Tuesday, October 27, 2009

Cheer and a half for Harry Reid

I believe in recognizing good news when it happens. At the same time, I definitely learned to restrain my enthusiasm on anything related to Harry Reid's leadership. Since Reid has been a sad excuse for a Majority Leader so far. With a theoretically "filibuster-proof" 60-vote Democratic majority in the Senate, with a popular Democratic President in the White House and the ability in any case to abolish the filibuster procedure with a simple majority vote, Reid has spent an unbelievable amount of time and energy whining about how he can't get anything done.

But apparently on Monday, he had an unusual rush of Democratic partisan energy. I was listening to C-Span in the morning and heard Reid in what I took to be a live Senate session defending the limits on executive compensation at bailed-out financial firms and sounding like an actual, living breathing Democrat! I was impressed in spite of myself.

Then later in the day, he announced that the Senate health care reform bill to go up for a vote will include a public option, although with a state opt-out provision. This was a pleasant surprise to me, because I expected that give-'em-whine-Harry might go for a phony "trigger" version of the public option. I don't think the state opt-out is good policy.

But purely as a political ploy, it may make some sense. For Blue Dog Dems who want to vote no on the final bill in order to preserve their, uh, good relationship with the insurance lobby, this could be a ploy to let them vote for cloture to shut off a Republican filibuster but then vote against the final bill. Then the Senate bill with the state opt-out could be reconciled with the House bill with a full public option by compromising on a full public option, which could then be passed on a majority vote in the Senate.

Still, a Republican filibuster is no excuse for not passing a solid health care reform. The Republicans effectively abolished the filibuster in 2005 with the "Gang of 14" manuever over Bush judicial nominations. The Senate Democrats can abolish the filibuster altogether by simple majority vote. No excuses on this one.

We don't yet know the details of Reid's proposed public option with the state opt-out. I don't see any redeeming features to it as policy. For one thing, on a practical level, it will almost certainly mean that my original home state of Mississippi, the state that needs health care reform most of all, will effectively wind up without it. The nominally Democratic legislature loves to roll over and whimper for the insurance lobby. And the Republican Gov. Haley Barbour is a reactionary who would surely push for Mississippians to be denied the public option.

Paul Krugman in An Incoherent Truth New York Times 07/26/09 laid out the basic premises of what would make a private-insurance-based program of the type being debated in Congress work:

Reform, if it happens, will rest on four main pillars: regulation, mandates, subsidies and competition.

By regulation I mean the nationwide imposition of rules that would prevent insurance companies from denying coverage based on your medical history, or dropping your coverage when you get sick. This would stop insurers from gaming the system by covering only healthy people.

On the other side, individuals would also be prevented from gaming the system: Americans would be required to buy insurance even if they’re currently healthy, rather than signing up only when they need care. And all but the smallest businesses would be required either to provide their employees with insurance, or to pay fees that help cover the cost of subsidies — subsidies that would make insurance affordable for lower-income American families.

Finally, there would be a public option: a government-run insurance plan competing with private insurers, which would help hold down costs.
Without the public option, what would result from the other pillars being in place would be that individuals would be required to purchase insurance but that insurance companies would still have broad discretion to set prices and evade coverage, e.g, by imposing high deductibles. This would reward the insurance companies and punish individuals without solving the actual coverage problems. That kind of reform without the public option would be a bad program, which is why the Congressional Progressive Caucus has insisted they would vote against such a plan.

I haven't heard anything yet that would convince me the state opt-out plan would be much better. David (dday) Dayen in his new gig at the News Desk feature of FireDogLake and Jane Hamsher and others at the main FireDogLake page are keeping their readers on top of this, as is Joan McCarter (McJoan) at DailyKos. As David explains in Not Enough Details To Make A Determination Of The Opt-Out 10/27/09, there are a lot of ways an opt-out policy could be constructed, some of them worse than others. But it seems to me that any state opt-out deprives the states opting out of the benefits of the program while stiffing their citizens who would still be subject to the mandate to purchase insurance. They get the obligations without the protections. That would limit the cost-control aspects of the national plan, depending on how many states with large populations opted out. If only less-populous states like, say, Mississippi and Wyoming opted out, then it would "only" be the people in those states who would be dumped on.

And how often could a state opt in and out? Annually? Every time a Republican Governor takes office? As a business structure, that doesn't sound like a very practical approach.

In the political aspects, the Democrats would be depriving their Party of a great deal of the long-term strategic political benefits of health care reform. Health care reform if done right will be a major instance in which a "active government" program will make tangible improvements in people's lives. It will be the best kind of argument against the anti-government ideology that conservatives (and even many liberals!) have promoted for the last four decades. And if the Democrats are ever going to make major inroads into the Republican's Solid South, it will take reforms like this to do it. If Katrina and the Republican national government's pathetic response to it didn't send voters in Louisiana and Mississippi rushing to the Democrats, we can't expect other "acts of God" to do it.

But if there is a state opt-out provision, Republican-dominated Southern states will opt out, depriving their publics of the tangible benefits of the health care reform while sticking them with the costs of the individual mandate and leeway the insurance companies have to exploit it. That will then confirm to their voters who otherwise might be persuaded that active Democratic government programs could have constructive effects that "Democrat big gubment" is actually bad for them. And, if the Democrats are foolish enough to let something like this go through, those voters wouldn't be entirely wrong in coming to that conclusion.

So, one-and-a-half cheers for Harry Reid on this one. But what counts is delivering a solid health care reform with a robust public option available to everybody, including people in Republican-dominated states.

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