Terrance Heath

The Stairs or the Window: Kill the Mandate, Kill the Bill?

Filed By Terrance Heath | December 18, 2009 4:00 PM | comments

Filed in: Living, Politics
Tags: Damon Wayans, health care reform, Joe Lieberman, kill the bill, kill the mandate, stairs or window

Recent developments in the health care reform debate debacle saga remind me of a a scene -- actually more like a repeated gag -- from one of my favorite movies, Keenan Ivory Waynans’ I’m Gonna Git You Sucka. I’ll explain why at the end of this post, but first I want to delve into an idea I’ve seen on a few blogs, which brought the movie and scene to mind: killing the individual mandate in the current health reform bill.

Of course, just when progressives were working on convincing themselves to accept, if not embrace, the Medicare buy-in that rose from the ashes of the public plan during Senate negotiations -- and even working up to the idea that the buy-in was more liberal than the public option -- Joe Lieberman smothered the idea in its crib. In fact, according to him, he killed it precisely because progressives were warming up to it. Or perhaps because he was peeved that progressive starting coming around to it three months after he did. Or maybe because he’s just a being a spiteful…

Anyway, with the White House already looking forward to passage, it and progressives like Howard Dean looking forward to reconciliation, there’s another intriguing strategy option getting a bit of play.

Between progressives arguing that we support passage of this bill (holding our noses if we must) and progressives arguing we must defeat this bill, there are a few voices out there suporting another idea: Change the bill, by killing the mandate. (Most likely, those who have moved from anger phase to the bargaining phase of the stages of grief.)

Probably the most high-profile, and thus most prominent of these voices is Markos.

My take is that it’s unconscionable to force people to buy a product from a private insurer that enjoys sanctioned monopoly status. It’d be like forcing everyone to attend baseball games, but instead of watching the Yankees, they were forced to watch the Kansas City Royals. Or Washington Nationals. It would effectively be a tax — and a huge one — paid directly to a private industry.

Without any mechanisms to control costs, this is yet another bailout for yet another reviled industry. Subsidies? Insurance companies are free to raise their rates to absorb that cash. More money for subsidies? More rate increases, as well as more national debt. Don’t expect Lieberman and his ilk to care. They’re in it for their industry pals.

If you want a similar model, watch how universities increase tuition to absorb increased financial aid opportunities. And since the Senate and its industry-bought Senators won’t allow insurance premium caps or an end to the insurance industry’s anti-trust exemption (much less a public option to compete against them), there is nothing keeping those companies from jacking up rates to screw people. In fact, that’s been their modus operandi for years.

Nicole Sandler is another.

But this “reform” is also a giant wet kiss for the for-profit insurance industry. It will require us — all of us– to purchase insurance from a for-profit health insurance company. If we can’t afford it, the government will give us subsidies to help pay for it.

Yes, our taxpayer dollars will go to line the coffers of these leeches. For years now I’ve maintained that the for-profit health insurers are government sanctioned extortionists. Now they’ll be able to get their payoff money right from the treasury.

If there’s a mandate for citizens to buy insurance, and our tax dollars are going to be used to subsidize the purchases, shouldn’t there be a way to do it without paying the extra dollars that go toward the insurance company profits? It seems to me a no-brainer.

It’s not a new idea. Many progressives have held that the individual mandate requiring Americans to purchase health insurance would be unconscionable without including a public option in health-care reform, simply because -- as Markos pointed out -- it’s unthinkable (or it at least it was) to all but force Americans to buy a product and thus require them to contribute to the profits of a private industry.

(Nevermind one that’s quite profitable already. And, no, car insurance isn’t a legitimate comparison, no matter what the President says. It’s simple. I don’t own a car, and haven’t for more than ten years. After my last car was totaled in an accident and the cost of repairing it was more than it was worth or what insurance would pay, I chose to do without one. Fortunately, I live in an area where that’s feasible. Thus, I don’t buy car insurance, and haven’t for over ten years. I can choose not to own a car, and thus never have to buy car insurance. But I can’t choose not to have a human body that requires upkeep and occasional repair.)

It may be worthwhile for progressive considering using what bargaining chips or leverage they have left to bury the mandate next to the Medicare buy-in. If the concerns progressives have expressed about the lack of cost controls in the bill are well founded, it does look like a bonanza for private insurers, who will gain 30 million or so new customers, even subsidized with tax dollars.

Given what we know about how insurers put their profits to use when it comes to policymakers, and we know what kind of return they get on their investment. We know that “Blue Dog” Democrats get about 25% more campaign contributions from the health care and insurance sector than other Democrats. We know the “typical Blue Dog” has received $63,000 more in campaign contributions than other Democrats.

We know that the handful of Senate Democrats seemingly self-appointed to determine what health care reform will look like if we get it, like Max Baucus, got a significant cut of the $107 million the insurance industry doled out to Congress in 2007 and 2008. (In fact, Baucus collected about $3 million from 2003 to 2008.) We know that health insurers and drug companies have given $5.5 million to top Senate and House recipients since 2005.

We know that this high-dollar “pay for play” scheme meant the public option was marked for death right of the starting gate. After all, either it’s a grand coincidence that we’ve arrived at this moment thanks to the work of many lawmakers who’ve benefited from the largess of health insurers, or we’ve arrived at this moment because this is when, where, and how they earn it.(Put another way, the $20 left on the dresser is for services rendered, and nothing else. Certainly not the pleasure of their company at $10,000-a-plate fundraisers, and $2,500-a-head fishing expeditions)

And now we know how their $1 million invested in Sen. Joe Lieberman appears to be paying off. Insurers may get the health reform bill of their dreams: no public option, no real competition, and no cost controls -- but with a mandate that American’s have to buy their product. (And face strong penalties for not doing to, if insurers get their way.)

But there are arguments for the individual mandate also coming from progressives. Ezra Klein responded to Kos’s post with a defense of the individual mandate on the grounds that it’s a must to keep costs down for everyone. Essentially, everyone has to buy-in for everyone to benefit, either directly or indirectly.

So, does it become a question of whether progressives want to move forward with a grossly imperfect bill, or sabotage it and take the blame for it not working down the line?

Pick your favorite system. Socialized medicine in Britain. Single-payer in Canada. Multi-payer with a government floor in France. Private plans with heavy public regulation in Sweden, Germany and elsewhere. None of these plans are “voluntary.” In some, there’s an individual mandate forcing you to pay premiums to insurance companies. In some, there’s a system of taxation forcing you to pay premiums to the government. In all of them, at least so far as I know, participation is required except in very limited and uncommon circumstances. And there’s a reason for that: No universal system can work without it.

Holding the price of insurance equal, insurance is gamble on both sides. From the insurer’s perspective, it’s a better deal to insure people who won’t need to use their insurance. From the customer’s perspective, it’s precisely the reverse.

Right now, the insurer sets the rules. It collects background information on applicants and then varies the price and availability of insurance to discriminate against those who are likely to use it. Health-care reform is going to render those practices illegal. An insurer will have to offer insurance at the same price to a diabetic and a triathlete.

But if you remove the individual mandate, you’re caught in the reverse of our current problem: The triathlete doesn’t buy insurance. Fine, you might say. Let the insurer get gamed. They deserve it.

The insurers, however, are not the ones who will be gamed. The sick are. Imagine the triathlete’s expected medical cost for a year is $200 and the diabetic’s cost is $20,000. And imagine we have three more people who are normal risks, and their expected cost in $6,000. If they all purchase coverage, the cost of insurance is $7,640. Let the triathlete walk away and the cost is $9,500. Now, one of the younger folks at normal cost just can’t afford that. He drops out. Now the average cost is $10,600. This prices out the diabetic, so now she’s uninsured. Or maybe it prices out the next normal-cost person, so costs jump to $13,000.

This is called an insurance death spiral. If the people who think they’re healthy now decide to wait until they need insurance to purchase it, the cost increases, which means the next healthiest group leaves, which jacks up costs again, and so forth.

Kill the mandate, says Klein and others, and you kill the bill; either by removing the cost controls that come with the mandate or by making it more likely that we’ll end up right back here again, with a broken system that threatens to break us.

And, proponents argue, even in the absence of a public plan, the current bill does a lot to counter the worst practices of health insurers, such as dropping people when they get sick, or selling subprime insurance policies that deny coverage when illness strikes.

But that’s assuming that (a) those provisions don’t get weakened even further during reconciliation, and (b) that insurers won’t find ways around the very regulations agreed upon by the folks who deposit their campaign contribution checks. Very little about the history of health care reform in this country inspires confidence in either assumption.

On one hand, the White House, while laying out what the bill must do, hasn’t drawn any clear “lines in the sand” about what must be in the bill for the President to sign it. Will it fight for these provisions as hard as it fought for the public option? Or will it leave progressive to fight for them as hard as we fought for the public option, and see where the chips fall?

On the other hand, never in the history of health care reform in this country has the insurance industry willingly accepted reform. Not without a fight.

Negotiations and concessions, whether over health care reform or homework, come down to how much one party can still get away with. And the insurance industry has gotten away with a lot in the long, long history of health care reform in this country, which goes all the way back to the inclusion of health care in the Progressive Party platform.

You can see, at various points along the timeline above, insurance companies opposed from the beginning any efforts to provide Americans with affordable, quality health insurance. Though the Clinton plan was the last attempt at universal health care in the U.S., what's happening now bears more resemblance to 1977 than 1994.

That's the last time the health insurance industry made a "voluntary effort" to control costs, after President Carter proposed tougher cost controls. The result was the Hospital Cost Containment Act of 1977, passed without cost controls, and a "voluntary effort" that didn't last very long.

More than a decade before the Clinton experience, then-President Jimmy Carter called for legislation to impose cost controls on hospitals as a way to rein in rising medical expenses. The industry came forward and said don't bother with legislation, we will cut costs voluntarily. "Congress never passed cost controls and six months later there was no sign of voluntary cost controls," recalled Robert Blendon, professor of health policy and political analysis at Harvard.

Health care spending soon surged again, and kept rising until 1993-1994 when -- again threatened with real change in policy -- the industry behaved itself just until the threat passed, and went back to business as usual.

The health care industry had more thirty years, and at least two obvious changes to change practices and policies that served profits more than patients, and put the health and lives of many Americans at risk. In 1977 and in 1994, they engaged in the kind of obfuscation a child does when he moves his vegetables around on his plate, and claims he's eating them.

After two the insurance industry's previous "voluntary efforts" to control it's own costs:

Instead, they gave us more behavior like this.

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And more stories like these.

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Karen Ignani, top lobbyist for health insurers, recently said to a congressional panel:

"We are not asking people to trust us," Karen Ignagni, the president of America's Health Insurance Plans, told a key congressional panel on Tuesday. "We are asking people to trust government."

It's a good thing the insurance industry isn't asking us to trust them. They've done next to nothing to warrant our trust. Asking us to trust the government is a new twist, in that sense. But the government is only as effective as the tools it has to work with. The insurance companies vague promises to change, and an expressed willingness to subject itself to tighter regulation aren't encouraging.

Like other influential corporate lobbies, or any six-year-old, without specific (verifiable and quantifiable ) requirements in place, little change is likely to happen. And the fact that, when a majority of Americans support public plan, the industry has even the slightest bit of leverage on that element of health reform -- given its past and recent behavior -- suggests that it wields more than enough influence to defang any serious regulations before they even come to a vote, let alone take effect. (The ongoing saga of Wall Street bonuses and executive compensation ought to be a sufficient lesson.)

The issue of health insurance reform is too important and the number of people facing loss of insurance too great to accept, let alone celebrate concessions that are short on specifics and largely due to a desire to avoid a policy change that would require greater change in behavior, and on a permanent basis.

That’s what progressives entered this fight hoping to accomplish -- real, long-term reform with enough teeth in it to change behavior on a permanent basis. Many of us are utterly unconvinced that the current health care (What do you call it if you don’t want to call it reform?) bill does any of that, or is likely to make it easier to fight for the above further down the line. (Plus, it’s pretty clear we’ll have about as much help from Democratic leadership in future fights as we did in this one.)

So, our choices are to support (begrudgingly or enthusiastically, it doesn’t much matter) the passage of this bill, or oppose it and end up taking the blame for killing health care reform.

Not to mention leaving high and dry some 30 million uninsured Americans who would finally be covered.

That’s what the bill being debated in the Senate would do. It wouldn’t have a public option, and it apparently wouldn’t enable those age 55 and older to buy-in to the Medicare program.

…So the question stands, is it better to kill a bill that would provide 30 million Americans with health insurance (in addition to the 4.1 million American children already extended coverage under the expanded SCHIP legislation passed through the Congress and signed into law by President Obama earlier this year) for lack of a non-robust public option, the premiums of which are projected to be higher than in private plans, or to back a bill without either a non-robust public option or a Medicare buy-in provision? Frankly, I’m not sure I ultimately come down the same as Howard Dean on this one, though I’m still hoping to learn more.

Except that, as Digby points out, they’re not necessarily being covered.

And Obama can say that you’re getting a lot, but also saying that it “covers everyone,” as if there’s a big new benefit is a big stretch. Nothing will have changed on that count except changing the law to force people to buy private insurance if they don’t get it from their employer. I guess you can call that progressive, but that doesn’t make it so. In fact, mandating that all people pay money to a private interest isn’t even conservative, free market or otherwise. It’s some kind of weird corporatism that’s very hard to square with the common good philosophy that Democrats supposedly espouse.

Nobody’s “getting covered” here. After all, people are already “free” to buy private insurance and one must assume they have reasons for not doing it already. Whether those reasons are good or bad won’t make a difference when they are suddenly forced to write big checks to Aetna or Blue Cross that they previously had decided they couldn’t or didn’t want to write. Indeed, it actually looks like the worst caricature of liberals: taking people’s money against their will, saying it’s for their own good. — and doing it without even the cover that FDR wisely insisted upon with social security, by having it withdrawn from paychecks. People don’t miss the money as much when they never see it.

…What this huge electoral mandate and congressional majority have gotten us, then, is basically a deal with the insurance industry to accept 30 million coerced customers in exchange for ending their practice of failing to cover their customers when they get sick — unless they go beyond a “reasonable cap,” of course. (And profits go up!) If that’s the best we can expect of progressivism for the next generation then I’m afraid we are in deep trouble.

*I realize that the subsidies and the medicaid expansion are meaningful. But they are also going to be subject to ongoing funding battles in an age of deficit hysteria. I don’t hold out much hope for any improvement on that count. Indeed, I fully expect they will be assailed as welfare and eliminated as soon as Republicans gain power. They have learned from their mistakes — don’t let any liberal “entitlement programs ” become entrenched. That’s why a big comprehensive program would have been better. It’s much harder to disassemble.

Digby makes a good point. Proponents of passing a health care reform bill -- such as Paul Starr -- with a mandate, but without a public option, point out that the time between passage and implementation will provide opportunities to revise it; especially during reconciliation.

But it’s also likely that the White House won’t have the stomach to return to this fight again. And while reconciliation and conference committee battles aren’t as sexy and controversial as Senate and House votes, given the ugly fight thus far it’s doubtful that the White House will veer much from its “just-get-a-bill-passed” agenda … or that progressives will have more influence on the process than we’ve apparently had thus far.

So, here we are with a mediocre bill that does more tweaking than reforming, and can be more easily undone by insurance companies, because it was devised by many of the beneficiaries of insurers’ generous support. And progressives are told that our choices are to either support a bill many of us sincerely believe will have negative consequences and seriously impede future reform efforts, or oppose it and let the status quo continue for who knows how long.

As Chris Bowers’ wrote, there are no happy endings here from a progressive perspective. That’s always the case when your choices come down to -- as they always seem to in this town, no matter who’s in charge -- the least worst option.

That brings me all the way back to the I’m Gonna Git You Sucka, and the scene brought to mind by the choices we’re left with on health care reform.

I'm Gonna git you Sucka Film

This occurs when a character is given two choices; one of which sounds much easier, safer or more pleasant than the other. When the “better” option is chosen, it is subsequently revealed that they’ve actually picked the worse option without realizing it until it’s too late.

Named after a running gag in the film I’m Gonna Git You Sucka. Damon Wayans and Kadeem Hardison play Evil Minions who are always being told by other characters that they can leave the building via “the window or the stairs”. Each time, they choose the stairs and each time they get thrown painfully down a long flight of stairs.

The trope is subverted at the end of the film when the protagonist says “There’s two ways you can leave this place…” at which point Wayans screams and jumps out the window. This prompts one of the heroes to say, “Didn’t he know about the elevator?”

Is asking progressives to chose between killing the public option, killing this health care reform bill, or passing it bit like asking us to chose the window or the stairs?

Or is it just me?

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Kill the bill. Start over. There HAS to be some sort of public option, period. As the bill stands now, it's simply the insurance industry's wet dream - government subsidies and a mandate that all citizens purchase the insurance industry's product, under the insurance industry's rules.

Why is Congress and the White House swinging further to the right, now, then it did the previous 8 years?

Kill the bill.
Just kill it.
It was all a sham anyways, Rahm has said as much.

Xavier Deron | December 20, 2009 6:53 PM

Oh god. The unabridged version please?
I mean, there is a reason that Towleroad, JMG, Perez etc. are so successful. They don't post term papers.

Sheesh, Terrance. Oh well. I guess if they'll post Ron Gold's diatribe the "fierce" flyover "editors" at Bilerico will post anything. smh