Benemax

President Obama has embarked on a speaking tour that is being billed as “the closing argument for Health Care Reform.” Current expectations are that the House of Representatives will vote on the legislation before the end of March, possibly by March 18.

Now is the time for all of us to make our own “closing arguments” (pro or con) to our own representatives in Congress. Where does your representative stand on health reform? The Wall Street Journal analyzes the stand of each House member in a new online vote tracker.

While Congress continues to edge closer and closer to passing the reform legislation, public opinion remains firmly opposed. An average of recent health reform polls compiled by Real Clear Politics shows 41 percent of Americans in favor of the Obama plan, with 50 percent opposed. See the full analysis

On Thursday of this week, President Obama is scheduled to meet Republican and Democratic leaders in a televised summit. The stated purpose: Find common ground. The more likely purpose: Re-engage the interest of the American people, create a ‘bully pulpit’ for the President to preach the message of reform, and of course, paint the Republicans as evil obstructionists.

In advance of the meeting, the President is likely to present his own version of Health Care Reform, a proposal that will probably include many of the features of the current House and Senate bills. It is possible, but my no means certain, that this “consensus” bill will include some brand new ideas from the President himself and/or some new provisions designed to appeal to Republicans in general (or to Olympia Snowe in particular) along with the disaffected American majority.

Finally, according to Senate Majority Leader Harry Reid, the Democrats have decided to rely on a legislative maneuver called “Reconcilliation” to get the bill through the Senate with only 51 votes (vs. 60). Reconcilliation is designed to be used for budgetary matters only, not to decide policy questions. It is hard to see how the use of this technique could possibly be appropriate for a bill that amounts to the biggest single policy shift in the history of The United States. But that doesn’t mean it won’t be tried.

The maneuver is fraught with risk. First, it is likely that a number of Democratic Senators who voted for the bill the first time will vote against it if their leadership resorts to  Reconcilliation. 10 Democrats would have to switch sides to change the outcome, and that is unlikely, but the loss of even a half dozen Democratic votes will be embarrassing for the President and the Congressional leadership.

Second, the new bill would still have to pass the House. Due to deaths and resignations, it is unclear whether the votes to pass this legislation are still there…even if not one Democrat switches sides after seeing what happend to their party in Massachusetts. Plus there are at least 11 anti-abortion Democrats who voted for the bill the first time but may not vote for it this time unless it contains strict pro-life provisions (which is unlikely).  

Third, it is possible that the courts might nullify all or part of this legislation if they find that the Reconcilliation process has been abused, i.e. if the find that the Senate did not follow its own rules. Courts traditionally dislike meddling in the affairs of the other branches of government but this could be deemed sufficient cause for a departure from that policy.

The following quote from Aetna says it all:

“In an effort to resuscitate health reform, President Obama has invited Republicans and Democrats to the White House for a February 25 summit. Whether this is just a way to postpone the inevitable, as some believe, announcement that health reform is dead for 2010 or whether the President truly believes he can get the patient up and moving again, remains as unclear as everything else surrounding reform.”

This afternoon, Senator-elect Scott Brown (R-MA) is scheduled to be sworn in, thereby becoming the 41st Republican in the U.S. Senate and the one vote the Republicans need to block the current version of Health Care Reform (and, potentially, other pieces of the President’s legislative program). Congratulations, Senator Brown!

But there’s an even bigger story. On Monday, Danny Williams, the far-left Premier of the Canadian Province of Labrador and Newfoundland, slipped across the US/Canada border and headed to an “undisclosed location” (rumored to be the Cleveland Clinic) for life saving heart surgery that he could not get for 182 days under Canada’s socialized health care system (a system Mr. Williams strongly supports and even helped architect). Premier Williams joins 41,000 other Canadians who come to the U.S. each year for health care.

Welcome, Premier Williams! I’m glad that the worlds’s greatest health care system, supported by the world’s greatest free market economy could help save your life. But I do have two questions for you:

(1) If it’s ok for YOU to receive this life saving surgery when you need it, why isn’t it ok for less affluent Canadians to receive the same life saving treatment in the same urgent time frame when they need it? The basic fact that most advocates of government controlled health care fail to address is that poorest resident of the U.S., citizen or not, documented or not,  insured or not, would have access to life saving heart surgery if they needed it…and they wouldn’t have to wait 182 days. So WHO is the real “liberal”…really?

(2) Once government takes over the U.S. health care system and rebuilds it in the image and likeness of Canada, where will you and the members of your family go when you urgently need medical care? And even more importantly, where will we go??????????????

Following the election of Scott Brown (R-MA) to the U.S. Senate, the future of Health Care Reform is entirely uncertain. Why did this one election change everything?

First, because it robbed the Democrats of their veto-proof 60 vote majority in the Senate. Even more importantly, because it sends an unequivocal message that American voters, even in dark blue Massachusetts, are unhappy with the course of government in general and with the current Health Care Reform bills in particular. But most importantly, because it demonstrates that no Democrat-held seat in either the Senate or the House is completely safe. I mean, if Ted Kennedy’s seat isn’t safe, whose is?

But now, what to do? The Democrats have wisely decided NOT to try to ram legislation through Congress before Scott Brown is seated. However, they still have a number of parliamentary procedures at their disposal that might allow them to avoid another vote in the Senate that would require 60 votes. The problem with these options is that some Democrats are opposed to them on principle while others worry that using them will anger voters even more.

A second option involves re-writing the bill(s) in an effort to find enough common ground with Republicans to get back to a 60 vote majority in the Senate. However, it will be MUCH harder to find bipartisan consensus now that there is blood in the water than it would have been 10 months ago when the process began. Republicans are calling on Congress to “go back to the drawing boards”. That might have worked a few months ago but it is questionable whether there is enough time…and energy…to do this before the 2010 election season begins in earnest.

According to a third set of options, the bill(s) would be broken down into smaller, less adventuresome bills that would enact fairly narrow, specific reforms that are generally popular and could get majority support in the House and 60 votes in the Senate. This is probably the best idea out there right now.

But all of these options ignore a basic reality: Speaker Pelosi is down to just a one vote pro-reform majority in the House and 11 conservative Democrats have indicated that they may switch their votes to “no” if the final bill does not contain a total ban on abortion funding, a provision totally unacceptable to liberals. Only one of these “Blue Dogs” needs to make good on that threat to kill the bill in the House. And it will now be easier than ever for one or more of them to change sides saying, “I am listening to the will of the people so clearly expressed in Massachusetts.” The election of Scott Brown has created political cover for members of Congress who would like to forget this entire nightmare and get back to the business of government.

So what’s next? Literally, nobody knows. As we’ve said before in this blog: Stay tuned!

A little known Republican state senator from Massachusetts has won election to the U.S. Senate seat held for 47 years by Ted Kennedy. Scott Brown becomes the 41st Republican senator, denying Democrats their filibuster-proof 60 vote “super majority”.

But Brown’s victory isn’t just about numbers; it is a dramatic message to everyone in Washington that voters (even in dark blue states like Massachusetts) are VERY unhappy with the course of events in this country and will do almost anything to turn things around. And there’s already evidence that politicians are getting the message:

Senator Jim Webb (D-VA) made it clear this morning that he would not support any effort to rush health care reform through Congress prior to Scott Brown’s official seating. And none other than ultra-liberal congressman Barney Frank (D-MA) stated that Congress needs to “re-think” the direction of that reform. 

Today, there are three possible paths: (1) The Democrat leadership could still try to push the current bill(s) through Congress, ignoring the express will of the voters or (2) Congress could abandon health care reform legislation entirely or(3) Congress could come together on compromise, bi-partisan health care reform package that would increase the number of insureds, improve the health of all Americans, and bend the heath care cost curve.

Such a compromise might include the following:

(1) Insurance reform: no more medical underwriting, no more pre-exisiting condition limitations.

(2) Catastrophic mandate: All Americans would need to show that they had protection against the cost of hospitalization, surgery and diagnositc testing over $5,000/year.

(3) Subsidy: Expansion of Medicaid to help low income Americans afford the cost of health insurance.

(4) Incentive: Tax breaks for employers who invest in their employees’ health.

Democracy…a novel concept. Since ancient Athens the idea of popular rule has flickered on and off across the global political landscape. But the current Health Care Reform debate is a great advertisement for self-government: the American people are WAY AHEAD of their political leaders when it comes to understanding the current health care crisis and supporting policies that would actually make things better.

For example, recent Rassmussed polling shows:

(1) 74% favor rules that would prevent insurance carriers from denying coverage based on pre-exisiting conditions. This is the single reform that is most urgently needed…and the people overwhelmingly agree.

(2) 57% favor increased subsidies to help lower-income people buy health insurance.

(3) 57% favor tort reform, a key element in any possible solution but an element entirely absent from the bills currently pending in Congress.

(4) On the other hand, less than 50% of the people favor either the individual or the employer mandate.

(5) Finally, and most perceptively, only 24% think that people should be prohibited from buying low premium/high deductible health plans. Such a prohibition is a key feature in pending legislation but it enjoys almost no support among the American public.

All in all, what people are saying is that increased competition, more personal choice and responsibility, a stronger safety net and a level regulatory playing field are the keys to expanding coverage and holding down costs. We couldn’t have said it better ourselves!

On January 19, voters in Massachusetts will elect a new Senator to replace Ted Kennedy. It has been widely assumed that the Democratic nominee, Martha Coakley, a strong supporter of the pending Health Care Reform bills, would win easily and preserve the Democrats’ 60 vote “supermajority” in the Senate.

However, polling data released Wednesday by Rassmussen shows a very different picture. Republican Scott Brown is within 9 points of Coakley. Even more surprising, he is within 2 points of Coakley among those who say they are “certain to vote”.

This polling result, reportedly confirmed by the candidates’ own private polls, will release a torrent of campaign spending as Democrats and Republicans all across America rush to contribute to their candidates in this historic contest.

A win by Brown would rob the Democrats of their 60th vote and would probably doom the current Health Care Reform bills to defeat. Even a strong showing by Brown (withing 10 percentage points?) might send enough of a shock wave across the country to shake lose one or two of the wavering Democrat Senators…or a half dozen wavering Representatives in the House.

Yup, it’s official. The American people have just received a collective lump of coal in their stockings. The U.S. Senate has passed the $870,000,000,000 Health Care Reform bill.

While the bill contains some positive features (e.g. insurance underwriting reform and expanded assistance for low income Americans), the legislation is loaded with provisions that will drive up the cost and drive down the quality of health care in the U.S. As much as we do need right minded reform, this bill will almost certainly do much more harm than good.

Chief among the disturbing aspects of this bill is a provision that would limit health benefit plans to 4 cookie cutter options (so called “Platinum, Gold, Silver, Bronze”). This feature would severely limit competition and undermine all the creative plan design efforts that have been the focus of employer groups and consultants over the past several years.

Also disturbing is the new tax on insurance companies, drug companies and medical device manufacturers; the cost of this provision will be directly passed through to customers in the form of higher premiums.

Finally, the bill severely cuts Medicare funding, threatens provider reimbursement levels and imposes all sorts of new bureaucratic regulations on the practice of medicine. At a time when 30 million new insureds are scheduled to be added to the insurance roles, Congress is determined to make the practice of medicine more difficult and therefore less attractive to “the best and the brightest” in our country.

You don’t need to be an expert to understand where this bill will take us. Newly insured Americans will increase the demand for services at the same time that new regulations and wage cuts will reduce the supply of those services. More demand + less supply = skyrocketting prices.

But the battle is far from over. The Senate bill needs to be reconciled with the House bill. There will be one more vote in both chambers, probably sometime in January, before this bill becomes law. A shift of just a handful of votes in either chamber would turn the tide.

Consulting firm Oliver Wyman was recently contracted by Blue Cross Blue Shield to evaluate the impact on premiums of the Patient Protection and Affordable Care Act (PPACA), the Senate’s version of Health Care Reform legislation.

According to Oliver Wyman’s study, small group premiums will increase 20% by the 5th year of Health Care Reform. This 20% is IN ADDITION to “normal” annual increases due to so-called trend (medical inflation, increased utilzation, aging population, etc…)!

To estimate the real world impact of this change, just take a look at your current premiums for single and family coverage; now add $100/month to the single premium and $250/month to the family premium. How will you (or your business) afford that increase?

So not surprisingly, Oliver Wyman also concludes that fewer small employers will offier health benefit plans if reform legistlation passes in its current form. Almost 3 million members, now insured by small employers, would lose coverage over the next 5 years. That is in spite of the tax credits and other provisions designed to encourage employers to offer health benefits to their employees.

There are many provisions in PPACA that contribute to this projected cost increase: the inclusion of sicker people in the insurance pool, the potential for “adverse selection” (as young, healthy people opt to go without insurance…until they need it), increased taxes on insurance companies, drug companies and medical devise manufacturers, and mandated minimum benefits to name a few.

Let’s look just at this last item. The Senate bill requires all health insurance plans to have an actuarial value of 0.6 or higher. Today 32% of individuals and 9% of small employers have insurance plans with an acturarial value of less that 0.6. (This does not necessarily mean that these folks have inferior benefits; in many cases their insured benefits are supplemented by various self-funded, equity account arragnements.)

In addition, PPACA exhaustively defines what it considers to be “essential benefits” and mandates that those benefits be included in all insurance plans going forward. Many employer sponsored plans lack one or more of these “essential” provisions. The cost of including ALL federally defined “essential” benefits in ALL employer sponsored plans will alone raise the cost of those plans by more than 5%!

No doubt the goals of Health Care Reform are lofty: universal coverage, richer benefits, etc. But if these reforms make even basic insurance unaffordable…or if they soak up all our discretionay income so that our quality of life deteriorates sharply…who will have gained?