Friday, August 28, 2009


Amidst the cries to pass Obamacare as a tribute to Ted Kennedy, I found a post by Anglachel. I was intrigued because she didn’t suggest passing Obamacare to honor him nor did she suggest passing single-payer to honor him; rather she said:

I think the best memorial we can offer to this man, respecting his political service and offering amends for any political follies, is to enact, in its own right and without any other riders, exceptions, additions and/or emendations, his Medicare for All Act.

Now Medicare For All usually seems to be thought of as synonymous with single-payer so I wondered why Anglachel didn’t just advocate passing single-payer. I clicked on Anglachel’s link and discovered that the Kennedy bill is Senate Bill 1218. Introduced in the 110th Congress (the previous Congress) on April 25, 2007, and entitled the “Medicare for All Act”, this bill was sponsored by Ted Kennedy with no co-sponsors. S1218 never made it out of committee and was not re-introduced in the 111th Congress.

Surprise, surprise. This is not the bill single-payers are talking about. As far as I can determine, the bill single-payers are pushing is House Resolution 676. This bill is entitled the “United States National Health Care Act or the Expanded and Improved Medicare for All Act”. (Arrogant, much?) HR 676 was introduced on January 26, 2009, by John Conyers and has 86 co-sponsors including Patrick Kennedy.

The main difference between the two bills is the level of coercion. I haven’t made a detailed study of either but from brief review the Kennedy bill:

1) Allows for enrollment in Medicare for All. It seems that joining is voluntary rather than mandatory. This not totally clear; if enrollment is in fact mandatory then some - though not by any means all - of the differences between the Kennedy bill and single-payer disappear.

2) Requires the HHS Secretary to allow private insurance companies to provide services so long as those companies offer benefits comparable to those in the Federal Employee Health Benefits Program. In other words, this bill allows for setting up a public version of the FEHP. The bill levels the playing field somewhat by requiring the Secretary to pay private insurance companies the average cost of providing benefits under the program. (I’d have to think about the math more but it’s possible an average that uses cost and includes private insurers is a bit of a Trojan horse as far as getting rid of private insurers.)

3) Uses taxes to fund the program: 1.7% on individuals earning over $25,000; 7% of employee wages on employers. However those taxes are only assessed on the enrolled. If enrollment is - as I believe it to be - voluntary that would leave the possibility of a dual public-private system intact.

4) Specifically allows for the continued existence of private insurance both individually and at a corporate level as a supplement to the program.

By contrast HR 676 is, shall we say, harsh. A brief review indicates that under this bill:

1) The government is the insurer just like now happens with much of Medicare.

2) If you’re qualified to participate you’re enrolled. This is a little unclear but it doesn’t much matter because:

It is unlawful for a private health insurer to sell health insurance coverage that duplicates the benefits provided under this act.

So even if you aren’t forced to enroll you can’t get health insurance anywhere else. (Private insurers can insure procedures not government-covered such as cosmetic surgery.)

3) The bill is rather coy about exactly what taxes are going to be required to fund this program. It gets the revenues already coming in for health care (Medicare, I assume); it increases income taxes on the top 5 percent (no amount given); is institutes “a modest and progressive excise tax on payroll and self-employment income” (no amount given); it institutes “a small tax on stock and bond transactions” (no amount given). Any additional funding will come from the savings realized by reducing paperwork; buying meds in bulk; and providing better access to preventive care (no amounts given).

4) No investor-owned health-care entities will be allowed to provide health care and be paid for it under this plan. Private entities are allowed; for-profit public entities must convert to non-profit entities and “shall be compensated for reasonable financial losses” incurred in the process.

The Kennedy bill is designed to provide universal access to health insurance; the Conyers bill is a true single-payer system designed to make our health care work like Canada’s does. The Kennedy bill may well nudge us down the road to single-payer but if enrollment is truly optional that makes such an outcome less likely. Furthermore, if the Secretary contracts with private insurance companies the Kennedy bill may instead move us toward a version of what Bill Bradley suggested: getting everyone who wants to enrolled in the Federal Employees Health Benefit Program. I suggested we would need appropriate firewalls to shelter the employees; the Kennedy bill firewalls FEHP by setting up a separate risk pool.

It’s also worth noting - worth emphasizing - that the people backing Obamacare can slap a KennedyCare label on the monstrosities they’re pushing but if Senate Bill 1218 truly represents what Ted Kennedy wanted then the Obamacare bills are most definitely not KennedyCare. Heck, Kennedy’s bill is only 27 pages long and if I spent as much time on it as I did on just one section of HR3200 I’m pretty sure I could fully understand all the ins and outs of the whole Kennedy bill. I don’t think anyone does - or ever can - understand all the ins and outs of HR3200. If nothing else, I don’t see the Kennedy bill creating the endless loops of new government agencies that are envisioned by HR3200; that right there should make KennedyCare a heck of a lot cheaper than HR3200.

If you dislike the idea of any further Federal government involvement in health care/insurance you’re not going to like KennedyCare. I’d rather go a different route myself. However, if we’re going to have some kind of overarching health care reform shoved down our throats by the Democrats, I’d rather have KennedyCare than single-payer and I’d rather have KennedyCare than HR3200. KennedyCare appears to actually insure the uninsured (unlike HR3200) and it appears to leave us some choices (unlike single-payer). Furthermore, it does have at least some free-market operation in the (presumed) competition among health insurance companies to contract for the right to provide services under the Federal program. If I’m right that enrollment in the Kennedy plan is optional then there is also competition in the fact that employees can elect to spend their 1.7% tax (and theoretically their employers’ 7% tax*) on buying their own private insurance. Or buy no insurance at all.

Rumor is that House Speaker Nancy Pelosi is going to allow a simple up or down vote on single-payer when the Congress reconvenes in September. I assume that vote will be on House Resolution 676. Most people seem convinced it will fail and I hope they’re right.

However, I suspect that if those pushing single-payer and those pushing the gargantuan Obamacare bills had chosen instead to get behind Senate Bill 1218 it might well already have passed. After all, who could resist a piece of legislation the stated purpose of which is to ensure “that all Americans have access to health care as good as their Member of Congress receives”?


* There is a big hole here that makes me suspect the intention is to make enrollment in the Kennedy plan mandatory (although the language of the bill may create a loophole). If an employee is enrolled in KennedyCare his employer has to ante up 7% of his wages. This seems like a situation tailor-made for an unscrupulous - or simply cash-strapped - employer to refuse to buy his employees health insurance and threaten to fire them if they enroll in the government program. Given Democrats’ (not entirely unjustified) suspicion of employers it seems unlikely they would leave such a land mine in a bill.

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