comments_image Comments

New Daschle Book Reveals White House Sold Out Public Option Early

This post first appeared on Hullabaloo. Think Progress reports:
In his book, Daschle reveals that after the Senate Finance Committee and the White House convinced hospitals to to accept $155 billion in payment reductions over ten years on July 8, the hospitals and Democrats operated under two “working assumptions.” “One was that the Senate would aim for health coverage of at least 94 percent of Americans,” Daschle writes. “The other was that it would contain no public health plan,” which would have reimbursed hospitals at a lower rate than private insurers.
I'm reminded of a White House conference call held right after they announced the hospital deal in which a reporter asked the official on the call why the hospitals would agree to all these sacrifices to their bottom line. The official replied, "because they're good Americans." As TP points out, the White House continued to insist all the way to the end that the public option was not off the table and that they backed it to the hilt. But of course, as was obvious at the time, this was merely a negotiating chip to hand to Lieberman and his ilk when he demanded something to gratuitously hit the loathed hippies over the head with to prove his "independence." And he did. None of this is really news, but it is revealing that Daschle put it in his book without giving a second thought to how it would be received. (He's now attempted to "clarify" and say that the president truly believed in the public option and fought for it, but whatever.) The best we can hope for at this point is that the hospitals and insurers who are now pouring money into Republican politics in the hope they can extract even more from the government for their benefit will crash upon the ideological incoherence within the GOP:
Many Republican leaders have enthusiastically embraced the call to revise the healthcare legislation, vowing to "repeal and replace" the law in the next congressional session. But that call to repeal poses a delicate issue for the budding GOP/insurance industry partnership. The Republican Party thinks it has a winning position in denouncing the unpopular mandate that will require Americans to get health insurance starting in 2014, while insurers and independent healthcare experts see the requirement as crucial to controlling costs for everyone by spreading the risk. The healthcare law will penalize Americans $95 in 2014 if they fail to get insurance. The penalty rises to $695 in 2016. "The one thing that insurance companies would love to see are penalties that are actually stronger," said Jeff Fusile, a partner at consulting giant PricewaterhouseCoopers. The insurance industry, attracted by the prospect of millions of new customers as a result of the coverage mandate, initially backed President Obama's campaign to overhaul the healthcare system. And insurers scored a key victory when Democrats abandoned plans to create a government insurance plan, or "public option." But insurers are increasingly balking at the myriad new directives in the healthcare law. Among other things, the law prohibits insurance companies from denying coverage to sick children and canceling policies when customers become ill. The law bars insurers from placing lifetime caps on how much they will pay when their customers get sick. Many consumers will also get new rights to appeal denied claims and win access to preventive care without being asked for co-pays. "The health reform law did not deliver the uninsured in the way that insurers wanted," said veteran healthcare analyst Sheryl Skolnick, senior vice president at CRT Capital Group.
They love the mandate. Indeed, it was the part of the deal the insurers and hospitals loved the most. What they don't like is any requirements that they cover sick people or, if they are required to cover sick people, to restrict their ability to raise prices. That's what they are paying the GOP to take care of for them. But Republicans are running on the notion of repeal and replace, which can mean anything, but which the crazed ideologues who are coming into power now have fairly well defined as repeal of the mandate, replace with ... nothing. You can be sure that the new Medical Industry overlords are not going to allow that. They want that mandate. I would guess that the GOP strategists are hoping the courts will overturn it, but they shouldn't count on that. The right wing courts are also in the thrall of corporate power, so they could easily see it from the industry's point of view, which is that it's only right that all Americans be forced to purchase this necessary product, but that it's very, very wrong for the government to tell the insurers and hospitals what they can charge for it. That's the new American way. It will be interesting to see how this all unfolds. If I had to guess, I'd think that the Republicans will relentlessly chip away at the funding mechanisms for the big medicaid expansion wherever they can, even if it requires changing the law the first chance they get a Republican majority w/president again. I would think the mandate will stand but that the mechanisms requiring that they keep prices manageable will be tweaked in such a way that the insurance companies will have much more latitude for charging customers. And they will be relieved from having to create comprehensive policies and will be able to go back to the old expensive premiums for crappy coverage model they love so much. In other words, it will take a while, but they'll probably be able to go back to some version of the status quo, only with a mandate that all citizens buy shitty insurance. The proof will be in the pudding about a decade from now when the court cases all finish and whatever is left of the program is in place. At this point we are dealing with theoretical outcomes even if the plan is unchanged for the worse (and I am very skeptical that it will be.) Politically, this is not a winner for the Democrats or Obama because average people don't see any positive change and until full implementation it's likely they will continue to see their rates going up. But then, that was baked in the cake as well. It is what it is. And we can guarantee one thing: all the talk of "improving" the legislation will be a joke if the Republicans get the chance to gut it before it ever gets going. That long window to implementation is a land mine that was set when everyone was still singing Kumbaaya about the Permanent Democratic Majority. It doesn't look so smart right now.