Health Care Reform Passes Senate: 60-39 | Hacker News Reader

Health Care Reform Passes Senate: 60-39

news.yahoo.com

7 pointsindiejade27 comments

This article is a really poor piece of journalism. It has dozens of paragraphs of text that can be summarized as "the senate passed some form of the healthcare reform bill", without any loss of information. It barely touches upon what's actually in the bill, and it uses some surrounding wording to make it appear grand, except that it doesn't sound grand at all.

Is it a minor piece of legislation everyone calls a "reform", or is it an actual reform? What's actually in the bill? Who exactly will it affect and how? What changes, exactly, will it make? The article doesn't answer any of these questions.

IMHO, the most significant aspects of the bill—making it genuine reform—are:

* Insurers will no longer be able to exclude people on the individual market for pre-existing conditions, they won’t be able to take your insurance away when you get sick (on the pretense of “oh, you didn’t report this case of acne you had as a teenager, therefore you lied to us on your application form and we don’t have to pay for your cancer treatments”), and they are sharply limited in how much they can charge different premiums to different groups of people.

* Since the previous rule creates a big moral-hazard problem (if the insurance companies have to take you no matter what, why not put off buying insurance until you actually need it?), there is a mandate for just about everyone to buy health insurance.

* Since paying the full cost of health insurance would put a very very large dent in a lot of poor and lower-middle-class people’s budgets, there is a system of subsidies in place to keep the cost of insurance below (IIRC) 10% of a family’s income.

* The subsidies are paid for by things like taxes on the most expensive health-insurance plans, so (according to the Congressional Budget Office) the overall system does not add to the Federal debt, and even slightly decreases it.

A summary of the Senate’s bill is here (scroll down to “Summary of the Patient Protection and Affordable Care Act”):

http://democrats.senate.gov/newsroom/record.cfm?id=321145...;

I think this is the summary of the House version:

http://www.speaker.gov/newsroom/reports?id=0218

The final law will probably look more like the Senate than the House version.

The claim that it does not add to the Federal debt is an accounting trick. The CBO is legally obligated to stick to a certain set of accounting rules, but this bill was designed to game those rules.

For example, the CBO measures a 10 year time horizon. The plan is for the cost saving measures to begin immediately, while we will only start paying out subsidies in a few years. So the CBO is scoring this bill by comparing the first 6-7 years of benefits to 10 years worth of revenues.

Another game being played is "mandatory" spending cuts. The CBO is required to assume they will occur. Historically, "mandatory" spending cuts are nearly always repealed at the last minute.

Another fairly major aspect of the bill is that it bans no frills insurance (high deductible, excludes routine care). This is likely to induce people to consume more unnecessary medicine (see the RAND experiment).

Another fairly major aspect of the bill is that it bans no frills insurance (high deductible, excludes routine care)

Oh my. I had no idea. That was the only insurance that can be called "insurance" with a straight face, and they took that away.

Is there at least an option to self-insure? Or do I need to give $100 to insurance co, just so that they can pass $50 to the doctor for routine care - something I could very well do myself without paying the middleman.

Jonathan Chait, The New Republic:¹ “According to the Congressional Budget Office, the Senate bill would reduce the deficit by more than one hundred billion dollars over the next decade. Some critics have asserted that the savings are an illusion produced by phasing in the higher taxes more quickly than the benefits, but this is incorrect. At no point do the costs exceed the savings. Indeed, the savings accelerate more quickly over the long run—CBO calculates² that reform will save on the order of a trillion dollars in its second ten years.”

Chait also notes that the bill contains a number of experiments in cost control which the CBO does not credit with any savings in its budget estimates, because we don’t really know yet how effective those experiments will be.

¹ http://www.tnr.com/article/politics/just-noise?page=0,2 ² [link currently broken] http://www.cbo.gov/ftpdocs/108xx/doc10868/12-19-Reid_Letter_...

The CBO numbers assume the mandatory spending cuts will not be repealed (since they are required by law to score the bill as written). Such mandatory spending cuts in previous bills tend to be repealed periodically.

Additionally, the CBO also does not account properly for the fact that when you lower the marginal cost of additional medicine, medical consumption increases. This bill bans high deductible insurance , even though high deductible insurance is the only tried and true method for reigning in medical spending.

Do you understand the details of the reconciliation process? If you do, could you shed some light on it? It was my understanding that the point of having two versions of the legislation that later go into reconciliation is to avoid filibusters for controversial parts that might increase federal budget (such as public option). This would mean that the democrats could easily include public option into the final bill with 50% + 1 votes, which would almost certainly happen. If this is the case, why do you say the final version will look more like the senate version of the bill?

Not every pill is The Pill, not every man is The Man, and not every reconciliation between the houses of Congress is Reconciliation, so to speak. Hence your confusion.

A bill passed under the reconciliation rules cannot be filibustered, but only budget-related resolutions that meet certain very strict criteria can be passed through the reconciliation process. Some folks were making a lot of noise along the lines of “if this gets filibustered we’ll just pass something through reconciliation”, but that hasn’t happened and at this juncture I don’t think it will happen.

What’s happening now is a very different process: negotiators from the House and Senate are going to try to come up with a single bill text that can still get a majority of the house and sixty votes in the Senate. They still need sixty Senators because the bill that emerges from these negotiations is governed by the same cloture rules as a normal bill.

It is too bad that such a historic change is being done in such a bad way, but in some ways is inevitable.

The challenge is that when Republicans saw that Obama was serious about health care reform, they trotted out their 1993-1994 playbook, where they managed to obstruct health care reform, and used the resulting negative publicity from special interests campaigning to take control of Congress in 1994. This time around Obama solved the problem by cutting side deals with every special interest he could, and engaging in some truly epic negotiating. The result is pretty much the weakest bill that could be called "reform", loaded down with complex provisions.

However the Democrats are under a deadline. They need to get the thing passed and enough concrete benefits out there to fight the FUD in time for the midterm elections. That is why they have been working so hard - their political lives depend on getting something workable out.

By my understanding now that both house and senate have passed the bill, the Democrats only need 50%+1 to reconcile differences, so they really have come too far to fail. Something will pass.

If the experience of literally every other industrialized country is a guide, the result, suboptimal as it is, will be an improvement on the status quo. Over time it will become very popular, and barring unforeseen circumstances the Democrats will win politically from it for years to come. (Unfortunately for everyone there are a lot of economic train wrecks barreling down on us. For instance the collapse of many companies purchased by private equity circa 2011 and 2012. The Democrats are likely to get blamed for those disasters, and that is likely to matter more come the next Presidential election than health care.)

Personally I'm still unhappy about how this unfolded. I would have liked to see Obama borrow Canada's legislative model. Not their solution, just how Pierre Trudeau got legislation through. What he did is passed a bill saying, Any province that passes some form of universal health care meeting these standards gets per capita transfer payments of this size. That pushed the problem to the provinces with a large carrot. After provinces saw other provinces successfully pass health care, every last province had it within 5 years.

If Obama had done that, then I think he would have had an easier time with legislation because all of the controversial bits would be pushed to the states. And after a few brave states passed it, others could see what works, what doesn't, and most could just wait to adopt a successful model.

I think it would be very difficult to pull this off on a state-by-state basis, because an effective insurance system depends on economies of scale. We have an individual insurance mandate in Massachusetts, but we also have all these teaching hospitals and we used to have a glut of hospital beds; the same kind of system would never have been able to work in, say, Alabama.

Personally I'm still unhappy about how this unfolded. I would have liked to see Obama borrow Canada's legislative model. Not their solution, just how Pierre Trudeau got legislation through. What he did is passed a bill saying, Any province that passes some form of universal health care meeting these standards gets per capita transfer payments of this size. That pushed the problem to the provinces with a large carrot. After provinces saw other provinces successfully pass health care, every last province had it within 5 years.

I am amazed that it's the year 2009 and serious, honest, intelligent folks think that some massive one-size-fits-all solution is workable for such a complex system. It's the ultimate in Big Design Up Front. After all, with all the difficulties they had for initial passage, do they really think that they are going to be able to iterate? Do they really think they've thought this through? Has anybody? If anything, to me this is a sign that the current legislation is more about hubris and power grabs than real solutions. At the end it's become more of a "we're going to pass something, no matter what it is, and then spin the hell out of it" than real, viable long-term solutions.

And yes, I think Canada's model is great. Push the problem out to 50 states, require them to fix it, let them iterate, and watch a distributed goal-seeking system evolve the best answer over a period of years. This is such a no-brainer I honestly don't even know why it's debatable. Something is seriously rotten somewhere.

This is relevant to start-up culture.

Employers would be induced to cover their employees through a combination of tax credits and penalties.

The cost of doing a start-up just went up, but overall, I think it's a good thing, since taxpayers would end up paying for it indirectly, anyway.

A neat visual: http://andrewsullivan.theatlantic.com/.a/6a00d83451c45669e20...

and note that without the reform, women would be charged 48 percent more(!)

Wouldn't "no denial of care" cause healthcare cost to rise because of increased demand?

There is no simple link between the two.

I wonder whether increasing the price of healthcare until people can't pay, which is how a free market would handle increased demand for a limited resource, counts as "denial of care".

I don't think you meant it in this way, but someone's healthcare cost could go up, even if no-one changes their prices, if someone demands more expensive care than they need and a doctor can't refuse it in fear of "denial of care" lawsuits.

Adverse selection may cause costs to rise. (I say "may" because I don't know which version of the bill was just passed.)

For one of the major versions of the bill, it was cheaper for many people to pay the tax hike rather than buy insurance. This means that the cheapest way to get health care is to pay higher taxes and buy insurance after you get sick.

That’s why there is now a mandate for everyone to buy health insurance (with partial subsidies for those who can’t afford it)—to force young healthy folks to get their premiums in the pool even if they’d rather not buy insurance and hope they never need more health care than they can pay for up front.

More money to buy health care does not automatically or instantly increase the supply. Especially if the new regime is so onerous and nonremunerative that a lot of older doctors retire early.

It doesn't actually say what your last line suggests, it says 48% more than men. Women could actually be charged exactly the same but men's charges could be increased to match.

Time to start trying to decide whether to pay the $1,500 to opt out or to not pay and go to jail.

Great. Nine votes worth of concessions we didn't need.

I hope that the arm-twisting it took to get up to 60 votes in the Senate will put more people’s attention on how broken the filibuster is as an institution. The Democrats passed up a golden opportunity, back when the Republicans were pushing for an “up-or-down vote” on Bush’s Supreme Court nominees, to say “hey, let’s get rid of the filibuster for everything”.

Somebody needs to write an article about how the current two bills will impact basement startups. Are there fines to pay because you can't afford insurance? If so, how much are they? Can full-time corporate-world employees move into a beans-and-rice startup and keep their old insurance? Indefinitely? If there are fines for bare-bones startups, how many will not start because of the financial overhead? None? A few? Does anybody really know?

You'd think one of the SV rags would pick this up and run with it, but I haven't read much at all.

I'm not so much interested in the medium-sized startups who view healthcare reform as a recruiting tool. Medium-sized startups have lots of problems already -- the field between initial success and large startup is littered with companies that could make the journey for one reason or another. It's the effect on itty-bitty startups, the seeds for the next generation of growth, that I want to know more about.

Yes, there is a fine.

I don't know what it is in Reid's "manager's amendment" version that just passed, or obviously what will emerge in the end if some version gets passed, but the last time I heard a Senate figure it was $750/year.

That's way too low (see the comment about adverse selection). To make the system that's envisioned work, you need three things in balance: universal coverage, guaranteed issue and community rating.

Universal coverage, everyone must be in the system (a fine AKA tax about equal to what you'd pay, with criminal penalties for non-payment).

Guaranteed issue: no one can be turned down.

Community rating: the healthy (e.g. young) must pay for the higher costs of the not-so healthy (e.g. the elderly). Otherwise the latter won't be able to afford it.

Community rating: the healthy (e.g. young) must pay for the higher costs of the not-so healthy (e.g. the elderly).

That's rather anti-progressive, no? Force the young and poor to pay for the old and rich? It's great politics, however, since the young don't vote and the old do.

Under the Senate bill, insurers on the individual market are allowed to charge older consumers up to four times as much as the young. (Right now, of course, there’s no limit on how much of a surcharge you get on your insurance for age.)

If your family income is under 400% of the Federal poverty line, then you will get a partial subsidy to buy private insurance, and IIRC more people will qualify for Medicaid. So poor people, young and old, are not being screwed here.

Unless rich old people consume less than 4x as much health care as poor young people, it's still forcing the poor to subsidize the rich.

Indeed (NB: as a class the elderly are "rich").

However, if "the young" start having to pay, say, $1000/month or go to jail, they just might start voting....

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