Blue Dogs' Bark Worse Than Bite

The House is back on track.  The Energy and Commerce Committee began marking up HR 3200 again this afternoon and will likely finish in the next few days.  At that point, all three committees will be done, their staff will work on reconciling discrepancies between the committee mark-ups, and when the House returns in September, a historic full health care reform bill will open for debate on the House floor.  All it took was a deal with the Blue Dogs – self-proclaimed fiscally conservative Democrats who effectively shut down Energy and Commerce until their demands were met.

The fact that the deal was struck is a positive – the process can roll on.  But most folks are worried first and foremost about what progressives in the House had to give up.

Surprisingly, not a whole heckuva lot.  Irate progressive Democrats are already calling this “a sop to the insurance industry,” but the insurance reforms and regulations are intact.  For those concerned that the disproportionate weight of the Blue Dogs and their pro-business tendencies would cause the House bill to be watered down, not much water was added.  Probably the biggest change – and the one least expected – was that originally the federal government was going to entirely pick up the tab for increasing Medicaid eligibility to all adults at or under 133% of the federal poverty line, as well as all of the cost for increased reimbursement, particularly for primary care, of the most anemic rates in Medicaid.  Now states will be asked to pay for 7% of the costs, at lest on the eligibility piece.  They’ll whine.  A lot.  But this still leaves the federal government paying for 93% of the cost.

What now seems like ages ago, the Blue Dogs aggressively suggested they only wanted to see a public health insurance option with a “trigger” – a five year “head start” for private insurance to take advantage of all the new customers and subsidies in the Health Exchange, with a public option kicking in to keep them honest only if private insurance fails to make health insurance affordable on its own (the sound you hear is me laughing so I don’t cry.)  They haven’t mentioned that in a while.  Instead, they held firm for a public option that does not use Medicare rates at all, but negotiates reimbursement with its providers.  It's a change.  But the House public option was always going to transition away from Medicare rates and towards negotiate with providers after three years.  The Senate HELP committee likewise uses provider rates from the get-go.  The negotiation with the Blue Dogs just anticipated (and resolved) a likely sticking point for reconciliation between the House and Senate bills.  The compromise also allows for states to set up their own co-ops.  The co-ops won’t replace the public option-- they’ll just be an additional choice.  No big whoop.

The element I was most nervous about was the cut in subsidies for those towards the high end of eligible income -- $43,000 for an individual and $88,000 for a family of four.  But the premiums for this income level will be 12% of their income instead of the original 11%.  Talk about tinkering around the edges.

As their main bragging point, the Blue Dogs pushed for small business exemption on the employer mandate to go up to payrolls with $500,000 (instead of $250,000).  Really, this is moving money around – robbing Peter (subsidies on individuals) and Patrick (Medicaid money from the states) to pay Paul (small businesses).  But not really paying Paul that much.

Finally, the total package will be shaved by $100 billion.  I’m by nature irked by cutting money just to say you cut money, rather than actually cutting in order to make a bill better.  But in this case, I just don’t see that the bill has lost anything.  Negotiating with the Senate is likely to change the reform legislation by an order of magnitude more than anything we’ve seen from negotiating with the Blue Dogs, for all of their barking.

That’s why I agree with the dominant sentiment – this was about stalling for time.  It’s basically impossible for a House vote before the recess at this point (so Henry Waxman and House leadership agreeing to delay a vote until September is a “no duh”).  Hopefully, the Senate Finance Committee – who has an extra week before recess – has a reasonable chance of getting their act together (defined solely as finally producing a draft bill, in this case).  As Jon Cohn writes, “[Blue Dogs] want to wait and see what the Senate produces. If they have to take what they consider a hard vote--to raise somebody's taxes, to change the way Medicare pays for medical services, whatever--they don't want to stick their necks out any more than is absolutely necessary.”

That’s why the Blue Dogs bit off so little of what makes HR 3200 work.  Once the vote was delayed, the rest was gravy anyway.

(Photo credit:  eepie on Flickr.)