President Obama sent Democrats mixed signals about how to move forward on ahead health care reform during a question and answer session organized by Democracy for America. While he argued that the “key [is] to not let the moment slip away,” Obama did not pressure the House to accept the Senate health care bill or echo House Speaker Nancy Pelosi’s (D-CA) call for the Senate to pass a package of ‘fixes’ through reconciliation:

The next step, is what I announced at the State of the Union, which is to call on our Republican friends to present their ideas. What I’d like to do is to have a meeting where I’m sitting with the Republicans, sitting with the Democrats, sitting with health care experts and let’s just go through these bills. Their ideas, our ideas. Let’s just walk through them in a methodical way…and then we’ve got to move forward on a vote. We’ve got to move forward on a vote…We should be very deliberate, take our time. We’re going to be moving a job package forward over the next several weeks. That’s the thing that’s most urgent right now in the minds of Americans all across the country…That’s why I think it’s very important for us to have a methodical open process over the next several weeks, and then let’s go ahead and make a decision. And it may be that, you know, if Congress decides, if Congress decides we are not going to do it even after all the facts are laid out and all of the options are clear, then the American people can make a judgment as to whether this Congress has done the right thing for them or not.

Watch it:

Roll Call reported this morning that Democrats still can’t agree on how to proceed with health care reform. “Reid appears to be trying to get Senate Democrats to move forward with a health reconciliation package to accommodate the House, but Members want him to move more quickly.” Pelosi is asking the Senate to pass a package of fixes through the reconciliation process that would scale down the “Cadillac” tax on high cost plans, “add as much as $50 billion to increase subsidies to buy health insurance and even more money to close gaps in Medicare prescription drug coverage” before the House passes the Senate legislation.

Meanwhile, POLITICO has identified “at least 10 senators who have said they are opposed to reconciliation or have expressed strong reservations. Reid can only afford to lose nine senators and still pass a bill.”

Sam Stein reports that “[h]ealth insurance giant Aetna is planning to force up to 650,000 clients to drop their coverage next year as it seeks to raise additional revenue to meet profit expectations.” One industry analyst told Stein, “[t]hey were surprised by an acceleration in medical costs in 2009 which pressured their earnings.” “In an effort to get back to a more profitable level, they are raising their prices to match cost trends. When you raise rates, you run the risk of losing your membership. Health insurance is a very competitive marketplace“:

“The pricing we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering,” said chairman and CEO Ron Williams. “We view 2010 as a repositioning year, a year that does not fully reflect the earnings potential of our business. Our pricing actions should have a noticeable effect beginning in the first quarter of 2010, with additional financial impact realized during the remaining three quarters of the year.”

The customers Aetna is targeting could have sicker profiles, but they could also be located in areas of the country where Aetna doesn’t have the market clout to negotiate cheaper rates with dominant providers. For Aetna, the customers may be more expensive because the insurer has to pay doctors and hospitals more than its competitors, not because they are significantly sicker than the average beneficiary.

As Princeton health economist Uwe Reinhardt explains it:

REINHARDT: It depends on the market power. If you face, as a hospital, a huge insurance company, they will bargain for a steep discount. But if you’re an uninsured, middle-class individual, you have no market power, and they will charge you often twice the price that would be charged to an insurance company.

NPR: So if I’m – sorry, so if I’m a massive insurance company, I can say I’m going to bring you 75,000 MRIs this year, you’d better charge me very little for them, whereas if I’m one uninsured person, I’ve got no bargaining power. Is that what you’re saying?

REINHARDT: That’s what it is. The insurance company will say look, we lower the price, but you can make it up on the volume, we bring you big volume, while the individual says I bring you one appendix. That’s not a volume. And so they can jack up the price and take what they want from you.

In 2001, Aetna felt like providers in certain areas were doing just that — charging the company too much for medical services. “Aetna completely overhauled its business between 2000 and 2003, going from 21 million members in 1999 down to 13 million in 2003, but boosting its profit margin from about 4% to higher than 7%.” The company pushed out almost 8 million enrollees by increasing their premiums and then pulled out of those insurance markets. “The most important characteristic…is that they were in markets in which we did not have very significant presence. So that the contracts that we had with the doctors and the hospitals were not as favorable as that of our competitors,” Jack Rowe, Aetna’s former CEO told PRI’s This American Life.

A recent analysis of the Massachusetts health care market concluded that “insurance companies pay some hospitals and doctors twice as much money as others for essentially the same patient care.” The report found that “payments were most closely tied to market leverage, with the largest hospitals and physician groups, those with brand-name recognition, and those that are geographically isolated able to demand the most money.”

David Broder argues that Democrats need to reform the health care system to reduce the deficit and stabilize the economy. Walking away from reform would “only dig us into a deeper deficit,” he writes. It’s an argument Democrats themselves used to make in 2009, before they pivoted towards jobs and the economy and left health reform in the dust.

But today, a new report published in Health Affairs finds that if Congress doesn’t do anything to reduce health care costs, by 2020, “about one in five dollars spent in the U.S. will go to health care, a proportion far beyond any other industrialized nation.” “For the first time, government programs next year will account for more than half of all U.S. health-care spending.” The new analysis flips the conservative narrative. It’s not that health care reform will result in a government take over of the health care system. The truth is, reform that slows the rate of growth in health care spending would reduce the government’s investment in the system.

Health care spending “grew to a record 17.3% of the U.S. economy last year,” the report found, “marking the largest one-year jump in its share of the economy since the government started keeping such records half a century ago.” Increased enrollment in Medicare and Medicaid as well as a decrease in the number of people with private insurance accounted for much of the growth in health care spending:

- U.S. health spending hit $2.5 trillion in 2009, up 5.7% from the previous year. That represents 17.3% of GDP, up from 16.2% in 2008.

- Public spending on health care will rise to 50.4% by 2011. Last year, the federal actuaries had predicted the 50% mark wouldn’t be reached until around 2016.

- Total health spending is expected to grow increasingly faster each year after bottoming out in 2010, reaching 7.0 percent by 2016

- For 2009–2019, health spending is expected to grow at an average annual rate of 6.1 percent (1.7 percentage points faster than GDP) and to climb to $4.5 trillion by 2019

At the end of last year, Jonathan Cohn made this chart comparing the annual rate of change in health care spending under the Senate health care bill and the rate of change under the status quo. The message is clear: Democrats who fail to act on health care reform are placing the country on the blue trajectory:

As The Kaiser Family Foundation’s Larry Levitt explained, “[r]eform lowers the rate of growth of health spending for a few years, primarily with Medicare savings. Then the rate of growth jumps up above baseline as the uninsured are brought into the system (the effect is really a one time increase in spending, but it shows up as big rates of growth for a few years as the uninsured are covered and use more services). Then things settle down back to the point where the rate of growth is below baseline, reflecting the effect of Medicare savings and the tax on high cost insurance plans.”