Tainted Saints

…According to a labor source familiar with the talks, the agreement calls for a 40 percent tax surtax on policies that cost more than $24,000 for family coverage and $8,900 for individuals, a slight increase over the levels in a bill approved by the Senate on Christmas Eve. Dental and vision benefits would be exempt, and the threshold for taxation would be raised by at least $3,000 in high-cost states, for high-cost professions and for workers whose policies cost more because of their age or their gender…

…This isn’t an instance where some government official wrote a bizarre paper in college 30 years ago about matters unrelated to his official powers; this was written 18 months ago, at a time when the ascendancy of Sunstein’s close friend to the Presidency looked likely, in exactly the area he now oversees… [more]

Investors are seeing the Senate’s version of health care reform as a massive public subsidy for insurance companies — and as a result, are sending the sector’s stock prices shooting up, up, up. Stripped of a government-run insurance plan, the bill would give tens of millions of Americans no option but to start paying hefty premiums to private companies.

The rise in stock prices has been particularly striking in the period since Sen. Joe Lieberman (I-Conn.) said on October 27 that he would filibuster a Senate health care reform bill if it included a public option – a threat that caused Senate leaders to cave without much of a fight.

Here’s a quick breakdown of major health insurance company stock performance from Oct. 27 to Friday’s market close:

• Coventry Health Care, Inc. is up 31.6 percent;  
• CIGNA Corp. is up 29.1 percent
• Aetna Inc. is up 27.1 percent;
• WellPoint, Inc. is up 26.6 percent;
• UnitedHealth Group Inc. is up 20.5 percent;
• And Humana Inc. is up 13.6 percent.

By comparsion, the Dow Jones Industrial Average is only up 2.3 percent during that time; the NASDAQ Composite is up a (relatively) paltry 1.4 percent.

Reuters noted the big bump Monday morning, after the bill passed the first critical test in the Senate:

“All in all, relative to the last version of health reform issued by the Senate, things have turned out pretty well for the health insurance industry,” said Carl McDonald, an analyst at Oppenheimer. “In particular, all versions of a government-run health plan have largely been eliminated.”

Thanks to Lieberman’s threat, health insurance companies dodged a major competitor that could have lowered margins, siphoned off customers and impacted profits.

Source: Google Finance

By comparsion, the Dow Jones Industrial Average is only up 2.3 percent during that time; the NASDAQ Composite is up a (relatively) paltry 1.4 percent.

Reuters noted the big bump Monday morning, after the bill passed.

[Albert Einstein's definition of insanity: Doing the same thing over and over again, and expecting different results...-Ed.]

BILL MOYERS: Something’s not right here. One year after the great collapse of our financial system, Wall Street is back on top while our politicians dither. As for health care reform, you’re about to be forced to buy insurance from companies whose stock is soaring, and that’s just dandy with the White House.

Truth is, our capitol’s being looted, republicans are acting like the town rowdies, the sheriff is firing blanks, and powerful Democrats in Congress are in cahoots with the gang that’s pulling the heist. This is not capitalism at work. It’s capital. Raw money, mounds of it, buying politicians and policy as if they were futures on the hog market. 

Here to talk about all this are two journalists who don’t pull their punches. Robert Kuttner is an economist who helped create and now co-edits the progressive magazine THE AMERICAN PROSPECT, and the author of the book OBAMA’S CHALLENGE, among others. 

Also with me is Matt Taibbi, who covers politics for ROLLING STONE magazine where he is a contributing editor. He’s made a name for himself writing in a no-holds-barred, often profane, but always informative and stimulating style that gets under the skin of the powerful. His most recent article is “Obama’s Big Sellout,” about the President’s team of economic advisers and their Wall Street connections. It’s been burning up the blogosphere. Welcome to both of you. 

BILL MOYERS: Let’s start with some news. Some of the big insurance companies, Well Point, Cigna, United Health, all surged to a 52 week high in their share prices this week when it was clear there’d be no public option in the health care bill going through Congress right now. What does that tell you, Matt?

MATT TAIBBI: Well, I think what most people should take away from this is that the massive subsidies for health insurance companies have been preserved while it’s also expanded their customer base because there’s an individual mandate in the bill that’s going to provide all these companies with the, you know, 25 or 30 million new people who are going to be paying for health insurance. So, it’s, obviously, a huge boon to that industry. And I think Wall Street correctly read what the health care effort is all about. 

ROBERT KUTTNER: Rahm Emanuel, the President’s Chief of Staff, was Bill Clinton’s Political Director. And Rahm Emanuel’s take away from Bill Clinton’s failure to get health insurance passed was ‘don’t get on the wrong side of the insurance companies.’ So their strategy was cut a deal with the insurance companies, the drug industry going in. And the deal was, we’re not going to attack your customer base, we’re going to subsidize a new customer base. And that script was pre-cooked so it’s not surprising that this is what comes out the other side. 

BILL MOYERS: So are you saying that this, what some call a sweetheart deal between the pharmaceutical industry and the White House, done many months ago before this fight really began, was because the drug company money in the Democratic Party?

ROBERT KUTTNER: Well, it’s two things. Part of it was we need to do whatever it takes to get a bill. Never mind whether it’s a really good bill, let’s get a bill passed so we can claim that we solved health insurance. Secondly, let’s get the drug industry and the insurance industry either supporting us or not actively opposing us. So that there was some skirmishing around the details, but the deal going in was that the administration, drug companies, insurance companies are on the same team. Now, that’s one way to get legislation, it’s not a way to transform the health system. Once the White House made this deal with the insurance companies, the public option was never going to be anything more than a fig leaf. And over the summer and the fall, it got whittled down, whittled down, whittled down to almost nothing and now it’s really nothing. 

MATT TAIBBI: Yeah, and this was Howard Dean’s point this week was that this individual mandate that’s going to force people to become customers of private health insurance companies, the Democrats are going to end up owning that policy and it’s going to be extremely unpopular and it’s going to be theirs for a generation. It’s going to be an albatross around the neck of this party. [more...]

[Proving that there is at least one Republican left in the U.S. with a conscience...-Ed.]

Rep. Jim Campbell, a veteran Republican state legislator in Maine, has announced he’s leaving the party over its inability to solve his state’s and the nation’s broken health care system. In a statement, Campbell expresses frustration with the party, saying he wants to “send a message” to Republicans in Washington to stop blocking health care reform for “partisan gain”:

This move has been a long time coming for me. I have been very frustrated with the Republican Party in Maine, and nationally, for their failure to address the health care crisis in a meaningful way. Nobody has all the answers, but the Republican Party has none when it comes to health care reform.

This move is about the working people and our seniors who need action. I became a Republican because I believed the party stood for something. I hope to send a message to the Republican Party – and the Democratic Party – that enough is enough; it is time to stop blocking progress in the hope of partisan gain.

Republicans have been brazenly using parliamentary tricks to slow down the health care bill in attempt to kill it before the Democrats’ self-imposed Christmas deadline. In October, Sen. Arlen Specter (D-PA), who himself left the GOP, ripped his former party as “a party of obstructionism.”

Ed Kilgore has a very perceptive analysis in The New Republic about the underlying (and largely unexamined) ideological and strategic differences among progressives that are at least partially driving the rift over the health care bill.  He argues — correctly — that the current debate “displays a couple of pretty important potential fault lines within the American center-left” that have manifested in other disputes as well.  That was the principal point of this much-maligned Daily Kos post observing that many (but not all) of the progressive bloggers most vehemently demanding passage of the health care bill also supported the Iraq War.  As the author of that post (Jake McIntyre) explicitly said, his intent wasn’t to suggest that those individuals shouldn’t be listened to because of their Iraq position six years ago (that would be an invalid and unfair claim), but simply that — as Kilgore says – there are underlying and significant differences in strategic and ideological outlook driving the health care debate that have been present for some time but are typically ignored.

Shared contempt for the Bush administration (at least once Bush and the Iraq War became discredited) largely obscured these differences when Bush was in office.  The desire to undermine the Bush GOP and dislodge that movement from power subsumed all other objectives and united people with vastly different political outlooks and agendas.  There is still a shared revulsion towards the Palin/Limbaugh Right, but that faction is too marginalized and impotent to serve the same function.  With the unifying force of Bush/Cheney gone, the divisions Kilgore describes are now vibrant and increasingly potent.  In addition to health care and Iraq, roughly the same progressive fault lines are seen over the bank bailout, escalation in Afghanistan, Obama’s economic team, tolerance for Obama’s embrace of Bush/Cheney civil liberties polices, and even the reaction to Matt Taibbi’s recent Rolling Stone article on Obama’s subservience to Wall Street. 

There are many reasons for the progressive division on the health care bill.  There are differences over the narrow question of health care policy, with some believing the bill does more harm than good just on that ground alone.  Some of it has to do with broader questions of political power:  if progressives always announce that they are willing to accept whatever miniscule benefits are tossed at them (on the ground that it’s better than nothing) and unfailingly support Democratic initiatives (on the ground that the GOP is worse), then they will (and should) always be ignored when it comes time to negotiate; nobody takes seriously the demands of those who announce they’ll go along with whatever the final outcome is.  But the most significant underlying division identified by Kilgore is the divergent views over the rapidly growing corporatism that defines our political system. [more...]

Since Joe Lieberman demanded stripping the public option and Medicare buy-in provisions from the merged Senate bill, some strong progressives like Howard Dean have argued that without a public option or a Medicare buy-in provision, the bill is a giveaway to private insurers and should be killed. Other progressive leaders like Senators Jay Rockefeller, Tom Harkin and Sherrod Brown believe that the bill represents the best chance for passing health care reform in the foreseeable future. “I’m going to vote for it,” Brown told reporters. “I can’t imagine I wouldn’t. I mean there’s too much at stake.”

Change of the magnitude envisioned by health care reformers does not come easily. There have been many frustrations and there will be more. But, as a senior White House staffer with a ringside seat for the slow death of comprehensive care in 1994, I am keenly aware of the real alternative to the bills now before us: millions more Americans without health care and billions more for health care spending as the same challenges President Clinton tried to resolve continue to metastasize unchecked.

So while I have great respect for Governor Dean, and we have worked together to provide the strongest health care reform bill for the American people, I come down on the side of the Senate passing the bill.

Here’s why:

The Senate health care bill is not without its problems. But if enacted, it would represent the most significant public reform of our health care system that Congress has passed in the 40 plus years I have worked in politics. The bill will give health care coverage to a record 31 million Americans who are currently uninsured, lay a foundation that will begin to lower costs for millions of families, and provide all Americans with the access to adequate and dependable coverage when they need it most.

[The top ten reasons for why progressives should support the Senate passing the bill...]

Dr. Howard Dean has a prescription for health-care reform:

Scrap the ridiculously compromised Senate bill — from which Majority Leader Harry Reid has, under pressure from Connecticut Senator Joe Lieberman, stripped both the public option and plans to expand Medicare — and use the budget reconciliation process to get over the 60-vote hurdle in the Senate.

“This is essentially the collapse of health care reform in the United States Senate,” the former Vermont governor, presidential candidate and Democratic National Committee chairman said of Reid’s compromise. “Honestly the best thing to do right now is kill the Senate bill, go back to the House, start the reconciliation process, where you only need 51 votes and it would be a much simpler bill.”

The budget reconciliation process, which was established in its current form by Republicans when they controlled the Senate, allows a omnibus legislation to be broken up and passed in new bills that pertain to budgetary matters.

It is complicated and imperfect, as it would require the passage of insurance regulations in a separate process with different rules.

Is this going to happen?

Probably not, as Senate Democrats would have to break not just with Reid but with President Obama, who is pressing for passage a bill, no matter how watered down it may be. [more...]

The first rule of medicine is, “Do no harm.” The post-Joe Lieberman version of the Senate health care bill fails that basic criterion. Unless Democratic leadership steps up to fix this misguided proposal, our only recourse will be to kill it.

The fundamental failing of the newest Senate proposal is that it requires individuals to purchase health insurance, but does nothing to rein in what insurance companies charge. There is nothing to stop spiraling health costs from eating up an ever-increasing percentage of our national productivity.

The House bill has two major cost-control mechanisms: the public option and the 85 percent medical-loss ratio requirement. The Senate bill is on track to have neither, and nothing new to replace them. The Senate bill is a recipe for national disaster. If it’s that bill or nothing, I prefer nothing.

We all know America’s current health care system is failing — and it’s failing everyone, not just the uninsured. It is far too expensive: Americans spend 16 percent  of GDP on health care and get worse results than countries that spend half that. Literally.

We need health reform that expands access to quality health care, abolishes unjust practices of insurers, improves value to the country, and puts us on a trajectory to continue to improve our health care system over time.

But the Senate has systematically stripped out nearly everything I liked about what was proposed in the early, heady days of health care reform. They have done so in order to please a handful of so-called centrists who care more about protecting corporate profits than protecting the people they claim to represent. [more...]

Of all the posts I wrote this year, the one that produced the most vociferious email backlash — easily — was this one from August, which examined substantial evidence showing that, contrary to Obama’s occasional public statements in support of a public option, the White House clearly intended from the start that the final health care reform bill would contain no such provision and was actively and privately participating in efforts to shape a final bill without it.  From the start, assuaging the health insurance and pharmaceutical industries was a central preoccupation of the White House — hence the deal negotiated in strict secrecy with Pharma to ban bulk price negotiations and drug reimportation, a blatant violation of both Obama’s campaign positions on those issues and his promise to conduct all negotiations out in the open (on C-SPAN).  Indeed, Democrats led the way yesterday in killing drug re-importation, which they endlessly claimed to support back when they couldn’t pass it.  The administration wants not only to prevent industry money from funding an anti-health-care-reform campaign, but also wants to ensure that the Democratic Party — rather than the GOP – will continue to be the prime recipient of industry largesse.

As was painfully predictable all along, the final bill will not have any form of public option, nor will it include the wildly popular expansion of Medicare coverage.  Obama supporters are eager to depict the White House as nothing more than a helpless victim in all of this — the President so deeply wanted a more progressive bill but was sadly thwarted in his noble efforts by those inhumane, corrupt Congressional “centrists.”  Right.  The evidence was overwhelming from the start that the White House was not only indifferent, but opposed, to the provisions most important to progressives.  The administration is getting the bill which they, more or less, wanted from the start — the one that is a huge boon to the health insurance and pharmaceutical industry.   And kudos to Russ Feingold for saying so: 

Sen. Russ Feingold (D-Wis.), among the most vocal supporters of the public option, said it would be unfair to blame Lieberman for its apparent demise. Feingold said that responsibility ultimately rests with President Barack Obama and he could have insisted on a higher standard for the legislation.

“This bill appears to be legislation that the president wanted in the first place, so I don’t think focusing it on Lieberman really hits the truth,” said Feingold. “I think they could have been higher. I certainly think a stronger bill would have been better in every respect.”

[more...]