Our guest blogger is Jessica Arons, Director of the Women’s Health and Rights Program at the Center for American Progress Action Fund.

At yesterday’s White House summit on health reform, Minority Leader John Boehner (R-OH) once again repeated the misleading canard that the White House’s embrace of the Senate health reform bill’s language on abortion would allow public funding of that procedure. This opinion can be explained only with the most twisted logic and inconsistent positioning about indirect funding and “fungible” money:

For 30 years we’ve had a federal law that says we’re not going to have taxpayer funding of abortions. We’ve had this debate in the House – it was a very serious debate. But in the House, the House spoke. And the House upheld language we’ve had in law for 30 years, that there will be no taxpayer funding of abortions. This bill that we have before us – and there was no reference to that issue in your outline, Mr. President – begins for the first time in 30 years, allows for the taxpayer funding of abortions.

For those of you scratching your head at all of this, here’s a brief review.

When we last left the world of health reform and abortion funding, the House bill included the noxious “Stupak Amendment,” which prohibits insurances plans that accept government subsidies in the new health market exchange from providing abortion services, except under the most extreme circumstances, even if only private money were used to pay for those services. Most if not all women in the exchange would only be able to purchase coverage through an impractical, separate abortion “rider.”

The Senate bill included a deal with Senator Nelson that was only slightly less onerous. In that legislation, health plans may offer abortion coverage, but only if their customers write two checks each month – one for the share of their premium that’s allocated for abortion services and one for all other health care coverage – even though both checks would come from the customers’ private funds, not from government coffers. The Nelson deal also included language that encourages states to pass their own version of the Stupak Amendment.

The White House’s plan for health reform, released Monday, maintains Senator Nelson’s approach in its entirety. It is consistent with current prohibitions on federal funding of abortion in that it creates a firewall between publicly- and privately-funded premiums and only allows private money to cover abortion costs. However, it fails to fix the unnecessary and discriminatory provisions mentioned above. While the means for passing comprehensive health reform are limited at this point, it is nonetheless disappointing that the White House did not acknowledge the faults in the Nelson language and look for ways to remove its worst features.

Abortion opponents claim to hate the Nelson language, but they should celebrate if it gets through. Although it’s not as retrograde as the Stupak Amendment, it still represents unprecedented restrictions on private insurance coverage for abortion care, making it much more cumbersome for insurers to offer coverage and for consumers to obtain it.

The White House plan includes several provisions that will make health insurance better for women, but abortion remains the one area where it will be worse.

Last month, Republican leaders seized on C-SPAN’s request for full access into the Democrats’ health care talks to argue that capturing policy negotiations on camera would inform the public and improve the underlying legislation. Sen. John McCain (R-AZ) accused Obama of breaking his campaign pledge and House Minority Leader John Boehner (R-OH) announced that “all House Republicans strongly endorse your proposal and stand ready to work with you to make it a reality.” “Hard-working families won’t stand for having the future of their health care decided behind closed doors,” Boehner wrote in a response letter.

The actual summit, however, turned out to be something less than substantive. Republicans used the existing reform legislation as props, Senate Minority Leader Mitch McConnell (R-KY) criticized Obama for “allowing Democrats to run on” (saying Republicans had spoken for 24 minutes while Democrats had had 52), and McCain seemed to resort to his old campaign rhetoric. Both sides used familiar talking points and memorized phrases and at least five different Republicans asked Obama to “scrap the bill ” and “start over” with a “clean sheet of paper.”

In the days leading up to the forum (and in the hours following it), lawmakers expressed doubts about the usefulness of a 6-hour televised debate session and most concluded that the chances of a a new bipartisan agreement were remote. Suddenly, the very same Republicans who argued that televised meetings would cleanse the process or produce a more bipartisan bill quickly recognized that C-SPAN gave lawmakers just another opportunity to score political points without advancing the debate:

- “This week’s summit clearly has all the makings of a Democratic infomercial for continuing on a partisan course that relies on more backroom deals and parliamentary tricks to circumvent the will of the American people and jam through a massive government takeover of health care.” [Rep. John Boehner (R-OH), 2/22/2010]

- “This whole dog and pony show that we’re about to witness today is something that should have taken place a year ago when the administration first came in last February and laid out its agenda for health care.” [Michael Steele, 2/25/2010]

- “Unfortunately, my fears about this summit were realized: rather than a substantive discussion about health care reform, the President’s summit was just for show.” [Rep. Mike Simpson (R-ID), 2/26/2010]

- “I was discouraged by the outcome…I do not believe there will be any Republican support for this 2,700 page bill.” [Sen. Mitch McConnell (R-KY), 2/25/2010]

The ultimate verdict on the bipartisan health care summit is still out, but yesterday’s forum didn’t alter the debate or meet the expectations of C-SPAN advocates. It’s why I argued back in January that “the public should have ample opportunity to review the final product before the vote, but when it comes to legislating, transparency is overrated. Changing Washington’s political culture requires far deeper systematic reforms than C-SPAN television. The hard politics isn’t pretty enough for TV.”

At yesterday’s health care summit and again this morning on Good Morning America, Sen. John McCain (R-AZ) proved that he was yesterday’s man as he rehashed old grievances and complained that Obama’s health care bill was full of special interest deals and carve outs. McCain signaled out an amendment offered by Sen. Bill Nelson (D-FL) during the Senate Finance Committee’s mark-up process, characterizing the provision as “unsavory”:

MCCAIN: The American people don’t like these unsavory deals. The issue came up twice about Florida and the 800,000 people. Because where they live in Florida they will not be subject to Medicare Advantage cuts. Now, you know, Medicare Advantage is a very popular program with seniors. Now, you can argue — I don’t agree with the argument that it might have to be cut. Although, I don’t agree with that. But to say carve out 1 group of 800,000. And there’s 300,000, 30,000, in my state, who have Medicare Advantage that are going to be cut with this plan. That’s unsavory. That’s unsavory.

Watch it:

In effort to reduce waste and lower spending, the Senate and House health care bills eliminate the government’s overpayments to plans that participate in the Medicare Advantage program. The legislation establishes a competitive bidding program under which private insurers in each geographical area would bid to provide coverage to Medicare beneficiaries in a particular geographic area.

Nelson’s proposal (on pg. 129) rewards any plan that provide services at rates that are below “the average per capita fee-for-service expenditure” with a bonus on top of their competitive bid. These extra bonuses are meant to encourage insurers to stay in a particular geographic area and continue providing benefits. So while it’s certainly not a coincidence that Florida (and other high cost states like New York and California) benefits from Nelson’s amendment, the provision is not exclusive to Florida and one could argue that encouraging efficient insurers to stay in certain markets is good policy. (Although, judging from Obama’s response at the Summit, it’s not clear that the administration agrees).

McCain claims that he’s now against cutting overpayments, but during the presidential campaign, he endorsed competitive bidding for Medicare Advantage. “We see no reason why the Medicare Advantage plans should continue to get a $15-billion-a-year subsidy,” McCain campaign adviser Douglas Holtz-Eakin said, “we’ll put them on a level playing field and save some money there.”

In May of 2009, GOP wordsmith Frank Luntz released a messaging memo instructing Republicans how to derail Democratic efforts to pass health care reform. The memo instructed Republicans to “acknowledge the crisis” and need for reform and argue that health care reform would lead to “the government setting standards of care,” government “rationing care,” and would “put the Washington bureaucrats in charge of health care.” “This plays into more favorable Republican territory by protecting individual care while downplays the need for a comprehensive national plan,” the memo states.

Republicans have been successfully deploying Luntz’s strategy for most last year and even used his tactics at yesterday’s health care summit. The Republican leadership acknowledged the crisis and agreed with some of the Democrats’ reforms, but demanded that the President abandon the existing legislation and “start over” on reform:

Watch a compilation:

Throughout the summer of 2009, Republicans claimed that they actually agreed with 80 percent of the Democrats’ bill. In September 2009, for instance, Rep. Eric Cantor (R-VA) told a town hall meeting that “Republicans and Democrats agree on 80 percent of fixing the nation’s healthcare system.” Rep.Charles Boustany (R-LA), who delivered the Republican response to the President’s congressional address in September, also said, “I would venture to say that we agree on about 80% of the issues right now. It’s just a matter of hashing out those few areas where we disagree, but there’s really not been that kind of real discussion, and it needs to happen.”

Unfortunately, even after yesterday’s “real discussion” and a drawn out negotiating process that only moved the President’s health care principles further to the right, Republicans are still more interested in deploying poll-tested catch phrases and strategies than genuinely addressing the health care crisis.

Education and Labor Committee Chairman George Miller (D-CA) suggested this morning that Democrats will move forward with health care reform using the reconciliation process. “I think the choreography gets a little complicated here,” Miller said, and explained that the House could pass the Senate bill before taking up a package of fixes through reconciliation:

MILLER: The House will present a reconciliation bill that’s going to be based upon many of the principles that the President put forth to correct some of the principles that the House has had with the Senate bill, that may require us to pass the Senate bill first and then send the reconciliation bill to the Senate for them to pass. I believe Senator Reid believes he can put together the votes for that and then we will have a new modern health care system in this country that can be signed by President Obama.

Watch it:

Media reports are suggesting that “congressional Democrats plan to begin making the case next week for a massive, Democrats-only health care plan,” but it’s still unclear if House Democrats — who have lost three votes and remain divided over federal funding for abortion — have enough votes to pass comprehensive reform.

At her weekly briefing today, House Speaker Nancy Pelosi (D-CA) rejected the GOP’s “itsy bitsy spider, teeny weeny” approach to reform and told reporters that the President’s bill bridged many of the differences between the House and Senate legislation. Still, she implied that the success of a vote in the House would depend on the reconciliation package put together by Majority Leader Harry Reid (D-NV). “I believe we have good prospects of passing legislation in light of the recognition the President gave to the House members,” Pelosi said. “Leader Reid will see what he can get the votes for and then we’ll go from there.”

Miller’s suggestion that the House would pass the Senate bill first also contradicts a previous assessment by top Pelosi aide Wendell Primus, who argued last week that the House would not pass the Senate bill until a reconciliation package is adopted.

The media has portrayed the bipartisan health care summit as a duel between two political parties, tending to focus most of their coverage and commentary on the process of passing reform (i.e. reconciliation) and he-said-she said debates. Republican guests are invited to dispute Democrats and Democrats are brought on to argue with Republicans about the coverage and cost provisions of the President’s health care plan. The back and forth filters out the substantive portions of the summit.

One such example is in the area of women’s health. Critics have rightfully criticized the White House for inviting few women to the summit (of the 47 participants at today’s bipartisan health care summit, only five are female) and for the majority of first half, House Speaker Nancy Pelosi (D-CA) was only female speaker. Immediately before lunch, Rep. Louise Slaughter (D-NY) began discussing women’s health disparities, but both CNN and MSNBC cut away to address the meeting’s political implication.

CNN interrupted Slaughter to discuss the summit’s lunch plans and MSNBC cut away for Rep. Mike Pence’s (R-IN) reaction. (Fox News carried the exchange.) Watch it:

The networks’ disregard for more substantive issues comes at a detriment to the public. After all, women make most family health decisions, insurers usually charge women more for coverage in the individual health insurance market and are less likely to offer benefits for women’s health. Significantly, the Democratic health care proposals would end insurer discrimination against women — who currently pay as much as 48% more for coverage than men — and give them access to preventive services with no cost sharing.

President Obama and Sen. Lamar Alexander (R-TN) got into a bit of a spat about whether or not the Senate health care bill actually reduces health care premiums. Obama conceded that Americans who purchase coverage in the individual market would see a 10-13% premium increase, but explained that they would be paying more for better coverage.

“What the Congressional Budget Office is saying is that if I now have an opportunity to actually buy a decent package inside the exchange that cost me about 10-13 percent more but is actually real insurance, then there are going to be a bunch of people who take advantage of that. So yes, I’m paying 10 to 13% more because instead of buying an apple, I’m getting an orange.” “They’re two different things,” he said.

Watch a compilation:

To be clear, Americans who qualify for subsidies would see very large cost savings. The CBO concluded that premiums will be “56 percent to 59 percent lower, on average than the nongroup premiums charged under current law.” Families will save $100-200 annually. Families purchasing coverage in the small business market could save up to $100 annually and those who seek insurance in the large-group market could save up to $200 annually, the CBO report found. Significantly, the premiums in these new insurance plans would cover a higher percentage of health care expenses (and provide more comprehensive coverage) than what’s currently available in the individual market. As Ezra Klein put it, “[t]he fact that I could buy a nicer car after getting a better job suggests that cars are becoming pricier. The bottom line is that if you’re comparing two plans that are exactly the same, costs go down after reform.”

Under the Senate bill, Americans can also purchase cheaper ‘Bronze-level’ insurance. In fact, another CBO report found that Americans who want to purchase a policy with a higher deductible would pay, on average, approximately $1,000 less that under current law:

Price Of Insurance In Individual Market WITHOUT Reform (2016)	Price of Bronze Plan (2016)	Effect On Premiums
$5,500 Individuals, $13,100 Families	$4,500 – $5,000 Individuals, $12,000 – $12,500 Families	Individuals and families could save up to $1,000 on average.

This Bronze-level policy is rather skimpy. As the budget office explains, the “lower actuarial value would reduce premiums for Bronze plans directly, because the policy would pay for a smaller share of enrollees’ costs for covered services, and indirectly, because enrollees would use slightly fewer or less-expensive services when faced with the higher cost-sharing requirements included in Bronze plans.” Individuals would also face much higher deductibles and co payments. Still, the reformed Bronze policy would have to cover the “essential benefits” specified in the legislation and would likely be more comprehensive than policies available in the existing nongroup marketplace. The affordability credits and out-of-pocket spending caps included in the final reform legislation would also lower costs for Americans between 133%-400% of the federal poverty line.

This morning, Sen. John Cornyn (R-TX) refused to say what Republicans would be willing to “to give in return” if Democrats accepted GOP proposals after the bipartisan health care summit. Cornyn insisted that the Democrats must scrap the current legislation and start from scratch if they hope to win bipartisan support.

CNN anchor Kiran Chetry twice tried to ask Cornyn if there is “anything Republicans would be willing to give on in return,” but Cornyn responded by criticizing the existing legislation:

CORNYN: Really, I think it’s not possible to take this bill or this proposal, this 11 page summary and to work with it around the edges. We’re going to have to put it on the shelf. That’s what the American people want us to do and start over and we would be glad to do that.

Watch it:

Republicans have long argued, somewhat disingenuously, that capping non-economic damages would reduce health care spending and Obama has signaled that he may be willing to accept some of their proposals. It’s unlikely that Obama will adopt caps, but he could could embrace a ‘Sorry-Works’ proposal. While in the Senate, Obama also co-sponsored “legislation aimed at reducing both medical errors and lawsuits through a program known as Sorry Works, rooted in the idea that injured patients value an apology as much as money.” That legislation would have given physicians who disclosed their errors “certain protections from liability within the context of the program, in order to promote a safe environment for disclosure.”

I’ve proposed four other areas where Democrats and Republicans can reach bipartisan agreement here. But if Cornyn’s answer is any indication, Republicans are more interested in obstructing reform than passing it.

During today’s bipartisan health care summit, Sen. Lamar Alexander (R-TN) — who continues to argue that Congress is not able to pass comprehensive legislation — cautioned Democrats against using reconciliation to pass health care reform. “You can say that this process has been used before and that would be right, but it has never been used for anything like this,” he claimed:

ALEXANDER: Before we go further today that the Democratic Congressional leaders and you Mr. President renounce this idea of going back to the Congress and jamming through…a little used process we call reconciliation your version of the bill…Senator Byrd who is the constitutional authority of the Senate said it would be an outrage to run the health care bill th rough the Senate like a freight train iwth this process.

Watch it:

Since the House and Senate first used the budget reconciliation process in 1980, they passed at least 19 reconciliation bills that “have been enacted into law,” including major health care reform initiatives. Reconciliation legislation enacted in 1997 created the Children’s Health Insurance Program,” the Medicare Advantage program in 1997 (then called “Medicare+Choice”), and COBRA. In 2001 and 2003, Republicans broke the tradition of using reconciliation to lower the deficit and used the process to “enact a large tax cut that greatly increased federal deficits and debt.” In fact, political scientist Joshua Tucker’s analysis of reconciliation utilization found that “14 of the 19 times reconciliation was used between FY1981 – FY2005, it was used to advance Republican interests. Or, to put this more precisely, it was used to advance bills that were signed by Republican presidents or vetoed by Democratic presidents.”

Alexander, a former Governor and Secretary of Education, was elected to the Senate in 2003 and has personally voted for reconciliation at least four different times:

- 2003 Bush Tax Cuts: The Congressional Budget office, Bush’s tax cuts for the rich increased budget deficits by $60 billion in 2003 and by $340 billion by 2008. The bill had a cost of about a trillion dollars. [Alexander voted yes.]

- 2005 Deficit Reduction Act of 2005: The bill cut approximately $4.8 billion over five years and $26.1 billion over the next ten years from Medicaid spending. [Alexander voted yes.]

- 2005 Tax Increase Prevention and Reconciliation Act of 2005: The bill extended tax cuts on capital gains and dividends and the alternative minimum tax. [Alexander voted yes.]

- 2007 College Cost Reduction and Access Act: The bill forgave all remaining student loan debt after 10 years of public service. [Alexander voted yes]

It’s also unclear that Byrd opposes using reconciliation to pass some parts of health care reform. Today’s New York Times, quotes a Byrd spokesperson as saying, “Mr. Byrd is not [opposed to using reconciliation] ‘if it’s done right.‘”

Today’s Bipartisan Health Care Summit may be the end of the beginning for health care reform. While the President has tried to unite the Democratic party behind a single proposal, Republicans have proudly pronounced that they would not bring new ideas to the table. They’ve promised to reiterate their criticism of the existing Democratic legislation and speak in generalities about how the private market place can lower health care costs and achieve “universal access.”

And while their poll-tested talking points may sound convincing, the GOP solutions actually shift the costs and risks of insurance onto individuals and divides the market into low-cost plans for the healthy and high-cost insurance for the sick. This morning, the Wonk Room is releasing a Viewers Guide to the Bipartisan Health Care Summit. Here is what the GOP will say and why they’re wrong:

GOP CLAIM 1: Tort reform will significantly lower health care spending.

FACT: According to the Congressional Budget Office, malpractice costs are not the main driver of health care spending and the GOP’s prescription of capping non-economic damages has failed to reduce premiums on the state level. Indeed, states that have adopted reward caps have failed to significantly lower health care costs. When Texas capped non economic medical malpractice damages to $250,000 in 2003, most conservatives argued that the reform would free doctors from having to prescribe unnecessary treatment. It didn’t happen. According to the Dartmouth research on disparities in health care spending, many Texan doctors are still prescribing aggressive treatments that don’t improve outcomes and premiums continue to increase. In fact, as of 2006, Texas was still at the top of the list of high-spending states.

GOP CLAIM 2: Selling insurance across state lines will promote competition among insurance companies and lower premiums.

FACT: Selling policies across state lines would allow an insurer to choose a single ‘primary state’ “whose covered laws shall govern the health insurance issuer” and sell its policies nationwide. This will encourage companies to choose a state with scarce regulations and sell policies that don’t provide mental health parity, cancer screenings, or abide by regulations that limit the rates that can be charged to higher-cost consumers. In fact, the GOP house health bill requires a “health insurance issuer” to issue a “notice” informing consumers that policies sold from other states are “not subject to all of the consumer protection laws or restrictions on rate changes” of the state where the beneficiary lives. The Republican proposal also expands the definition of ‘state’ to not only include the District of Columbia and Puerto Rico, but the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands. This would allow the governments of the Virgin Islands or the Northern Mariana Islands to be the sole regulators. Given the record of corruption and general willingness of these countries to allow themselves to be used for off-shore banking and tax shelter entities, it is unlikely that these governments would provide effective oversight for market conduct, trade practices.

GOP CLAIM 3: Everyone will have “universal access” to insurance. Individuals who cannot purchase insurance in the individual market can be covered by high risk pools that states will be required to establish.

FACT: Nationwide, high-risk pools cover fewer than 200,000 people. Often, enrollees face high premiums and are denied benefits for treatments related to their preexisting conditions. Covering all high-risk Americans through these pools is likely to be prohibitively expensive. According to a 2008 report from the Tax Policy Center, using high-risk pools “to prevent large losses in insurance coverage among the sick and needy could be extremely expensive—on the order of $1 trillion over ten years given projected health care costs.”

Download the entire guide here.

Yesterday, Rep. Eric Cantor (R-VA) responded to White House requests for the GOP to post a comprehensive health care bill online by explaining that Republicans had already offered and voted on a comprehensive alternative on the House floor. “Our House bill has been scored by the CBO and will bring down insurance premiums. That’s what the American people want right now while we’re in economic times of unprecedented unemployment,” he said. Calling the GOP bill “a better way,” Cantor characterized the President’s bill “is a nonstarter” that “the American people have resoundingly rejected.”

Republicans have yet to coalesce around a single health care proposal or commit to offering a viable alternative at tomorrow’s bipartisan health care summit. But since the GOP is demanding that Democrats scrap their proposal and adopt the GOP’s solutions, comparing the two bills may be instructive. As it turns out, the GOP alternative would do little to lower health care spending or expand access to affordable coverage:

	President’s Bill	GOP’s House Plan
Insured	30 million	3 million
Cost of Bill	$950B/10yrs	$61B/10yrs
Access	Healthier uninsured will be guaranteed coverage from a regulated exchange. Sicker uninsured will be guaranteed coverage from a regulated exchange. Lower-income Americans can enroll in their state’s Medicaid program. Americans with employer-based coverage will keep the coverage they now have.	Healthier uninsured could find affordable coverage in the individual market. Sicker uninsured will be denied individual coverage. Could find coverage in high risk pools but that’s often inadequate. Lower-income Americans who aren’t offered affordable coverage will be uninsured or underinsured. Americans with employer-based coverage will keep the coverage they now have.
Regulations	Insurers can’t deny coverage because of pre-existing conditions or rescind coverage. Insurers can’t apply lifetime or annual limits to coverage. Insurers will have to offer comprehensive benefit packages that provide adequate coverage to sicker Americans.	Insurers can deny coverage because of preexisting conditions but they won’t be able to rescind coverage. Insurers can’t impose “arbitrary” lifetime limits and annual limits on coverage. Insurers don’t have to offer comprehensive benefit packages that provide adequate coverage to sicker Americans.
Premiums	CBO concluded that most Americans would pay less or the same for insurance. The majority of Americans who purchase coverage through the exchanges would pay premiums that are “56 percent to 59 percent lower, on average than the nongroup premiums charged under current law.”* Families purchasing coverage in the small business market could save up to $100 annually.* Families purchasing coverage in the large-group market could save up to $200 annually.*	CBO concluded that healthier Americans would pay less for insurance. CBO concluded that the bill would slightly reduce premiums for healthier Americans who purchase coverage in the individual or small group market but “would tend to increase the premiums paid by less healthy enrollees.”
Medicare	The bill eliminates some waste and fraud in the Medicare system. The bill gets rid of the special subsidy to private insurers participating in Medicare Advantage. The bill extends the life of the Medicare trust fund by 9 years.* Closes the doughnut hole that affected 3.4 million seniors enrolled in Medicare Part D in 2008.	The bill eliminates some waste and fraud in the Medicare system. The bill gets rid of the special subsidy to private insurers participating in Medicare Advantage. The bill extends the life of the Medicare trust fund by 0 years. Keeps the doughnut hole open.
Small Businesses	Small employers can take advantage of large risk pools by purchasing coverage through the bill’s state-based exchanges. Small employers would receive a tax credit to help them provide coverage to their employees.	Small employers can come together and purchase coverage in associations. Association health care plans have sole discretion in selecting specific items and services that can be included as benefits. Not required to provide a standard package of benefits. Can craft skimpy policies that attract healthier applicants. Small employers would not receive a tax credit to help them provide coverage to their employees.
Expenditures	The most conservative government estimates conclude that the bill would reduce national health care expenditures by at least 0.3% by 2019.*	Does not reduce national health spending. Establishes state innovation program grants to reward states for lowering the cost of their premiums.

*Using CBO estimates for Senate health care bill.

Today, during a hearing before the House Energy and Commerce Health Subcommittee, Reps. Bart Stupak (D-MI) and Henry Waxman (D-CA) questioned WellPoint CEO Angela Braly about the company’s proposed rate increases in California’s individual health insurance market. The congressmen read from a series of inter-company emails which revealed that WellPoint was rising premiums to increase its profits and padding proposed increases to allow room for negotiations with regulators:

- “The average increase is 23 percent and is intended to return California to a target profits of 7 percent, versus 5 percent this year.” [WellPoint email, October 7, 2009]

- “We’re asking for premiums that would put us $40 million favorable…if we get the increases on time, we will see an opt gain upside of $30 million downgrades and rate cap.” [WellPoint email, November 2, 2009]

- “[W]e needed to reach agreement on filing strategy quickly — specifically in the area of do we file wth a cushion allowed for negotiations.” [WellPoint email, 10/24/2009]

Watch a compilation:

Waxman also unveiled a slide shown at a meeting of the companies’ shareholders which showed that the company had asked for a rate increase of 25 to 26% in 2010 “but the assumed rate increase is just 20%.” This seems to say that you’re asking for a 25% percent increase but expected to see that lowered to 20% through negotiations.” “You are raising your rates far above what’s necessary. You’re trying to squeeze every dollar of profit you can out of policy holders in California and across the nation at a time when families are struggling to pay their bills, you’re trying to charge them inflated rates that pad your profits and support the salaries and the trips and the retreats and everything else,” Waxman said.

WellPoint admitted that it set its increases to keep up with medical costs and maintain a 2% profit. The company justified the increases in California by arguing that it was making up for lost profits in the individual market– a point somewhat belied by the fact that WellPoint has also increased premiums in at least 11 other states. “We are talking about profit increases in absolute dollars but again, when you look at the profit margin that is build into the rates for 2010 it’s less than a 22% profit margin,” chief Corporate Actuary Cindy Miller explained. “A 25% rate increase became necessary…to achieve a profit margin of less than 2% on an after tax basis.”

“$2.8 billion that was your profit in 2009, which is a year that everyone would consider was a horrible year economically in this country…what I’m concerned about is that our hard working Americans are asking to increase their premiums to the wealth of WellPoint’s investors,” Stupak observed. “I don’t mind you making a profit but at the end of the year, 2009 a horrible year, you still made 2 point something billion dollars, and that’s not enough,” Stupak asked, noting that WellPoint’s high profit margin is the reason “many of us believe in a public option.”

Roll Call and the Washington Post are reporting that Republicans are planning to present a “united front” at tomorrow’s bipartisan health care summit, settling on a two-prong strategy designed to avoid the embarrassment of the Republican retreat. “Republicans are preparing to use Thursday’s White House health-care summit to sell their own ideas for using the private marketplace to expand coverage and reduce costs,” the Washington post reports. “The Republican summit strategy is twofold: to portray the Obama plan as radical and ruinously expensive, while reassuring a potential television audience of millions that the GOP takes the health-care crisis seriously and is prepared to address it head on.” Put simply, the Republicans will say that the health care bill will eat your first born, but their incremental solutions will cause gold to fall from the skies.

Considering this strategy, many are predicting that the summit will turn into a very long photo opportunity, but lawmakers do have an opportunity to reach a consensus on some provisions. The Senate health care bill — which is the basis for President Obama’s proposal — already includes numerous Republican ideas and if the GOP was truly interested in passing legislation they could find ways to improve the existing provisions.

Here are 5 areas where Democrats and Republicans can reach bipartisan agreement:

1. Tort reform: While the Senate bill authorizes demonstration projects, Republicans continue to insist that caps are the only way to eliminate junk lawsuits. But given Obama’s openness to adopting more malpractice reforms, lawmakers can explore other solutions like ‘Sorry-Works’ programs or special health care courts.

2. Selling policies across state lines: Under the existing legislation, states can form compacts within which insures then sell their policies across state lines. The Democrats plan establishes a floor of regulation that prohibits insurers from selling insurance from the least regulated location (i.e. like the Northern Mariana Islands in the Republican proposal) and cherry pick the healthiest individuals. Both parties can find a way to tweak the compact provision (maybe change the way the ‘primary state’ is established) and form a consensus.

3. Small business tax credits: The Senate bill and the President’s proposal offer tax credits to small businesses that continue to offer health care coverage. Since Republicans consistantly claim that they stand behind ‘the engines of our economy,’ they can certainly find a compromise. The bill already exempts small businesses from the mandate but lawmakers can expand small business participation in the exchange or allow small business tax credits for those purchasing insurance outside the state insurance exchange. (Republicans proposed both of these ideas as amendments to the Senate Finance Committee’s health bill.)

4. Wellness and prevention provisions: Republicans have long advocated job-wellness programs that give employers greater flexibility to financially reward employees who seek to achieve or maintain good health and the Senate bill already includes these provisions. But if necessary, lawmakers can increase the premium discount that employers can use to reward employees for participating in wellness programs. (The House bill allows employers to offer higher discounts.)

5. Delivery system reforms: Both parties agree that the current fee-for-service reimbursement system encourages quantity, not quality care. The Senate bill already includes reforms like bundled payments and accountable care organizations, but lawmakers can work to expand and strengthen those demonstration projects.

If Democrats move to pass health care reform after tomorrow’s summit, their newfound momentum can be at least partly attributed to WellPoint’s decision to drastically increase premiums in California’s individual health insurance market. The rate increases highlighted the broken health care system and pressured lawmakers to drastically reform the individual health insurance market. The administration’s strong response also enunciated the differences in lawmakers’ approach to reform and may have pushed the President to add stronger cost control provisions into his health care blue-print.

WellPoint’s hikes created a political opportunity for reform, but California policy holders aren’t the only ones experiencing drastic rate increases. A new survey from the Center for American Progress Action Fund has found that “double-digit hikes have been implemented or are pending in at least 11 other states among the 14 where WellPoint’s Blue Cross Blue Shield companies are active: California, Colorado, Connecticut, Georgia, Indiana, Maine, Nevada, New Hampshire, New York, Virginia, and Wisconsin.” Below is a sample:

- California: Average rates are expected to increase 25 percent in 2010, with increases as high as 39 percent for some policyholders.

- Colorado: Average rates are expected to increase 19.9 percent in 2010, with increases of up to 24.5 percent for some policyholders.

- Indiana: Rates are expected to increase 21 percent in 2010.

- Maine: Anthem Blue Cross and Blue Shield requested a 23 percent increase for 2010 after five straight years of double-digit increases for individual policyholders. Anthem is suing the Maine Insurance Commissioner for rejecting its request last year for an 18.5 percent rate hike and allowing a 10.9 percent increase.

- Ohio: Average individual rates are expected to decline 40 percent in 2010 due to a new state law that went into effect in 2010.

Hikes are the kind of thing that bring lofty political rhetoric about the need for reform into reality for millions of Americans. More importantly, they could convince those who already have coverage to pressure their lawmakers on reform. This morning, House members will have an opportunity to question WellPoint CEO Angela Braly about the rate hikes when she appears before the Energy and Commerce Committee. But let’s hope they use this report to do more than just talk.

Democrats are privately conceding that passing the President’s health care plan — that is, passing a series of fixes through reconciliation and adopting the Senate health care bill — may prove to be an uphill battle, particularly in the House. Since last year, “three House Democrats who voted for the measure have left Congress and have not been replaced – Rep. Neil Abercrombie (D-HI), who resigned to run for governor of Hawaii, Rep. Robert Wexler (D-FL), who resigned to run a think tank, and Rep. John Murtha (D-PA), who died from complications following gallbladder surgery.” If the Democrats are to pass reform again in the House, they have to hold together a fragile coalition of moderate and progressive Democrats.

House leaders (with the exception of Majority Whip James Clyburn) haven’t said if they had the 218 votes needed to pass reform and most House Democrats have only — and unenthusiastically — acknowledged Obama’s plan. Today House Majority Leader Steny Hoyer (D-MD) admitted that Democrats may still come up short:

“We may not be able to do all. I hope we can do all, a comprehensive piece of legislation that will provide affordable, accessible, quality health care to all Americans,” Hoyer said at his weekly media briefing. “But having said that, if we can’t, then you know me – if you can’t do a whole, doing part is also good. I mean there are a number of things I think we can agree on.”

Hoyer’s uncertainty may be the reason for the White House’s reluctance to support the public option and its attempts to distance itself from the public option letter. The White House has to craft a bill that achieves a delicate balance between progressive and moderate provisions; openly supporting the public plan may tip the scales and alienate important moderate votes. In this environment, urging the repeal of the health insurers’ anti-trust exemption could be seen as somewhat of a compromise. As Press Secretary Robert Gibbs admitted today, “We have seen obviously that though there are some that are supportive of this, there isn’t enough political support in a majority to get [the public option] through.”

As a general matter, I agree with Ezra Klein’s argument that White House should pick a position on the public option and stick to it. But as a practical matter, I think the White House feels that they don’t have the luxury of choosing a side. As the Hoyer-Clyburn disagreement demonstrates, nobody knows where this latest push for reform is heading. Any sudden turns could push the whole effort off the cliff.

President Obama’s health care bill doesn’t contain many new proposals, but a provision that would allow the federal government to review and deny excessive, unreasonable or discriminatory health insurance premium increases is stirring up some controversy. Sen. Dianne Feinstein (D-CA) proposed the amendment — which would limit insurers’ ability to exploit the time between passage of the bill and 2014, when reforms are fully in place — but it was not included in the final Senate bill “because of the objections” of an unnamed Democratic senator.

Conservatives are now seizing on the provision to further their claim that Obama wants the government to take over the health care system:

– “In other words, de facto price controls….The result of this rate-setting board will be less competition in the individual market, as insurers flee expensive states or regions, or even a cascade of bankruptcies if premiums are frozen and the cost of the care they are expected to cover continues to rise.” [Wall Street Journal, 2/23/2009]

– “But more important, attempts to control prices by government fiat ignore basic economic laws — and the result could be disastrous for the American health-care system.” [New York Post, 2/23/2009]

But if conservatives want to argue that rate review will lead “less competition in the individual market” or “a cascade of bankruptcies” they should point to some specific examples in the more than 25 states that have already instituted the policy. Of course, it’s unclear that they can.

The same health insurers that operate in states that do not review premiums “also operate in many other states that do have prior approval requirements.” Rate regulation protects consumers from sudden spikes and limits insurers ability to lure consumers with low introductory rates without drastically undermining the market. In fact, states with rate review, like Minnesota — which “has had prior approval in place since 1993 — “has a vibrant, competitive individual health insurance market with plenty of carriers and stronger-than-average individual enrollment.”

The problem with rate review isn’t that it goes too far; it’s that it may not go far enough. Insiders predict that insurers could game the review by transferring cost increases into higher deductibles and co-payments, despite their objects to Obama’s proposal. As former health insurance executive Wendell Potter pointed out this morning on CNN, “I think they’ll find away around it.” “The regulators need to focus on how the insurance companies are shifting the cost of health care from them and to their consumers to people who are insured. Obviously they’ve been increasing premiums and making people pay more out-of-pocket. They can see they are increasing the premiums modestly. But if you look closely, they are shifting more and more of the cost to consumers. That’s something that regulators will have to watch in the future.”

This morning, Rep. Eric Cantor (R-VA) summed up the GOP’s rather predictable reaction to President Obama’s health care bill, calling the plan a “non starter.” “The President insists on bringing back a bill that the American people have resoundingly rejected”:

CANTOR: The American people do not like the Senate health care bill. Yesterday the President’s health care official, Nancy-Ann DeParle , said that this bill is the Senate bill with some strategic changes. If we look at some of the details that are coming out, this bill is a nonstarter. I’m hoping that the President will answer the question why does he want to continue to push a bill that the American people have rejected and will he join us in a bipartisan way to finally accomplish the things most Americans can support…

Asked about Dan Pfeiffer’s early morning blog post challenging Republicans to post their health care bill online, Cantor responded by explaining that House Republicans have offered and voted on a comprehensive Republican alternative on the House floor. “Our House bill has been scored by the CBO and will bring down insurance premiums. That’s what the American people want right now while we’re in economic times of unprecedented unemployment,” he said. Watch it:

By refusing to negotiate or engage with the numerous Republican ideas already in the Senate health care bill Republicans are effectively taking themselves out of the debate and almost tempting Democrats to bypass the minority using reconciliation. Their proposals may be posted online and scored by the Congressional Budget Office (CBO) but they’re nothing to brag about. As the New York Times put it this morning, “[a]ll of their ideas have these basic facts in common: they would not reduce the number of uninsured Americans substantially; they would not guarantee affordable coverage for people with pre-existing conditions; they make only feeble attempts to rein in medical costs; and their proposals to slow the rise in the cost of premiums would mostly benefit the healthy. That is not enough.” According to the CBO that Republican proposal would extend coverage to just 3 million Americans and actually result in an increase in the number of uninsured. The problem isn’t that Republicans don’t have a proposal — as Pfeiffer was arguing — it’s that their proposal isn’t designed to make coverage more affordable or accessible.

It’s also worth noting that the Republican meme about public voters rejecting health care reform is only half true. Voters may be frustrated with the process of securing votes, but they’re rather fond of Democratic health care prescriptions. Republicans have a tendency to conflate process and policy but the two elicit very different popular responses. From the latest Kaiser tracking poll:

Thursday’s health summit will provide Democrats with one more opportunity to clearly explain their proposals.

This morning, House Majority Whip James Clyburn (D-SC) suggested that Democrats have enough votes to pass the Senate health care bill in the House if President Obama’s ‘fixes’ were adopted using reconciliation. Clyburn stressed that he had “not seen what the president’s proposals are” but said that the House could pass the bill with more than 219 votes if what he’s been hearing about the bill is accurate:

CLYBURN: Well, you know, I do believe that we got to 219 before. We got there with some people holding out for things we have not gotten in the Senate plan and other things.

TODD: You think there is more there.

CLYBURN: So I do believe there is more fertile soil today than there was when we first took this up.

Watch it:

The White House released its bill ahead of the bipartisan health care summit to present a unified Democratic front, but the real audience for the legislation aren’t Republicans (they’re not voting for health care), it’s Congressional Democrats who have resisted passing the Senate health care bill until the senate improved its affordability standards and increased the threshold on the excise tax. The Obama plan attempts to bridge the gap between the House and Senate proposals without adopting progressive measures like the national exchange and the public option. The plan also fails to endorse the House’s push for repealing insurers’ special anti-trust exemption.

The President’s moves to the left are not insignificant, but it’s not clear if it will be enough to sway reluctant progressives, angry at the White House for almost leaving reform at the alter in the aftermath of the Massachusetts election. So far, House Democrats have only acknowledged the release. The chairmen of the three House committees with jurisdiction over health policy, Reps. Charles Rangel (D-NY), George Miller (D-CA), and Henry Waxman (D-CA) issued a general statement praising Obama for “moving in the right direction.” House Speaker Nancy Pelosi (D-CA) also only went so far as to say that Obama’s plan “contains positive elements from the House and Senate-passed bills.”

Clyburn’s assessment is the only ringing endorsement for the plan in a sea of lukewarm support. Here’s to hoping it doesn’t get any colder.

Moments ago, the White House just released a $950 billion health care proposal bridging the differences between the House and Senate health care bills. Administration officials described the President’s legislation as “our take on how to bridge those differences” and explained that the language was informed by meetings between House and Senate officials. “We view this as the opening bid for the health meeting [on Thursday]. The President believes strongly that the meeting would be most productive were we to come to the table with one proposal that addresses these concerns as a pose to different proposals,” White House Communications Director David Pfeiffer explained.

The Obama plan maintains key elements of the Senate proposal but also incorporates stronger anti-fraud provisions and allows the federal government to review insurance rate hikes. On a call with reporters Pfeiffer insisted that the administration has not determined “on which path to move forward with”, but the bill’s substance suggests that Obama is hoping to bypass a prolonged-Senate debate and use the reconciliation process to fix the Senate bill and convince reluctant House progressives to pass the Senate legislation. “The American people deserve up or down vote on health reform,”Pfeiffer said. “We can get an up or down vote if opposition decides to take extraordinary steps of filibustering health reforms.”

But it’s unclear if progressive House members will embrace the new compromise. While the bill addresses House members’ affordability concerns, increases the excise tax thresholds and completely closes the donut hole in Medicare Part D, the legislation does not include a public option, retains the Senate bill’s state-based exchanges and keeps the start date for most reforms at 2014. (Obama’s plan also retains the Senate’s abortion compromise and most other core provisions).

The White House explained that it paid for its changes (which cost approximately $75 billion) by levying higher penalties on individuals and employers that don’t meet the legislation’s requirements, extending the payroll tax to unearned income, $10 billion in fees on branded pharmaceuticals, and increased savings from Medicare Advantage.

The proposal also eliminates the so-called Cornhusker kickback and provides full federal funding for Medicaid expansion for four years starting in 2014. Between 2018 and 2019, the federal government will pay 90% of the cost of the expansion and provide extra funds to states with generous Medicaid programs.

Here is how the Obama plan compares to the House and Senate proposals:

Provision	Obama’s Bill	House Bill	Senate Bill
Affordability	Improves the Senate bill’s subsidies for lower income Americans. Families below $44,000 and above $66,000 would pay less in premiums. Also raises the percent of health costs that are paid by insurers from the Senate proposal.	Families earning below $55,000 would still receive more subsidies under the House bill, but Americans earning more than $55,000 would pay higher premiums (as compared to Obama’s proposal). The percent of costs paid by the insurers is higher than Obama’s proposal.	Families making under $55,000 would see higher premiums than Obama’s proposal and the percent of costs paid for by health insurers is lower than Obama’s proposal.
Excise Tax	‘Labor agreement’ for everyone. Changes effective date of the Senate policy from 2013 to 2018. Raises the amount of premiums that are exempt from the assessment from $8,500 for singles to $10,200 and from $23,000 for families to $27,500 and indexes these amounts for subsequent years at general inflation plus 1 percent.	No excise tax.	40% excise tax beginning in 2013 on individual polices worth $8,500 or higher and family policies starting at $23,000.
Payroll Tax	Adopts Senate bill approach and adds a 2.9% assessment on unearned income.	5.4% surcharge on high-income households.	Payroll tax increase of 0.9% on earnings above a specific threshold for a total employee assessment of 2.35% on these amounts.
Individual Mandate	Mixed bag. May be easier for younger Americans to opt out. Lowers flat dollar amount to $695 by 2016 from the Senate bill and raises the alternative percent of income to House levels that individuals will pay for not having health insurance. Hardship waiver when premiums over 8% of their income, and couples under $18,700 are exempt from the requirement.	2.5% of income by 2016 with a limit of the average national health premium.	Flat rate of $750 by 2016 and hardship waiver when premiums exceed 8% of income.
Employer Mandate	No mandate, free rider provision. Large employers (50+ workers) have to pay a fee if employees receive subsidies. Improves transition to free-rider policy by subtracting first 30 workers. (A firm with 51 workers that does not offer coverage will pay an amount equal to 51 minus 30, or 21 times the applicable per employee payment amount.)	Employer mandate. The House bill requires a payroll tax for employers that do not offer health insurance that meets minimum standards.	No mandate, free rider provision. Large employers have to pay a fee if taxpayers are supporting the health insurance for their workers.
Grandfathered plans	Plans have to conform to new regulations. Plans have cover adult dependents up to 26yo, prohibits rescission. After exchanges begin in 2014, plans can’t institute annual and lifetime limits or pre-existing condition exclusions. Beginning in 2018, the President’s Proposal requires “grandfathered” plans to cover proven preventive services with no cost sharing.	“Grandfather” policy that allows people who like their current coverage, to keep it. Abide by all rules after 5 years.	“Grandfather” policy that allows people who like their current coverage, to keep it.
Medicare Donut Hole	Completely closes donut hole. Replaces $500 increase threshold increase limit with a $250 rebate to Medicare beneficiaries who hit the donut hole in 2010. Closes donut hole by phasing down the coinsurance so it is the standard 25% by 2020 throughout the coverage gap.	The House bill fully phases out the donut hole over 10 years. Raise the dollar amount before the donut hole begins by $500 in 2010.	The Senate bill provides a 50% discount for certain drugs in the donut hole. Raise the dollar amount before the donut hole begins by $500 in 2010.

Responding to the Anthem Blue Cross rate hikes in California, President Obama will include a provision in the White House health care bill that would allow the federal government to review and deny excessive, unreasonable or discriminatory health insurance premium increases. Obama’s proposal is modeled on a rate review amendment offered by Sen. Dianne Feinstein (D-CA) during the Senate’s floor debate in December and revived as a stand-alone measure in recent weeks.

The final Senate health care bill already bars insurers with excessive rate hikes from participating in the insurance exchanges but this new provision would go a step further, federalizing the states’ traditional and somewhat uneven role in monitoring insurance rate increases. At least 25 states have some “form of a prior approve process for premium increases,” but state governments often lack the resources or political will to keep insurers in check. Obama’s provision is both politically and substantively significant. It protects consumers from unreasonable rate increases but also prohibits insurers from dramatically increasing rates during the elections of 2010 and 2012 or the period between the passage of comprehensive reform and implementation.

Democrats were worried that insurers would exploit the interim period to boost profits ahead of the new insurance regulations. The federal government’s new rate review powers could blunt at least some of the anticipated increases. Here is how rate review would work:

- Insurance companies would have to justify unreasonable premium increases.

- The Secretary could deny or modify health insurance rate increases that are found to be unjustified.

- The Secretary would determine whether states have the capability to conduct rate reviews.

- Establishes a Health Insurance Rate Authority to advise the Secretary. It will have seven members, including consumer representatives, an insurance industry representative, a physician and other experts like health economists and actuaries

Jonathan Cohn points out that “the key question, of course, is what constitutes ‘unreasonable‘” rate hike. According to the New York Times the Health Insurance Rate Authority, “made up of health industry experts that would issue an annual report setting the parameters for reasonable rate increases based on conditions in the market.” What’s ‘reasonable’ will vary from state to state.

In Arizona, rates were considered to be excessive if “they are likely to produce an underwriting profit that is unreasonably high.” “Considerations include loss experience, hazards, expenses, reasonable profit margins, trends, investment income from loss reserves, claims and earned premiums.” Oregon just passed a law giving consumers “30 days to comment on insurance company rate requests for individual, small group, and portability health insurance plans.” Insurers will be required to “separately report and justify increases and decreases of administrative expenses” and state regulators can consider an “insurance company’s overall finances, including profits, investment income, and surplus, when reviewing a proposed rate.”

It’s unclear if states with rate review have experienced smaller rate increases than states without such authority (state efforts are uneven and depend on how rate review authority is structured and enforced), but several states have successfully avoided sudden rate hikes. Regulators in North Dakota “were able to reduce 37 percent of the proposed rate increases filed by insurers,” for instance. “Maryland used their state laws to block a 46-percent premium increases” and New Hampshire regulators “were able to reduce a proposed 100 percent rate increase to 12.5 percent.”

Most rate regulation occurs in the individual health insurance market, where consumers are most vulnerable to sudden rate hikes. The presumption is that a large employer “should be sufficiently sophisticated and knowledgeable enough to negotiate rates with a carrier, and the state shouldn’t interfere with the process. These groups achieve bargaining power by leveraging their relatively large budget.” Here are efforts by Connecticut and Oregon regulators in the individual market in 2009 and 2010:

Company	Pct. Requested	Pct. Approved
Anthem Health Plans (CT)	24%	17%
Health Net (CT)	19%	19%
ConnectiCare (CT)	16%	12%
Regence BC/BS (OR)	20%	16%
LifeWise Health Plan (OR)	16%	16%
PacificSource Health Plans (OR)	15%	15%

Since conservatives will surely claim that rate review is some kind of government take over of private industry or a burdensome new federal requirement for insurers, it’s important to note that states that have instituted rate review house profitable insurance companies and maintain competitive and vibrant markets. Families USA has more on that here.