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December 19, 2009

Vermont's Senators Tout Potential Gains via Health Care Reform Bill

052208MILCToast Vermont's Senators Patrick Leahy (D) and Bernie Sanders (I) touted various elements of the federal health care reform bill that emerged Saturday, ranging from an additional $250 million in Medicaid funding to a measure allowing states to potentially enact single-payer health care systems on their own.

This latter element is something Sanders and several other Senators have been fighting to keep in the bill. It is seen as a way to potentially enact a single-payer health care system at the state level. In Vermont, lawmakers have said they will take testimony on various bills aimed at expanding the availability of publicly funded and managed health care insurance to Vermonters.

Sanders this week disappointed many single-payer advocates by yanking a proposed amendment that, though not expected to pass the Senate, would have forced a debate on creating a Medicare-for-All health care system in the United States. For months, Sanders touted his amendment as a "historic" moment, where for the first time in history the Senate would debate the merits of a single-payer system.

However, after Sen. Tom Coburn (R-OK) called on Sanders' amendment to be read word for word, the Vermont independent immediately withdrew his nearly 800-page amendment. Sanders agreed to withdraw the amendment per Majority Leader Sen. Harry Reid's request, as Reid was worried reading the amendment aloud would have taken up nearly 12 hours of Senate time — potentially derailing the entire health care reform debate.

Sanders called the Republicans' tactic "an outrage."

Since then, however, he has intimated that his vote is not iron clad on the final bill. That said, he noted today that he will vote for cloture — a move to end debate and move toward an up or down vote on the full legislation.

Leahy said he, too, will vote for cloture, as he believes it's time for senators to either vote yes or no on the legislation.

Many progressives who claim the reform effort has been so watered down without a so-called public option of any kind are urging Sanders and other liberal members of the Senate to vote against the bill.

Neither Sanders nor Leahy would say how they will vote on the final bill, however. A final vote on the Senate version of health care reform is expected before Christmas.

Among the key provisions included in the bill that will benefit Vermont is a Leahy-crafted measure that will  bring an additional $250 million in Medicaid funding to Vermont between 2014 and 2019.

The Senate’s reform bill requires all states to expand their Medicaid programs to cover more low-income individuals, and increases Medicaid payments to cover the expansion. But, because Vermont has already expanded its coverage using the Medicaid program, Leahy, Sanders and Gov. Jim Douglas warned that the state would have been penalized for the state’s early efforts. This would make Vermont ineligible for extra Medicaid funding.

Under the Vermont-specific formula fix engineered by Leahy to the bill’s Federal Medical Assistance Percentage (FMAP), Vermont will be in a position to net an additional $250 million between the years 2014 and 2019, according to the Congressional Budget Office (CBO), whose scoring of the Leahy-led provision was also released Saturday.

“Vermont has always been a national leader in expanding access to health insurance, and that is something that any health reform plan should reward and not punish. This formula adjustment will ensure that Vermont is not disproportionately burdened by a further expansion of the Medicaid program," said Leahy. "This is a major improvement in the bill for Vermont.  Majority Leader Reid has kept his word in working with us to fix this unintended loophole.”

Sanders also praised the additional spending, and Leahy for his leadership.

“It would have been unfair for states like Vermont, which did the right thing by providing broad coverage for more low-income people, to be penalized," said Sanders. "I am pleased that this issue has been addressed in a way that recognizes and rewards Vermont’s forward-thinking policies instead. The Vermont delegation worked well together on this, and I appreciate Senator Leahy’s leadership.”

Sanders, too, scored a victory with the inclusion of what is likely to be a $14 billion expansion of free community health centers, and provide loan repayments and scholarships through the National Health Services Corps.

The provision is expected to provide primary care for 25 million more citizens.

Sanders said the additional resources will create new, or expanded, health centers in an additional 10,000 communities. The provision would also provide loan repayments and scholarships through the National Health Service Corps to create an additional 20,000 primary care doctors, dentists, nurse practitioners, physician assistants and mental health professionals.

Another Leahy-authored amendment will make clear that the same level of medical malpractice coverage under the Federal Torts Claims Act (FTCA) received by community health centers will be extended to free clinics. Current law, Leahy says, makes it unclear whether nonmedical staff such as board members and administrative staff serving the community in free clinics are covered by malpractice insurance. This lack of clarity results in free clinics purchasing medical malpractice insurance on the private market for all of their nonmedical staff.

The Senate bill will also put more effort into investigating and prosecuting fraud, waste and abuse.

The amendment – which includes key provisions from the Health Care Fraud Enforcement Act introduced in October – will further strengthen the government’s capacity to investigate and prosecute waste, fraud and abuse in both government and private health insurance that drains between $72 billion and $220 billion from the system annually.

The amendment makes straightforward but critical improvements to the federal sentencing guidelines, to health care fraud statutes, and to forfeiture, money laundering and obstruction statutes, all of which would strengthen prosecutors’ ability to combat this particularly destructive form of fraud, Leahy noted.

One Leahy-backed element that didn't make it into the compromise bill is his amendment repealing the antitrust protection granted to health insurance companies.

In September, Leahy introduced the Health Insurance Industry Antitrust Enforcement Act. It aimed to repeal the exemption for flagrant antitrust violations, including price fixing, bid rigging and market allocations, and subject health insurers and medical malpractice insurers to the same good-competition laws that apply to virtually every other company doing business in the United States.

“I am disappointed the [amendment] will not be part of the Senate’s debate on health reform legislation," said Leahy. "I look forward to working to include a repeal of the industry’s antitrust exemption when the Senate and House convene to reconcile this health care legislation.”

Um, let's not forget the Senate's roll-back on a woman's (make that, a poor woman's) right to choose. Shame on Bernie and Pat. The pork they secured is nothing compared to the false promises, corporate gifts, and continued inequality that this bill represents.

Trust me, someday they'll say they "made a mistake" with this. But, by then, the media (alternative and otherwise) will pretend that Bernie & Pat weren't instrumental in creating this mess.

When will we ever learn?

I have some background in health policy, but I am thoroughly mystified by what the heck is truly in the House and Senate health insurance proposals. The more I read various commentaries, the more confused, uncertain and ... perplexed I become. At the heart of my worry is this: because we are overlaying additional complexity on an existing complex and unjust system, we may find that whatever Congress passes has a "negative synergy", where the whole is worse than the sum of individual good parts. I believe that only a few circles will truly understand the coming hyper-complexity of the new health insurance system, and they most likely will be the actors who can milk that system for more money. In that respect, I am reminded of Joseph Tainter, whose thesis in his book "The Collapse of Complex Societies" is: as societies become ever more complex, the cost of trying to solve those complexities leads to diminishing returns and, ultimately, political collapse.

I liken our health insurance system to the recent perversions in our financial markets. Just as only a few on Wall Street understood the intricacies and distortions -- including fraud -- of collaterialized debt obligations and credit default swaps, the future we face in our health insurance system may be similarly toxic. A few insiders will be able to manipulate the new in's and out's to their advantage leaving the rest of us with the gnawing gut feeling that we have been had.

Regarding Obama's obsession to get a bill, whatever its fundamental faults, I remember Howard Dean, early in his tenure as Governor, exhorting the Vermont House to just pass a a health reform bill and get it to the Senate. So, Howard, despite his present huffing and puffing, should easily understand where Obama is coming from.

I agree that Leahy and Sanders extracted some good things from the Senate leadership, but eventually, their accomplishments may be lost in that negative synergy I fear may be coming.

"Sanders called the Republicans' tactic "an outrage.""

When was the last time anything that didn't please Sanders was not "an outrage"? Everything's "an outrage." He's perpetually outraged. Whenever he doesn't get exactly his own way, which is almost always, he's outraged.

He's an outrage.

While I can agree that the perfect is often the enemy of the good, this Senate bill is a big turd that Democrats won't be able to run away from fast enough. It doesn't do enough to control costs, it doesn't make insurance coverage affordable, and it does almost nothing to prescription drug prices.

No public option, no Medicare buy-in, no real coverage. Yes, insurers must now cover those with pre-existing conditions--as up to four times the basic rate.

This is a terrible bill and does nothing but assure the insurance companies a steady supply of income for the future. They should call this the Medical Insurers Full Funding Act of 2009. Shame on you Bernie! Shame on you, Pat!

I'm not sure the Senate bill would allow state's to adopt a single-payer health care system. It does allow states some wiggle room for adopting something of their own design, subject to specific requirements. Is exemption from other federal laws, ERISA, in this case, permitted?

If exemption from federal laws is allowed, pity those folks living in red states.

Ah, yes, in the name of "purity," make no progress! Reject incrementalism! Storm the streets and say NO to anything that isn't 100% what we like! (Nevermind, of course, the fact that there will always be someone who says any bill does not go far enough.)

That sure is a good idea. I'm glad our two Senators rejected that philosophy, even "outraged" Bernie.

@Craig: Am delving more into the federal exemptions, and ERISA is not on the federal waiver list.

So, single-payer proponents would have to fight that battle, too, in order to design some state-level system. Case law, I'm told, doesn't necessarily preclude a single-payer system, but it's not likely that it would be allowed without some fed pushback.

You know more about this than I, but I wonder: If you decouple employment from health care insurance, wouldn't that make some of the ERISA tenets unnecessary? It seems as if ERISA is there to protect people either in between jobs, or with pre-existing conditions, etc.

The Senate bill allows states to opt out of allowing the insurance plans to provide abortion coverage. It also allows the insurers to charge up to THREE TIMES the basic premium for pre-existing conditions or for those over a certain age. This is reform???


You raised an important question re. pre-emption and ERISA. While I share your concern for those in Red states, I don't think that should disuade us from moving forward if there's an opening. After all, we're not talking about opting out of the Bill of Rights (the Supreme Court has done a good job on some of that already). The voters in those states need a nasty reminder of what they asked for. But the changes that might occur would be temporary assuming the bad outcomes are sufficient to change their minds in future elections. In the meantime, Vermonters deserve an opportunity to try something different. If we can't, it makes a mockery of the notion that states are laboratories of social change.

"It also allows the insurers to charge up to THREE TIMES the basic premium for pre-existing conditions or for those over a certain age. This is reform???"

Yes, it is, if you mandate that they cover pre-existing conditions, which this bill does.

Insurance 101: insurance is intended to cover unpredictable risks, not pre-ordained events. It's a risk pool. The very idea of insurance is that it is intended to cover unknown and unanticipated conditions. Premiums are based on the statistical likelihood or unlikelihood that an event (whether it be a hurricane, a car accident, or an illness) will occur in the broad risk pool of people who are part of the insurance program. The reason your homeowner's insurance premium is $500 or $1,000 per year, as opposed to $500,000, is that you are grouped together with a bunch of other homeowners and the risk of any one individual homeowner making a claim is relatively small. That's called INSURANCE. Once you mandate that pre-existing conditions (i.e., known events) be covered, it's no longer "insurance," but something different. And the premiums have to change.

If you want guaranteed coverage for any health event, whether the condition is known in advance or not, that's fine. That's what they have in some countries (albeit rationed). But it's not insurance.

Let's not forget something else that's factored into insurance premiums in this country - profit motive. Maybe what some other countries have is not insurance, but we're one of the only industrialized nations with for-profit health insurance.

Capitalism 101: Add profit motive to a business and profit motive supercedes any other goal of the business.

Also, this whole "rationing" argument is a red herring. Private insurers ration their care right now, through premiums and caps on benefits. You may want to call it business as usual, but it's still rationing.

I'm not against single-payer (although the details of implementing it would be difficult to work through). All I'm saying is that bashing the insurance companies for jacking up their premiums when you suddenly force them to cover pre-existing conditions is not fair. Even if you turned them all into nonprofits (such as BCBS), they'd still have to jack up their premiums because you're asking them to do things that traditional "insurance" does not cover. For example, if you've just been diagnosed with cancer and suddenly I'm forced to accept you onto my insurance rolls and pay for all your chemo and radiation and a lifetime's worth of future cancer monitoring, plus any other "normal" illness you come down with, no normal premium structure is going to be able to afford that, whether I'm making a profit or not.

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