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House Health Care Bill Released – Random Thoughts

Being at this conference, I have missed most of the big story of the day, the House’s unveiling of their health care bill. You can check out FDL Action for full coverage. I just have a few disconnected thoughts:

• That big tea party “flash mob” that was supposed to crash the official announcement of the House bill on the Capitol steps? It had 10 people at it. “If this is organized, we suck,” said one teabagger. Whoops.

• Moving on more to substance, as you know by now, the Blue Dogs were able to deliver for the health insurance industry by forcing Nancy Pelosi to include a public option that relies on negotiated rates, not Medicare +5% rates. My understanding from speaking with leaders in the Progressive Caucus is that a lot of those Blue Dogs aren’t a positive vote for health care whatsoever, regardless of what rates the public option uses. It’s not clear to me that changing the rates even adds votes, as many of the issues from the ConservaDems are unrelated to the public option entirely.

• One of those big issues is abortion “funding,” which Digby describes well. Since there will be no amendments on the floor to the bill, anti-abortion Dems will not be able to substitute their preferred language, which may include limiting any private insurance company operating on the exchange to offer reproductive health coverage, as 90% of current health plans do. That would represent a step BACKWARD for coverage of these legal medical services. Chris van Hollen signaled today that the House will basically give in to that anti-abortion faction, led by Rep. Bart Stupak (D-MI). That means codifying the Hyde Amendment into the bill. Bad news.

• Here’s the monster of a bill. It costs the government $894 billion over 10 years, according to CBO, and it reduces the deficit in a twenty-year window. The financing is mainly through a tax on millionaires. Certain measures on doctor reimbursement and filling the prescription drug “doughnut hole” could push the price tag to $1 trillion. 96% of Americans would be covered under the bill.

• There’s a major increase in Medicaid in the bill, up to 150% of poverty, that significantly expands access for low-income Americans. That also puts a fairly heavy burden on the states, essentially shrinking the cost of the bill at the federal level but increasing it at the state level. The feds pay for most of the coverage expansion, however.

• The House shoved aside the Obama/Senate/Big Pharma deal.

It was nothing short of a shakedown. The sacrifice of $80 billion was nothing to the drug industry, particularly since, by any reasonable accounting, it wasn’t even a sacrifice. It was merely accepting less revenue on new purchases of drugs–and, most likely, worth less than $80 billion anyway.

The House, though, was not party to this deal. And so it’s decided to ask a little more–about twice as much, in fact. My understanding (pending confirmation as I wade through the text) is that it comes by extending more rebates to Medicare recipients. This is something PhRMA strongly opposes.

Will the House prevail? The rationale behind making the deal was that PhRMA wielded too much clout to overcome. And that may be still be the case.

I think ultimately the drugmakers will prevail without huge pressure.

• Another positive in the House bill: the exchanges expand rapidly over time, which means that eventually more people will get the choice of a public option as we transition most of the health care system away from the employer-based model and toward exchanges.

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David Dayen

David Dayen