Bill Clinton on Student Loans and Health Care

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me-and-bill.thumbnail.jpegI told you all that I was going to cover Bill Cinton’s Clinton Global Initiative this week. What I didn’t tell you is that I was invited to attend a meeting between Clinton and a group of about 15 bloggers. On the eve of his big shindig, Clinton generously spent an hour and a half with us last night, answering at least one question from each of us.

I’ll talk about what he said about CGI last night as I cover the event itself. For now, I want to point out an inconsistency between what Clinton said about student loans and what he said about a public option for health care.

In response to a question on education, Clinton hailed the House’s recent action to give Federally-guaranteed loans directly to college students rather than via private loan companies. Clinton noted that under his Administration, he provided this as an option, as opposed to the required change now before Congress. Even with just the optional program, students who took their loans directly from the Federal government saved $9 billion in loan repayments. And the Federal government saved $4 billion because fewer people defaulted on the loans held by the Federal government than defaulted on private loans (this was partly because the Federal government could build in flexibility to keep loan payments affordable). If the Senate succeeds in passing this bill, Clinton noted, it would make college more accessible and affordable for the middle class, and would be a crucial element in keeping America competitive internationally.

In short, Clinton argued that by bypassing the private sector in supporting a critical service to taxpayers, both the users of that service and the government could save money and achieve better outcomes.

Clinton was much less insistent on bypassing the private sector with health care, though. While Clinton made it clear that he personally supports the public option, he suggested that those insisting health care reform must have a public option were being unreasonable. "If it’s not a net negative," Clinton said, "we ought to pass it," repeating a sentiment he voiced at Netroots Nation. Of note, Clinton also pointed out that the public option had been largely gutted by limiting access to it to those who buy their own insurance, suggesting that that made it more expendable in the bill itself.

To explain his stance, Clinton invoked an op-ed Paul Begala wrote last month. Read more →

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Obama (and John Boehner) on Al Punto

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Since I pushed Obama’s appearance on Univision’s Al Punto the other day, I thought I should watch it.

The Obama interview lasted about 15 minutes (as did the Boehner interview that followed) and included–in addition to the questions about whether undocumented workers and health care reform I discuss in more detail below–the following questions (working from memory–my Spanish too rusty to live-blog and retranslate while listening!!):

  • Whether the opposition to Obama’s policies stem from racism (he gave the answer about delegitimizing government he has given elsewhere)
  • Presenting a claim John Boehner made–that Democrats don’t have the votes to pass health care by themselves–whether the Democrats could do it on their own (Obama gave a typical answer celebrating bipartisanship but saying he thought it would pass)
  • Whether Obama supported a public option and whether it could be passed (Obama repeated his answers about the importance of the public option as part of a larger reform, and said he did not believe that it was dead)
  • Whether Obama, who has said he supports more cultural exchange with Cuba, supported a big concert they’re doing there
  • What Obama would do regarding Honduras (Obama took a middle ground, appealing to having a more legitimate election in the future)
  • Whether Obama would fulfill his promise to put forth immigration reform in the first year of his Administration (again, Obama took a middle ground, and pointed out he promised he’d have to get it passed)

The most important questions, of course, had to do with the exclusion of undocumented workers from the health exchange (and therefore from health care in the United States). Al Punto host Jorge Ramos asked Obama whether this policy made sense in about three different ways (and asked the same question in his interview of John Boehner). Both Obama and Boehner generally responded by pretending that exclusion from the exchange didn’t amount to exclusion from health care (Obama said something like, "well, if they buy health care from insurers directly, that’s between them and the insurer"). Both, too, responded to questions about health care by talking about the need for immigration reform. Ramos asked Obama specifically about the number of children born in this country who, because at least one parent is undocumented, will have problems accessing health care (if I heard it right, Obama said he’d like to cover these children in SCHIP).

Read more →

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MaxTax’s Medicare Reforms: Would They Really Reform Health Care?

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The MaxTax is largely a Medicare bill attached to 39 pages of private health care reform. To show you what I mean by that, here’s roughly how many pages MaxTax spends on each topic:

Health care exchange and other means to make private care available to the uninsured: 39 pages (including several on preventing tax dollars from being spent on undocumented workers or abortions)

Extending access to the poor and underserved (including expanding Medicaid to 133% of poverty): 34 pages

Improving the efficiency of public health care systems (mostly Medicare): 120 pages

Revenue plans: 25 pages

Total: 223 pages

I make this observation as a way to raise an honest question about Ron Brownstein’s claim that "Baucus’ draft bill offers the most fiscally sustainable framework yet devised for expanding coverage."

About half of Brownstein’s support for this claim comes in a discussion of the changes the MaxTax makes to public health care delivery. To understand what those changes are, read paragraphs four through thirteen of his piece. Those paragraphs summarize the 120 pages of the MaxTax treating Medicare that do things like shift payment to reward the quality of service, rather than the quantity of it (these changes make the kind of changes proposed by Atul Gawande in this important New Yorker piece). 

Now, I’ll get to the other half of Brownstein’s support for his article in a second. But first, regarding the many admirable changes MaxTax advocates for Medicare, here’s my question.

What effect will those important changes in public health care delivery–made in a bill that specifically prohibits public health care solutions for the rest of the population–really have on the fiscal responsibility of health care overall?

That is, Brownstein rightly commends Baucus for implementing changes to Medicare that will probably have real impact on the cost the government pays for Medicare. But this is in a bill that–almost as an afterthought–dumps 30 million people into private care that includes no such changes (at least no mandated changes). The Federal government would, under MaxTax, be paying billions for health care that did not necessarily integrate the same changes that the government would incent in Medicare coverage.

So here’s my honest question. Do policy wonks believe that by rewarding or even mandating such changes in Medicare, the entire health care delivery system would change? Read more →

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Pay2Play Ceci: “The Most Influential Players” Love MaxTax

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Pay2Play Ceci Connolly has an article out summing up the reaction she’s seeing to Max Baucus’ health care plan:

As they scoured the 223-page document, many of the most influential players found elements to dislike, but not necessarily reasons to kill the effort. Most enticing was the prospect of 30 million new customers.

In order of appearance, here are the people she cites in her article (I’ve bolded the ones she has actual quotes from):

  • Max Baucus
  • Obama
  • Liberal Democrats and allies, particularly labor unions
  • Republicans
  • Major industry leaders and interest groups
  • White House strategists
  • Obama
  • John D. Rockefeller
  • Lawmakers and lobbyists
  • Ron Wyden
  • Neil Trautwein, a vice president of the National Retail Federation
  • Leaders of the Business Roundtable and the National Federation of Independent Business
  • Drugmakers and hospitals
  • Kenneth E. Thorpe, an Emory University professor and Clinton administration official (noting that health care providers stand to make more than they’ll lose)
  • Max Baucus
  • Several trade associations
  • The medical device industry (dsecribed "recruiting" four senators to roll back fees on its industry)
  • One White House aide

In all, Ceci presents a landscape in which the most important players–aside from two Senators who have been slighted in the process thus far–are trade industry groups. And the most important issue for them is the profit they stand to make off of taxing America’s middle class to make them wealthier.

Now, to be fair to Pay2Play Ceci, that’s unashamedly the point of her article–that while the bill has pissed off Democrats and Republicans, it has thus far lulled the industry with dreams of forthcoming riches.

But behind the rhetorical fireworks was a sense that the fragile coalition of major industry leaders and interest groups central to refashioning the nation’s $2.5 trillion health-care system remains intact.

And also to be fair to Pay2Play Ceci, it’s clear that these players were the prime movers behind this bill. The story is absolutely accurate–though that doesn’t mean it has any business being told.

Nothing demonstrates the degree to which actual politicians–much less their constituents–have become mere bystanders as the health care industry crafts up a plan to get 30 million new captive customers.

One more point on this (so I can count this as my daily thrashing of the WaPo). An article like this is the natural outcome of the WaPo’s attempt to be a broker of the key players (not surprisingly, the same industry hacks highlighted here) in the health care debate. Read more →

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CBO on Co-Ops

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Ezra has posted the CBO’s initial estimates on the costs of MaxTax–some of the assumptions for which seem to pretend that insurance companies will not react in any way to the new rules imposed by MaxTax.

But before I get into what CBO’s assumptions, here’s what CBO thinks of Baucus’ crappy co-op option.

(The proposed co-ops had very little effect on the estimates of total enrollment in the exchanges or federal costs because, as they are described in the specifications, they seem unlikely to establish a significant market presence in many areas of the country or to noticeably affect federal subsidy payments.)

That is, as designed, the co-ops would not be more attractive than the private insurance options, nor would they bring down subsidies (which means they wouldn’t bring down costs to us, either).

As designed, the co-ops are totally worthless.

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The REAL Worst Policy in the Bill

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Ezra continues to claim that the worst employer incentive in MaxTax is the way it fines employers for not covering employees.

Max Baucus’s bill retains the noxious "free rider" provision on employers. Rather than a simple employer mandate that forces every employer over a certain size to provide health-care insurance or pay a small fee, the free rider approach penalizes employers $400 for hiring low-income workers who are eligible for subsidies.

[snip]

This isn’t just the worst policy in the bill. It’s one of the worst policy ideas I’ve ever seen. It creates a huge incentive to build a workforce that entirely excludes low-income workers.

Now before we get into whether this really is the worst incentive or not, let me correct something Ezra said. He said:

The employer doesn’t just pay $400 per low-income employee. He pays "$400 multiplied by the total number of employees at the firm (regardless of how many are receiving the state exchange credit)." The bill actually gives an example of how this works: Employer A has 100 employees and does not offer health-care coverage. Thirty of the employees receive subsidies on the exchange. Employer A doesn’t pay $400 x 30 employees, but $400 x 100 employees, for a total of $40,000. 

But that’s not what the MaxTax does or says. Here’s what MaxTax says [update: Ezra has now amended his post to reflect this difference.]

The employer would pay the lesser of the flat dollar amount multiplied by the number of employees receiving a tax credit or a fee of $400 per employee paid on its total number of employees.

For example, Employer A, who does not offer health coverage, has 100 employees, 30 of whom receive a tax credit for enrolling in a state exchange offered plan. If the flat dollar amount set by the Secretary of HHS for that year is $3,000, Employer A should owe $90,000. Since the maximum amount an employer must pay per year is limited to $400 multiplied by the total number of employees (for Employer A, 100), however, Employer A must pay only $40,000 (the lesser of the $40,000 maximum and the $90,000 calculated fee). [my emphasis]

So Ezra’s (and Baucus’) hypothetical employer would pay just $40,000. But say Employer B had just 5 employees who were subsidized, out of the same 100 employee firm. Employer B would pay $15,000, which brings it closer to the costs an employer might incur trying to preferentially hire an employee who might already have health care.

Ezra’s point still holds–to a degree. Both employers have an incentive to avoid hiring low income workers for whom they might be fined.

Read more →

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Affordable for Individuals Versus Affordable for Wal-Mart Employees

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Here’s a scary part of MaxTax, if I understand it correctly. MaxTax still screws employees but rewards Wal-Mart as I’ve laid out in this post and this post. Here’s the language in question:

As a general matter, if an employee is offered employer-provided health insurance coverage, the individual would be ineligible for a low income premium tax credit for health insurance purchased through a state exchange. An employee who is offered coverage that does not have an actuarial value of at least 65 percent or who is offered unaffordable coverage by their employer, however, can be eligible for the tax credit. Unaffordable is defined as 13 percent of the employee‘s income. For purposes of determining if coverage is unaffordable, salary reduction contributions would be treated as payments by the employer. The employee would seek an affordability waiver from the state exchange and would have to demonstrate family income and the premium of the lowest cost employer option offered to them. Employees would then present the waiver to the employer. The employer assessment would apply for any employee(s) receiving an affordability waiver. Within five years of implementation, the Secretary must conduct a study to determine if the definition of affordable could be lowered without significantly increasing costs or decreasing employer coverage.

A Medicaid-eligible individual can always choose to leave the employer‘s coverage and enroll in Medicaid. In this circumstance, the employer is not required to pay a fee.

But note how affordability is defined: 13% of "income."

Now look at how MaxTax defines "affordable" for individuals having to buy insurance via an exchange.

Exemptions from the excise tax will be made for individuals where the full premium of the lowest cost option available to them (net of subsidies and employer contribution, if any) exceeds ten percent of their AGI.

The individual definition of affordable uses 10% of Adjusted Gross Income. Whereas the employer’s definition of affordable uses 13% of (apparently) total income.

Now, it’s a good thing (sort of) that the affordability rate for individuals is 10% of AGI. That means a family would be able to opt out if there were no health care available at even a lower rate than I thought (for example, it might mean a middle class family could opt out if health insurance cost them $6,000 a year, as opposed to $8,000 a year). Read more →

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MaxTax: Working Thread

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Fatster found Max Baucus’ health care plan here. Use this thread to post what you find.

I’m about 1/10 of the way through. My favorite detail so far is that the Health Exchanges would take your MaxTax–your mandated payment to shitty insurance companies–as a payroll deduction.

For employed individuals who purchase health insurance through a state exchange, the premium payments would be made through payroll deductions.

This really is a tax to benefit Baucus’ donors.

This is interesting:

Individuals between 300-400 percent of FPL would be eligible for a premium credit based on capping an individual‘s share of the premium at a flat 13 percent of income. For purposes of calculating household size, illegal immigrants will not be included in FPL. Liability for premiums would be capped at 13 percent of income for the purchase of a silver plan. The share of premium enrollees pay would be held constant over time. The premium credit amount would be tied to the second lowest-cost silver plan in the area where the individual resides (by age according to standard age factors defined by the Secretary of Health and Human Services) plan.

This is the cap for premiums for some middle class people, remember. What I’m interested in is that they cap the subsidy to the second lowest-cost plan that qualifies for subsidies. The insurance companies will be gaming that system, to direct consumers into precisely what model they want to pay for, because they know that strapped middle class families will only get what they can get a full subsidy for.

I’m on page 21 now, and already there have been 3 discussions of how to make sure undocumented workers (Baucus calls them illegals) will be prevented from buying into insurance in this program. They may have reprimanded Joe Wilson, but they sure kowtowed to him.

Here’s another way Baucus is incenting employers to pay their employees shit wages:

A qualified small employer for this purpose generally would be an employer with no more than 25 fulltime equivalent employees (FTEs) employed during the employer‘s taxable year, and whose employees have annual fulltime equivalent wages that average no more than $40,000. However, the full amount of the credit would be available only to an employer with ten or fewer FTEs and whose employees have average annual fulltime equivalent wages from the employer of less than $20,000.

McJobs: It’s not just for WalMart anymore.

There’s a whole bunch of language making sure Read more →

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We Can’t Afford the MaxTax

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The newspapers (and some Senators) have apparently discovered what I pointed out a week ago. The MaxTax is completely unaffordable for the middle class.

Near the top of the list for the panel’s Democrats is worry that health insurance subsidies will not be sufficiently generous nor available to enough people despite the fact that the bill would legally require most people to obtain coverage. Beyond premiums, some Democrats are concerned that Baucus’s proposal would not do enough to protect middle-class families from high healthcare expenses.

"It’s very clear, at this point in the debate, the flashpoint is all about affordability,” said Sen. Ron Wyden (D-Ore.). “I personally think there’s a lot of heavy lifting left to do on the affordability issue.”

The healthcare bills already approved by three House committees and another Senate committee offer more generous subsidies – but at a higher cost to taxpayers.

“We’re doing our very best to make an insurance requirement as affordable as we possibly can, recognizing that we’re trying to get this bill under $900 billion total,” said Baucus, who has been courting Republican support for his measure in an attempt to guarantee that a healthcare bill can achieve the 60 votes or more needed to avoid a Senate filibuster.

“I’m going to work even harder to address any legitimate affordability concerns. I knew they were there,” Baucus said.

Just as a reminder, here are the numbers I came up with last week–showing that if a middle class family had a significant (but not catastrophic) medical event under MaxTax, it might be left with as little as $7,215 to pay transportation, utilities, school, clothing, and debt.

Here’s a very rough budget for that family making $67,000 (I’m not an accountant, so tell me where my assumptions are wrong).

Federal Taxes (estimate from this page): $8,710 (13% of income)

State Taxes (using MI rates on $30,000 of income): $1,305 (2% of income)

Food (using "low-cost USDA plan" for family of four): $9,060 (13.5% of income)

Home (assume a straight 30% of income): $20,100 (30% of income)

Bad Max Tax: $20,610 (31% of income)

Total: $59,785 (89% of income)

Remainder for all other expenses (including education, clothing, existing debt, transportation, etc.): $7,215 (or 11% of income)

(Note, there was a lot of discussion about the Federal tax figure–including whether it would be lower once you account for writing off these medical costs. Since it’s a CBO number that accounts for that kind of deduction now, Read more →

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Race and the Public Option

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MoDo has discovered that racists are upset they have a black President.

I’ve been loath to admit that the shrieking lunacy of the summer — the frantic efforts to paint our first black president as the Other, a foreigner, socialist, fascist, Marxist, racist, Commie, Nazi; a cad who would snuff old people; a snake who would indoctrinate kids — had much to do with race.

I tended to agree with some Obama advisers that Democratic presidents typically have provoked a frothing response from paranoids — from Father Coughlin against F.D.R. to Joe McCarthy against Truman to the John Birchers against J.F.K. and the vast right-wing conspiracy against Bill Clinton.

But Wilson’s shocking disrespect for the office of the president — no Democrat ever shouted “liar” at W. when he was hawking a fake case for war in Iraq — convinced me: Some people just can’t believe a black man is president and will never accept it.

Now, frankly, I think MoDo was partly right in agreeing with Obama advisors that Democratic President will always attract nuts. As Glenn Greenwald argued yesterday:

I have very mixed feelings about the protests of conservatives such as David Frum or Andrew Sullivan that the conservative movement has been supposedly "hijacked" by extremists and crazies.  On the one hand, this is true.  But when was it different?  Rush Limbaugh didn’t just magically appear in the last twelve months.  He — along with people like James Dobson, Pat Robertson, Bill Kristol and Jesse Helms — have been leaders of that party for decades.  Republicans spent the 1990s wallowing in Ken Starr’s sex report, "Angry White Male" militias, black U.N. helicopters, Vince Foster’s murder, Clinton’s Mena drug runway, Monica’s semen-stained dress, Hillary’s lesbianism, "wag the dog" theories, and all sorts of efforts to personally humiliate Clinton and destroy the legitimacy of his presidency using the most paranoid, reality-detached, and scurrilous attacks.  And the crazed conspiracy-mongers in that movement became even more prominent during the Bush years.  Frum himself — now parading around as the Serious Adult conservative — wrote, along with uber-extremist Richard Perle, one of the most deranged and reality-detached books of the last two decades, and before that, celebrated George W. Bush, his former boss, as "The Right Man."

It’s also why I am extremely unpersuaded by the prevailing media narrative that the Right is suddenly enthralled to its rambunctions and extremist elements and is treating Obama in some sort of unique or unprecedented way.  Read more →

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