Why the Senate Bill is Still Worth Passing (Plus some Thoughts on Reconciliation)

Howard Dean says the Senate bill should be scrapped, and Congress should pass health care reform through reconciliation.

Under reconciliation rules, you can probably pass a public option, a Medicaid expansion, and (if you still had the appetite for it) a Medicare buy-in. Any new regulations on insurers could be eliminated, as could the exchanges and delivery system reforms. Many progressives argue that a strong public option is the key to cost containment. A government-run plan to compete with private insurance would undoubtedly do some good in this regard, but moving away from fee-for-service medicine is more important with respect to driving down costs. As long as doctors are paid for every procedure they perform, most economists believe that national health care spending — that is, spending on health care as a percentage of GDP — is unlikely to budge all that much.

To be clear, the bill doesn’t make great strides in moving away from fee-for-service (FFS). But it does begin such delivery system reforms in Medicare, which is an important first step. The bill begins the process of moving toward bundling payments and reducing hospital readmissions — by beginning such a transition in Medicare. It would be very unfortunate those provisions were stripped out of the bill due to reconciliation rules.

On the Young Turks Program last night, I was asked about the possibility of doing two bills — one through reconciliation, and then another that includes everything that can’t be done through that process. It’s certainly a plausible option, but it’s not without complications.

I think you would see the number of Democrats balking at health care reform grow. In addition to worrying about Lieberman, Nelson, Lincoln, and Landrieu, I think you could conceivably lose Evan Bayh and Kent Conrad (who has made his opposition to using reconciliation clear). You might even need to worry about Kay Hagan and Jon Tester. Already, that brings the Dems down to 52 votes. How long would it be before Virginia’s Democratic senators grew skittish?

I’m not saying Senate Democrats can’t pass a bill through reconciliation. Indeed, I think they probably could. But there’s no reason to think it would be an easy or quick process.

In any case, here are four provisions that I think make the bill worth passing even without a public option or a Medicare buy-in. Obviously, I’d like the legislation to be much stronger in many respects, but here’s why I think it’s worthy of enactment:

1) The exchanges

These ought to be significantly expanded, but creating exchanges where private insurers compete for consumers within a tightly regulated market is a good idea. The Netherlands essentially have a national exchange, open to everyone. Plus, the national, non-profit insurance idea (offered in the exchanges) is still part of the deal, as far as I know. It’s not a public option, but forcing private insurers to compete with a national non-profit (in which the government plays a role in setting premiums) is a good idea.

2) Expanding Medicaid

I’d much rather expand the exchanges, but this will provide health insurance to the working poor who currently don’t qualify for federal assistance. Medicaid certainly has it’s problems, and its reimbursement rates are far lower than Medicare’s, but this is an important provision. If you are uninsured, I think you’d rather have Medicaid coverage (or even private coverage) than none at all. And this bill does a lot for the uninsured.

This is where I really disagree with progressives who argue that no bill is better than the Senate bill. Haven’t liberals always contended that health insurance is the right of every American? Do we really want to turn our backs on covering 30 million people? Even if it means giving private insurers more customers, this is an easy, unequivocal “yes” for me.

3) Insurance Market Reform

Getting rid of preexisting condition exclusions and rescissions, and requiring caps on out-of-pocket spending are all good provisions. We should not go another day without enacting them.

4) Delivery System Reform in Medicare

See above. These are baby steps, needless to say. But they lay the groundwork for fundamental change down the road. And that’s important.