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Tuesday, October 13, 2009

Insurance Industry's Hail Mary

Big vote today on healthcare reform. The Senate Finance Committee will vote on its version of a reform bill and there isn't a lot of fingernail biting going on over it. This thing, as bad as it is and barring the completely unforeseen, is going to pass. McClatchy Newspapers has the shocking headline, "Partisan split likely in key Senate health care vote."

Imagine that.

The committee is the last of five congressional panels considering the measure. Once Finance is done, Senate leaders and the White House will merge the proposal with another one written by the Senate Health Committee over the summer, creating one bill likely to be considered by lawmakers later this month.

Three House of Representatives committees also have finished writing bills, and those, too, will merge into one. Final House action also is expected in late October.

In the Finance Committee, while virtually all 13 Democrats are expected to back the proposal, only one of the 10 Republicans, Sen. Olympia Snowe of Maine, is viewed as a possible supporter.

So 14-9, 13-10, 12-11... something like that. Then this contentious bill will be absorbed within another bill -- twice -- and the final legislation sent to the president's desk probably won't look anything like Max Baucus's compromise. It's a big fight over a bill that only stands a chance of hell of ever become the law in an alternate reality. Welcome to Washington.

The Hill reports that lobbyists, hearing the ticking clock, are scrambling to put the brakes on what's looking more and more inevitable.

AHIP logoLobbying organizations representing every healthcare sector from the insurers to the drug companies to the hospitals have maintained a pro-reform stature all year.

But a health insurance industry broadside on Monday against healthcare reform could mark a turning point as interest groups position themselves for the final weeks of a lobbying battle that has been brewing all year. America's Health Insurance Plans (AHIP) issued a report, written by PricewaterhouseCoopers, concluding that health insurance premiums would skyrocket under a bill the Senate Finance Committee is expected to pass on Tuesday.

"This creates another hurdle on the road to reform -- and not an insignificant one," said a veteran healthcare lobbyist who asked not to be identified, citing the "sensitive" stage of the legislative process. "The key is whether [the AHIP report] is a one-time event or a domino."

Remember, the Senate Finance Committee's bill is not the bill, so even if AHIP is right (and they're not), it hardly matters. And an insurance industry report on the devastating consequences of reforming their industry isn't likely to strike a lot of people as persuasive. It's like a study from Philip Morris showing that smoking isn't bad for you -- it's kind of transparent.

"Those guys [AHIP] specialize in tax shelters," said director of the White House Office of Health Reform Nancy-Ann DeParle. "Clearly this is not their area of expertise."

"It's a health insurance company hatchet job, plain and simple," said Scott Mulhauser, a spokesperson for Sen. Max Baucus.

While reform opponents will no doubt glom onto on the AHIP report like a drowning man grabbing a lifesaver, many veteran observers say it won't have much effect on the process. "I don't view the impact of the report as a bill-stopper as much as a bill-changer," Robert Blendon, a health policy pollster and political analyst at Harvard University, told Politico. "The momentum is way too far [in favor of passing a reform bill], and there is a sense out there that something has to be done."

Others see the report as the insurance lobby shooting themselves in the foot. "They have opened themselves up," an unnamed "senior Senate Democratic aide" told Politico. "It is an incredibly stupid strategic blunder. If you are going to fire a shot like this, you fire a good shot." The problem here is that insurance lobbyists, up to this point at least pretending to be pro-reform of some kind, have exposed themselves as being anti-reform. As a result, Democrats committed to meaningful change will see no reason to work with insurance lobbyists any more. The industry shut a lot of doors, while opening few -- if any -- that weren't already open to them. The report is a Hail Mary pass in the final minutes of the game; i.e., strategy has failed, so one tactic becomes the strategy. It's the same thing that's been failing so well for Republicans. Townhall screamers and tea parties haven't had a lot of effect, either. Your tactics have to serve some strategy or you're just relying on blind luck. That doesn't work out very often.

This thing is moving along slowly and all opponents can think of to do is put out speed bumps to buy time while they think of something to do. Right now, reform -- while contentious -- looks like a pretty good bet. The Senate Finance Committee's bill will be the only bill without some form of a public option and it's going to be merged with four other bills. The odds of a public-option-free bill don't look very good at this point.

But never underestimate the ability of Democrats to screw everything up. If it's possible to ruin this thing, there's a danger they will. Still, if you're feeling optimistic today, your optimism probably isn't misplaced.


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