and the merging of corporations and politics will continue apace, with private companies being built ever more deeply into our social fabric. Considering the options, it’s a price worth paying for finally getting a national health care plan, but still, going more openly socialist would have been so much more cost effective (not to mention just).

  17. It’s funny, most people I know who’ve had to go without health insurance for any amount of time feel extremely anxious about that, and not being able to get coverage in the future if they have a serious medical condition is not a big part of their anxiety.
    Granted personal anecdotes aren’t data, but I’ll be interested to see how many people follow an accountant’s advice and forego coverage until they need it for a serious condition. Will they be the parents whose kids are at the doctor three or four times a year, at least? The elderly folks on a bucket of medications and the regular appointments with specialists to prescribe them and monitor their conditions? The empty-nesters reading all those health blogs and wanting a dozen screening tests a year?
    Health insurance isn’t just about cost, it’s about access, and the folks who don’t want access don’t have insurance now. My health insurance premiums and hospital costs are already absorbing the cost of their choice not to be insured, after they get catastrophically ill. So while I think this bill has a lot of problems (and the low penalty for non-coverage is on my list), I’m hard-pressed to believe that it will make things worse than they already are.

  18. …and they would realize, of course, than single-payer is cheaper in the long run.
    I don’t want to limit myself to a single option for anything. I’m willing to accept that, for example, private armies are bad. But, beyond that, I’d like to try to keep multiple sources, even if it does cost more. One of my fears is that HCR is designed to drive the insurance companies to the brink. In fact, if I didn’t fear the current bill was a trojan horse for a single-payer system, I’d probably support it.

  19. “I fear, however, that instead what we’ll see is these insurance companies flourishing, and the merging of corporations and politics will continue apace, with private companies being built ever more deeply into our social fabric.”
    Yes, that’s the great irony of current politics. At the same time that industries (banking, insurance, etc.) are being demonized, they are also being rewarded for intertwining themselves tightly with the political order. This is not a recipe for the sort of innovation and excellence we need to feed, house, and clothe 300+ million people, tens of millions of whom are heading into retirement in the next few years.
    I sometimes suspect that Obama and Co. don’t understand that businesses are supposed to make money.
    “I’m hard-pressed to believe that it will make things worse than they already are.”
    It’s always possible for things to get worse. Speaking of which, is it true that the bill kills catastrophic policies?

  20. “I sometimes suspect that Obama and Co. don’t understand that businesses are supposed to make money.”
    Yes, it’s entirely possible that half the political establishment is entirely clueless about economics. All of us on the internet know both sides of the debates, and make informed decisions which result in half of us disagreeing with the other half, but the President of the United States lives in cloud cuckoo land.

  21. Not to enter the fray or touch this subject with a ten-foot pole, but it’s interesting that Germany has a private payer system that operates on a non-profit status. So the concerns for corporate America’s incipient demise b/c of health care reform might be overreaching a bit.
    And one big winner of the health care bill is big pharama. The background wheeling and dealing on this bill from the White House indicates that Obama is very aware of the profit motivations of businesses.

  22. It’s the youngsters that will cause the moral hazard problem.
    How so? Everyone I know that is under the age of 35 and doesn’t have insurance is in a nonunionized, low-wage job—in other words, people who can’t realistically afford insurance after paying necessities like rent, utilities, transportation, childcare. With this bill, all those people will be subsidized, thus insured, and not part of the dynamic Jodi describes: My health insurance premiums and hospital costs are already absorbing the cost of their choice not to be insured, after they get catastrophically ill.
    Is there really that many high-wage earning, no-pre-existing-condition-having younger people who don’t have insurance provided through work? (and yeah, I’ll say if there are, it boggles my mind—because if they really do have a high wage and/or assets, if anything happens to them, they do have a lot to lose, unlike the people who don’t earn much and/or own anything)

  23. “Yes, it’s entirely possible that half the political establishment is entirely clueless about economics. All of us on the internet know both sides of the debates, and make informed decisions which result in half of us disagreeing with the other half, but the President of the United States lives in cloud cuckoo land.”
    Isn’t Obama prone to complaining that industries are profitable (banking and health insurance, for instance)? I’m sure he knows intellectually that businesses need to make money, but I don’t think he really grasps what that means.
    Here’s how health care (which gives just over a 3% return) rates in terms of profitability:
    http://mjperry.blogspot.com/2009/08/health-insurance-industry-ranks-86-by.html
    “And one big winner of the health care bill is big pharama. The background wheeling and dealing on this bill from the White House indicates that Obama is very aware of the profit motivations of businesses.”
    There’s one more example of the administration’s tendency to put a finger on the scales for favored industries.

  24. I’m not sure how pointing out that big pharma will make big profits under Obama’s health care plan proves the point that he doesn’t understand profits.

  25. Everyone I know that is under the age of 35 and doesn’t have insurance is in a nonunionized, low-wage job—in other words, people who can’t realistically afford insurance after paying necessities like rent, utilities, transportation, childcare. With this bill, all those people will be subsidized, thus insured,
    The penalty for not having insurance is fixed as a percentage of income and is much lower than the cost of insurance, even after the subsidy. The theory is to get these people (young people with low to moderate income and no health problems) to pay what they can. If it doesn’t work, the cost of covering those who do get insurance is going to ratchet up very quickly.
    Just as an aside, you live in a different world than I do if most of the people you know with well-paying jobs are unionized. Every union member I know is a government worker.

  26. “I’m not sure how pointing out that big pharma will make big profits under Obama’s health care plan proves the point that he doesn’t understand profits.”
    What I’m thinking is that he doesn’t understand profits as something that you get because you supply people with stuff they want. Normally, if you’re making profits, that’s a good sign, and if you’re not, it’s a sign that you are screwing up. In Obamaworld, it’s different: profits are something that you get because either a) you’re evil (like the health insurance companies) or b) because you’ve cut a deal with the administration (like pharma).

  27. An NPR report outlining one thinktank’s estimate of who still won’t have health insurance after the bill goes into full effect, and why:
    http://www.npr.org/templates/story/story.php?storyId=125030086
    For those who don’t want to listen to the story, the Urban Institute agrees with La Lubu: most of the young people who are currently uninsured aren’t playing their odds, they’re just too broke to afford coverage. The bill’s sponsors and advocates believe that the incentives and subsidies will make it possible for that pool finally to buy the insurance coverage they want.
    Amy P, if you believe what you’re writing about Obama and his administration, I don’t think we agree on enough facts even to have a conversation. The last time I checked, there were plenty of people in “Obamaworld” who loved profits as much as the next capitalist on the block.

  28. MH, I just wanted to point out that single payer doesn’t always mean removal of choice.
    I live in Toronto and I have quite a bit of choice. The least choice I have is in choosing a GP, mostly because they’re somewhat in short supply. However, I can pick any one I can find – and I never, ever have to ask if they’re in network.
    For my pregnancies I had choice of midwives or OB practice including, in my second pregnancy, the top high-risk pregnancy practice in my city.
    For my son’s recent appendectomy we went in through our community hospital and had the choice of surgery there, or a transfer to one of the world’s top children’s hospitals (Sick Kids) which we took.
    Whenever we are en route to an ER we can pick the one we want to go to across the city.
    In my observation, my American relatives have less choice because they have to find out if their insurance deals with wherever they want to go. For me, if I can get there/get an appointment (and to date, I have never needed a specialist with whom I could not get an appointment), I know they’ll take my card.
    So I never quite get the ‘choice’ argument with the single-payer system. I presume people mean they can choose their insurance company/contract terms, but after that you don’t get a choice – and how do you know what you are going to get and whether your insurance will cover the particular specialist at that point?
    Total personal cost for all of the above: parking in the hospital parking lot, and $45 ambulance fee for the transfer.
    I’m not sure about citing Wikipedia but as far as taxes go vs. my US cousins, this link pretty much describes how I find it – minus the co-pays and stuff, it’s pretty much a wash if you’re middle middle-class.
    http://en.wikipedia.org/wiki/Comparison_of_Canadian_and_American_economies#Taxation

  29. JennG,
    Mostly, I have a general distrust of large concentrations of power, which is what a single-payer system is. However, I’m not speaking solely as a consumer of health services (though of course that is part of it). I’m not any type of clinician, but I work in medical research and would prefer to maintain a choice of employers as well as doctors.

  30. Jody,
    I’ve been watching the business policy that’s been made over the past year, and it’s just really strange. Objectively, I can’t look at it and and believe that the people who are responsible for it know what they’re doing. Take for instance Cash for Clunkers (after the end of which the car market fell off a cliff) or the home buying credit (which is getting ready to do the exact same thing). During the election, we heard a lot of talk from Obama and his people about how this is the worst economy since the Great Depression. That is potentially true, but they don’t seem to understand what they said. If you really believed that this was the worst economy since the Great Depression (which went on for much of two decades, just as the Japanese are suffering a multi-decade economic slump), would you think that you could fix it with gimmicky temporary programs that encourage vulnerable people to take out loans? There’s a lot of this sort of gimmick lately. Take for instance Obama’s $5,000 tax credit for hiring new employees. In an environment where laying off current employees is much more likely than hiring new ones, this is just plain strange. It’s also financially nonsensical. A $5,000 tax credit doesn’t even begin to approach the cost of a new employee. It only makes sense to hire if you are going to make a money on the new employee, and if you’re making a pile of money, you don’t need a $5,000 tax credit. I could go on and on, but there’s more here.
    http://abcnews.go.com/Business/Obama/obama-tax-credit-33-billion-hiring-jobs/story?id=9697334&page=1
    As I said, I don’t think Obama really understands the situation, or maybe he does and is just hoping to artificially boost the economy in time for the 2010 and the 2012 elections.

  31. Amy, just to take the $5000 tax credit, Obama has economic advisors who did regressions to identify the ideal dollar amount which would overcome an employer’s fixed costs for hiring an additional employee (instead of distributing the additional employee hours needed to current employees). You might disagree with the model the economists used to calculate the fixed costs. You might disagree with the idea that the government should encourage employers to hire additional employees instead of distributing the additional labor to current employees. But I don’t see how you can argue that the people involved don’t understand labor markets, macroeconomics, or the capitalist system.

  32. JennG,
    The giant service provider/insurance company that iss the largest employer in my area does, as do some of the others. Even if they don’t do what most people would call research, they hire people with similar skill sets to my own to do program evaluation and the like.

  33. Jody,
    I just don’t see how the $5,000 credit could have any significant positive effect in an economy where employers are laying off rather than hiring.
    If I had to make up a name for the economic philosophy on display, I think I’d call it the “pixie dust method.” You sprinkle a little pixie dust ($8,000 worth of tax credit) and you can lift a house! Or (varying the quantities of pixie dust slightly) a car or a job market! Alternately, we could call it the “Dumbo method,” where all you need is faith and a magic feather.

  34. JennG,
    Actually, I responded to the question above, but that wasn’t quite what I was getting at. A single-payer system would do more than eliminate health insurance companies. It would remove much of the entrepreneurial incentive for doctors, meaning that fewer of them would be looking for research opportunities. I’m also fairly certain that the NIH would be under more pressure to fund the types of research that can generate a quick savings and have less funding for basic exploratory work. That’s neither probably here nor there as far as employment in research goes in the short term, but in the long term it is a negative for society.

  35. The penalty for not having insurance is fixed as a percentage of income and is much lower than the cost of insurance, even after the subsidy.
    Huh? Do you have a link for that? I could be wrong, but for folks whose income is low enough to qualify for a subsidy, that isn’t true. The subsidy affects single earners up to $44,000; households of four up to $88,000—or, just about everyone in my (rust belt) city!! The portion that (most of) these people would have to pay for coverage is less than the penalty, even though the total cost is higher than the penalty.
    Just as an aside, you live in a different world than I do if most of the people you know with well-paying jobs are unionized. Every union member I know is a government worker.
    MH, I didn’t say that high wage earners were necessarily union, just that low wage earners are nonunion. But yeah, “my world” is composed mostly of tradespeople. From the perspective of poor folks, we earn high wages. From the perspective of folks who earn six-figures, we’re lower-middle class. I consider myself well-paid because (a)I’ve been poor, as in can’t-afford-to-eat-everyday poor, and (b)I do have disposable income, which a lot of folks in my geographic area don’t. YMMV. I don’t know many people with higher-paying jobs that aren’t unionized, because…well, they don’t go to the same places I do. They go to the snazzy health club, not the “Y”, that sort of thing. In my part of the country, the social classes are pretty segregated; we don’t have a subway or any other public commons where “all walks of life” are.

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