Next Up: Turning Two Health Care Bills Into One

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Next Up: Turning Two Health Care Bills Into One

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...

(Soundbite of laughter)

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.

(Soundbite of music)

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.

(Soundbite of music)

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.

(Soundbite of music)

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.
..COST:
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