Thanks, Joe,
 ...for what seems to me a very good analysis of the situation.

Best,
Shirley

P.S. I think the "reconciliation bill" will pass the Senate.  The political stakes are too high for the Dems. to do anything else.




----- Original Message -----
From: Joseph White <[log in to unmask]>
To: [log in to unmask]
Sent: Mon, 22 Mar 2010 10:09:13 -0400 (EDT)

Hi Adam and all,

Well, the pessimist and congressional scholar in me says, "first lets see
the Senate deliver."

But the odds are good.  So: any policy or political lessons?

Not sure, but a few comments:

1) This is still a far cry from what any other rich democracy does.
     a) It might cover about 95%, if ever implemented (remember, the main
provisions do not take effect until a year after the next President is
inaugurated, meaning there is a real chance of repeal).
     b) Compared to a private-insurance-based, individual mandate system in
a country like Switzerland, it:
          1) Has a much less standard benefit package
          2) Puts the poor in an inferior second tier, Medicaid coverage
which is likely to have worse access due to some providers refusing to
participate due to the unusually low fees
          3) Has much weaker cost controls because of the absence of
anything resembling all-payer regulation
          4) I'm not sure but it seems to require a large portion of the
public to pay much more for health coverage, both in premiums and
out-of-pocket, in relationship to income, than would be the case in
Switzerland.  The subsidies are based on the cost of covering about 70% of
total costs through the insurance, though there is extra cost-sharing
coverage for some lower-income people; and with U.S. care being so much more
expensive to begin with, the net effect has to require much higher payments
than in other countries.

2) The regulatory structure, though better than the status quo, is quite
weak.  Most of the core regulation of the individual and small-group markets
is left to the states, which are expected to set up the "exchanges".  (Tim
can go into this at greater length, including how I'm wrong).  Benefit
packages are allowed to vary in actuarial value (there are four levels), and
within a given actuarial value plans can reach that value in different
ways.  This likely poses an extremely difficult regulatory task, since of
course the whole point of varying plans, to the insurers, will be to come up
with plans that have the same actuarial values on average but market them
appropriately so that they have less value to the people to whom they are
sold.  Whether the insurers can manage this will remain to be seen.  At any
rate, the regulatory task is harder than in Switzerland or the Netherlands,
because of the greater variation allowed, and yet the regulatory apparatus
is weaker.

3) The whole bill does very little to improve the insurance currently used
by the largest group of Americans, namely insurance received through
employers with more than 50 employees.  It does almost nothing to reduce the
costs of that coverage.  It provides a bit of protection against the risk
that people will lose insurance currently provided through those employers.
First, employers which do not just drop coverage before the penalties go
into effect will, when those penalties take effect, have to figure that cost
into the cost-benefit-analysis of what they gain by dropping coverage.
Second, employees who lose their covered jobs or whose employers drop
coverage will at least have somewhere else to go (the exchanges).  But the
legislation still leaves most U.S. employers in the ridiculous position of
having, as isolated purchasers, to try to win bargaining battles with the
insurers (who find it easier to pass on the providers' costs than to fight
the providers).

So I think it's important to understand that, while this legislation will
(if implemented) be a big improvement on the U.S. status quo, it is still a
long way from what I have called the "international standard."  If the
Republicans were a bit more sane, it would be seen as what it is: a fallback
position from what most Democrats really wanted, and a moderate compromise.


That leads to one observation about politics.

4) The U.S. has become a viciously partisan political system.  For years,
people believed that the U.S. was a relatively consensual political system,
with much less ideological conflict than in most European systems.  This was
probably misguided even back in the 1960s, as the U.S. left was centrist in
European terms but the U.S. right was way to the right of a normal European
conservative party, even then.  But at that time the two parties were
themselves more internally diverse.  That's gone now; there is still some
diversity in the Democratic party but less than in the past, and the
Republicans are pretty monolithic.  The Democrats passed (maybe) this
legislation with only Democratic votes; and in the end they probably passed
it in the House mainly because some of the more uncertain Democrats decided
they  just couldn't let the other side win.  This means that shifting
control of the government could lead to policy alternation of a type that
makes the British "stop-go" of the 1960s look stable.  Ironically, the only
stabilizer is the hated, undemocratic, Senate filibuster.  And that can be
avoided, somewhat, with reconciliation.  At any rate, this is another reason
to be unsure of whether the key parts of this legislation will be
implemented.  But it also means that, in the end, the process was a matter
of the Democrats who were pretty much liberals and mostly in safe
constituencies negotiating with the Democrats who are less liberal and less
safe.  The latter represented what used to be considered moderate Republican
positions.  In the end, the bill was a compromise, that appears to be about
to pass because of a degree of partisan loyalty that is unusual for
Democrats.  All along the key question was whether the swing Democrats would
decide it was safer not to vote for a bill, or whether that was actually
more risky because, if they did nothing, Democrats would look ineffectual.
Enough chose the latter -- pending the Senate.

cheers,
Joe

On Sun, Mar 21, 2010 at 10:50 PM, Adam Oliver <[log in to unmask]> wrote:

> So, US health care reform has passed. I'd be interested in reactions from
> those who commented over the last year; e.g. Tim, Joe, David W. Etc. Etc.
> Sent using BlackBerry® from Orange