Healthcare Reform

In the House, a handful of conservative Blue Dog Democrats have teamed up with Republicans to keep the Energy and Commerce Committee from voting on the legislation; negotiations to get them back on board are focused on how a proposed government-run public health insurance plan would set the rates it pays doctors. In the Senate, a bipartisan klatsch of centrist Finance Committee members led by Democratic chairman Max Baucus of Montana and meeting in secret talks seems ready to dump the public option altogether, replacing it with some sort of co-op scheme, the details of which are still being hashed out. If the compromises wind up devouring the legislation’s initial principles, healthcare reform could turn out to be a drug whose side effects are as bad as the disease.

The Blue Dogs who are holding up the House bill have been friendly with the insurance industry for years — a report out last week found the healthcare sector has already given nearly $300,000 to the Blue Dog PAC this year. Baucus, meanwhile, has received nearly $3 million from healthcare businesses over his career, though he stopped taking contributions from the industry on June 1.

Already, Democrats who aren’t participating in the Finance Committee’s negotiations are eyeing Baucus and his six-senator cabal a little warily. “The public intuitively understands — way better than some people here — that a public option will keep the insurance companies honest,” said Ohio Democrat Sherrod Brown, who sits on the Senate Health, Education, Labor and Pensions Committee, which has already passed its own bill that includes a public plan. Polls show voters agree with the idea, though depending on how the question is framed, the results can vary widely. “There is lots of evidence that a public plan option kind of thing works,” Brown said. “There is no real evidence that we could put together a co-op and scale it up and make it work on a national level.”

The White House is staying in close touch with negotiations on both sides of Capitol Hill — some of Obama’s top healthcare aides sat in on the Senate Finance group’s talks on Sunday, for instance. The administration line is still that any progress is better than none, and that as long as the legislation is still moving along, there’s no reason to panic. “We’ve not yet seen … the plan that might arise from the Senate Finance Committee or under what umbrella it will come out of the committee, with whose support,” press secretary Robert Gibbs said Tuesday. Obama remains committed to reform that slows the increase in healthcare costs — if things continue as they are, by 2018, healthcare will account for $1 out of every $5 spent in the U.S. economy  – and bans insurance companies from dumping patients due to preexisting conditions. Premium costs have risen much faster than salaries in recent years; the U.S. spends more money on healthcare than any nation in the world, without much evidence that the quality of the care is any better. The White House also says any reform must cover the 46 million people who don’t have insurance.

For now, those broad goals don’t seem to be threatened by the legislation’s recent loss in momentum. A Senate Democratic source noted that no matter what the Finance Committee comes up with, the legislation would still make it easier and cheaper for people to buy insurance, expand coverage, end the preexisting conditions hassle and cut Medicare subsidies to insurance companies. Outside experts said the same thing. “People understand that the status quo isn’t going to work,” said Peter Harbage, a healthcare expert at the liberal Center for American Progress, which has been pushing hard for reform that lines up with Obama’s outline. When the last reform effort failed, “in 1993, there wasn’t widespread acceptance of that idea.” Harbage thinks a public option is the best way to hold costs down and keep private insurance companies in line, but he said a co-op might be able to do that, too, depending on the details. The details, for now at least, remain a mystery to anyone who’s not involved in the negotiations.

Many Senate Democrats also still seem to prefer a public insurance option, rather than a co-op. Even lawmakers who were skeptical of the public option to begin with admit that the co-op idea is only picking up steam now because the Finance Committee is focusing on it. That might not be enough to carry it through. So lawmakers who aren’t involved in the talks aren’t quite willing to write off the Finance Committee’s compromise without seeing it. But they’re starting to run out of patience. The No. 2 Senate Democrat, Dick Durbin of Illinois, said there was “high anxiety” as Baucus slogs through negotiations with the panel’s top Republican, Chuck Grassley of Iowa. “This is really behind closed doors with six senators,” Durbin said. “The rest of us are truly on the outside.” The only message Democratic leadership has really conveyed to Baucus? “Hurry up,” Durbin said. Baucus wouldn’t say much Tuesday about the progress of the talks, or when the talks will be done.

What supporters of reform take pains to note is that none of the current slowdown was all that surprising, even though Obama had originally set an August deadline that neither the House nor the Senate will wind up meeting.

And in the end, Obama — and Democratic majorities in the House and Senate — should still have the final word. The bill could shift to the left again in later negotiations between the House and Senate, even if it has to shift to the right now to stay on track. “Because you want three Republicans to come along on this, we’re going to betray what the American people want? I don’t think so,” Brown said. “Just because Finance was slower doesn’t mean that they’re stronger or that their plan will carry the day … I’m very certain that whatever comes out of the Finance Committee, [healthcare reform] won’t look like that when President Obama signs it.”