The ACA preserved state regulation of health insurance

Yesterday I noted that the state-vs.-federal exchange debate within the Democratic party in early 2010 was focused primarily on which level of government would regulate insurance -- and not, as Halbig proponents are suggesting, on whether the "backstop" federal exchange created by the Senate bill would be enabled to issue tax credits.

Both before and after the Scott Brown earthquake, the question was how the Senate and House bills would be reconciled. The House bill created a federal exchange, with an opt-out for states that wanted to create their own. The Senate bill stipulated that states would establish their own exchanges, with an opt-out for those that chose to cede the function to the federal government.

As it turned out, the reconciliation bill that tacked House modifications on the Senate bill did not substantially alter the Senate bill's state exchange structure -- though it did, by the way, include a tax reporting provision that referred directly to tax credits allocated by the federal exchange, a provision that should lay to rest the Halbig contention that ACA tax provisions preclude the federal exchange allocating tax credits.  And although the federal government did end up running most of the state exchanges, in the sense of running the website processing citizens' applications, regulation of insurance, within the broad coverage parameters set by the ACA, remained mainly in state hands.*

Evidence of that retained state control can be found in the varying steepness of 2015 health insurance premium increases in different states. Overall, the rate hikes are in line with or slightly below the increases of previous years. A heat map by PriceWaterhouseCooper indicates that states that ran their own exchanges, and so more actively oversaw the offerings approved for sale, were on balance subject to more moderate increases (Vermont is an exception). From the data that's come in so far (only about half of the states have so far reported wholly or partly on 2015 rates), Jonathan Cohn extracts an illustrative tale of two states:

No, Ben Nelson didn't scuttle the ACA's federal exchange

[Update, 1/29/15: As Jonathan Cohn reports, Nelson has just precisely confirmed the reading below of his position re federal and state exchanges.]

The latest bit of sophistry deployed by Halbig supporters to convince the world that the Senate Democrats who drafted the ACA deliberately barred subsidies from flowing through any exchange set up by the federal government is a claim that "Ben Nelson made them do it," Here's David Catron in The American Spectator (retailed without value-add by the Wall Street Journal's James Taranto):

Jonathan Cohn advises his New Republic readers, “Like other journalists who were following the process closely, I never heard any of them suggest subsidies would not be available in states where officials decided not to operate their own marketplaces.”

This is an odd statement indeed considering that high-profile publications were reporting a lively debate over this very issue. And Ben Nelson’s name was frequently mentioned. In January of 2010, for example, Politico reported that he regarded federal control of Obamacare’s exchanges as “a dealbreaker.” Nelson said that too much federal involvement would inevitably lead to government-run health care: “I wouldn’t support something that would start us down the road of federal regulation of insurance and a single-payer plan.”

He reiterated his objection to federal exchanges in this 2010 video, wherein Greta Van Susteran presses him to provide a legitimate motive for ultimately voting in favor of health care “reform.” Nelson vehemently insists that no one bought his vote: “I had requirements… no government-run plan, no federal exchange… and adequate language to deal with abortion. Those were requirements, but no one was buying any vote.” Nelson clearly implies that these conditions had been met and this is why he flip-flopped and voted for the bill.

These statements prove nothing, and indicate nothing.There was precisely zero public debate over whether the Senate bill allowed a federal exchange to credit subsidies. Catron strips the context out of the Politico article, which in fact indicates the opposite of what Catron and Taranto imply.

On educating voters

The Times' Robert Pear reports that labor leaders are backing away from the pre-Scott Brown compromise forged between House and Senate Democrats over the excise tax in the health care reform bill, on grounds that "the proposal is too high a price to pay for the limited health care package they expect to emerge from Congress."

If that's true, it would seem that labor leaders don't expect the House to pass the Senate bill with a "reconciliation sidecar," which is very bad news.   Also striking, though, is the article's snapshot of the extent to which attacks on the bill from all sides have penetrated voters' perceptions, whereas its virtues have not. The attacks cross-fertilize: 

At meetings of the House Democratic Caucus, lawmakers from Massachusetts, including Representatives Edward J. Markey and Richard E. Neal, said they were struck by the vehemence of opposition to the tax in their districts.

Mr. Markey recalled that a constituent had poked him in the chest and said: “Eddie, I’ve voted for you my whole life. But if you think you will tax my benefits and give the money to Ben Nelson in Nebraska, you’re crazy.” Senator Nelson, Democrat of Nebraska, voted for the bill after it was rewritten to provide extra Medicaid money to his state.

To which there's an obvious response: if the excise bill is in there, the Nelson giveaway won't be. Even Nelson has asked that the special deal for Nebraska be removed from the bill. So any deal that House Democrats cut that allows a portion of the Senate bill's excise tax to remain in place would entail getting rid of the Nelson deal.

Markey does not say that he did not make that point to the voter. But so many Democrats seem so cowed by every line of attack, no matter how partial, trivial, misleading, disingenuous  -- it's agonizing to watch them cringe.

1995 Redux: Call the Republicans' shut-down-the-Senate bluff

It's a given by now that Republicans will do all they can to obstruct any deal between House and Senate Democrats entailing the House passing the Senate health care bill and amending it through the reconciliation process. Jeff Davis, Greg Sargent and Karen Tumulty have explained in numbing detail how Senate Republicans can stall reconciliation fixes. Sargent:

The GOP Senate leadership has privately settled on a strategy to derail health reform if Dems try to pass the Senate bill with a fix through reconciliation, aides say: Unleash an endless stream of amendments designed to stall for time and to force Dems to take untenable votes.

The aide described the planned GOP strategy as a “free for all of amendments,” vowing Dems would face “a mountain of amendments so politically toxic they'll make the first health debate look like a post office naming.”

Notwithstanding the difficulties, what remains striking is the difference in political will between the two parties. Republicans, as ever, will act as a body to do whatever it takes to get what they want -- the death of comprehensive health care reform, a Waterloo for Obama, an electoral debacle for the Democrats to dwarf 1994. 

Theocracy in America

A lot of people are angry that Senate rules and Republican intransigence give Joe Lieberman and Ben Nelson life-or-death power over the health care reform bill.  I am angry that the Catholic Church also has a near-veto:

Leadership aides say progressives are prepared to take it on the chin and will vote for a final bill without a public option. But they say pro-life Democrats will seek direction from the U.S. Conference of Bishops as to whether they can support an amendment weaker than Rep. Bart Stupak's, thus setting up what will likely be the most difficult negotiation before a final vote.

Catholic bishops have about as much credibility on matters of sexual and reproductive morality as Iranian mullahs have with respect to vote-counting.