Tuesday, June 9, 2009

The House Tri-Committee Bill—The Playing Field Just Moved Back to the Middle

Just when people were getting ready to write-off the Baucus bipartisan approach to a health bill the debate has swung back to the middle on a number of critical issues.

For a longtime I have been telling you two things:
  • The final health bill will be more moderate than liberal—for example, no Medicare-like public plan, only a soft individual mandate, but including insurance exchanges and underwriting reform.
  • A health care bill will go nowhere without a politically viable way to pay for it and no one has yet to put that on the table.
The Democratic caucus from the three House Committees working on a health care bill just released their outline.

It is clear that the House Blue Dog Democrats and other moderates have had a big impact upon it. Those who thought the House would come up with an unrealistically liberal proposal need to think again.

First, there is a public plan proposal. But it is the neutered variety—“The public health insurance option is self-sustaining and competes on ‘level field’ with private insurers.” This is a clear response to the Blue Dogs and other moderates saying “no way” to the Medicare-like public plan.

The House version of the insurance exchange idea only applies to the individual and small group market.

There would be a “pay or play” employer mandate accompanied by benefit standards—something I continue to believe will not survive to the finals out of opposition by the employer community to taking their ERISA plan design flexibility away. The individual mandate is the soft version--applying only to those who can truly afford it.

But on the spending side, it doesn’t look like the fiscal conservatives have had a lot of impact. The House bill also promises to subsidize individuals and families with incomes up to 400% of poverty. For physicians, it promises to get rid of the Sustainable Growth Rate formula and give primary care physicians a raise. It also promises to improve low-income Medicare subsidies, and eliminate cost sharing for all preventive Medicare services.

These are all good things—but they are also very expensive. This is where it gets a lot more problematic. Spending money for all of these things could well take this bill to a cost well north of $1.5 trillion depending upon the details.

The House bill puts no new revenue ideas on the table—they don’t even begin to talk about how to pay for it in any detail.

Because of the influence of the moderate and conservative Democrats the House outline is not so far away from the kind of bipartisan compromise that can be had—in terms of a plan outline.

But on the cost of the bill, and how it will be paid for, there is little to make us believe the “Blue Dogs” have had much influence.

This pushes my health care reform meter past $1.5 trillion on the cost side for this particular bill with still only about $300 billion in the tank.

Word on just whose hide the money will come out of has to come out soon. The Blue Dogs will be successful in continuing to demand full pay-fors.

That is when the “fun” will begin.

"The Tri-Committee Health Reform Draft Proposal"
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