The deform of reform

November 11, 2009

Alan Maass and Helen Redmond analyze the legislation passed by the House in the name of health care reform.

THE HOUSE of Representatives narrowly passed health care legislation last weekend that was hailed as "historic" and sweeping."

It is those things--a historic and sweeping disaster for the hope that a Democratic president and Congress would finally do something to fix the screwed-up health care system that is a source of misery and suffering for so many people.

The House's Affordable Health Care for America Act would force millions of people to buy high-cost, low-coverage insurance policies from private companies. It would funnel hundreds of billions of taxpayer dollars that could be used to do something useful about health care into the pockets of the insurance giants. It capitulates on even the half-measure of the "public option" of a government-run alternative for the uninsured. It gives up on effective regulation of all but the worst practices of the medical-insurance complex. It contains an appalling concession to the anti-abortion fanatics that would be the most expansive government restriction yet imposed on women's right to choose.

Democratic leaders celebrate the passage of a health care bill in the House of Representatives
Democratic leaders celebrate the passage of a health care bill in the House of Representatives

By abandoning any attempt to win real change in the system, and then compromising on already compromised fallback positions, the House Democratic majority has produced health care legislation that will do more harm than good--and that will tarnish the idea of reform in the future.

And this is likely better than what the Senate will come up with as it begins debate on legislation that has even more wrong with it from the point of view of fixing health care. To top it off, the Senate's bill may not even make it to a vote--not, at least, without further surrenders--because of the opposition of Republicans and a few conservative Democrats.

Every Democrat in Washington understands this grim picture, but there was still an unreal air of self-congratulation after the House vote. President Barack Obama praised lawmakers for "answering the call of history," and the union-backed Health Care for America Now coalition said they cast "a vote for the American people, for making health care a human right."

Rep. Tammy Baldwin, one of the most liberal Democrats in Washington, looked past everything wrong with the House bill and declared: "I truly believe that we'll look back years from now and view the passage of this act to be as significant as the passage of the Social Security Act in 1935 and the Medicare and Medicaid Act in 1965."

"Significant" maybe--but not in a good way. The House vote last weekend deserves to go down in history as a capitulation to the health care robber barons in defiance of overwhelming public support for real reform. If it does, liberal Democrats like Baldwin--who vowed to fight for strong legislation, and then provided the margin of victory for this outrage--will be remembered as the ones who let it happen.

BEFORE THE injury of the final vote on the bill came the insult of an amendment that amounts to one of the most far-reaching anti-abortion measures ever passed in Washington.

In a bid to win support for the full legislation from a handful of conservative Democrats, House Speaker Nancy Pelosi decided at the last minute to allow a vote on the Stupak Amendment. The amendment would bar coverage for abortion services not only from a government-run "public option" program, but from any private insurance policy available through the legislation where the government provides any subsidy at all. The amendment passed with the votes of 64 Democrats and every Republican in the House.

By all accounts, a large majority of people who would purchase health coverage through the so-called "insurance exchange" established by the reform legislation would get some kind of subsidy or credit to help with premiums. Insurance companies that currently provide coverage for abortions would have to drop it if they want to sell their product to the vast majority of customers coming to them through the exchange.

As Washington Post blogger Ezra Klein put it:

[V]irtually all women with insurance through the exchange who find themselves in the unwanted and unexpected position of needing to terminate a pregnancy will not have coverage for the procedure. Abortion coverage will not be outlawed in this country. It will simply be tiered, reserved for those rich enough to afford insurance themselves or lucky enough to receive it from their employers.

If it makes it into the final version of health care legislation, the Stupak Amendment will make it harder than ever to obtain an abortion for millions of women who are currently uninsured and will have to buy--under threat of financial penalty--health insurance through the government's exchange.

Even women who currently have employer-based insurance that covers abortion care would feel the effects--many employers are expected to dump coverage for their employees and force them into the exchange, where insurance companies will have an incentive to not cover abortion for any woman.

Rep. Jan Schakowsky was among the many liberals who spoke out against the anti-choice measure. "This amendment is a backdoor way of overturning Roe v. Wade; it is a disservice and an insult to millions of women throughout our country," Schakowsky said.

But this was a charade. Schakowsky knew that once Pelosi allowed a vote on the amendment, it would pass. If she really wanted to stop it, she and her fellow progressives needed to threaten to vote against the bill itself. But almost none did.

Rep. Diana DeGette, a leader of the Progressive and Pro-Choice Caucuses in the House, now claims to have 41 representatives signing a letter to Pelosi saying they won't vote for a final bill if the Stupak restrictions remain. But why didn't these 41 champions of a woman's right to choose fight when they had a chance the first time?

Once the Senate acts, and leaders of the two Houses of Congress get together in conference committee to come up with a final version, the pressure will be even greater on Democratic liberals to swallow their concerns about any "flaws." We can't trust them to keep their promise to fight against restrictions on abortion--or any other provisions in this health care non-reform.

LIBERAL DEMOCRATS do admit that the House bill isn't "perfect." At least, though, they say, it delivers on long-needed regulations of the insurance industry's most notorious practices, and adds substantial funding to the government's Medicaid program for the poor.

What's stunning, though, is how little there actually is on "pro" side of pro-con balance sheet.

The expansion of Medicaid, for example, would be a temporary fix, and unsustainable in the long term. The costs of expanding the program would fall on state governments, which are experiencing severe budget crises, and already cutting benefits and eligibility.

Insurance companies would be barred from denying coverage to people with pre-existing conditions, and retroactively discovering reasons to cancel policies after a person gets sick, known as rescission. But there are a lot of loopholes in the new regulations for insurance company lawyers to try to exploit--and because there are no controls on premiums, companies can respond to any regulation that threatens to impact their profits by simply charging more money.

One provision in the bill caps the amount policyholders will have to pay in out-of-pocket expenses: $5,000 for an individual and $10,000 for families. But what working class person or family has thousands of dollars on hand to cover out-of-pocket health care costs? These amounts are more than enough to drive people into bankruptcy.

On top of this, points out Dr. Marcia Angell, author of The Truth About the Drug Companies: How They Deceive Us and What to Do About It, there's the question of whether any of the regulations will be enforced. "[Q]uite apart from its content, the bill is so complicated and convoluted that it would take a staggering apparatus to administer it and try to enforce its regulations," Angell wrote.

The highly touted "public option"--a government-run alternative provider of coverage to the uninsured--has been whittled down to almost nothing. When first proposed, the public option had a potential enrollment of 129 million people. Now, according to estimates, it would cover between 6 million and 11 million--around 2 percent of the U.S. population at the low end--and the Congressional Budget Office (CBO) estimates that premiums in the public option could cost more than private plans.

A public option this small and expensive won't be the competitive force to "keep private insurers honest" that Obama talked about. On the contrary, it will be more of a convenient dumping ground for insurance companies--covering the sickest people who the private insurers would rather not have as customers anyway.

Meanwhile, at the heart of the House health care reform bill--as with every other proposal under consideration during the Washington debate--is a measure that ordinary people will certainly come to despise if a law is ever passed: Mandates requiring people who don't have insurance through an employer and don't qualify for a government program like Medicare or Medicaid to purchase a policy through a newly established "insurance exchange."

If this feature of health care non-reform were discussed more often in the mainstream media, there would surely be more outrage against the legislation in Congress. Basically, the government is planning to force everyone, with some small exceptions, to buy an overpriced, defective product, year after year, or face a stiff financial penalty.

This is why the insurance companies--while also supporting the protests of the Republican right against any reform at all--have been happy to work with the Obama administration to shape health care legislation. In the House bill, the companies got a fine for anyone who doesn't buy insurance of 2.5 percent of adjusted annual income above the filing threshold or the average premium of a policy available in the insurance exchange.

Karen Ignagni, the insurers' top lobbyist, grumbled about the penalties being phased in too slowly and affordability waivers being "too generous." But this is trivial compared to the windfall profits insurance companies would bank because of a mandate.

Rep. Dennis Kucinich--who voted against the House bill--estimated that at least 21 million people would have to buy private insurance, resulting in "at least $70 billion in new annual revenue [for the industry], much of which is coming from taxpayers. This inevitably will lead to even more costs, more subsidies, and higher profits for insurance companies--a bailout under a blue cross."

THAT ISN'T the end of what's wrong with the House bill, by any means.

Like the proposal under consideration in the Senate, House Democrats plan to pay for a big chunk of their legislation with hundreds of billions of dollars in "savings" from the Medicare program for the elderly. Supporters of the bill talk about cracking down on fraud and modernizing the system, but Medicare "savings" really means Medicare benefit cuts--a further step toward the hollowing out of the popular program.

Big Pharma will get theirs, too. Under the House bill, manufacturers of biologic drugs--those produced through biological, rather than chemical processes--will get a monopoly period of 12 years, and potentially much longer. Biologic drugs are some of the most important recent developments in medicine, providing life-saving "miracle" treatments for cancer, rheumatoid arthritis and other conditions. They're also extremely expensive, costing tens of thousands of dollars a year.

And they'll stay expensive, if Democrats in the House get their way--their health care legislation extends the "exclusivity" period when generic versions of biologic drugs are forbidden to 12 years. "And," wrote Jane Hamsher, founder of the FireDogLake blog, "because of an 'evergreening' clause that grants drug companies a continued monopoly if they make slight changes to the drug (like creating a once-a-day dose where the original product was three times per day), they will never become generics."

On the other hand, a proposal by Dennis Kucinich that would have protected the right of individual states to create a single-payer health care system--something that would have been mere token support for the distant possibility of a government-run system providing coverage for everyone--was excluded from the bill by the House leadership.

Though the legislation focuses around how the uninsured will be covered, the House bill--and whatever final version emerges after the Senate debate and the reconciliation process--would have a broader effect, and not for the good.

Currently, 60 percent of American workers get their health insurance from private insurers, mostly through employers. Under the House bill, employers will be given the option of providing coverage for employees or contributing to a fund on their behalf. If employers offer insurance, they must pay at least 72.5 percent of the premium for workers, and 65 percent for families.

That gives companies who currently pay a higher percentage an incentive to shift costs onto employees until they hit the government-mandated limit. And because the legislation does nothing to cap what insurance companies can charge for policies, the trend will be for employers to stop providing coverage altogether, and push their employees into the insurance exchange.

Beyond all the details, there's something twisted and Orwellian at the core of the House's "landmark" health care legislation. The same corporations responsible for a health care crisis that has left 50 million people uninsured and at least 25 million underinsured, that is the leading cause of personal bankruptcy, and that kills 45,000 people every year are being left in charge of the system. The insurance companies are presented as the only solution to a crisis they caused.

As Kucinich said in a statement about why he voted against the House bill:

We have been led to believe that we must make our health care choices only within the current structure of a predatory, for-profit insurance system which makes money not providing health care. We cannot fault the insurance companies for being what they are. But we can fault legislation in which the government incentivizes the perpetuation, indeed the strengthening, of the for-profit health insurance industry, the very source of the problem.

That's the reality of health care non-reform, brought to you by a president who promised to bring change to Washington and a party controlling Congress that claims to represent "the people." As Dr. Marcia Angell concluded:

Is the House bill better than nothing? I don't think so. It simply throws more money into a dysfunctional and unsustainable system, with only a few improvements at the edges, and it augments the central role of the investor-owned insurance industry.

The danger is that as costs continue to rise and coverage becomes less comprehensive, people will conclude that we've tried health reform and it didn't work. But the real problem will be that we didn't really try it. I would rather see us do nothing now, and have a better chance of trying again later and then doing it right.

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