Next Up: Turning Two Health Care Bills Into One
Jonathan Cohn traveled the country in search of ordinary Americans who had been affected by America's health care crisis. The stories he found — of heart attack victims becoming casualties of overcrowded emergency rooms and diabetes patients going blind because they can't afford treatment — earned him the Harry Chapin Media Award for coverage of poverty-related issues, as well as praise from both journalism and health care professionals. They also became the core of his book Sick: The Untold Story of America's Health Care Crisis — and the People Who Pay the Price.
A senior editor at The New Republic, where he also writes a blog about the health care overhaul effort called The Treatment, Cohn joins Fresh Air for a conversation about the health care bills that recently passed the U.S. House and Senate — and explains, as the bills head for reconciliation in a conference committee, what a compromise between the two might look like.
TERRY GROSS, host:
This is FRESH AIR. I'm Terry Gross.
The House and Senate have started working out their differences on health care reform. We've asked Jonathan Cohn to explain some of those differences, consider what a final bill might look like, and talk about the political maneuvering behind the scenes.
Cohn is a senior editor at the New Republic and writes the magazine's health care reform blog, "The Treatment." He's also the author of the 2007 book "Sick: The Untold Story of America's Health Care Crisis - and the People Who Pay the Price."
Jonathan Cohn, welcome back to FRESH AIR. Let's start with what's happening now behind the scenes in the Senate and the House. What's going on?
Mr. JONATHAN COHN (Author, "Sick: The Untold Story of America's Health Care Crisis - and the People Who Pay the Price"): Well, we are now at the point, which a lot of us never thought we'd really get to, where the House has passed a bill, the Senate has passed a bill. And that, you know, we're far along. We're at, you know, at the other - if you want to use that football analogy, you know, we're in the red zone, close to the other end zone. But obviously, there's one crucial step left.
The House bill is different from the Senate bill. They have to come to agreement. And that's what's happening right now. There are meetings taking place. A lot of these are meetings just among staff. So you'll have one person from the House side, one person from the Senate side, somebody there from the administration - and they are working through the many issues, many parts of the bills, where they are different.
Now, sometimes these are not big differences. Sometimes, it's a matter of - we're going to create an agency. Does it report to Health and Human Services, or is it independent? And those type of issues are really completely being resolved by staff.
As you get higher up in terms of importance, and you get to the big questions: What kind of a tax are we going to have? What is the level of benefits? These are the big, big questions - eventually are going to have to be solved by members of Congress in the room, the leaders of Congress, high administration officials and the president himself.
GROSS: Now the meetings that you're describing are meetings that are happening between Democrats in the House and Senate. It's not formal conference committees of Republican and Democratic representatives. Why are the Democrats doing this Democrat to Democrat, as opposed to the more official conference committees?
Mr. COHN: Well, you know, right in the civics textbooks, they teach us there's a conference committee, and the members are appointed, and we go through this whole formal process. The reason the Democrats have decided not to do that, the - I guess you'd say the spark for it was the concern that Republicans - remember, none of whom voted for this bill. There are no Republican Senators who voted for this bill, and there is a lone Republican congressman out of the 435 who voted for it in the House. The concern was that they would use this as yet another opportunity to gum up the works; to, you know, raise procedural objections because when you have a conference committee, you have to go through a series of votes. The minority, you know, gets to do certain things.
So as much as anything else, this is an effort to expedite the process in anticipation of obstructionist tactics that the Republicans quite frankly promised to use.
Now, that said, I think it's important to remember that in reality today, when we have a conference committee, it's not as if we really see all the negotiations going on. Even if you have a conference committee with the votes, with appointed minority and majority members, the real business of negotiation happens exactly like it's happening now. It happens in private, with staff and members from the people who voted for the bill.
And you know, to some extent, that's logical. I mean, realistically, you can't close a deal like this out, you know, with everybody bargaining in front of the cameras and everybody posturing. You have to be able to, you know, step inside an office and have an honest, frank conversation.
GROSS: Some Republicans are accusing the Democrats of nefarious backroom deal-making. In fact, those are the exact words of Tom Price of Georgia. He's chair of the Republican Study Committee. Do you think that that's a common perception among Republicans, and do you think it's an accurate perception?
Mr. COHN: Well, it may well be a common perception. I would remind Republicans, in particular, making this argument - I would ask them where they were when Dick Cheney had his Energy Task Force and wouldn't even let people know who was on it or where they were during the - take some - a closer example - where were they in 2003, when President Bush worked with the Republican Congress on crafting the drug benefit for Medicare, and that was all done behind closed doors.
Again, I think realistically speaking, when you negotiate a bill like this, much of the business is going to be done in private. Even if you had a conference committee, a televised conference committee - you know, that would be a bunch of televised speeches, senators getting up and saying I'm for this, I'm for that, but the real business of negotiating this deal was always going to take place in private, and you can understand that.
Whether it is a nefarious backroom deal, the proof is going to be in the pudding. We're going to have to see what's in the bill. Did they cut deals at the last minute that we don't like? Were there giveaways to industry? Or, you know, did they produce a bill that lives up to the goals of what they've promised, what they've campaigned on and what they've said this bill will do?
GROSS: Once a bill is written, and it actually goes up for a vote, will the Senate have - will Senate Republicans have another opportunity to filibuster?
Mr. COHN: Yes, and this is why when they are in these conference committee negotiations or non-conference committee negotiations, the power, the political power remains - the equation is very similar to what it was back when the Senate was voting on this. You still need to hold 60 votes. And in fact, the 60th vote, Senate Ben Nelson from Nebraska, went out of his way to say when he voted for the bill - if you remember on Christmas Eve, in that dramatic vote - he made it very clear that if the bill that came back from House-Senate negotiations was substantially different than the bill he had just voted for, he would not vote for that new bill. Joe Lieberman, the 59th vote, said something to the same effect, and we've heard that from other senators.
Now, this is always the case with the House and the Senate, and some of this is posturing, and obviously, there is some room to negotiate, but the last votes on the Senate side, the one the Democrats needed to get to overcome the last Republican filibuster, they still need those votes because the Republicans, yes, are going to filibuster one more time.
GROSS: Let me ask you a little bit about obstructionism. Senator Judd Gregg, a Republican from New Hampshire, wrote a memo outlining how senators could kill health care reform with parliamentary tactics, like forcing hard quorum calls, bringing a point of order up for debate without cause, recommending that Republican senators offer an unlimited number of amendments - whether they were relevant or not, to the bill.
And then Tom Coburn, Republican of Oklahoma, used a procedural maneuver that required a 767-page amendment that was introduced by Vermont Democrat Bernie Sanders to be read out loud before it could be discussed. So Sanders eventually just withdrew the bill because it would have taken so long to read through the whole thing. Are you expecting to see those kinds of, like, stalling tactics and interference when the final bill comes to the Senate for a vote?
Mr. COHN: I think they will try to use the opportunities they have to stall if they can. And again, they have promised that. That memo from Judd Gregg, I mean, they followed through on a lot of those ideas.
You know, I always thought that memo was kind of funny. It was a bit - it's like watching a James Bond movie, and you're always sort of wondering: Why does the, you know, villain tell you exactly what nefarious thing he's going to do and then draw it out in dramatic...
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GROSS: I know exactly what you mean, right.
Mr. COHN: And here we had this memo basically saying: Guess what? We're going to use every trick we can to gum up the works and stall this and try to derail it with process issues. And I'm thinking, you know, you're putting this on paper, and you're distributing - I'm not surprised you're going to do it, but not the smartest thing to tell everybody that you're going to do it.
But you know, that's the way the party has approached this. I think, you know, when we talk about - whether we're talking about the decision to bypass a formal conference committee, or we're talking about the fact that it is only Democrats and people who caucus with the Democrats who voted for this bill. Whether you think that is a good thing or a bad thing in the abstract, you have to consider it against the backdrop that you have a party that wants nothing to do with this.
And not only does it not want nothing to do with the bill, is not even open to discussing how to construct a bill, to the point where they are, you know, getting back to the filibuster for a second, people need to remember, I mean, it's become such a common practice in the Congress we take it for granted. Yeah, the minority party launches a filibuster.
A filibuster is an attempt to stop a vote from taking place. So basically by promising, threatening, carrying out a filibuster at every step of the process, the Republicans have, in effect, been saying we don't even want to let the democratic process rule on this. We don't want there to be an up or down vote.
When that is the attitude of the opposing party, you know, you can either give up to it and just get nothing done, or you sometimes have to, you know, try other means of passing things.
GROSS: Putting the filibuster aside, but with the obstructionist delaying tactics, just to, like, delay it, what's the point of that if eventually there's going to be a vote? It's not like a filibuster but to just, like, add more amendments and read things out loud. What's the point of that delay?
Mr. COHN: For one thing, it shows you're fighting. It shows your base that you're fighting. I think the Republicans, like the Democrats, all parties, you know, they have a base of supporters who want to see action, and when you're in the minority, and you know you're going to get out-voted, you know, this is the tools you have. These are the tools you use.
I also think that they believe that time is their ally, that the longer this drags out, the less enthusiastic people become about this bill. There is nothing, nothing at all fun about watching legislation get made, and the longer this process this drags out, the more ineffective the president looks, the more ineffective the Congress looks, and the less appealing health care reform sounds.
And I would actually say that not only was that the theory behind the Republican obstructionist strategy, I would say that it has worked that way in practice; that in fact, you know, one of the most interesting things you see is that you look when the polls on health care first started to go down - and they went down for a while in the summer - it was really in June and July when the numbers really started to go south, which is the period in which we saw the messiness of the legislative process starting to come out into the open.
We had committee hearings, and we had committee hearings, and we had negotiations. There's - it's not a pretty sight to watch, and you expect the public to grow disenchanted with it.
So I think, you know, there was the hope that, you know, look, going into this process, they were looking at a situation where the Democrats had a 60-seat majority, where the House, they had a large majority in the House. They had a popular president, and I think they figured well, it's not going to get worse. Maybe it'll get better. Let's stall this thing. Let's grind it out and hopefully peel away enough support so that by the time they're at the end of this process, either they can't pass anything, or what they can pass is much more limited.
And let's face it: it worked. I mean, the bill that we are going to get is not everything that the Democrats wanted. Some of that is the result of the fact that they were able to drag this out. They were able to obstruct, and support has eroded.
GROSS: If you're just joining us, my guest is Jonathan Cohn. He's a senior editor at the New Republic. He writes the New Republic blog "The Treatment," which is about health care, and he's also the author of "Sick: The Untold Story of America's Health Care Crisis - and the People Who Pay the Price."
Jonathan, let's take a short break here, and then we'll talk some more about what's actually in the House and Senate bills, how they compare and how that will affect our health care in the future. This is FRESH AIR.
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GROSS: If you're just joining us, my guest is Jonathan Cohn, he's a senior editor at the New Republic, and he writes the magazine's blog on health care, which is called "The Treatment." He's also the author of a book about health care, which is called "Sick."
Let's look at the House and Senate bills and see how they compare. Let's start with differences in what kind of coverage we would get. Are there fundamental differences in the kind of actual coverage that we get in what the Senate and House are proposing?
Mr. COHN: In the broad sense, they're not huge differences. You've heard, perhaps, the expression that there is 80 percent agreement between the House and Senate bills, and that's about right. I mean, in the broad architecture, you know, standing at a distance, the two bills look very, very similar.
In both bills, the basic concept is that if you have insurance from an employer, you more or less will keep that insurance from your employer. Where the massive changes are going to take place is for people who don't get insurance from their employers - people who are self-employed, people who don't have health insurance right now, to some extent, smaller businesses.
And for these people who are often locked out of the market because they either - they have pre-existing conditions that make them a bad risk, individually, or they don't have enough money to pay for (unintelligible), we're creating a marketplace called an exchange. And basically it will be a regulated marketplace where anybody who can get into the exchange can buy insurance on their own once a year, in an annual enrollment process, just like if you worked for a big company, and you'll get the same kind of benefits.
You'll get a comprehensive insurance policy that you know will cover all preventative services. It will cover a wide range of, you know, essential - what we would define as essential coverage. There will be limits on how much you could ever have to pay in out-of-pocket expenses, and you'll have guarantees like that.
And then in addition to that, there will be a third group of people who are on Medicaid. That will include people who are on Medicaid now, and again, Medicaid is the program for the very poor and disabled. So Medicaid would continue to exist for people who have it, and it would be expanded a little bit to include people who are not now eligible for it - not so much because of their incomes, typically, but because of who they are. You know, if you're a single male making $15,000 a year, you're not eligible for Medicaid right now. Under this plan, you would be.
So under both plans, that would be the structure of insurance. You'd get either insurance from your job, you would continue to get it from your job. If you don't, you'd get it through either an exchange or through Medicaid.
I'm exempting the elderly here. If you're part of Medicare, that stays the same. You know, that doesn't change.
GROSS: So getting to the exchanges, in the House bill, it's a national insurance exchange. In the Senate bill, it's state-oriented. Would you explain the difference between the two bills?
Mr. COHN: Absolutely, and this is a very important difference that frankly has gotten little attention. It's not a hot-button issue like abortion or the public option.
The basic idea is as we were saying, these exchanges are the marketplaces where the self-employed, people now uninsured, or many of them at least, and some small businesses will be buying coverage. Now, do you organize that state by state, or do you have one big one for the whole country?
The House approach is to go with a national exchange, and the theory is you will have much more regulatory power as a national enterprise and that if you do this on a state level, then you're basically reinventing the wheel 50 times. You know, every state's going to have to redo it.
There's a concern, frankly, that some states historically - states have a lot of responsibility now for regulating insurance. Some states do a very good job. Minnesota, for example, has a record of having a very smart management of insurance from their state officials.
But a lot of states don't, and you would be concerned that in states where they didn't have a lot of experience, where the government bureaucracy wasn't necessarily the most well-funded, they wouldn't be able to run things.
The counter-argument, which is not without its own merits, is that when you look at running an insurance market and really trying to make insurance work for people, there's a certain value to being able to understand the particular circumstances of an area, and that's particularly true when it comes to things like - what makes insurance work?
Well, a lot of it is about negotiating with doctors and hospitals in particular. And hospitals, you know, are often - you know, you have local hospitals that are very powerful. So there's a sense - you will hear people argue, and this is not a crazy argument, that a state exchange is just going to have a better feel for the way that the local market works.
One thing to keep in mind, and I think this is why in the end I think the House approach is superior - and I hope we end up with that, and we may, it does seem to be like there's some momentum behind this - is that the House bill starts with a federal exchange, but it does allow states to petition to do it on their own if they can demonstrate if they're capable of doing it.
GROSS: Now, how does a state system, as opposed to a national system, affect the ability of the health care lobby to influence the packages that are being offered?
Mr. COHN: An excellent question, and you'll get different answers, depending on who you ask about this. My impression has always been that the health care industry tends to be - has more power relatively speaking at the state level, particularly again when you're talking about something like the hospitals.
And you know, it's funny. You never hear about the hospitals as a lobby - you always hear about, like, the drug industry, right, or the insurance industry, but if you kind of talk to people who work on health care, you'll discover the hospital industry is incredibly powerful and has a lot of influence over, you know, the way policy is made. And of course, they're the ones charging the biggest bill. So you know, it hits us all in the wallet.
They tend to have a ton of influence, particularly at the state and local level, I think in part because it's not that there isn't a huge amount of money and lobbying being poured into the national scene, as well. But at the end of the day, there's so much - there's more media scrutiny. We have all these think-tanks following money in politics.
So it's a little harder to do it under the radar screen at the national level, whereas the state level, you know, people aren't paying as much attention. You have - you know, and you tend to see more cozy relationships sometimes.
But you know, there's some variation, obviously, and it's not going to be true of every state. But there certainly is a concern that if you move to a state model, you really are moving, you are putting - giving a little more influence over to the industries who frankly you need to be watching over very carefully.
GROSS: Now, there's also an option, isn't there, is a Senate bill, to opt out of the exchange?
Mr. COHN: There is some kind of opt out, and I'll be honest. This is not something I've looked into that closely because I don't think it's going to end up in the bill. But you know, basically this I believe was part of the Ben Nelson compromise.
Basically, where a state could opt out of the exchanges, I find it hard to believe a state would actually do that. You know, it's - if you think about the history of these sorts of things, Medicaid was set up and is, remains, an optional program for states. States can opt out of Medicaid if they want to.
They don't because there's a lot of federal money they are entitled to if they participate in Medicaid. In addition to that, it helps them cover poor people in their state, and if they don't get that money from Medicaid, they're going to be totally responsible for this on their own.
I can't possibly imagine a state opting out of an insurance exchange, given it's a good deal for the state. And I know a lot of states are nervous about what's going to happen with this, but at the end of the day, I just don't see it happening.
GROSS: Jonathan Cohn will be back in the second half of the show. He's a senior editor of the New Republic and is the editor and chief writer of the magazine's health care reform blog "The Treatment." I'm Terry Gross, and this is FRESH AIR.
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GROSS: This is FRESH AIR. I'm Terry Gross, back with Jonathan Cohn, a senior editor at The New Republic and the editor and main writer of the magazine's health care reform blog, The Treatment. We're talking about the differences between the House and Senate health care reform bills and what a final bill might look like.
When we left off, we were talking about the House and Senate versions of a health insurance exchange. The exchange would be a marketplace of insurance companies with group rates for people who don't get insurance through an employer. It would also be opened to small businesses. In the House bill, there would be one national exchange. In the Senate version, each state would create its own exchange, and states could choose to opt out.
I know you think it's unlikely that if the Senate version of the exchange was written into the bill and states could opt out, I know you think it's unlikely that states would opt out. But say a state did opt out of the insurance exchange, where would that leave people who couldn't afford insurance and didn't have insurance from their employer?
Mr. COHN: Well, I mean, the exchange is the heart of health care reform. If you have no health insurance exchange, you are basically saying to the self-employed, to small businesses and to many of the uninsured, guess what? Nothing's going to change for you. You are in the same wilderness you are now. Because a lot of these problems we see, you know, let's say, you know, denials of coverage to people for preexisting conditions, this is a function of the fact that insurance companies are dealing with people one-on-one. They don't do it when they're dealing with a group. So we're grouping people together and - and this is really important - we're putting somebody in charge of this exchange or a group of people who understand health insurance and who are responsible to the taxpayers and whose job it is is to make sure that the insurance you're getting is good insurance.
So, you know, you don't have to worry reading the 500 pages of fine print, because someone's already done that. And if they discover there's an insurance policy that's got this loophole that says oh, by the way, you know, if you check into the hospital on a Tuesday and check out on a Thursday, there's an extra charge, they say uh-uh. You, the insurance company, can't do that. If you do, we're just not going to let you sell through the exchange. And so it's kind of like having, you know, your own advocate there buying insurance for you, and that's a huge change. So to opt out of the exchange would be to basically give up on all of that.
GROSS: Before we get any further into the overview, tell us about some of the things in the health care reform that would be likely to kick in sooner than the rest of the bill, because some of the bill wouldn't take effect till, like, 2014. But there are things that would take effect much more quickly.
Mr. COHN: That's right. There are things that would take place quickly. One of them is there would be a rule that says children - or not children, young adults - up to the age of 26 would be allowed to stay on their parent's policy, which is a - which, you know, would make a difference to a lot of, you know, people in their young, early 20s. They're just finding a job, hard to find benefits. So that would be something early.
You also see some consumer regulation and consumer-friendly reforms. For example, insurance companies would be required to come up with some kind of appeals process, some kind of binding appeals process. So, you know, your carrier denies you a coverage, you have a way to appeal it. There'd more information put out about every insurance company. And insurance companies would all be required to give better coverage or preventative services right away, what we call first dollar, so that, you know, basically, they can't say that if you're going in for your regular exam, you right off the bat have to pay. That goes towards your deductible. No. No matter what kind of insurance you have, they have to cover first dollar preventative care.
GROSS: And is there anything that would kick in quickly regarding preexisting conditions?
Mr. COHN: They are going to set up - or there's talk of it. And again, you know, everything's subject to where they come out at the end of the day on these negotiations. But the hope is to create some kind of catastrophic high-risk insurance that is available to anybody right away, you know, in the first year as a kind of stop gap before the full reforms kick in. I mean, eventually, we want to get - make sure that anybody can get good insurance, no matter if they have a preexisting condition. But that takes money.
You have to set up the insurance exchanges. So as a stop gap for the first two to three years, they'll create these high-risk pools, and basically, if you have a preexisting condition and you can't get Etna or Cigna or whoever to sell you a policy, you could go here and you'd get coverage. It won't be great coverage, but it'll at least, you know, cover your catastrophic costs, you know, so that, you know, your out of pocket cost at least will be have some kind of cap on them.
GROSS: My guest is Jonathan Cohn. He writes The New Republic's health care reform blog The Treatment. We'll talk more after a break.
This is FRESH AIR.
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GROSS: If you're just joining us, my guest is Jonathan Cohn. He's a senior editor at The New Republic, and he writes the magazine's blog on health care, which is called The Treatment. He's also the author of a book about health care, which is called "Sick."
From what I've been reading, a lot of experts who are analyzing health care reform and support health care reform think that the House bill offers more in terms of health care for consumers but it costs a lot more, whereas the Senate bill has more cost controls. Let's look at one example in the news now that compares the Senate and the House approaches to raising money to cover health care reform.
The Senate calls for a tax on expensive health care plans. This is being called a Cadillac tax, and labor is opposing this. Labor unions met with President Obama yesterday. Before we get to that meeting, I'd like you to describe what this tax is.
Mr. COHN: Sure. Right now, the tax system exempts fringe benefits -health care benefits from taxation altogether. And this is widely considered to be a bad thing for two reasons: Number one, it's a very regressive tax break. The more money you make, the more money you can take off your taxes. So rich people are getting a much better deal out of this than the middle class and poor. Second - and this is where it really plays into the cost question - it's widely believed that this tax break gives you kind of an artificial incentive for spending extra money on health care. So the goal is to somehow curb that, to put a cap on that and say, look. We're going to keep the, you know, this tax break for group health insurance, fine. But let's not - let's sort of set a limit on it and let's not tax above a certain level.
And that is the idea behind this Cadillac tax. Now, for complicated reasons that have to do with politics, we're actually going to be taxing the insurers, and then the insurers are going to pass it on, presumably, to the people who are getting the benefits. But we call it a Cadillac tax because it's going to be affecting the most expensive health care benefits.
GROSS: So if this is meant to be a tax on wealthy people who are getting tax breaks and therefore spending more money on health insurance, why are labor leaders opposing the tax?
Mr. COHN: Well, the catch here is that the way it is designed - and in part because we're taxing the insurance company, not the individual -it's hard to target who's going to pay it. There are some people who have high insurance premiums because they're in a group of employees who are relatively sick. They're older. Some people live in parts of the country where health care is just very expensive, and they're not necessarily getting super-duper, generous health insurance. It's just that their insurance is more expensive than average. You know, as labor would put it, they say look, you may call this a Cadillac tax, but you're going to catch a few Chevys.
And so what labor wants is to figure out some way to tweak this. I mean, they'd like to get rid of it altogether, but if it has to be there, some way to tweak it so that they're - you're not catching the Chevys when you're trying to catch the Cadillacs.
GROSS: Yeah. And another point labor leaders have made is that a lot of unions have given up wages - raises and wages and instead settled for better benefits. So if you're taking away some of those benefits, then they've, you know, they say they've really lost, in the long run.
Mr. COHN: Well, that's right. Now it's important to remember this tax wouldn't start next year. It would kick in a few years down the road. So there would be an opportunity for unions to renegotiate their contracts. And remember, again, if you do this and you get your health care costs down, which is what we want - I mean, we want everybody - yeah. We want employers and unions using this as an opportunity to go demand cheaper, better insurance. The money you're not spending on health care at the end is money that's going to come back as wages. So, in fact, the experts predict that's exactly what will happen.
GROSS: Now, President Obama has indicated that he's willing to be flexible on this tax on expensive health care plans. How do you interpret that? What do you think flexibility might mean?
Mr. COHN: Well, you know, it's hard to know for sure. I mean, obviously, the simplest thing, you know, you can raise - you can change the numbers. You can just say, all right, well, let's raise the threshold a little bit so it affects fewer people. And it's already, by the way, it's very important to remember that from - if you look at where this started, a very small group of people are going to be affected by this. It'll grow overtime, but it's - and the people affected will not be taking a huge hit, for the most part.
But obviously, you can change the numbers. You can write exemptions into the law. We've already done that for some professions. We've said, you know, certain high-risk professions are not subject to this. You can tweak it so that people who have higher health insurance rates just because they're older don't get penalized by this. There's any number of ways you can soften the impact. Or ideally, if you target it better. Again, you know, the idea here is to target insurance that is more expensive, but isn't better.
GROSS: What is the House counterpart to the Senate's Cadillac tax?
Mr. COHN: Well, the House counterpart is simply an income tax surcharge. It's just, you know, charging a higher income tax to the very wealthiest Americans. You know, purely on social justice grounds, I think they make a very compelling case when you look at the way the tax burden shifted during the Bush years, you know, why not do it this way?
GROSS: And specifically, in the House version, the tax would be applied to individuals whose adjusted gross income exceeds half a million dollars or families over one million dollars.
Mr. COHN: That's right. We're talking about the very wealthiest Americans, people who certainly can afford to pay slightly higher taxes, you know, without in any way, you know, crippling the economy or anything like that.
GROSS: Is there, like, a fundamental philosophical underlying difference in the House and the Senate approach to the taxes in terms of what they're targeting and why?
Mr. COHN: Yes. Absolutely. The House bill is simply saying, look. This we - this is the government assuming a responsibility. The government, to some extent, has to pay for that with taxes, and the fairest way to do that is to tax the people who have benefitted the most, who have the most and can afford to pay the taxes. And that is the straight equation.
The Senate is very determined, it doesn't like to do that. And so they have - number one, they only want money that's coming from what they consider within the health care system. And they consider since there's already an existing tax break on health benefits, this is taking that back. They consider that money from within the health care system. And they're determined to use the tax system as one of the levers to push down health care spending. Remember, the House bill, it actually - that tax raises a lot of money, but does nothing to health care spending, whereas the benefits tax - according to every economist that I know -will, in fact, over the long run, reduce what we spend as a country on the whole as health care.
GROSS: Because plans that give easier access to - so that allow you to see as many doctors as you want to, give more access to tests are more expensive plans, and those are the ones that'll be cut back?
Mr. COHN: It's a combination. It's both that, you know, people will use less health care, and they will be paying - and the plans they'll be getting will be bargaining harder on prices. So, you know, it'll be a combination of insurance companies finding better deals, managing care more aggressively. And managing care more aggressively can be good and bad. It really depends on your perspective.
If it's a good insurance company doing the managing, then hopefully, you know, they're steering you into the best providers and they're getting you good preventative care and you're not getting unnecessary tests. If they're managing it badly, it's means they're sort of the bureaucratic on the other end of the 800 line saying, no, you can't do this. No, you can't do that. Obviously, you don't want that part to happen. But, you know, it's, you know, that's the question: How much will you get of the former? How much will get of the latter?
GROSS: Are there any safeguards against the kind of cheaper insurance plan where you get the bureaucrat at the end of the 800 number?
Mr. COHN: Sure. Sure. And that's what I was, you know, the safeguards -I mean, you have to remember, again, we are - this is part of a much broader package of all kinds of consumer protections we're introducing. So, you know, today, if you - depending on where you live and what kind of insurance you have, chances are good if the bureaucrat denies you treatment you can't do anything about it. Well now, you know, the laws are saying okay, well, there's an appeals process. You can go through it. You can appeal. It's going to be legally binding.
Remember, we also are going to have this requirement on what's called medical loss ratios, and we're basically going to require insurers to put a certain percentage of money into actual patient care. And that's going to force them - it's going put a limit to how much they can just sort of skim off the top and just, you know, and sort of take out of the system as profits. They're going to have to be much more transparent about what they cover. There's going to be a guaranteed benefits package that every insurer's going to have to cover.
There's going to be a limit on overall out-of-pocket costs. They're not going to be able to introduce annual lifetime limits, which is one way they frequently get around paying high bills for people. So you have a whole series of these that have been introduced. And, you know, the hope is - and I think it's realistic, although I would not be so optimistic to say it's going to work all the time. But I think it's fair to assume it will be - there will be some protection in there to protect the people. And that will mitigate, if not eliminate, the extent to which insurers can just say, all right, we're just going to pass these extra costs onto individuals and give them lousier insurance.
GROSS: Let's talk about Medicare a bit. How would the Senate version and the House version of the bills affect people who are on Medicare?
Mr. COHN: Well, in terms of benefits, in terms of saying, you know, Medicare's going to cover this and that, you know, in the near term at least, there's no difference. Neither the House nor the Senate is trying to reduce what Medicare offers to its beneficiaries. The two big changes that are coming down the pike, one is that, you know, we have these private insurance plans that offer alternative coverage to Medicare recipients. It's called Medicare advantage. And there's a mountain of evidence to suggest that the government is just handing over subsidies to these plans that they don't justify with, you know, by offering more to their beneficiaries. So, we're going to take that money back. It's wasted money. The catch is that, you know, you do have private insurers who are in this business to take advantage of that extra money. You take away that extra money and some of them will either offer less to the people who sign up or some of them may even just drop out all together. So, people who are on Medicare advantage plans might see either a small reduction in what they're getting from the plans. It's possible their plans might just, you know, say, hey, we don't want to do this anymore.
Of course, that might happen anyway in the normal course of business. It's not as if anybody ever guarantees that next year Aetna is going to continue to offer, you know, this Medicare advantage plan. So, that's always a risk they run. The bigger change - and this will ideally not be so visible to Medicare beneficiaries, but will be visible to all of us in the form of saved - money we save is that, you know, we want to control health care spending. We want to control it in the private market, and that's what the point that Cadillac tax is, but we also want to control what we're spending on the public programs. So, we're going to pull some money out of Medicare.
But we're not just randomly whacking off or kind of, you know, say, all right, you know, we're not just going to lop off at the top a certain percentage of Medicare spending. We've gone to the different industries. We've gone to the drug industry. We've gone to the doctors. We've gone to the hospitals and say, look, we want to change the way Medicare pays for services. If we make changes that we expect will take this much money of your income, can you live with that? And they've all said yes, and these are these deals you read about in the papers. So, we're going to pull some money out of Medicare.
And this will - and the Congressional Budget Office affirms this, every expert does - this will save what we spend on Medicare. The idea is that these changes are all designed to promote efficiency, so they shouldn't be less services for people, it just be more efficient health care.
GROSS: I still think I don't really understand where the money that would be pulled from Medicare is coming from. Republicans are saying that this would affect care. And they are really opposed to the cutbacks in Medicare.
Mr. COHN: What is being done is we are changing - we are making changes in the way that Medicare pays for medical services. And these are all changes that will, according to every expert, not only change the way that medicine is sort of given to senior citizens in a good way, but also result in saved money.
I can give you a very simple example is that we are going to say to hospitals if you have a very high rate of in-hospital infection, we're not going to pay you as much. Now, we know that hospital infections are very expensive to treat and we know that they are very easy to prevent. Any hospital just doing - taking the right, you know, a few very simple steps ought to be able to dramatically reduce the number of in-hospital infections. So, you impose this penalty to hospitals that don't do that and one of two things is going to happen. The hospital is going to respond. They will have fewer infections and then we're spending less to treat the infections, or they don't respond and they keep giving the infections, but then we're paying them less.
Either way, two good things have happened. People on Medicare are getting better hospital care because they are not getting infections when they go to the hospital and we're spending less. There are several other proposals like that in both the House and Senate bills that are designed to, again, improve the care that seniors in Medicare get even as they also save money in Medicare.
GROSS: Now, the Senate bill has an independent Medicare commission. What would this commission do?
Mr. COHN: Right. And this is, I think, one of the other very important differences between the two bills. The Senate - you know, one of the problems with Medicare historically is that Congress decides - you know, has full discretion over the Medicare payment policy. And it gets in the weeds of, you know, what is it paying for this procedure or this device? And, you know, it's basically a full employment act for medical industry lobbyists.
You know, you have a device, you have a drug, you're hospitalized, you go to your congressman and say, I want my money for this, I supported your campaign. The congressman says, of course. And the next thing you know, we're paying too much for this. So, the idea is to set up a commission that looks over Medicare policy and says, you know what, we are paying too much for this because it doesn't really do that much good. And, you know, too much for this drug, we pay too much for this treatment. it all could be too less. Also, there may be cases where we're underpaying for services.
Now, we actually have a commission like this right now, but it has no power. The key thing - what the Senate bill will do, it would give this commission power and crudely speaking, would operate like a base-closing commission. It would send recommendations to Congress and Congress would have to vote up or down. And if they voted down, some other changes would ensue.
So, it's a way to sort of take the micro managing of Medicare out of the hands of Congress and put it in the hands of this administrative board which will be appointed by, you know, members appointed by the president, by Congress. It would be doctors and economists and public health experts, trying to make these sort of payment decisions in a rational way and do the best we can sort of insulating them from politics. And the belief is that you do this, we will stop paying two or three times as much for drugs and devices and treatments that don't work.
GROSS: My guest is Jonathan Cohn. He writes The New Republic's health care reform blog, The Treatment. We will talk more after a break. This is FRESH AIR.
(Soundbite of music)
GROSS: My guest is Jonathan Cohn. He is senior editor of The New Republic and writes the magazine's health care reform blog, The Treatment.
Now, Republicans are vowing to repeal health care reform if it passes. So, what have you heard about that, about whether there would really be a Republican plan to repeal health care reform?
Mr. COHN: Oh, I have no doubt there are going to be Republicans running on the repeal of health care reform. As a practical, political matter, it's going to be awfully tough, at least, before 2012 because I would imagine President Obama would veto. Even if they could sweep Congress, you know, in next November, I would have to think President Obama would veto it. I don't think they are going to get the two-thirds they would need to override a veto. So, politically speaking, it's going to be awfully hard to do that.
And I think practically speaking it's going to be quite difficult too. You know, right now, health care reform is this abstract weird thing. Nobody really understands it. Once you start having - if you really wanted to repeal it, you know, I think the debate will turn into, wait a minute. You want to take back the regulations that say everybody is entitled to health insurance even if they have a preexisting condition? You want to get rid of the subsidies that are going to help people, you know, middle and working and poor working class and poor Americans buy insurance, you want to get rid of all that? You want to get rid of the consumer appeal so, you can't protest when - if an insurer denies you a treatment?
And I don't - those are all very popular and I don't see them repealing those. What I do imagine is possible is they could go after pieces of it. There are vulnerable pieces of it. You know, maybe they will go after the tax, maybe they will go after this requirement on health insurance. But, you know, and that's where it will be fought. But, of course, you know, at the same time, there is going to be push in the other direction, not just in the next two years but I would say in the next 50 years, to also make the - you know, to push health insurance to make it better.
Certainly, that's something, you know, somebody who - liberals, I think, look at this bill and they want to pass it, most of them, because they think it will make a great improvement, but they think it's far from perfect. And I think they plan to spend the next five, 10, 20 years improving it, getting some of the things they couldn't get this round, you know, like the public option. So, you know, Republicans will be pushing to repeal it, you'll see Democrats pushing to strengthen it. And, you know, I have no reason to think that the Republicans will actually, you know, win.
GROSS: So, the health care war is going to continue even if the bill is passed?
Mr. COHN: I think the health care war is an ongoing war that never ends. And if you look abroad, certainly, I mean, every country goes through these arguments. They are constantly arguing how much do we spend on the health care system? Do we need to change the design? But I do think- and this is, I think, why Republicans and conservatives are opposing health care reform so strongly, and, you know, I respect that this is the principled position - I do think that when you pass this bill, you establish a principle that every American is entitled to health insurance, that we, as a society, have an obligation to make sure that insurance is available to everyone and affordable.
And I don't think you ever take that back once you establish that. I think we're - if anything, that once we've established that right and that system comes online, we will start to notice that, gee, we haven't actually put enough money into this system to provide for everybody. We haven't done enough to regulate the health care system to make it affordable for everybody. So, let's do more. But I don't see us falling back in the same way that, you know, Republicans promised a repeal of Social Security when it was passed. It's still here. The last effort to take it down during the Bush presidency arguably was one of the reasons the Bush administration lost so much of its political luster.
GROSS: Jonathan Cohn, thank you very much for talking with us.
Mr. COHN: It's been my pleasure.
GROSS: Jonathan Cohn is the senior editor of The New Republic and writes the magazine's health care reform blog, The Treatment. For more explanation of how a bill becomes a law, we turn to "Schoolhouse Rock" and Jack Sheldon.
(Soundbite of song, "I'm Just A Bill")
Mr. JACK SHELDON (Singer): (As Bill) (Singing) I'm just a bill. Yes I'm only a bill. And I got as far as Capitol Hill. Well, now I'm stuck in committee, and I'll sit here and wait while a few key Congressmen discuss and debate whether they should let me be a law. How I hope and pray that they will, but today I am still just a bill.
(Soundbite of crowd)
Unidentified Man #1: (as Boy) Listen to those congressmen arguing. Is all that discussion and debate about you?
Mr. SHELDON: (as Bill) Yeah, I'm one of the lucky ones. Most bills never even get this far. I hope they decide to report on me favorably, otherwise I may die.
Unidentified Man #1: (as Boy) Die?
Mr. SHELDON: (as Bill) Yeah, die in committee. Oh, but it looks like I'm going to live! Now I go to the House of Representatives, and they vote on me.
Unidentified Man #1: (as Boy) If they vote yes, what happens?
Mr. SHELDON: (as Bill) Then I go to the Senate, and the whole thing starts all over again.
Unidentified Man #1: (as Boy) Oh, no.
Mr. SHELDON: (as Bill) Oh, yes.
(Soundbite of song, "I'm Just A Bill")
Mr. SHELDON: (As Bill) (Singing) I'm just a bill. Yes, I'm only a bill.
GROSS: You can download podcasts of our show on our Web site freshair.npr.org and you can follow us on Twitter at nprfreshair.
I'm Terry Gross. Transcript provided by NPR, Copyright NPR.