Is the House's Health Bill Really Worse than Nothing?

Step back for a moment and marvel at the legislative contortions on display in Washington as lawmakers try to address a deep crisis in our health-care system without shaking up the status quo too much.

What does that look like? They’re planning to leave the employer-based private system intact, but they’ll re-regulate insurers to a modest degree and brand it “change." No, they won’t force private insurers to compete with a public plan on a truly level playing field, but they’ll give us a small public option where insurance companies can park their sicker, costlier patients. Perhaps states will be able to skip that part entirely. They refuse to make other hard choices that might really bring down costs, but they’ll force you to buy a policy -- don’t worry, if sky-high premiums are out of your reach, they’ll give you a subsidy, assuming you qualify. For those who are too poor to afford even those subsidized premiums, they’ll expand Medicaid, and they’ll pay for the whole thing in part by trimming payments to Medicare providers. And maybe with a tax on millionaires, or maybe one on union autoworkers and others with expensive health insurance. They’ll make employers shoulder a share of their workers’ health-care, or perhaps just pay a small fine if they refuse to.

Got all that? They call Washington’s legislative process "sausage-making," but this time around you’d almost think they’re mixing up a batch of hash brownies. If we’re lucky, what comes out of the oven will be a uniquely American "universal" health-care system that’ll only leave something in the neighborhood of 20 million people uninsured 10 years from now.

But that’s only half the story -- the half about how a decent, progressive legislative proposal got watered down to such a degree by the insurance industry and its allies in Congress that it will do little or nothing to rein in the staggering growth of health-care costs and ultimately prove a windfall, to some degree, for the private insurance industry.

Unfortunately, that half is also almost the exclusive focus of a widely discussed analysis, by one of the nation’s most respected single-payer advocates, of the health-care reforms wending their way through Congress.  And focusing primarily on that half, it should come as little surprise that Marcia Angell, a lecturer at Harvard Medical School and a passionate proponent of progressive health-care reform, concluded the bill is "worse than nothing” in an essay published on the Huffington Post.

Her analysis of the bill’s shortcomings is spot-on. Most of her column slices and dices the many ways in which the House bill fails to control costs, fails to cover every person in the country and “augments the central role of the investor-owned insurance industry."

But while it’s hard to argue with her analysis of the bill’s flaws, her conclusion that it's "worse than nothing" is harder to accept. To get there, one has to all but ignore the fact that the House legislation would do quite a bit for millions of real Americans struggling through a very real health-care crisis.

Angell all but ignores that, rendering her analysis incomplete. There were always multiple goals to reform: covering the uninsured, offering access to decent care to those who are priced out of the current system, reining in the abuses of the private market and controlling overall health care costs. The House bill, the subject of Angell’s column, does fail miserably at controlling overall costs and the insurance regulations it contains are tepid (they would only stop the worst abuses, and have loopholes, but that’s clearly better than nothing at all), but it would also do quite a lot to expand the access and improve the affordability of coverage for tens of millions of Americans, many at the lower end of the economic ladder.

Angell all but ignores that primary thrust of the legislation. She offers only this brief indication that the proposal would bring any relief at all to working families:

To be sure, the bill has a few good provisions (expansion of Medicaid, for example), but they are marginal. It also provides for some regulation of the industry (no denial of coverage because of pre-existing conditions, for example), but since it doesn't regulate premiums, the industry can respond to any regulation that threatens its profits by simply raising its rates.

Marginal is in the eye of the beholder, and Angell arguably negates her larger, "worse than nothing" thesis in the paragraph above. According to the Congressional Budget Office, Medicaid expansion alone would offer public insurance to more than 10 million low-income Americans who would otherwise be without.

While Angell at least gives a passing nod to the fact that Medicaid would be expanded to those earning up to 150 percent of the poverty line in the House bill, she omits entirely the rather generous subsidies for those making between 150-400 percent of the poverty line (almost $90,000 for a family with two kids).  More than nine in ten people who lack insurance in America fall beneath 400 percent of the poverty line, and every one of them will get some help getting coverage. We can certainly quibble over the definitions of “decent” and “affordable,” but Angell’s argument is that the House bill is worse than a status quo in which decent affordable coverage -- by any definition of those words -- eludes tens of millions.

And she doesn’t mention the very real impact the legislation would have on millions more who are self-employed, employed part-time or are otherwise left to fend for themselves in the individual insurance market -- always home to the worst rip-offs in the industry.

While her analysis of what private insurers stand to gain from the legislation (millions of new coerced customers) is cutting, Angell omits the fact that the House bill requires most companies to cover their employees, or pay the equivalent of 8 percent of their payroll into the system to cover them. (Also no mention of the fact that small employers would also get subsidies for offering their workers coverage.)

It’s noteworthy that Angell focuses on the House’s approach -- long understood to be more progressive than the Senate’s legislation. In the House bill, a good chunk of the project is financed with a surtax on the very millionaires who benefited so richly from the lavish tax-breaks of the last eight years.

So, to recap: the House legislation is a watered-down bill that would do little to contain America’s overall health-care costs, but would help contain the family health-care expenses of tens of millions of real working people, while covering 36 million who would otherwise be uninsured, and it finances much of it with the kind of upward redistribution of wealth that’s been exceedingly rare in recent decades.

Flawed as it may be, the only way the legislation might be worse than nothing is if it heads off more substantial reform in the future. As Jon Cohn, writing in The New Republic put it, "Perhaps Angell and those who agree with her that this would be a constructive failure--that eventually growing frustration with our health care system will help us elect even more progressives and pass more ambitious reforms.” Cohn, noting that progressives said the same thing during earlier attempts at reform, suggests, "That's an awfully big chance to take.”

The studies--which I know Angell has seen--suggests tens of thousands of people die or go bankrupt every year because they can't afford to pay their medical bills. Countless more suffer. The House bill wouldn't stop such hardship altogether. But it would reduce it significantly--arguably, by as much as any single piece of domestic legislation since the Great Society. Surely that qualifies as something more than "a few improvements around the edges."

Angell's assumption that passing a bill now will head off future reform just doesn't hold water.  The final result of the legislative process in this Congress, whatever it might be, would be modified by amendment for years, perhaps decades to come. If it doesn't provide real relief to ordinary people, if it doesn't control costs, then the political will to continue the reform process will be there down the road, with some of the infrastructure already in place.

All of this is more than an academic debate. We don't know what the final legislation will look like. Both the Senate and House bills have serious flaws, and it’s possible that what emerges when they’re combined will in fact be worse than nothing. The infamous Stupack amendment (which Angell doesn't mention) would, if it were to survive in conference, arguably make the legislation impossible for progressives to support. But other than that, drawing the line at the House bill is privileging ideology over getting something done in the short-term, however imperfect it might be overall.

Since single-payer health care was “taken off the table” (and, no, that didn’t happen earlier this year when Senator Max Baucus had cops escort advocates out of reform hearings, but back before the Dems ran and won -- twice -- on this weird Frankenstein approach to expanding coverage), progressive reformers have been left with a choice of trying to push for the best package possible or leaving a disastrous status quo in place in the hope that something will give at some point in the future that will result in the passage of the kind of modern, universal system that’s eluded us since Truman first attempted the feat in 1948.

Looking only at the meager effects the Democrats' reform bills have on America's health-care costs -- and the corruption that made them that way -- and ignoring what the bill would do for working families' health-care costs makes it that much harder to come to the right conclusion.

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