Homeowner's Blog

Regardless Of The Health-Care Summit Outcome, The Political Math Is Pretty Easy

The political math on this issue is really very simple. The public supports a health care bill, but believes the current Democratic alternatives are too expensive and the current Republican alternatives are too stingy. The public wins if both sides meet each other half way and Congress passes a consensus bill, which would also give Congress and both parties a badly needed boost in the public's eye. This would be the safe route for both parties. In alternative scenarios, either party could lose big time at the polls this fall, depending on how things play out.

Democrats will certainly lose a lot of seats this fall if they game the reconciliation process in order to pass a bill that the public perceives is too expensive. Republicans will hammer them mercilessly on both the cost of the measure and the unfairness of the process. Moderates will desert the Democratic party in droves, whether the healthcare bill passes or not. Conversely the Republicans risk losing their current polling advantage on this issue if they refuse to meet the Democrats in the middle and the Democrats then take the more moderate approach in order to pass a health care bill without gaming the process. The risk for Republicans is that the Democrats might voluntarily reduce the cost and coverage of their bill as much as it takes to get 60 votes in the Senate, which would require the vote of one moderate Republican and make it a "bipartisan bill" in Washington parlance. The bill would only have to be affordable and just a little better that the Republican alternatives to achieve wide public support, and that is not a big challenge.  If the Democrats took the latter approach and succeeded, the current Republican polling advantage on this issue would evaporate.


Continue reading Regardless Of The Health-Care Summit Outcome, The Political Math Is Pretty Easy.

Why Congress Should Allow Drug Re-importation

A pending amendment to the Senate healthcare bill would allow drug re-importation from other countries, saving consumers and the government an enormous amount of money. The pharmaceutical industry has argued that drug re-importation would gut their profits and medical research investments, but we disagree. True, they would have less money available for marketing, big bonuses, and lobbying expenses. Cutting those costs wouldn't hurt consumers or the pharmaceutical industry.

If the pharmaceutical industry also cut back on medical research as a result of the re-importation proposal, that can easily be addressed as well. We could offset any decline in corporate primary medical research resulting from the re-importation proposal by reinvesting a small part of the considerable resulting government savings in expanded government sponsored medical research. Taxpayers could recover much of those additional costs as well, simply by requiring pharmaceutical companies to start reimbursing the government for the share of publicly owned intellectual property reflected in the cost of the proprietary drugs enabled by that research. We should have done that a long time ago anyway.

Pharmaceutical companies have argued that other governments who place caps on the amount they will pay for prescription drugs are also acting foolishly, because it is undercutting their profits and medical research investments. We disagree with that as well . Those governments are only practicing the golden rule (he with the gold rules). Foreign governments can't force pharmaceutical industry to sell them their products, so it is obviously still profitable for the pharmaceutical companies to do so.

Time for Targeted Health Insurance Legislation?

The health insurance industry got a sweet deal in return for their agreement to support health care reform legislation in this Congress. They will get millions of new customers, and were able to take off the table in this Congress many other potential health care provisions that would impact health insurers, but could have significantly reduced health care costs. The Democrats worked to keep as much of their end of the bargain as possible, but in the Senate Finance Committees healthcare package passed this week Senator Baucus was not able to deliver as many new customers as the healthcare insurers and many Democratic leaders had hoped.

Considering the many other provisions Congress and the Administration could have included in the original package, the Senate Finance healthcare reform package is still a bargain for healthcare insurers. For that reason it is surprising that the insurers have broken the agreement by running the Medicare ads last weekend. On the plus side, the insurers' abrogation of their commitment to support healthcare reform legislation does create a wonderful new opportunity for the introduction of a supplementary healthcare insurance bill to create some additional healthcare insurance cost savings.

We suggest that Congress introduce another healthcare bill that would complement and follow the one now moving through Congress. That bill would allow healthcare insurers to compete across all state lines, direct a federal study of additional ways to increase competition/reduce costs in the health insurance sector, and (just as a backup), also prohibit preexisting healthcare insurance exclusions in the future. No doubt creative legislators and some of the folks at the White House could come up with additional provisions to reduce health insurance costs.  They should title the legislation the "American Healthcare Insurer Payback" bill (AHIP).

This new package would also give the health insurers some additional legislation to focus their 2009 advertising dollars (and our insurance premiums) on, and the diversion would hopefully make it more likely for an amalgamation of currently pending healthcare bills to eventually pass. Since deals like the one made with AHIP are usually good only through one Congress anyway, this new complementary package would also give Congress an early start on working out the bugs and refining the measure so that it will be shovel ready for early serious consideration in the next Congress.

Healthcare: The Art of the Possible

Healthcare legislation is in the news a lot these days. Popular support for President Obama's plan is eroding according to the polls. Faced with that challenge, Congressional supporters have been expected to either go for broke or else cut out some of the controversial parts. The latter would include reducing the total cost (one of the big sticking points), as well as removing relatively minor provisions that have become very controversial (insurance coverage for end-of-life counseling, for example).

A third alternative has been gaining momentum the last several days. Senate democrats are thinking about dividing the bill into two parts. A less controversial bill with little or no budget impact would be voted on first. It would include such generally popular provisions as prohibiting insurance companies from denying coverage to consumers based on pre-existing conditions. That should pass easily, probably with significant Republican support. The big fight would be over the far more expensive second measure. Some parliamentary procedures could make it possible to pass the bill with only 50 votes. However Senate Democratic leaders would still have to consider the public opinion polls. Even if they could pass a very expensive bill, that could come back to haunt them in the 2010 mid term elections.

Whatever course Congress follows, we hope that they will keep in mind that the vast majority of homeowners support healthcare reform in one form or another. Some want it all right now, while others support only parts of the proposals that have been offered. A lot of homeowners are both moderates and pragmatists. We want to see the situation improved this year, and would rather save some fights for later than have the effort fail because the extremists of either party were unwilling to compromise.

The two prong approach is starting to look pretty attractive. If Congress can pass a widely supported package with substantive improvements most homeowners will be happy. They can then relax, make some popcorn, and sit back and watch the next fight between the extremists of both parties.