What’s holding up the Senate Finance Committee on health care reform?

Many are extremely frustrated by the slow progress in the Senate Finance Committee, but it looks like one reason for the delay is the serious consideration by the committee for an excise tax on health insurance companies for gold-plated health care plans.

A proposal to tax insurance companies on their most expensive health-care plans may help lawmakers seeking a bipartisan solution for financing President Barack Obama’s $1 trillion health-care plan.

The plan, offered by Democratic Senator John Kerry of Massachusetts, would impose an excise tax on insurers that could generate tens of billions of dollars. Making the companies pay may help break a deadlock in Congress over funding. Obama opposes taxing health benefits for middle-class Americans and many Republicans and Democrats have said they won’t accept a plan to tax the policies of the wealthiest.

“We’re taking an intense look at it,” Senator Charles Grassley of Iowa, the ranking Republican on the Finance Committee, said in an interview yesterday on Bloomberg Television’s “Political Capital with Al Hunt.”

The measure would help end “perverse incentives to over- utilize and have high-cost care,” said Grassley. “We’re interested in it as a discipline within health care.”

Senator Olympia Snowe of Maine, another Republican on the Finance Committee that is drafting health-care legislation, said she was also open to the proposal.

‘Practical Option’

“That may be a practical option, as a way of attacking future costs in health care and driving them down and creating disincentives for the most expensive policies,” Snowe said July 23. Earlier this week, Senator Kent Conrad, a North Dakota Democrat on the Finance Committee, said the idea is under consideration by the panel.

The Kerry proposal is similar to an amendment that Senators Bill Bradley, a Democrat, and John Danforth, a Republican, floated in the 1994 effort to overhaul health care. Obama has said he wants his plan to remake health care, which accounts for 17 percent of the economy, to have bipartisan support.

“It might be a way of accomplishing our goals,” Kerry said.

Grassley agreed. The proposal, he said, has “been a subject of discussion for two days of the last four or five” in the committee.

This is an excellent option given that any proposal to limit the health care deduction for individuals who have gold-plated plans went nowhere for political reasons. The delay must relate to the various ways this can be structured and the need to have it scored properly by the Congressional Budget Office. If the numbers work, this will go a long way towards getting a bill that can achieve broad support and even bring along some Republicans.

Taking on the health insurance companies

Anyone wondering how the health insurance companies have been increasing their profits at such a rapid rate should read this recent article from BusinessWeek. It appears that large health insurers completely dominate the market in many states.

The insurance industry is up in arms over congressional proposals to create a publicly financed competitor in an effort to bring down health-care costs. That may be because it doesn’t have to face much in the way of competition now: Most regions of the U.S. are dominated by just one or two health insurers.

Each year the American Medical Assn. (AMA) surveys the commercial health-insurance landscape and finds little if any competition. Its latest report says that, out of 314 metropolitan markets, 94% are controlled by one or two companies, or fewer. In 15 states, one insurer has 50% or more of the entire market.

Such market concentration has become a potent argument for supporters of a public insurer, President Barack Obama among them. With no need to generate profits, a public plan could offer lower premiums, thus bringing competitive pressure to bear on the private insurers to do the same.

Ezra Klein makes a similar point in the Washington Post.

In the modern health-care system, there is no higher power than the insurance market. And the insurers who populate that market have grown all the stronger. The Justice Department judges an industry “highly concentrated” if a single company controls more than 42 percent of the market. By that definition, 94 percent of statewide insurance markets are highly concentrated. A recent study by the advocacy organization Health Care for America Now showed that in Indiana, WellPoint controls 60 percent of the insurance market; in Iowa, Wellmark accounts for 71 percent; and in Alabama, Blue Cross/Blue Shield holds 83 percent. In the past 13 years, there have been more than 400 corporate mergers involving health insurers.

Economics textbooks tell us that concentrated markets reduce the competitive behavior that benefits consumers and lead to outsize profits for the dominant firms. Predictably, health-care premiums shot up more than 90 percent between 2000 and 2007, while the profits of the 10 largest insurers increased 428 percent over the same period.

We have a system that is not sustainable. This isn’t capitalism – instead we have several large insurance companies practically stealing money from American taxpayers.

Right now, President Obama is trying hard to get a bill with the help of all the major players, including the insurance companies. Therefore we’ve seen him go after costs and premiums, but he has not taken on the insurance companies in a direct manner.

If the current effort at reform fails or stalls, expect to see a full-throttled attack against these companies that informs the American people just how much money they are making and the tactics they are using to deny coverage to pad profits.

Krugman slams the media for health care coverage

Paul Krugman has been tough on Barack Obama at times, but he’s behind him on health care. Today he mocks the media for focusing on everything but the actual policy issues.

The talking heads on cable TV panned President Obama’s Wednesday press conference. You see, he didn’t offer a lot of folksy anecdotes.

Shame on them. The health care system is in crisis. The fate of America’s middle class hangs in the balance. And there on our TVs was a president with an impressive command of the issues, who truly understands the stakes.

Mr. Obama was especially good when he talked about controlling medical costs. And there’s a crucial lesson there — namely, that when it comes to reforming health care, compassion and cost-effectiveness go hand in hand.

Of course, the policy issues are too boring for our brain-dead media when compared to all the drama surrounding the process.

Krugman also focused on one of the most important policy developments over the past several days.

I don’t know how many people understand the significance of Mr. Obama’s proposal to give MedPAC, the expert advisory board to Medicare, real power. But it’s a major step toward reducing the useless spending — the proliferation of procedures with no medical benefits — that bloats American health care costs.

And both the Obama administration and Congressional Democrats have also been emphasizing the importance of “comparative effectiveness research” — seeing which medical procedures actually work.

So the Obama administration’s commitment to health care for all goes along with an unprecedented willingness to get serious about spending health care dollars wisely. And that’s part of a broader pattern.

Many health care experts believe that one main reason we spend far more on health than any other advanced nation, without better health outcomes, is the fee-for-service system in which hospitals and doctors are paid for procedures, not results. As the president said Wednesday, this creates an incentive for health providers to do more tests, more operations, and so on, whether or not these procedures actually help patients.

MedPAC was originally created by Republicans to look for ways to cut costs in Medicare and Medicaid, so you would think they would be openly in favor of this development of giving this panel real power, but most Republicans are too busy trying to kill the reform effort.

CNN smacks down Lou Dobbs on Birther silliness

At least someone at CNN has some journalistic integrity left. Next, they need to get rid of Dobbs.

CNN President Jon Klein wrote an email last night to “Lou Dobbs Tonight” staffers telling them the Obama birth certificate story is “dead,” TVNewser reports.

“It seems this story is dead,” Klein wrote, “because anyone who still is not convinced doesn’t really have a legitimate beef.”

CNN focused on the additional information that all Hawaii records are now electronic, so they don’t produce paper copies of “original” birth certificates.

Will this end the story? Don’t bet on it. The level of hatred on the right for Obama is reaching a fever pitch.

UPDATE: A civil rights organization is demanding that CNN remove Lou Dobbs from the air.

Birther mania

Since Barack Obama announced his candidacy for President, we’ve seen the lunatic fringe on the right push the limits of idiocy. Since his election, the levels of insanity on the right have grown exponentially.

The “birther” movement has set a new standard, even by the standards of the loony right wing. They make the teabaggers looks like sober economic scholars.

Naturally, Jon Stewart, the most trusted newsman in America following the death of Cronkite, has a field day with this one.

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
The Born Identity
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Pay particular attention to his smackdown of Lou Dobbs, who brings up “questions” surrounding Obama’s place of birth several days after a guest host ON HIS OWN SHOW completely debunks the asinine story. Further proof that Lou Dobbs is a complete buffoon. Why is this clown still on CNN?

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