James Pethokoukis

Some polling results from a healthcare poll from global branding firm Siegel+Gale:

– 37 percent understand the president’s plan
– 17 percent believe the plan is deficit neutral
– 20 percent believe funding will come from a fine on the wealthy.
– 32 percent actually support the president’s plan
– 40 percent have no idea how is being paid for
– 34 percent think everyone other than Congress will be pushed into public plan

“Clearly the whole health care issue is fraught with complexity, political in-fighting, and emotion that is not helped by poor media coverage. So I’m not surprised that the American people have thrown up their hands – even sophisticated consumer advocates are not clear about the plan,” says Alan Siegel, Chairman and Founder of Siegel+Gale.

Time for another speech!

From Greg Mankiw:

In other words, the plan would reduce the deficit if it were carried out as written, but there is good reason based on historical experience to be skeptical that it would be.

Let me try to put CBO’s point in a more familiar setting:

Your friend Joe, who says he want to lose weight, asks you for an extra slice of pie after dinner. Naturally, you are doubtful about the wisdom of the request.

“Ahem, Joe,” you whisper, “Aren’t there a lot of calories in that?”

“Yes,” he says, “but the pie is part of a larger plan. I am committed not only to eating that slice of pie but also to going to the gym every day for the next week and spending at least half a hour on the treadmill. That exercise will more than work off those extra calories.”

“But that’s what you said last week, when you asked for piece of cake. And you didn’t go.”

“Yes, I know” he replies ruefully, “but this time I really mean it….Can you please pass the pie?”

Here is what the CBO says about them:

The proposed co-ops had very little effect on the estimates of total enrollment in the exchanges or federal costs because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments.

Are they excited that Congress is moving a step closer to fulfilling decades of their healthcare dreams? Nope. This, from the liberal Health Care for American Now group:

The Baucus bill is a gift to the insurance industry that fails to meet the most basic promise of health care reform: a guarantee that Americans will have good health care that they can afford. The Baucus bill would give a government-subsidized monopoly to the private insurance industry to sell their most profitable plans – high-deductible insurance – without having to face competition from a public health insurer.

Under the Baucus bill, employers would have no responsibility to help pay for their workers’ coverage and would be given incentives to have workers pay more for barebones insurance. Americans who don’t get health benefits through work would still not be able to get good, affordable coverage.

We urge Senators on the Finance Committee to replace the Baucus plan with legislation that will do what the Senate HELP Committee and three House committees have done: guarantee that Americans have good health insurance that they can afford with the choice of a strong national public health insurance option.

The guys at ATR give the rundown:

· Employer Mandate Tax. $400 per employee if health coverage is not offered. Note: this is a huge incentive to drop coverage, as $400 is much less than the average plan cost of $11,000 for families or $5000 for singles (Source: AHIP)

· Backdoor Death of HSAs. By requiring that all plans (besides the few that are grandfathered) provided first-dollar coverage for most services, there would be no HSA-qualifying plans available from the Massachusetts-like exchanges

· Excise Tax on High-Cost Health Plans. New 35% excise tax on health insurance plans to the extent they exceed $21000 in cost ($8000 single)

· Report Employer Health Spending on W-2. This is clearly a setup for the easy individual taxation of employer-provided health insurance down the road.

· Cap Flex-Spending Account (FSA) Contributions at $2000. Currently unlimited.

· Eliminate tax deduction for employer-provided retirement Rx drug coverage in coordination with Medicare Part D

· Medicine Cabinet Tax. Americans would no longer be able to purchase over-the-counter medicines with their FSA, HSA, or HRA

· Increase Non-Qualified HSA Distribution Penalty from 10% to 20%. This makes HSAs less attractive, and paves the way for HSA pre-verification

· Corporate 1099-MISC Information Reporting. Currently, only non-corporations providing property or services for a business must be issued at 1099-MISC. This would expand the requirement to corporations doing business with other businesses. The amount of reporting needed for an average business would be huge. Paves the way for full information reporting to the IRS.

· Various industry tax grabs based on market share. $2.3 billion PhRMA; $6 billion health insurance providers; $750 million clinical labs; $4 billion medical device manufacturers

– The Baucus healthcare bill is released.

– Baucus makes his case. (WSJ)

Health care is a complicated and deeply personal issue; it takes time and effort to get reform right. Legislating every piece of this puzzle would be impossible and counterproductive. What we can do is seize this opportunity to put America back on a fiscally sustainable path. The Senate Finance Committee proposal builds on what already works and fixes what threatens to break the bank for future generations.

– Rockefeller: Baucus bill contains “dangerous” tax hikes on middle-class (ABC):

He should understand that (his proposal) means that virtually every single coal miner is going to have a big, big tax put on them because the tax will be put on the company and the company will immediately pass it down and lower benefits because they are self insured, most of them, because they are larger. They will pass it down, lower benefits, and probably this will mean higher premiums for coal miners who are getting very good health care benefits for a very good reason. That is, like steelworkers and others, they are doing about the most dangerous job that can be done in America. … So that’s not really a smart idea,” Rockefeller continued. “In fact, it’s a very dangerous idea, and I’m not even sure the coal miners in West Virginia are aware that this is what is waiting if this bill passes.

– Obama speech gives healthcare a bounce, not a sustained boost in polls.

– No Snowe, Dems ready to go it alone. (The Hill)

Me: Failure is not a political option for Dems, so reconciliation it will be if need be. Don’t doubt that.

President Barack Obama’s speech on Wednesday night went about as well as the White House could have reasonably hoped.

According to a snap poll afterward, two out of three Americans who watched the president now favor his healthcare reform agenda. That’s up 14 percentage points from pre-speech levels.

Now, the audience watching the speech was more Democratic that the general U.S. population, according to polls. Still, that was probably a plus considering that one of Obama’s main goals was to shore up support among both moderate Democrats (worried about the budget deficit) and liberal Democrats (concerned that a final healthcare plan would exclude a government-backed option).

But, as the president put it, “there remain some significant details to be ironed out.” And while that process continues, Obama is likely to grow weaker rather than stronger.

It is no coincidence that the lack of progress over the summer coincided with an erosion in the president’s popularity. It was notable that the president led off his remarks with a brief economic update, reminding Americans that while the unemployment rate continues to climb, at least America avoided another Depression thanks to his policies.

But the unemployment rate does continue to climb. And that will continue to erode Obama’s popularity and drain his political capital.

In the next two monthly job market reports from the Labor Department, there is a good chance that one will show an unemployment rate at 10 percent or above. And there is also a good chance that Obama’s approval ratings could dip below 50 percent.

From that vantage point, Obama is in a worse situation than President Clinton, who at least had a brisk economic recovery putting the wind to his back as he pushed healthcare reform.

What this means for Obama is that cooperation with him offers little for moderate, blue-dog Democrats or Republicans. So a final bill could be pretty much a Democrat-only affair, with maybe the exception of Senator Olympia Snow, the moderate Maine Republican.

But that was also the situation before the speech.

And even before Obama spoke, some important liberals — including House Speaker Nancy Pelosi — appeared to be backing down from a demand that a strong public option be ready to go on day one of any new healthcare era.  (But don’t discount the possibility that liberals are still willing to sink healthcare reform if the public option isn’t robust enough.)

So in the end, it’s hard to make the case that Obama’s speech has really changed much of anything. If reform passes, it will be a far more limited bill than what Democrats had hoped for back in January.

Crazy — at least according to a snarky definition — is doing the same thing over and over and expecting a different result.

By that measure, President Barack Obama looks as if he’s going to indulge his crazy side tonight when he once again reiterates his core principles for healthcare reform, in his 122nd speech on the subject.

Now there may be a bit more detail (a public option trigger? tort reform?), a bit of different language and perhaps a more strident tone, but no one should expect a bold departure. And maybe not a different result, either.

Obama has to reassure:

- more independents that ObamaCare isn’t a budget buster

- more seniors that Medicare won’t get slashed

- more liberals that reform without an immediate public option is still worthy of being called reform, and

- more members of the middle class that the risk of inaction outweighs the risk of change to a health insurance system with which they’re kind of satisfied.

(The president’s support among indies and old folks, in particular, has been in free fall.)

That’s a lot of reassuring still to do for speech No. 122.

Maybe what’s going on here isn’t mild political insanity but rather quirky irrationality identified by behavioral economists as “anchoring.” Once people anchor to an idea or a belief, that becomes the metric by which they analyze competing ideas or beliefs.

Indeed, the president and many congressional Democrats seems to be anchoring to existing outlines for reform and ignoring competing ideas that could actually gain broader political support and work more efficiently.

Take the 166-page Healthy Americans Act sponsored by two senators, Oregon Democrat Ron Wyden and Utah Republican Robert Bennett. It reads as if it were designed by a bunch of centrist economists rather than by lobbyists representing unions, activist groups and healthcare companies.

It would do a lot of the stuff many Republicans and Democrats agree on, such as mandating everyone buy insurance and requiring insurance companies cover everyone.

But it would also scrap America’s weird employer-based healthcare system by giving individuals a big tax deduction so they could buy their own insurance from private companies.

Of course, many conservatives would hate the increase in regulations and government involvement, while liberals would loathe the absence of a public option that could one day lead to a single-payer system.

But it seems like a plan that Americans could understand intellectually and accept ideologically. It seems like the kind of plan that Americans would expect from the centrist president they thought they voted for.

Time for that guy to let go of the anchor and try a new plan. If speech No. 122 goes as well as the previous 121 in capturing moderate Democrats and independent voters, Obama may have no other choice.

My pal Dan Clifton over at the Strategas Group gives his superinformed two cents:

First, healthcare has served a liability to the Democratic Party and we believe the Administration is making a political argument that doing nothing will hurt the party but doing something may or may not help the party and their reelection prospects. The only potential upside from here is to do something.

We also believe the moderate Democratic Senators can be pushing this trigger idea for the public plan knowing it will never go into effect as is the case with the pharmaceutical prescription drug program.

This last point is key because the rules set up for the trigger will determine the impact this legislation will have on managed care. We don’t believe the moderate Democratic Senators will sign off on a bill that will allow the cannibalization from private to government healthcare plans.

Some wise words from economist Andrew Samwick over at Capital Gains and Games:

1) The scenario I envision is that the public option does nothing to control costs.  Its payment system is set up to resemble Medicare, and it is the growth in real, age-adjusted Medicare expenditures per capita that has most people concerned about long-term deficits.  But with a public option, there will now be recourse for every citizen to petition the government to get a better deal on its health insurance premiums.  The pressure will be enormous to subsidize the public option, just as there has been enormous pressure to offer services in Medicare that increase its cost at (future) taxpayer expense.

2) There is no way to keep politics out of the operation of an entitlement program as complicated as Medicare.  Legislators simply cannot help themselves.  Staying with the follies of former Senator Stevens to whom Stan referred in his post, recall what he did for Medicare payments in Alaska on his way out the door.  I have argued that the government does have an important role to play in the regulation of health insurance markets (Community rating, Guaranteed issue, Ex post risk adjustment, and an individual mandate, with Medicaid for a fee as the backup option).  To the extent possible, it should stay out of the business of delivering health care.  Markets should determine the allocation of goods and services, not legislators and bureaucrats.