Monthly Archives: June 2009

A Quibble with Josh’s Quibble

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My friend Josh Tucker graciously linked up to my post on public opinion on health care on The Monkey Cage. He did suggest that my bottom line that opinion is not all that more favorable to reform (and may be less favorable) than 1994 might “underestimate the importance of Obama having a reservoir of public support behind him.”

But I guess I forgot to mention (but the NY Times did too) that Obama’s approval rating on health care is 44% and his disapproval rating is 34%. Not terrible numbers, but not a reservoir. The NYT/CBS report does not give comparable numbers for Bill Clinton in 1993-1994. But my guess is that they were in the same neighborhood when his reform effort was getting underway.

Is the Public Now Ready for Health Care Reform?

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To those of us who follow the way media reports on public opinion polls, it is no surprise to find out that the headline and lede are generally cherry-picked from among the poll’s finding. So that the reporting on the NY Times/CBS poll on health care focused on the finding that 72% of Americans favor “a government administered health insurance plan — something like the Medicare coverage that people 65 and older get — that would compete with private health insurance plans?”

That is a striking number. But it is hard to know whether, as Paul Krugman suggests, it represents a fundamental change in public attitudes since the last time the Democrats tried to reform the health care system. That’s because the question had not been asked before.

But the survey did ask many questions that were asked back in the 1990s. Looking at those questions gives a much more mixed picture of the changes in public opinion about health care reform. There are a few questions that suggest substantial change over the past few years. The public does trust the government substantially more than private insurance companies to provide coverage and hold down costs than it did in 2007. But we did not have a comparable question from the 1990s.

On the questions that were asked in the current survey and the 1990s, the picture is one of tremendous stability in public opinion rather than marked change. Some highlights:

  • On the question of whether the health care system required major reform, 85% of the current respondents said it required “fundamental changes” or needed to be “rebuilt completely.” But 90% said this on the eve of the failure of Clinton-care. Indeed even at the height of the Republican takeover in 1994, 79% felt health care needed significant reform.
  • 57% trust the Democratic Party most to reform health care. But 59% felt the same way in 1994.
  • 48% of the current respondents are dissatisfied with health care generally. The number was 55% in 1993. 2003.
  • Today 57% of Americans are willing to pay higher taxes for universal coverage. 64% were in 1993.

What is more interesting is that neither 1993 nor 2009 are close to being peak years for public acceptance of health care reform. Based on the questions asked at regular intervals, the peaks years seem to be the late 1990s and early 2000s. Many of the questions were asked only in 2007 and 2009. The public was generally more concerned about health care in 2007.

There are many reasons why health care reform may be more successful now that it was sixteen years ago. But it does not appear that a sea change in public opinion is one of them.

CORRECTION: My original post stated that 55% of Americans were dissatified with health care in 1993. I missread the poll results. That number came from a 2003 poll and I do not believe that question was asked before that. My basic point stands.

The Word of the Day

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In the Treasury Department’s white paper on its financial reform plans, the word “robust” is used 47 times in 101 pages. Some choice examples:

· [our plan will] promote robust supervision and regulation of financial firms.

· [financial holding companies] should be subject to robust consolidated supervision and regulation, regardless of whether the firm owns an insured depository institution.

· [the SEC] should require robust reporting by issuers of asset backed securities.

· [the SEC] should promote robust policies and procedures that manage and disclose conflicts of interest [for credit rating agencies].

· The CFPA [consumer financial protection agency] should be an independent agency with stable, robust funding.

· Regulators will need to require that CCPs [central counterparties] impose robust margin requirements

· The CFPA should also establish a robust research and statistics department

It is too early to tell whether the new regulatory regime will be effective, efficient, and equitable. But it will certainly be robust!

Getting the Numbers to Add Up

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As reported in the New York Times, the Congressional Budget Office has thrown a bucket of cold water on President Obama’s plans to reform the health care system. According to the CBO analysis, the leading Senate plan would only decrease the ranks of the uninsured by 16 million, leaving 36 million without insurance. This finding poses many problems for the push to reform health care. Much of the anticipated cost savings from reform come from the fact that expanded coverage means more preventive care and fewer emergency room visits. But if coverage does not expand much, these savings are illusory. Consquently, a deficit-neutral plan will be hard to fashion. As I pointed out last week, deficit neutrality is crucial procedurally in order to pass legislation by a simple Senate majority. Moreover as the public becomes more concerned about deficits, a plan that increases red ink will be more difficult to sell politically. Finally, the analysis gives opponents of reform a real opening. Their argument will now be that Obama wants to spend a trillion dollars and completely reorganize the health care sector only to cover a third of the uninsured.

Will Republicans Flip Health Care the Byrd?

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The administration has laid out a two-prong strategy for getting health care reform this year. The first part is to present Congress with only the bare outline of a plan and let legislators fill in the details. The second is to bring the bill to the floor under the budget reconciliation process. The budget resolution passed in April contains reconciliation instructions for several committees to produce a health care reform bill by October 15. Consequently, under congressional budget rules, this health care bill cannot be filibustered and requires only 50 votes in the Senate.

Neither part of the strategy is failsafe. How can the president expect Congress to work out the details when it doesn’t agree on them? Take the goal of creating a public insurance plan that can compete along side private insurers. Few if any Republicans are willing to support such a provision for fear that the public plan would drive private plans out of business and expand the government’s role in health care. After the GM nationalization, the GOP cry that the Democrats will use the public plan to gin up a government takeover of health care ought to spook enough voters to make moderate Democrats nervous. Other parts of the plan including a “play or pay” employer mandate and the possibility of taxing some employer-provided health benefits are just as controversial.

The plan to use the reconciliation process is just as tricky. The use of the reconciliation process is governed by the Byrd Rule, named for America’s senior senator Robert Byrd. Essentially, the Byrd Rule places two important restrictions on the use of reconciliation. The first is that it disallows any “extraneous” provisions in which “changes in outlays or revenues … are merely incidental to [its] non-budgetary components.” As Ezra Klein pointed out a few months ago, health care legislation will certainly contain many provisions that may run afoul of this rule.

But is regulating insurers “merely incidental” to government revenues? How about reforming hospital delivery systems? How about incentives for preventive treatment? Or the construction of a public plan? An individual mandate?

The second relevant provision of the Byrd Rule is that the bill cannot contain provisions that increase the deficit in a year not covered by the reconciliation instructions unless their effects lead to an overall reduction in the deficit. Consequently, because the budget resolution is based on a five-year window, a health care reform bill passed via reconciliation must be budget neutral or decrease the deficit beyond 2014 (its short term costs are covered by the $635 billion set aside contained in the budget resolution).

The upshot is that if Republicans raise a point of order on either of these grounds and it is upheld by the Senate parliamentarian, a 3/5s majority is required to waive it. So essentially, the bill (or at least some of its provisions) would lose filibuster protection.

Klein is correct to worry about points of order based on “merely incidental” provisions. But as he points out, these are essentially judgment calls by the parliamentarian (and the Democrats can always follow the GOP strategy of firing uncooperative parliamentarians.)

So I think it is the second Byrd Rule objection that may be the more dangerous one. The effects of the health care bill on the deficit will be scored by the Congressional Budget Office. It will be much more difficult politically to confront the CBO over an adverse scoring decision than it would be to fire the parliamentarian. So budget neutrality is an absolute necessity for the reconciliation gambit to work.

I believe it will prove very difficult to produce a meaningful health care reform bill that is budget neutral over the long run (or at least one that will be scored by the CBO that way). First, any budgeting for a health care plan is going to rely heavily on cost savings through hard to quantify reforms like electronic medical records. If the CBO comes back with a low number for these savings, other cuts or revenue increases will be required. Second, many of the revenue enhancements expected to be in any reform bill such as employer “play or pay” or the taxing of some employer-provided benefits may not sit well with many moderate Democrats. As these provisions get scaled back to keep the moderates on board, expenditure cuts will be necessary to ensure Byrd Rule compliance.

For 60 years, Democratic presidents have sought to reform the health care system. Clearly, President Obama thinks this time will be different. Perhaps it will be, but it is far from a done deal.