More Subsidy-Blogging Needed?
Kevin Drum says:
I sure wish that overall subsidy levels in the current healthcare bills produced the same kind of uproar as abortion and the public option. In terms of real-world effect on real-world people, subsidies are the biggest issue by a mile. But not a very sexy issue, apparently. That’s too bad.
Three points on this. One is just that the White House undercut efforts to organize around really generous subsidies by setting a $900 billion overall price tag during his big congressional speech. Another is that moderate Democrats by-and-large seem to have accepted this number, and not seriously pushed for a $600 billion bill or whatever. So there’s a certain amount of fatalism.
Last, I think most people see subsidies as the kind of thing that’s relatively likely to be tinkered with and revisited in the future. If a public option isn’t enacted in 2009, it’s not going to arrive in 2015. The subsidies, by contrast, are bound to be tweaked.
14 Responses to “More Subsidy-Blogging Needed?”
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November 14th, 2009 at 11:39 am
The subsidies, by contrast, are bound to be tweaked.
One look at TriCare is your hint. Higher premium sharing, lower benefits, higher deductibles copays. That’s what I hear from my retired military friends under 65.
Another look at employers reveals the same pattern. Insurers love when customers effective self insure for the first few thousands in annual health care costs.
The feds will decrease subsidy or hold it steady while decreasing benefits. It’s like that 20 lb bag of dog/cat food, that’s now 16 pounds and cost $1 more.
The global race to the lowest common denominator on worker pay/benefits, taxes and regulations continues. Health care deform sets the table for you to pick up more. The red and blue Beltway boys call it “personal responsibility.”
November 14th, 2009 at 12:13 pm
“The subsidies, by contrast, are bound to be tweaked.”
I certainly hope so. The effective marginal tax rate for those trying to get out of poverty is high enough already.
(And kudos to Mr. Drum for an actually reasonable take on the Stupak amendment, despite being opposed to it)
November 14th, 2009 at 12:19 pm
I had thought that a public option could relatively easily be created in the future under reconciliation because it clearly reduces the deficit.
November 14th, 2009 at 12:38 pm
Well I sure can’t see any way inadequate subsidies could be politically harmful when some future Congress could tinker with them! I mean hey, right, we’re imposing giant new costs on millions of Americans, all for the benefit of insurance companies who will almost certainly embarrass themselves/us, but everyone will totally understand if we assure them they only have to deal with it for 6 years or so.
Let’s be real. Every dollar of unsubsidized-but-mandated premiums will hurt progressives. We need to be trying to fix this now or, failing that, running like hell from it.
November 14th, 2009 at 12:40 pm
John, if we can’t pass a PO now, we’re not going to be able to in 5 years. 60 seat majorities are rare. We might as well pass the best bill possible without-the-public option and then spring out the most robust PO possible as a reconciliation surprise the next day.
Which isn’t a half bad idea and would be pretty funny to boot.
November 14th, 2009 at 12:55 pm
I would say that the subsidies have the potential to become what Social Security/min. wage increases were in the 30s-70s, a standard part of Democratic politics.
Moreover, I would note that having the Federal government have “skin in the game” as the odious expression goes will create further pressure towards single-payer.
November 14th, 2009 at 2:16 pm
Maybe I am wrong, but my feeling is, the subsidies are the price to pay to the industry to get anything at all. The industry is being subsidized, not the people. The industry will be the big winner, the people will win a few crumbs, just like Medicare part D. It is what the Republicans want and they can blame the Democrats to make it so expensive.
November 14th, 2009 at 2:16 pm
$600 billion? What does that mean? You think Democrats should have argued for less subsidies?
November 14th, 2009 at 3:18 pm
Atrios has been saying this all along–forcing people to buy (the mandate part) shitty healthcare policies that they can’t really afford from private insurance companies is a loser politically. Also, I don’t see how the current proposals do anything to reduce costs for everybody who already has insurance–most of us will most definitely be paying a lot more and screaming about it.
November 14th, 2009 at 3:31 pm
@8
The point here is that, in this case, the act of pre-compromise can be argued as having been effective.
The Obama administration did not ask for $1.2T but instead $900B. Then, the moderates accepted this amount without calls for further reductions. This stands in contrast with the stimulus debate in that a pre-compromised position taken by the president was further weakened by the blue dogs.
I don’t trhink that this analysis matters very much as i dont see any core philosophy that governs the blue dog’s contrarian approach to governance. Attempting to pick a Goldilocks inspired sweet spot (not too big… not too small… but juuusssst riiiiggghhht) is just asking for a pickup game of Calvinball.
November 14th, 2009 at 3:48 pm
Atrios has been saying this all along–forcing people to buy (the mandate part) shitty healthcare policies that they can’t really afford from private insurance companies is a loser politically.
A) Why must the policies be “shitty?” Isn’t it the case that, at the very least, whatever legislation is passed will at least put in place some decent standards?
B) Mandate/subsidize is going to be a political loser if that’s the way the numbers work. But I don’t think they will. I think there are something like 12 million legal US residents who will fall under the mandate requirement. Of those, the vast majority will get some subsidies OR will be exempted because their incomes aren’t sufficiently high. The universe of people who A) are required to buy insurance, B) get no or inadequate subsidies C) don’t qualify for an exemption, and D) are eligible to vote can’t be but a trivial percentage of the electorate.
Now, I think the number of such people is likely to grow in the fullness of time, but I also think it’s likely that the legislation will be tweaked in the fullness of time with an eye toward increasing the subsidies or (more likely, because it will be cheaper) rolling out a more robust public option. In other words, I just can’t envision Congress allowing public disgruntlement over mandate/subsidy get to to the point where it’s a big political problem, because they’ll head it off at the pass with legislation.
November 14th, 2009 at 3:57 pm
Three points on this. One is just that the White House undercut efforts to organize around really generous subsidies by setting a $900 billion overall price tag during his big congressional speech.
I know people are claiming this, and I myself wish BHO hadn’t uttered these words. But that didn’t stop the House from promptly passing a $1.2 trillion bill, right?
If the Senate spits out a $900 billion bill, and the two chambers split the difference in conference, we’d be looking at a $1.05 trillion bill. Do people seriously think Obama would veto such a bill for exceeding the limit he said he wanted? Sure, Repubs would try to make political hay out of the higher price tag, but they’re doing to attack the Democrats for socialism in any event. So what does it matter?
The President, after all, could quite plausibly remind people that he doesn’t possess a line item veto, so it’s either accept a somewhat larger price tag (and get a bill that will please more voters in the long term) or veto universal health care.
I think people should calm down about Obama’s $900 billion quote, unless what’s going to happen is that Democrats in both chambers really will try to make the final version come in at that figure to please the White House (is that what people think is going to happen?).
November 14th, 2009 at 4:53 pm
Jasper, I think you underestimate the number of people who currently have insurance, but really can’t afford what they are paying now. This includes a huge portion of the real middle class that make around $50-75K per year. They’re already struggling, they’ll see their health costs rising, they won’t be getting much if any subsidies, and the Repugs will be noting every chance they get that the health bill was passed by the Democrats. Plus, a lot of young people, possibly supporters of BO in the last election, who currently don’t have health insurance, will be shocked at how much they have to contribute towards healthcare or else pay a penalty. Forcing someone to buy something from a private, for-profit, insurance company is a sure loser. I keep hoping the public option will be robust enough to head off these huge price increases that will make the public hate the plan.
November 15th, 2009 at 3:35 am
Matt,
Oh yeah! The bill will include the mandate to purchase and some weak-tea “regulations” about rescission and “everyone is eligible” that the carriers will blithely ignore.
And the next time the Republicans get control of Congress the subsidies will be shut down, “because we can not afford this new entitlement.”
And who will be blamed? The Democrats, who will not control Congress again until 2026 when Texas flips blue from Hispanics.
The idiots are handing the throat cutting knives to the sociopaths and smiling while they do it.