In a move that will certainly upset all-or-nothing repeal advocate Rep. Steve King (R-IA), the Republican leadership in the House has finally introduced a 9-page “bill” (read: press release in legislative language) to repeal the health care law and replace it with the Republican alternative already defeated on the House floor in November.

The legislation lists 25 grievances Republicans have with the Democrats plan — including the fact that “the national unemployment rate remains near 10 percent — quotes studies by conservative groups like the Chamber of Commerce and the National Federation of Independent Businesses (NFIB) and regurgitates debunked smears about IRS agents, rationing, and the so-called marriage penalty.

Sponsors of the legislation concede that the bill is dead on arrival and King believes that the bill will undermine the entire GOP repeal effort:

Asked of the chances the measure would move through the House, Herger’s Democratic counterpart, Rep. Pete Stark (Calif.), responded, “Like a prayer in hell.” ….The chairman of the Ways and Means Health subcommittee admitted he hadn’t seen the GOP measure but added, “It’s probably lousy.” [...]

Rep. Steve King (R-Iowa) said in an interview with The Hill that Republicans “should be for 100 percent repeal. The replacement component of it should be a separate question because it blurs the issue; once you tie a comprehensive replacement to a repeal bill, you’ve guaranteed it’s going to bog down and the American people that are sick of backroom deals are going to ask a whole lot of questions that we are going to have to answer.” King called ObamaCare a “malignant tumor that has metastasized as we speak.”

This is the third repeal bill introduced by the GOP, but the first to replace the law with different legislation. The GOP alternative would shift the costs and risks of insurance onto individuals and divide the insurance market into low-cost plans for the healthy and high-cost insurance for the sick. In fact, according to the Congressional Budget Office, the number of uninsured Americans would increase to 52 million by 2019, but deficits would decrease by $68 billion over the 2010–2019 period. The bill could slightly reduce premiums for Americans who purchase coverage independently.

Under the proposal, insurers would be allowed to sell policies from such regulatory heavy states like Virgin Islands, Guam, American Samoa and Jack Abramoff’s favorite client-the Northern Marianas. Millions of Americans would remain uninsured and continue to pay higher premiums. In fact it’s unlikely that any of the members of the Republican House Leadership would be able to find affordable insurance under their own proposal, should they chose to give up their government-sponsored plans.

Throughout the health care debate, states have complained that the new health care law expands Medicaid for adults at or below 133% of the federal poverty line (FPL) but does not completely fund the state portion of the program. Sen. Ben Nelson (D-NE) almost killed reform by offering an amendment that would have required the federal government to pay for Nebraska’s entire expansion and at least 20 states are now suing the federal government over what they believe is an ‘unfunded mandate’ to open the program to more uninsured residents.

Supporters of the legislation have always found this position a bit bizarre, since the law provides states with a lot of extra cash, insures more residents and — consequently — allows states to “reduce payments they make to support uncompensated care costs.” The federal government picks up the entire tab of Medicaid expansion until 2016. The government will pay for 95% of the expansion in 2017, 94% in 2018, and 93% in 2019. Beginning in 2020, the federal government will fund 90% of the expansion. Significantly, the law will also allow an enhanced match to the 11 states that already cover childless adults below 133% of the federal poverty level (the 11 states will begin receiving higher federal matching funds for this population until all states receive 93% federal matching rate by 2019).

Indeed, a new study by the Kaiser Family Foundation predicts that “increases in state spending are small compared to increases in coverage and federal revenues and relative to what states would have spent if reform had not been enacted.” Under one scenario:

[F]ederal spending would increase by $443.5 billion and state spending would increase by $21.1 billion between 2014‐2019. Thus about 95 percent of all new spending would be by the federal government…The Medicaid expansion will result in large reductions in the uninsured across states, but especially in states that have higher levels of uninsured today. Overall, the Medicaid expansion is expected to result in a decrease in the number of uninsured of 11.2 million people, or 45 percent of the uninsured adults below 133 percent of poverty.

Look:

In other words, states will be able to cover a large number of residents at little direct cost, and despite all their rhetoric and complaints, they recognize a good deal when they see one. In April, Arizona — which is suing over the law — actually passed legislation to protect its share of federal Medicaid funds. The state had eliminated its CHIP program to close a budget hole, but after the health law passed, it restored state funding to the program in order to qualify for the new federal Medicaid funds. (The law requires states that want to continue receiving federal health care funds to maintain eligibility in Medicaid and CHIP.) Gov. Jan Brewer (R-AZ) “urged legislators to restore the programs,” proving once and for all that the money states will receive under reform will trump any ideological repeal effort.

As Emma Sandoe explains in this report, states that choose to opt out of the Medicaid expansion will lose billions of dollars in federal funding and will be no closer to grappling with the strained public health programs in their states.

While Republicans are still grumbling about the HHS brochure informing seniors about the benefits from the new health care law, NPR’s Julie Rovner reminds me that Democrats were complaining when the agency sent out information educating seniors about Medicare Part D:

Sound familiar? That’s because it’s almost identical to the flap that took place six years ago, except with the politcal parties in opposite roles.

Back then, it was a Republican administration trying to educate seniors about a new Medicare prescription drug law passed with mostly Republican votes. Democrats were so outraged at the time that they called for investigations by the Government Accountability Office and HHS’s own inspector General into whether the campaign was inappropriately political. “There is no purpose for these advertisements except to convince senior citizens that the Medicare bill is good for them. They are nothing more than propaganda for the Bush re-election campaign, using $23 million of the senior citizen’s own money,” said the late Sen. Edward Kennedy, D-Mass. [...]

In the end, those 2004 investigations did find the Bush administration’s mailings about the new drug benefit “misleading.” The GAO said the administration may also have illegally used public money to make what in effect were fake news reports about the law that did amount to propaganda.

The question now is whether this brochure can be labeled as purposely misleading. A quick reading suggests that it can’t; nor are Republicans really saying that anything is fundamentally untrue. They’re frustrated that the brochure does not include certain caveats or projects. Which is precisely the problem. Many of these benefits are not implemented until 2013 and 2014 and policymakers are relying on projections from the CBO and CMS to educate the public about the future effects of the law. The GOP can complain that the brochures don’t note very dissenting opinion, but they can’t claim that HHS is grossly misleading the public, particularly since they so vehemently defended Humana for sending unsubstantiated information about the health care law to its Medicare Advantage beneficiaries.

The government is once again defending itself from lawsuits challenging the constitutionality of the new health care reform law, this time filing a motion in Virginia to dismiss that state’s independent lawsuit. Led by conservative Attorney General Ken Cuccinelli the lawsuit, filed just hours after health reform became law, argues that “requiring people to buy health coverage or pay a fee exceeds federal powers limited by the Constitution’s 10th Amendment.”

But in its motion to dismiss, the federal government argues that Virginia does not have the standing to sue over reform, before reiterating that the individual mandate is “within its [Congress'] authority under the Commerce Clause”:

The Commonwealth asserts it has standing to vindicate a sovereign interest in its new statute purporting to exempt Virginians from any federal requirement to purchase health insurance. A state cannot, however, manufacture its own standing to challenge a federal law by the simple expedient of passing a statute purporting to nullify it…This is particularly so given that the only provision Virginia challenges in this litigation – Section 1501 of the Patient Protection and Affordable Care Act (“ACA”), which requires individuals either to obtain a minimum level of health insurance or to pay a penalty if they do not – will impose no obligations on the Commonwealth, even after the law takes effect some four years from now. The provision applies only to individuals, not the state government. Because Virginia itself neither has sustained a direct and concrete injury, nor is in immediate danger of such an injury, it does not have standing to sue.

Constitutional scholars have warned that the state-based lawsuits will have to overcome two very significant hurdles: 1) the lack of standing and 2) the Tax Injunction Act, which forbids courts from “restraining the assessment or collection of any [federal] tax.” If the Court accepts these arguments, the states case is in grave jeopardy.

But Cuccinelli is not giving up. Last night, during an appearance on Fox News’ On the Record, Cuccinelli reiterated that the federal law conflicted with a state law nullifying the legislation. “Normally the supremacy clause would have the federal law trumping, but it is our position that because the federal law is unconstitutional that Virginia’s law should trump,” Cuccinelli said. “And our injury as a sovereign state is that the federal government is attempting to block the implementation or the effectuation of one of Virginia’s laws. And that is a very basic right of a sovereign state to pass its own laws and to protect those laws. And that’s what we are doing in this lawsuit.”

Virginia will respond to the motion to dismiss by June 7th, and the federal government has to file its reply on June 22nd or before, Cuccinelli said. On his Twitter, he struck a more conciliatory tone. “US filed motion to dismiss HC case last night. Very much what we expected, but they r clearly good attys. Thankfully we have good attys too!”

POLITICO’s Pulse is reporting that Republicans are objecting to a new flier sent out by CMS informing Medicare beneficiaries about how the new health care law will improve the program. “This goes beyond propaganda and is blatantly political. If this document is really about Medicare, then why is there information in there about 26-year-olds being able to stay on their parents’ policies?” Rep. Dave Camp (R-MI) asked. “The brochure fails to inform seniors that the president’s new law cuts $550 billion from their Medicare,” Sen. John Barrasso (R-WY) added. From the flier:

The Affordable Care Act passed by Congress and signed by President Obama this year will provide you and your family greater savings and increased quality health care. It will also ensure accountability throughout the health care system so that you, your family, and your doctor—not insurance companies—have greater control over your care. These are needed improvements that will keep Medicare strong and solvent. Your guaranteed Medicare benefits won’t change—whether you get them through Original Medicare or a Medicare Advantage plan. Instead, you will see new benefits and cost savings, and an increased focus on quality to ensure that you get the care you need.

Democrats are pointing out that CMS sent similar fliers to seniors after Congress passed the Medicare Part D legislation during the Bush administration, but that’s not the GOP’s only flip-flop. Last year, the GOP defended Humana’s alleged use of federal dollars and data to send deceptive fliers warning Medicare customers that health reform will cut “important benefits and services” and urging them to call Congress to register their concern. Republicans rallied behind the insurer and accused Democrats of “trying to keep seniors in the dark about the consequences of congressional Democrats’ costly government-run health care bills.”

Camp, who is now so critical of the CMS fliers, demanded “to know whether anyone from the White House was involved in the decision to tell companies to stop using taxpayer-subsidized communication to terrify seniors into opposing health reform.” “I have never seen anything like this and I question if politics was the deciding factor,” Camp said at the time. Minority Whip Jon Kyl (R-AZ) also registered outrage, noting “You don’t lose your rights because you happen to sell insurance for heaven’s sake.”

Ultimately, CMS backed down from its investigation of Humana and issued a guidance reminding companies that they “can’t use federal dollars to pay for the mailings or federal data.” But the hypocrisy is fairly stark — the GOP will go to bat for ‘free speech’ if it supports their talking points, but attack it if it doesn’t comport to their particular “propaganda.”

Another week, another attempt by Republicans to present the new health care law as the costly government takeover they said it was. Republicans are all over a new report from the conservative National Center for Policy Analysis that “shows that tax credits in the new healthcare law could negatively impact small-business hiring decisions“:

The new law provides a 50 percent tax credit to companies offering health coverage that have fewer than 10 workers who, on average, earn $25,000 a year. The tax credit is reduced as more employees are added to the payroll. The NCPA study finds the reduction in tax relief to be a cost concern for companies looking to hire additional workers, but operate on slim profit margin yet still provide employee health coverage.

The study has been tweeted by House Minority Leader John Boehner (R-OH), SenateDoctors (Sens. Tom Coburn (R-OK) and John Barrasso (R-WY)), and Rep. Mike Pence (R-IN) but its source and message are somewhat suspect. First, the National Center for Policy Analysisis “a right wing think tank with programs devoted to privatization” of “taxes, Social Security and Medicare, health care, criminal justice, environment, education, and welfare.” The group is funded by conservative Bradley, Scaife, Koch, Olin, Earhart, Castle Rock, and JM Foundations.

Moreover, the argument itself makes little sense. The credit operates on a sliding scale and was designed to aid the businesses that face the biggest obstacles in providing affordable coverage — small businesses that don’t have the advantage of large risk pools. Throughout the health care debate, Senators incorporated amendments from Sen. Olympia Snowe (R-ME), improving the structure of the credit, but legislatures remained aware of the reality of limited resources. Democrats were coming under daily bombardment for presenting a bill that cost too much and were constrained by the president’s price tag ceiling of $900 billion. Now, the very same individuals who claimed that the bill spent too much, are seemingly suggesting that it did not spend enough on small business tax credits.

Stripping the argument of its health care context and extending it to any kind of sliding scale structure only underlines its weakness. Under this logic, any program that caps eligibility is flawed because it encourages individuals to make less so they can continue to receive a government benefit. Rather than help millions of Americans access affordable health care and other social services, all social aid programs actually discourage upward mobility and the progressive tax system pushes Americans into lower paying jobs.

If you believe that people’s decisions center around federal aid guidelines and nothing else, then I suppose have to discount not only the growth of America’s middle class, but also all other small business benefits of the new health care law.

As a growing number of cities and states are considering plugging budget shortfalls with a tax on soda, the beverage industry is actively lobbying legislatures to defeat the measure, the Wall Street Journal reports. In Philadelphia, the Canada Dry Delaware Valley Bottling Co even offered to donate $10 million “into health and wellness programs in the city through the Pew Charitable Trusts” to keep the city from imposing the tax. “The moves come as officials in at least 20 cities and states have proposed new taxes or the removal of tax exemptions on non-alcoholic beverages so far this year”:

Industry officials argue that taxes would penalize consumers at a time when people are already struggling and lead to lost jobs for bottlers and distributors. “This is all about grabbing money to fill budget deficits and pay for more government,” said Kevin Keane, a spokesman for the American Beverage Association, the main trade organization representing Coca-Cola Co., PepsiCo Inc. and other beverage makers. “There’s really a grassroots disdain for more taxes, especially on grocery items.”

The ABA spent $18.9 million in 2009 on lobbying, compared with about $668,000 in 2008, with most of the money going toward ads against a federal soft-drink tax. The organization spent $5.4 million in the first quarter of 2010, up from $140,000 in the year-earlier period, with most of the money in the latest quarter spent on advertising changes that have been made in beverage selections at schools to reduce calories, the ABA said. The figures don’t include money spent by local coalitions and lobbyists to battle state and local taxes.

Map of state efforts:

So far the lobbying has been a success, as soda tax initiatives have basically failed in Washington, D.C., Baltimore and New York City. The industry has put forth the argument that soda is an essential commodity and that taxing it would disproportionately impact poor families who drink it most. But the tax is only as regressive as the disease itself and the industry’s meme only makes sense if you ignore or discount the fact that obesity disproportionately affects the poor. The “more government” argument is also unsound, since taxing soda could actually reduce government spending on obesity-related treatments and improve health outcomes among lower income Americans.

Lobbyists may have succeeded over the short term, but you can’t get away from the reality that in a period of staggering deficits, taxing a non-essential commodity that only increases health care expenditures makes a lot of sense. That economic necessity for revenue may make all of the lobbying obsolete– at least in the long-term.

In reporting on the new medical-loss ratio provisions in the health care law, I’ve expressed concern that the law could allow insurers to reclassify administrative costs as medical expenses, artificially inflating their ratios without improving care efficiency or quality. But over at the National Journal’s National Experts Blog, Paul Ginsburg worries that tight MLR restrictions could discourage insurers from investing in improvements like payment reform:

One of the major purposes of health insurance exchanges is to make the health insurance market for individuals and small groups more competitive. Exchanges do this by facilitating consumers’ process of gathering information about plans and making informed comparisons. In contrast, MLR regulation is designed for situations where competition is not possible and approaches more suitable to public utilities must be used. Any need for MLR regulation will clearly be lower starting in 2014 than it is today.

A second contradiction concerns innovation in the organization and delivery of care. Recognizing that we do not have the answers today about how to get care that is higher quality and less expensive, the legislation has numerous provisions designed to increase innovation in this area. Payment reforms strike me as having particularly large potential. Private insurers have a very important role to play in payment reform and many other areas of fostering improved delivery of care. But there are real risks that much of this activity could be precluded if administrative costs incurred to support reformed delivery are treated in the same way as selling costs and profits. The last thing that we would like to see is insurers deciding that the only path open to them is to do little beyond processing claims–that can lead to very high MLRs. Constraints on Medicare’s administrative budget has led to a program that is very efficient in paying claims but does little to make the delivery of care more effective.

Ginsburg is right to note that after 2014, actuarial values in the exchanges will undermine the need for MLR. MLR is designed to control insurer profits and would do very little to improve care quality. As James C. Robinson points out in this Health Affairs article, “High ratios can be achieved either through a large numerator (high medical expenditures) or through a small denominator (low insurance premiums).” In 2007, for instance, 6 of the 7 largest publicly-traded health insurers reported that their profits increased by 10%, while their medical loss ratios also went up. The same could happen in 2014. Once the exchanges are established, insurers will spend less on administrative expenses (reform will limit their ability to underwrite policies and the exchanges will streamline certain administrative tasks), and their medical-loss ratio will likely increase. This does not mean that they’re spending more money on patient care or shifting less towards profits. In fact, the law recognizes this reality and only requires insurers to maintain an 85 or 80% ratio until 2014.

As for his second concern about constraining insurers, the law creates a new category of expenses: “activities that improve health care quality.” Theoretically, if certain expenses really do help “get care that is higher quality and less expensive,” then insures should be able to convince regulators to include them in that definition (and by extension in the numerator of the MLR ratio).

The Associated Press’ Ricardo Alonso-Zaldivar has a story out today claiming that the Obama administration oversold the small business tax credit provision in the new health care law. Under reform, businesses with 25 workers and average annual wages under $50,000 technically qualify for a credit, but in reality, many could come out dry. “The credit drops off sharply once a company gets above 10 workers and $25,000 average annual wages,” he argues:

It’s an example of how the early provisions of the health care law can create winners and losers among groups lawmakers intended to help — people with health problems, families with young adult children and small businesses. Because of the law’s complexity, not everyone in a broadly similar situation will benefit.

Consider small businesses: “The idea here is to target the credits to a relatively low number of firms, those who are low-wage and really quite small,” said economist Linda Blumberg of the Urban Institute public policy center. The smallest businesses are at greatest risk of losing coverage — assuming they can afford it in the first place, research shows. On paper, the credit seems to be available to companies with fewer than 25 workers and average wages of $50,000. But in practice, a complicated formula that combines the two numbers works against companies that have more than 10 workers and $25,000 in average wages.

Indeed, the new law provides the smallest businesses with the greatest aid and uses two separate phase out formulas — one for size of the company and the other for amount of wages — to determine how much each business can receive. But it’s inaccurate to describe the businesses that don’t qualify for the credit as “losers.” After all, if they don’t currently receive an added (extra) benefit, what exactly do they lose? Nothing.

In fact, they have much to gain. The law explicitly exempts small businesses with fewer than 50 workers from the free rider penalty and provided tax credits for small business employees to purchase insurance, allows businesses to pool risk through SHOP exchanges (a long time NFIB goal), and will distribute grants for employer wellness programs. To be sure, Congress could have included more money for small businesses. But they were operating under a certain cap and had to stay within certain fiscal limits. But just because the law doesn’t do enough, doesn’t mean it does nothing at all.

To figure out which business receives what, you can use CAP’s handy tax credit calculator.

As Democrats work to prevent a 21% pay cut to doctors treating Medicare patients, they may find an unlikely ally in hard-nosed libertarian Senate candidate Rand Paul, who just won an upset victory in the GOP Kentucky primary. The cut is the fault of the so-called sustainable growth rate formula (SGR), which Congress created in 1997 to match increases in physician payments under Medicare Part B to the growth in the GDP. SGR has threatened to cut Medicare reimbursements for nearly a decade and Congress has been preventing any cuts in payment without fixing the problem permanently. Each year the problem just piles onto itself – so what was a 2% cut back in 2002 has mushroomed exponentially into a 21% cut due June 1st.

In November, the House voted to replace the current SGR with a formula that would give doctors an annual payment increase equal to 1% more than the growth in the GDP (2% more for primary and preventive care physicians). But Democrats, concerned about that proposal’s high price tag (and worried that Republicans would add the cost of the proposal to price tag of the health care law), are now proposing a multi-year patch that would prevent the cuts from going into effect but do nothing to address the underlining problem.

Repealing the SGR would cost about $250 billion, a five-year fix “is estimated to cost $88.5 billion” and Paul, who as an ophthalmologist has an average salary of some $256,320, supports the more expensive permanent fix. From the WSJ:

In fact, Paul — who says 50% of his patients are on Medicare — wants to end cuts to physician payments under a program now in place called the sustained growth rate, or SGR. “Physicians should be allowed to make a comfortable living,” he told a gathering of neighbors in the back yard of Chris and Linda Wakild, just behind the 10th hole of a golf course.

Paul’s sentiment is shared by the American Medical Association and other doctors groups, but it’s particularly surprising for a candidate who rallies against “out of control” government spending and warns that the country could experience a Greek-like debt crisis. “I’m concerned that we could have a debt crisis in this country, and we’ve got to look at the entire budget,” Paul told CNN’s John King. “We either downsize departments, maybe eliminate some departments, maybe privatize some departments, or maybe we can’t do anything to a department. But we look at every department, every expenditure, and we find out how it can be reduced.” Apparently, the same does not apply for his own pocketbook.

Senate Democrats are expected to move the “scaled back” fix to the floor tomorrow and attract the support of Sens. Susan Collins (R-ME) and George Voinovich (R-OH).

David Leonhardt makes a compelling case for the soda tax in the New York Times today, noting that as the price of sugary drinks has fallen relative to the price of healthy foods, consumption of the bad-for-you soda skyrocketed. Indeed, the inflation-adjusted price of fruits and vegetables rose 17% between 1997 and 2003, while the price of Coca-Cola fell by an astonishing 34.89%. All this has resulted in higher obesity rates and increasing health care costs:

Sugar-sweetened beverages …may be the single largest driver of the obesity epidemic. A recent meta-analysis found that the intake of sugared beverages is associated with increased body weight, poor nutrition, and displacement of more healthful beverages; increasing consumption increases risk for obesity and diabetes; the strongest effects are seen in studies with the best methods (e.g., longitudinal and interventional vs. correlational studies); and interventional studies show that reduced intake of soft drinks improves health. Studies that do not support a relationship between consumption of sugared beverages and health outcomes tend to be conducted by authors supported by the beverage industry.

As price of soda has fallen:

Consumption of soda has increased:

The beverage industry is busy sponsoring its own contradictory studies and pushing the meme that a tax on soda is by nature regressive (the industry spent at least $18 million to keep a tax out of federal health reform and is now spending more in the states), an argument which only makes sense if you ignore or discount the fact that obesity disproportionately affects the poor and that taxing soda would help reduce consumption (if it’s high enough), improve health outcomes among this population, and raise much-need revenue. As Leonhardt observes, “Someday, we will probably look back on our gallon-a-week soda habit the way we now look back on allowing children to ride without seat belts or listening to doctors who endorsed Camel cigarettes. We will wonder what we were thinking.”

Thirty-three states already levy a sales tax on soda (39 states levy a tax on soda in vending machines) and the President’s White House Task Force on Childhood Obesity makes a relatively weak pitch for the idea. Recommendation 4.9 suggests that policy makers should merely “analyze the effect of state and local sales tax on less healthy, energy-dense foods.”

Today’s Progress Report has more on the Task Force and the obesity debate.

Senator Pat Roberts (R-KS) took to the Senate floor today to continue the GOP’s ‘second opinion’ campaign against the new health care law and Donald Berwick, President Obama’s nominee to head the Center for Medicare and Medicaid Services (CMS). During a rather meandering speech about health care rationing, Roberts tried to connect Berwick to the British health care system and imply that the nominee supports death panels:

ROBERTS: What did he [Berwick] mean when hesaid that equity is a necessary component of quality? Does that mean that high-quality care should not be available unless it is available to all? This certainly seems to square with the United Kingdom’s practice of denying or delaying access to the latest break though drugs or technologies because of its high cost…Now I know that “socialized medicine and “death panels” have become loaded terms. I understand that. But if that is what you are for, you should just say so. Don’t be afraid to have this discussion. Dr. Berwick certainly hasn’t been shy about his views in the past.

Watch a compilation:

Roberts also criticized Berwick for supporting universal health care, noting that Berwick’s sentiment may “sound very nice” and “very realistic.” “The reality is, that declaring health care a human right necessarily places one above others, suppressing the rights of others in favor of another government favored group….what you’re essentially saying is that some people have a right to somebody else’s property, whether that be taxable income or doctor’s services or their health care,” he said. Health care “cannot be properly described as a right without egregious government coercion and income redistribution and patient care consequences.”

Despite Roberts’ fear mongering and use of ‘loaded terms’ like ‘rationing,’ the non-GOP talking point reality is that “Medicare makes decisions on coverage all the time.” As Bush appointee Thomas Scully, the Administrator of the Centers for Medicare and Medicaid Services (CMS) from 2001-2003, told me last year, “I made decisions on coverage all the time… You got to do it the right way” by relying on research about the effectiveness of certain drugs. There is simply no way around it. However, since the government spends about $700 billion a year on treatments that don’t improve health care outcomes, the first order of business is to identify this waste and redistribute it to other parts of the health system.

Republicans are fond of saying that everyone in America has access to health care, because anyone can go to an emergency room and receive treatment. “There is a misnomer out there, I think, there’s a misconception, that somehow or another… uninsured means that you have no health care,” Gov. Rick Perry (R-TX) has said. “That’s not correct. Everyone in this country has access to health care.” This argument was most commonly deployed during the health reform debate, as conservatives tried to downplay the extent of the crisis by suggesting that everyone who needs care has access to it.

This line of argumentation has always struck me as a weak notch to hang your hat on, and now a new study suggests that it’s also deadly. A new review of intensive care units or ICUs in Pennsylvania finds that patients without insurance “were 21 percent more likely to die than insured patients“:

“Our findings suggest that ICU patients without insurance have a higher risk of death and receive less intense treatment in the ICU,” Dr. Sarah Lyon of the University of Pennsylvania, who led the study, said in a statement.

“Expanding and standardizing health care coverage through health care reform may improve outcomes in critically ill patients,” she added….”We still do not understand all the reasons for differences in survival between the insured and uninsured,” Lyon said.

“Critically ill patients without insurance may arrive to the hospital in more advanced stages of illness, perhaps in ways we could not control for in our study. Patients without insurance may also have different preferences for intensity of care at the end of life, and may not wish to be kept alive on life support as long as patients with insurance.” But there could be another reason, she said.

“Another, more concerning explanation is that physicians and hospitals treat patients without insurance differently than those with insurance. More work is needed before we can say with certainty that treatment biases caused these results.”

The analysis also found that patients with Medicaid had a 3% greater risk of death than patients with private insurance, suggesting that more needs to be done to improve access to doctors and improve quality standards.

The report also builds on an existing studies which found that thousands of Americans die every year because the lack health insurance coverage. “In September, Harvard Medical School researchers reported that nearly 45,000 people die in the United States each year because they lack health insurance.”

Friday marked the end of the open comment period for rules relating to the new medical-loss ratio (MLR) requirements and rate review standards in the new health care law. As expected, America’s Health Insurance Plans (AHIP) asked for fairly broad provisions that would allow the insurance industry to both reclassify administrative spending as medical spending and increase premiums with only limited regulatory oversight.

The new health care law allows insurers to classify certain practices as “activities that improve health care quality” and count those expenses as medical costs. Following the lead of insurers like WellPoint, AHIP recommends reclassifying certain provisions that were previously excluded from medical expenses (or considered administrative in nature) as “activities that improve health care quality”, thus inflating insurers’ medical loss ratio percentage without improving efficiency. “This definition should recognize the full range of health plan activities — both directly and indirectly related to patient care — that have the primary purpose of improving patient outcomes,” AHIP argues, before providing a long list of services like “nurse call lines,” “quality research and reporting programs,” and “consumer education programs.” [Read their full letter HERE]

But before insurers are allowed to reclassify any expenditures as “activities that improve health care quality,” they must “provide credible scientific evidence that the function improves the health quality of individual policyholders.” As Consumer Watchdog notes in their recommendation to HHS, “Any program or function added under the new ‘health quality’ definition must be stringently monitored by the states and the Department of Health and Human Services to protect against future abuses.” Interestingly, the Federation of American Hospitals goes even further in its recommendations, specifically stating that “the inclusion of a separate category specific to activities that improve health care quality is not as common, and requires a close focus by federal regulators to avoid becoming a “catch-all” into which a wide variety of expenses not directly related to patient care and clinical service quality may arbitrarily be placed.” The FAH warns regulators against agreeing to brand services like disease management and health education as “activities that improve health quality” [Read their full letter HERE]:

There are broad categories of costs that may appear to be related to quality improvement, when in actuality the various types of costs within the broad categories need to be closely scrutinized to reach a proper classification. It is not sufficient or appropriate to allow for one type of classification for all types of costs within the broad categories. For example, most activities related to disease management and health/wellness promotion programs are not directly related to quality improvement for particular patients and should be excluded. Also, generalized programs of health education for the population at large, which are often used as much for promotion of the health plan as to be generally informative on health status, should be excluded.

AHIP also adopted a rather lax approach towards the premium rate review provisions in the law, which require the Secretary to work with the states to establish an annual review of “unreasonable rate increases,” monitor premium increase, and to award grants to sates to carry out their rate review process. The provision is one of the only mechanisms preventing insurers from dramatically increasing rates before the exchanges become operational in 2014. Unfortunately, the AHIP letter recommends no set standards by which regulators can deem rates unreasonable, noting only that rate review should “continue to occur at the state level” — this will allow insurers to take advantage of states that don’t’ have adequate rate review protections — and that “the annual review of ‘unreasonable increases’ in premiums should be tried to principles of actuarial standards and solvency and should be applied consistently across states.” (The letter also lists a variety of factors that should be considered before a rate increase is deemed ‘unreasonable’).

Conversely, Consumer Watchdog recommends establishing several definite criteria by which an insurance regulator can brand a rate hike as unreasonable:

- The proposed premium increase is greater than 150 percent of the rate of “medical care” inflation as calculated by the Bureau of Labor Statistics (BLS).

- The proposed premium increase is greater than 10 percent, or will result in an increase of more than 10 percent in one year.

- If the insurer failed to meet the medical loss ratio (MLR) requirement of section 2718 in the year prior to the proposed rate increase, or if the proposed rate increase is likely to result in a loss ratio below the 80 percent or 85 percent MLR requirements.

- The premium includes provision for excessive administrative expenses or profit.

- The premium includes provision for unreasonable or wasteful administrative expenses.

- The benefits provided under the policy are unreasonable in relation to the premium charged.

- The premium is unreasonable in relation to the deductible or out-of-pocket charges including but not limited to co-pays and coinsurance costs required of the policyholder when accessing medical care.

- The insurance company failed to adequately negotiate provider reimbursement rates.

- A premium increase should not be considered reasonable simply because the increase is necessary to avoid a future financial loss on the insurer’s block of business. Such a standard would allow an insurer to avoid scrutiny even if the rate increase was made necessary due to poor business practices by the insurer.

Insurers are required to report their medical loss ratio in 2010, but won’t offer rebates until January 1, 2011. Later this year, states will also have to establish a process for reviewing increases in health plan premiums and require plans to justify increases.

On Monday, administration officials eager to build support for the new health care law held a conference call outlining how small businesses can apply for the new tax credits. The Internal Revenue Service also “issued a series of rules clarifying eligibility for the credit, which is available to businesses with fewer than 25 employees and paying an average salary of less than $50,000 a year. The value of the credit phases out as the number of workers and their salaries rise, with the full 35 percent credit available only to businesses with fewer than 10 full-time workers paying an average salary of less than $25,000.” From the guidance:

In particular, an employer that receives such a state tax credit or subsidy will also receive the full federal credit based on its entire contribution so long as the federal credit does not exceed the employer’s net contribution…. The guidance clarifies that small businesses can receive the credit not only for traditional health insurance coverage but also for add-on dental, vision, and other limited-scope coverage. The employer must meet the requirements for limited-scope coverage that are similar to those that apply for single coverage: the employer must offer to pay at least 50% of the premium…. The new guidance allows employers to choose among 3 different methods of determining hours to minimize their bookkeeping duties while receiving the maximum tax credit for which they are eligible. Employers can look at actual hours of service, or can use simple rules of convenience to estimate hours based on total days or weeks of service.

Despite the benefits, the National Federation of Independent Businesses (NFIB), the nation’s largest small business lobby, announced last week that it is joining a lawsuit challenging the constitutionality of health care reform:

NFIB joined this lawsuit to further its mission to protect the rights of small business owners to own, operate, and grow their business…The federal government has really simply gone too far with this law. The individual and employer mandates in the law, the onslaught of new taxes, the paper requirements and the new rules are dramatically going to increase the cost of doing business…Small businesses deserve better than the health care law that was rushed through the legislative process, ignores the constitution, and ultimately will destroy jobs and could force some small business owners to close their doors.

If the rhetoric sounds like recycled GOP soundbite, that’s because it is. In fact, the federation and its leaders have long-standing ties with Republican party, leading the Washington Post and the Washington Times to describe the group as “a bastion of Republicanism.” According to CQ MoneyLine, “Since 1980, the NFIB has donated $9,004,517 in campaign contributions, 91.6% of which went to Republican candidates” and many leaders have ties tot he Republican party.

The group my have legitimate problems with the law, despite its conservative leanings, but joining a frivolous lawsuit certainly won’t help address their concerns. For one, the rhetoric is completely overblown. The group has to know that the law does not include an employer mandate — only a free rider requirement for large employers — or taxes that would “force some small businesses owners to close their doors.” Aside from the tax credits, the law provides a whole host of benefits: businesses will be able to pool risk through SHOP exchanges (a long time NFIB goal), receive grants for wellness programs, and expect insurers to spend 85% of their premium dollars on claims.

Sure more can be done to improve the bill, but by aligning itself with the Congressional Republican election efforts rather than try and shape the law through the regulatory process, the federation betrays itself as a purely political operation. Had it chosen quiet advocacy, the group could have actually addressed some of its concerns about increased paperwork and the like. By supporting the lawsuits, they’re undermining the success of their future lobbying efforts and invalidating the legitimacy of the federation. In fact, some business groups are already distancing themselves from NFIB’s theatrics.

Justice Antonin Scalia is the Supreme Court’s most outspoken conservative.  He defends torture and finds little wrong with executing the innocent.  When a majority of his colleagues reached the radical conclusion that people have a right to choose their own sex partners, Scalia railed against them for embracing the “homosexual agenda.”  Yet, for all Scalia’s stridency, right-wing lawmakers are now implying that Solicitor General Elena Kagan may only be confirmed to the Supreme Court if she embraces fringe views that even Scalia soundly rejects.

On the day General Kagan was nominated, Sen. John Barrasso (R-WY) argued that the recently-enacted Affordable Care Act violates “states’ rights,” and that Kagan will be forced to explain whether she would strike down health care reform.  And Barrasso’s comment echoed a similar statement by Sen. Jeff Sessions (R-AL) who, in a thinly-veiled reference to health care, warned that “the court’s interpretation of the Constitution in the coming years could significantly affect the implementation of domestic polices approved by the president and Congress over the past year.”

Barrasso and Sessions’ belief that health care reform is unconstitutional, however, places them very much at odds with Justice Scalia.  In a case called Gonzales v. Raich, Scalia wrote that Congress has sweeping authority to regulate “economic activity,” and there is simply no question that comprehensive health care legislation is economic in nature.  The right-wing conceded this fact with their perpetual braying that health reform would regulate “1/6 of the economy.”

Rep. Mike Pence (R-IN) also announced today that he would use his speech to the National Rifle Association’s national convention to warn that Kagan is “one more jurist who is not sympathetic to the individual, constitutional rights of the American people,” but if Kagan’s views on the Second Amendment offend Pence, then Pence should also be quite peeved by the views of Justice Scalia.

In his landmark decision in District of Columbia v. Heller, Scalia wrote that, although the Constitution protects an individual right to bear arms, “the right secured by the Second Amendment is not unlimited.”  Indeed, Scalia said, a wide range of laws restricting firearms are constitutional:

[N]othing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms.

We also recognize another important limitation on the right to keep and carry arms. Miller said, as we have explained, that the sorts of weapons protected were those “in common use at the time.” We think that limitation is fairly supported by the historical tradition of prohibiting the carrying of “dangerous and unusual weapons.”

It may be objected that if weapons that are most useful in military service—M-16 rifles and the like—may be banned, then the Second Amendment right is completely detached from the prefatory clause. . . . [b]ut the fact that modern developments have limited the degree of fit between the prefatory clause and the protected right cannot change our interpretation of the right.

General Kagan’s record is consistent with Scalia’s view of the Second Amendment.  A blog post by the right-wing Heritage Foundation highlights two objections to Kagan’s record: a 1987 memo recommending that her boss, Justice Thurgood Marshall, deny Supreme Court review to a party raising a Second Amendment challenge; and an presidential memorandum Kagan worked on in the Clinton White House which restricted the importation of certain firearms.

The first issue is easily disposed of.  At the time Kagan wrote the 1987 memo, Heller was still 21 years away, and then-existing law clearly permitted laws banning firearms for personal use.  Just as significantly, Justice Scalia was a member of the Court in 1987, yet he indicated no dissent from the Court’s decision not to hear the case Kagan recommended against their taking up.

The same is true about Kagan’s work on the Clinton-era memorandum, which sought to close a loophole permitting foreign gun manufacturers to import military-grade firearms such as Uzis into the United States.  Scalia’s holding that government may restrict “weapons that are most useful in military service” is clearly consistent with President Clinton’s memo.

So Barrasso, Sessions and Pence are entitled to their radical opinions about what the Constitution does not permit.  Before they attack Kagan’s views, however, they should look a little closer to home.

Our guest blogger is Sonia Sekhar, a research assistant for Health Policy at the Center for American Progress Action Fund. TP intern DJ Carella provided research assistance for this post.

Last night, Senate Republicans launched their opening salvo against Don Berwick, President Obama’s nominee to head the Center for Medicare and Medicaid Services (CMS). Recycling old talking points from the health care debate, the GOP ripped into Berwick’s association with the British health care system and argued that he would “explicitly advocate for rationing”:

SEN. MITCH MCCONNELL (R-KY): I think many of us are alarmed by this nominee’s focus on the British System, where government makes decision for people on their care.

SEN. PAT ROBERTS (R-KS): Dr. Berwick is a huge fan of the British National Healthcare System, called the NHS, a system that relies on rationing health care to hold down costs. … Dr. Berwick is the perfect nominee for a president whose aim has always been to save money by rationing health care.

SEN. JOHN BARRASSO (R-WY): So when you think about that, as a patient in the United States, you say “do I really want Dr. Berwick? Do I want someone who is in love with the National Health Service of Britain? Someone who says they have incredible respect for the way it works and thinks its the right way to go.” Why would an American citizen want that person to be in charge of Medicare and Medicaid for this country?

Watch it:

The GOP is using Berwick’s nomination to make their case against the health care law ahead of the midterm elections. But here again the GOP is purposely conflating managing health care services and containing health care spending with malicious rationing.

As for Berwick himself, the former Harvard professor has spent his career helping hospitals control costs and has built a reputation of finding innovative ways of squeezing value out of every health care dollar. His approach — which is based on the idea that “less intensive, less invasive — and less expensive — healthcare can sometimes be more effective than the most aggressive care” — is nothing like the one-size-fits all government-takeover caricature.

“I think he’s a great guy and a great pick for that kind of big-picture reformation thing,” Bush’s former CMS head Tom Scully told the Wonk Room.

Ultimately, the CMS administrator will be contained by the law. By not confirming Don Berwick, the GOP is hurting Medicare and Medicaid’s abilities to serve their over 80 million beneficiaries well. As Tom Scully said at a recent Health Affairs Round table “…there’s a lot of discussion that [Don Berwick] won’t be confirmed for months, that it will be political; that’s really a shame, whether you’re a Democrat or a Republican. Ninety-five percent of this job is not, in my opinion, political. Ninety-five percent of it is just making the trains run on time and making these programs run, and it’s crazy not to have somebody in there day to day, steering the ship.”

If the 21 states that are suing the federal government over the constitutionality of health reform have failed to explain where their interpretation of the constitution fit within current law, the Department of Justice’s brief in a separate case filed in federal court in Detroit, Michigan goes to great lengths to argue that Supreme Court precedent is on its side. Responding to a suit filed by the Thomas More Law Center challenging the individual requirement to purchase health insurance coverage, DOJ cites at least 69 different instances where the Court has disagreed with the plaintiff’s interpretation of the law. Read the full brief HERE.

Below is the basic summary and a preview of the arguments we’ll hear during the much anticipated case led by Florida attorney general and gubernatorial candidate Bill McCollum:

1) Plaintiff have no standing: The plaintiffs, who filed suit “four years before the provision they challenge takes effect, demonstrate no current injury, and merely speculate the law will harm them once it is in force.” The plaintiff’s insurance status could change between now and 2014 — ensuring that they don’t have to pay a penalty for not purchasing coverage. But even if they choose not to obtain minimum coverage “and incur the penalty, they can fallow the procedures prescribed in law and sue for a refund, without the bar of sovereign immunity,” the government’s brief states.

2) Can’t get around the Anti-Injunction Act: The Anti-Injunction Act, forbids courts from “restraining the assessment or collection of any [federal] tax” whether the suit is by the taxpayer, a state attorney general, or anybody else. Since the plaintiffs themselves allege that the penalty under the mandate is an “unconstitutional tax,” they recognize that they fall within the scope of the Act.

3) Insurance = commerce. Congress can regulate commerce: Congress has determined that the individual mandate “is an essential part of this larger regulation of economic activity,” and that its absence “would undercut Federal regulation of the health insurance market.” “The predicate of this finding, and a distinguishing feature of the health care market, is that virtually everyone will need medical services at some point. Congress had a rational basis to conclude that economic decisions not to purchase insurance to pay for these services, taken in the aggregate, substantially affect interstate commerce, by among other things, shifting costs to third parties.” In fact even the failure to buy a product constitutes commerce in this case. The brief notes, “individuals who do not carry insurance are nonetheless participants in the health care market, and those uninsured often receive treatments from traditional providers for which they either do not pay or pay very little, which is known as ‘uncompensated care.’ Congress found that the cost of providing uncompensated care for the uninsured was $43 billion in 2008.”

4) Congress has authority to “provide for the…general Welfare”: The brief notes that the “determination of what furthers the general welfare is for Congress to make…The minimum coverage provision, either considered by itself…falls squarely within Congress’ ‘extensive’ General Welfare authority.”

Significantly, the government’s brief doesn’t even mention the 10th amendment — reiterating once again that it only applies to powers that are not relegated to the federal government. Since the court has concluded that the federal government can regulate interstate commerce (and by extension the purchase of health insurance coverage), the 10th amendment argument is moot.

The Washington Post reported this morning that the private lawyer advising the Florida-led lawsuits has said “he anticipated that the judge would hear arguments on the case as soon as mid-September.” “It’s an aggressive schedule,” he said.

The National Association of Insurance Commissioners (NAIC) — the insurance industry funded group tasked with making recommendations to HHS about the medical-loss ratio standards in the new health care law — released a new draft report Monday, suggesting that the Secretary should exempt plans in the individual health insurance market from spending 80% of premium dollars on actual medical expenses. The provisions, known as medical-loss ratio percentages (MLR), are intended to prevent insurers from registering unreasonable profits between 2010 and 2014 and require issuers in the individual market to spend 80% of premium dollars paying for claims, while companies in the small and larger group markets have to meet a requirement of 85%. The law also allows the Secretary to adjust the percentage if she believes that “application of the 80 percent standard may destabilize the individual market in that State, and/or 2) on account of the volatility of the individual market due to the establishment of State Exchanges.” Significantly, insurers that don’t meet these minimum standards will have to issue rebates to customers.

The draft NAIC warns that the rules may be “too strict for some individual policies,” leading some customers to lose coverage. The group argues that newer individual policies could not meet the 80% requirement because the risk pool is specifically selected to weed out sicker people, ensuring that its healthier applicants don’t begin filing claims until later in the life of the plan. Unable to spend 80% of its premiums on claims — since few claims are coming in — the insurer would have to lower premiums to avoid issuing rebates, potentially destabilizing the company. In that case, the NAIC warns, individual policies could leave the market, leaving customers stranded:

2. What criteria do States and other entities consider when determining if a given minimum MLR standard would potentially destabilize the individual market? What other criteria could be considered?

The primary factor is the extent to which issuers would be unable or unwilling to meet the standards and would therefore withdraw from the market and terminate existing policies. In the worst case, this could lead to a lack of available coverage, but even if coverage remains available, those with health conditions who are terminated by withdrawing issuers could be left with no access for up to six months because in most states, issuers will be permitted to medically underwrite until 2014. In that case, they may have to remain uninsured for After six months, when they would qualify for the new federal high risk pools.

Consumer advocates and progressive lawmakers have stressed that regulators must ensure that the new MLR standards don’t allow issuers to re-classify administrative expenses as medical expenses (to artificially inflate their MLRs) or hide lower MLR rates behind larger aggregate numbers. As the NAIC’s consumer board said in a recent report, “insures should be prohibited form grouping their plans together to mask the low MLRs of some of their plans” (insurance-related data may be aggregated at the policy form level, by plan type, by line of business, by company, by State.)

In this case, as long as insurers aren’t reclassifying expenses or aggregating their MLRs to conceal lower numbers, the Secretary may want to consider their request. After all, if the newer policies in the individual market are not exempt from the MLR requirements, then younger and healthier people would receive the bulk of the rebates. The devil, though is still in the details and regulators will need to pay close attention to the final NAIC recommendations. Insurers should not be given an exemption for newer plans and the ability to protect their most profitable plans from MLR rebate requirements. This early document presents a refreshingly thoughtful explanation, suggesting that regulators may want to show MLR rates at plan level for reporting purposes but show more aggregated date for rebating.

But consumer advocates I spoke to cautioned that this is only a preliminary draft and that the NAIC has until June 1 (or later if they push back the deadline) to submit its final recommendations to HHS. The public has until this Friday to submit its comments.

Yesterday, our old friend and former McCain campaign adviser Douglas Holtz-Eakin wrote an editorial distancing the former presidential candidate from the high-risk insurance pools in the new health care law. President Obama has argued that the program — a temporary measure designed to provide coverage for individuals who are uninsured for at least six months — was modeled off of McCain’s proposal to cover every American with a pre-existing condition in state-based high-risk policies, and has touted the provision as an example of the Republican ideas contained in the health care bill.

Under the law, a state can meet the new HRP requirements (the pools have to cover at least 65 percent of costs, have limited out-of-pocket expenditures, have no exclusions for pre-existing conditions and cost no more than a standard rate for a standard population) by 1) improving the affordability standards in its existing program, 2) building a new pool that meets the federal requirements or 3) allowing the federal government to enroll its residents into a national program. Holtz-Eakin takes exception to the notion that this has anything to do with what his boss was proposing on the campaign trail:

In contrast, McCain’s GAPs would have emphasized best practice as a condition for federal assistance — including permitting GAPs to band together with other states’ GAPs to enlarge pools, purchase coverage across state lines and lower overhead costs.

It would have provided incentives for use of innovative tools to reduce health care costs. As a condition of federal assistance, states would have permitted a broad range of insurance, including preferred-provider organizations and health savings accounts. McCain’s GAPs would have addressed both cost and coverage, improved competition in insurance markets and expanded the quality of insurance offerings.

In addition, McCain’s plan would have put serious money behind the needs of those with costly conditions. How much? More than $20 billion annually, according to Lewin Group estimates.

There is a clear bottom line: Obamacare marches into a state with no regard for the existing high-risk strategy and no attempt to coordinate to achieve sensible coverage, competition and budgetary outcomes. In return, states get a temporary program with a 2014 expiration date.

Thus, at its best, it is a bandage that won’t foster market reforms.

I’m not going to deny that there are some differences here, but I also don’t believe that the Democrats were under any kind of obligation to adopt McCain’s “GAPs” since the senator ultimately voted against the measure, along with every other Republican. The final provision was a compromise between McCain’s proposal and Democrats’ principles but the basic concept is the same incredibly expensive proposition: bring all the sick people together, put them in a single risk pool and see how much that costs you. Holtz-Eakin says that McCain would have put “serious money” behind the proposal, more than $20 billion annually. But during the campaign, he suggested that far less would be needed.

“When Mr. McCain unveiled his high-risk pool proposal, his chief domestic policy adviser, Douglas Holtz-Eakin, the former director of the Congressional Budget Office, estimated the federal cost at $7 billion to $10 billion. Mr. Holtz-Eakin said five million to seven million uninsured people would be singled out for coverage,” the New York Times reported in July of 2008. “But in a recent interview, Mr. Holtz-Eakin emphasized that the projections “could change dramatically” depending on how the program was structured.”

The point of all this is to say that HRP are just a very expensive way of doing business, no matter whose version you consider. The states that are choosing to opt out of the program are arguing that $5 billion over three and a half years is not nearly enough and who’s to say that they would be satisfied with the kind of funding McCain was proposing? 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” would require far more than $100 billion over 10 years. The real cost would be “on the order of $1 trillion over ten years given projected health care costs.”

No matter how much better Holtz-Eakin believes McCain’s proposal was at containing costs, he can’t possible agree that the GAPs were sustainable over the long term. Obama’s approach is an interim measure which may require more funding, but at least it ends once the exchanges begin.