5 scenarios for healthcare reform
Former Bush White House economist Keith Hennessey lays some odds on how healthcare reform will proceed from here:
I see five possible paths for the President and Democratic Congressional leaders.Â I will list them in the order in which I think they will be considered, and I will assign my subjective probabilities to each.
- Cut a bipartisan deal on a comprehensive bill with 3 Senate Republicans, leading to a law this year;Â (10% chance)
- Pass a partisan bill through the regular Senate process with 59 Senate Democrats + one Republican, leading to a law this year;Â (10% chance)
- Pass a partisan bill through the reconciliation process with 50 of 59 Senate Democrats, leading to a law this year;Â (25% chance)
- Fall back to a much more limited bill that becomes law this year;Â (50% chance)
- No bill becomes law this year. (5% chance)
And here is his bottom line:
You canât make the insurance âreformsâ work by themselves.Â In addition, insurance reforms without the individual mandate would cause insurers to awaken from their confused slumber and enter the debate with vigor (in opposition). … For this reason, I think itâs easier to âbuild upâ to a smaller bill.Â There will clearly be a bipartisan consensus to increase Medicare spending on doctors (the so-called âdoc fixâ).Â I will guess that this path leads to $100B â $200B of spending over 10 years:Â more Medicare money for doctors, combined with expansions of Medicaid for the poor.Â To offset the deficit effect, they would cut Medicare Advantage and nick at other Medicare providers, and maybe do some of the Kerry tax increase proposal.Â This would be an âincrementalâ package that advocates would argue is a small step in the right direction.Â I would oppose such a package, but it might be able to get 60 votes, and could almost certainly get the 50 votes needed through reconciliation, and without any significant procedural hurdles.Â … This is what Democrats do when all else has failed, to make sure the President has something to sign.Â Itâs a failure path that they would unconvincingly argue is a first step toward a larger reform.