The New Republic: Why Today's Summit Matters

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Mitch McConnell, John Boehner, Jon Kyl and Eric Canton i i

Republican Congressional leadership, including Senate Minority Leader Mitch McConnell, House Minority Leader John Boehner , Senator Jon Kyl and Eric Cantor, speak about the upcoming health care summit today. Saul Loeb/AFP/Getty Images hide caption

itoggle caption Saul Loeb/AFP/Getty Images
Mitch McConnell, John Boehner, Jon Kyl and Eric Canton


Saul Loeb/AFP/Getty Images

On one end of Pennsylvania Avenue yesterday, administration staffers were busy making preparations for an event that will likely determine whether comprehensive health care reform goes forward. And on the other end of Pennsylvania Avenue, their counterparts in Congress were busy making the case for why it should.

For several hours, members of the House Energy and Commerce Committee grilled the chief executive officer of Wellpoint, to see why the company's California subsidiary was raising health insurance premiums by nearly 40 percent for some customers. The testimony, combined with documents that the Committee had obtained, painted an illuminating if unsurprising picture. It appears that Anthem Blue Cross, Wellpoint's subsidiary, was trying to protect profit margins at a time of rising medical costs. That meant, among other things, charging more money to people that were running up higher medical expenses — people who, because of their pre-existing medical conditions, would have tremendous difficulty finding comparable coverage elsewhere.

That's pretty much the way the market works. And, combined with a new report showing that the similar things are happening all over the country, the message could not be clearer: The American health care system is fundamentally broken. Around a sixth of the population has no health insurance at all; that much we've all known for a while. But even among the majority of working-age Americans who have private health insurance, security turns out to be precarious.

You might think you're safe — that your insurance will always be there, at a price you can afford, covering whatever medical treatments you need. But if you get sick, you may discover your plan has loopholes and limits, so that you owe tens of thousands of dollars in out-of-pocket expenses. And if you buy coverage on your own, you could end up trapped in a plan that, eventually, you won't be able to afford — just like many of those Anthem Blue Cross customers.

Thursday's summit is about how best to solve this problem. And, ostensibly, there are two basic approaches on the table. There is the comprehensive plan that President Obama put forward on Monday, which is a compromise between the measures Democrats in the House and Senate passed late last year. And there is the approach that leaders of the Republican Party have articulated — a set of familiar conservative hobbyhorses that, at best, might lower insurance premiums for the healthy only by making the sick pay more.

But there is also a third option, one that's been lurking in the background ever since last summer, when the push for comprehensive reform got bogged down on Capitol Hill. It's the administration's Plan B or, as the insiders have been calling it, the "skinny bill." Back in January, after the Massachsuetts election eliminated the Democrats' filibuster-proof majority, Robert Pear and David Herzenhorn of the New York Times described the basic outline of such a scheme — primarily, a more modest expansion of public programs to cover children and their families. On Wednesday, Laura Meckler of the Wall Street Journal reported that the White House stood ready to pursue Plan B if the push for Plan A fails.

This isn't surprising: Of course the administration has a Plan B. (It would be political malpractice to do otherwise.) But the timing of the story is rather unfortunate: Just in the last 36 hours, the signs from Capitol Hill have been unambiguously positive: Conservative Democrats in the Senate are indicating their willingness to take up final amendments to the health care bill via the budget reconciliation process, while House Democrats are, according to multiple sources, warming to the Obama compromise. Exactly who leaked this and why is not clear, but sources close to the administration were quick to say that any impression of presidential mixed feelings would be wrong.

Says one senior Democrat in close contact with the White House over this issue:

The truth here is that this proposal was developed because the president wanted to know what the impact would be if he had to go smaller after the Massachusetts setback. He wants to pass comprehensive health reform and is fighting hard to make that happen.

A senior administration official e-mails with similar thoughts:

The President is not at all ambivalent. He understands that the only way to solve the problem is comprehensive reform. You can't guarantee affordable coverage for people with preexisting conditions, you can't really rein in costs, etc, unless you do this.

The account of Obama's sentiments is consistent with my own reporting — and Meckler's story, for that matter. It's also consistent with the pattern we've seen for more than a year now. Top administration officials and congressional allies have frequently urged Obama to step back from comprehensive reform, given its political difficulty. Obama has rejected the option repeatedly, arguing that the nation's health care problems require a comprehensive solution — that piecemeal measures just won't do the job.

And he's right. The Republican bill would, if anything, accentuate and accelerate the dysfunctions of the status quo. People with medical conditions would struggle to find decent coverage; people too poor to buy insurance wouldn't get the financial assistance they need. The vulnerable, in other words, would remain vulnerable if not more so.

The skinny bill, if enacted, would surely be an improvement. Sources confirm it would bringing insurance to an additional 16 million total, or about a third of the uninsured, primarily through Medicaid and the State Children's Health Insurance Program. It would also cost around a quarter of what comprehensive reform would, which means it could be paid for mostly through cuts to Medicare Advantage plans and other financing tweaks. That might appeal to some skittish Democrats, who want nothing except a face- (and job-) saving way out.

But the politics of the skinny plan aren't as simple as they might seem. It would give the administration an accomplishment, yes, but nobody would mistake it for "success." It's also not clear — to me, anyway — that that the political optics are so appealing. Republicans have been known to demagogue expansions of Medicaid and S-CHIP, after all; financing them with reductions to Medicare Advantage plans will, undoubtedly, produce the exact same attacks the comprehensive bill already has (and for which most Democrats have already voted). It's easy to imagine negotiations dragging out, which is the last thing Democrats need right now. And that's to say nothing about the broader impact on Obama's ability to drive an agenda.

Most important of all, though, the skinny bill doesn't actually fix the broken system. It doesn't re-engineer the insurance market, so that anybody can get insurance regardless of pre-existing condition; it doesn't strengthen requirements on existing coverage, so that the insured can be safe in the knowledge that they'll be protected if they get sick; and it doesn't make as much progress towards cost control, which means neither individuals nor employers nor the government will get relief from the huge financial burden health care costs are placing on them.

However opaque the campaign for health care reform has seemed, it really does come down to those three goals: Making sure that everybody has insurance, making sure the coverage is good, and making sure, over time, that health care costs less. The fallback options, Democrat or Republican, don't accomplish those goals. Only comprehensive reform does.

The president knows this. The Democrats in Congress know this. And they have the power to act on it. The only question is whether they will.

Update: A senior administration official got back to me just after the article posted initially; I've now added the quote. Also, Ezra Klein has some even stronger (and compelling) warnings against the fallback plans:



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