MSNBC’s Lawrence O’Donnell explains how President Obama’s healthcare bill traded old problems for new problems by keeping the employer-based insurance system in place.

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California’s “Medicare for all” universal health care legislation fell short of the 21 votes needed to pass the state Senate today.

Senate Bill 810 failed on a 19-15 vote during this morning’s floor session, with four moderate Democrats abstaining and one voting no.

Democratic Sen. Mark Leno, who authored the bill, said the proposal would stabilize health care costs and expand access to coverage.

He called the bill, which does not include funding to cover the projected $250 billion annual cost of running the single-payer system, the first step in a “many year project” that will likely require asking voters to approve financing. He encouraged members to support the bill to allow the policy discussion to continue.

No Republicans voted for the bill. Sen. Tony Strickland, R-Moorpark, criticized the proposal as an attempt to create “another costly and inefficient bureaucracy.”

“There’s no doubt that we need health care reform, there’s no doubt that we need to improve our health care system, but members, this is not the bill to move forward,” he said.

The bill faces a Tuesday deadline for passing the state Senate in the current legislative session. Several similar bills have cleared one or both houses in recent years. The last version to win legislative approval was vetoed by then-GOP Gov. Arnold Schwarzenegger.

Let’s say you have a Ford and decide to replace everything under the hood with Hyundai parts, including the engine and transmission. Could you still honestly market your car as a Ford?

That question gets at the heart of the controversy over who is being more forthright about GOP Rep. Paul Ryan’s plan to “save” Medicare, Republicans or Democrats.

If you overhaul the Medicare system like you did your Ford and tell the public it’s still Medicare, are you doing so honestly?

As I noted last week, PolitiFact, the St. Petersburg Time’s fact checker, decided that the Democrats’ claim that Ryan’s plan would mean the end of Medicare was so blatantly untrue it merited designation as the 2011 “Lie of the Year.” Republicans, whose erroneous claims about health care reform garnered “Lie of the Year” prizes in 2009 and 2010, cheered. Democrats, as you might imagine, jeered — as did some journalists and pundits.

PolitiFact’s Washington-based editor defended the choice by contending that Ryan’s proposal to restructure Medicare by providing beneficiaries subsidies to buy private insurance would not “end” the program. It would still be Medicare, he reasoned.

What he’s missing is that Ryan’s proposal would change the program so fundamentally as to represent the equivalent of replacing the engine and transmission.

Ryan’s plan would be a continuation of what Yale professor Jacob Hacker wrote about in his 2006 book, The Great Risk Shift. As Hacker pointed out, big corporations, aided and abetted by their political allies, have been methodically shifting more and more of the risk of providing benefits from them to us. Ryan’s plan would accelerate the trend and take it a major step further by gradually shifting much of the financial obligation of paying for benefits from the government to Medicare beneficiaries. Under Ryan’s blueprint, the government would be doing just what big corporations have been doing for several years now: off-loading risk.

The corporate world started doing this when big banks and multi-line insurance companies with financial services divisions persuaded them to phase out their pension plans and replace them with 401(k)s, so-called because of the section of the federal law that authorized their creation.

In the early part of my father’s career, 401(k)s had not yet been invented. Soon after he was hired as a shift worker at a Tennessee glass factory, he was enrolled in his employer’s pension plan. When he retired more than 25 years later, he began receiving a predetermined pension benefit every month until he died last December. The payments weren’t nearly as big as the paycheck he received while on the job, but it was an enormous help financially.

By contrast, when I went to work for CIGNA in 1993, pensions were an endangered species. CIGNA still offered one, but the company changed the structure soon after I was hired, which meant that I would get less each month upon retirement than colleagues who had joined the company a few years earlier. CIGNA was among the first companies to offer a 401(k) plan because, at the time, it was one of those multi-line insurance companies that had a financial services division. That division created and managed 401(k)s for several large employer customers, CIGNA itself being one of them.

Aetna also had a financial services division back then. So two of the biggest health insurance firms in the country, Aetna and CIGNA, played key roles in the early years of the great risk shift by ushering in the era of 401(k)s and bringing the pension era to an end. Employers began phasing out pensions in the 1990s as rapidly as they began jettisoning indemnity health insurance plans in favor of HMOs and other managed care plans (which, of course, Aetna and CIGNA also marketed, and still do).

Transitioning from pensions to 401(k)s meant that employers would have much more money available to reward shareholders because they would be paying less in revenues over time to retired employees. The winners consequently have been the wealthy individuals and institutions who own today’s corporations, while the losers have been the ones who work for them.

Instead of being “defined” benefits plans like pensions, 401(k)s are referred to as defined “contribution” plans. That means that workers enrolled in such plans no longer get a certain amount of money every month when they retire as my father did, but instead will get whatever is in their 401(k) balances, most of which they contributed themselves.

Highly compensated employees, including CEOs, are pleased with the shift because they have the means to sock away more money in their 401(k)s than the rank and file. And the money they sock away is tax-deferred, so 401(k)s have become a favorite tax shelter for the well-to-do.

Ryan’s Medicare scheme would replicate what 401(k)s have done to the rank and file. The vouchers the government would provide beneficiaries are the equivalent of a defined contribution. And the vouchers invariably would become less valuable over time as the cost of insurance increased. The wealthy among us wouldn’t be nearly as disadvantaged when that occurred as low- and middle-income earners who would have to dig deeper into their own pockets to buy health care coverage from private insurers. And undoubtedly, they would find that the only plans they could afford would be those with high deductibles.

If backers of Ryan’s plan would drop the word “Medicare” and name it something with a bunch of numbers and a letter or two in parenthesis, that would be far more honest than calling it Medicare or anything similar. At least the proponents of the great risk shift didn’t have the audacity to call 401(k)s pensions. They’re entirely different creations with engines and transmissions that bear little resemblance to each other. That ain’t no lie, PolitFact.

As Barack Obama battled Hillary Rodham Clinton over health care during the Democratic presidential primaries of 2008, he was adamant about one thing: Americans, he insisted, should not be required to buy health insurance.

“If things were that easy,” Mr. Obama told the talk show host Ellen DeGeneres in February of that year, “I could mandate everybody to buy a house, and that would solve the problem of homelessness. It doesn’t.”

Now President Obama may wish he had stuck to those words. On Monday, the Supreme Court agreed to take up a constitutional challenge to his landmark health care bill, and a decision could come in the midst of Mr. Obama’s 2012 re-election campaign.

At the heart of the challenge is “the mandate” — a provision requiring nearly all Americans to buy coverage or pay a penalty — that he so vigorously opposed as a candidate. If it is struck down, much of his signature legislative achievement could fall with it in a decision that would undoubtedly be construed as a rebuke to the president.

Polls show the mandate is by far the most unpopular provision of the 2010 bill, and now Mr. Obama, who ultimately embraced the idea, is in the awkward position of defending something he once rejected.

“I think his political instincts were right,” said Paul Starr, a health policy expert at Princeton University who argues that it is possible to expand coverage by other means. “I think he saw that there could be a backlash against a mandate and that there needed to be some other kind of approach. So in a way, I’m sorry he didn’t stick to his original position.”

The theory behind the mandate, according to its proponents, is this: Requiring coverage brings both sick and healthy people into the pool of those insured, which is essential because premiums paid by the healthy offset the cost of covering the sick. Otherwise, healthy people wait until they are ill to buy insurance, which leads to what policy analysts call a “death spiral” in which premiums skyrocket out of control.

As a candidate, Mr. Obama did favor requiring all children to have insurance. Once he took office, his top aides began examining other options, said Ezekiel J. Emanuel, a former health policy adviser to Mr. Obama. The aides studied the experience of Massachusetts, which has a mandate, and health laws in other states that do not. They considered voluntary incentives to get healthy people to enroll.

Their internal modeling, Dr. Emanuel said, showed that a mandate would extend coverage to 32 million uninsured people. Without such a requirement, he said, the administration estimated it could cover 16 million people at three-fourths the cost of covering the 32 million. In the face of such evidence, Mr. Obama reversed himself.

“I don’t think it was a slam-dunk,” said Dr. Emanuel, now a vice provost at the University of Pennsylvania and a regular contributor to The New York Times’s Op-Ed page. “The president did take very seriously his reputation for following what he said, so he was very reluctant to change his opinion unless he was very convinced.”

Health insurers also insisted on a mandate, as did the Democrats who controlled Congress. In July 2009, Mr. Obama told CBS News that he was “now in favor of some sort of individual mandate as long as there’s a hardship exemption” for people who truly could not afford to buy insurance.

While the White House may have been prepared for the public unhappiness over the provision, it appears to have been caught off guard by the constitutional challenge — in part because Obama advisers regarded the mandate as a conservative notion. The idea gained currency in the early 1990s, when some Republicans proposed their own version of an “individual mandate” as an alternative to the “employer mandate” in President Bill Clinton’s health plan.

Polls show that the individual mandate is unpopular. The Kaiser Family Foundation, which tracks public opinion on the health measure, reported in March that 74 percent of Americans would keep, rather than repeal, the law’s provision barring insurers from discriminating against people with pre-existing conditions. But only 27 percent would keep the mandate. (A CNN poll released Monday found that 52 percent supported the mandate, up from 44 percent in June, though unlike Kaiser, CNN did not explain that failure to comply would result in a fine.)

The Obama administration insists that if the mandate falls, so does the provision on pre-existing conditions. “The mandate,” said Jonathan Gruber, a health economist at the Massachusetts Institute of Technology who has advised the administration, “is the spinach you need to get the chocolate you want.”

Continue reading…

The Obama administration announced Friday that it was scrapping a long-term care insurance program created by the new health care law because it was too costly and would not work.

Kathleen Sebelius, the secretary of health and human services, said she had concluded that premiums would be so high that few healthy people would sign up. The program, which was intended for people with chronic illnesses or severe disabilities, was known as Community Living Assistance Services and Supports, or Class.

“We have not identified a way to make Class work at this time,” Ms. Sebelius said. She said the program, which had been championed by Senator Edward M. Kennedy, Democrat of Massachusetts, was financially unsustainable.

Kathy J. Greenlee, the assistant secretary of health and human services in charge of the program, said: “We do not have a viable path forward. We will not be working further to implement the Class Act.”

The administration’s decision was another setback for the new law, which is under attack in court, in Congress and in many state legislatures. Ms. Sebelius said her decision “does not affect the rest of the health care law,” which is supposed to provide coverage to more than 30 million people who are uninsured.

But the Senate Republican leader, Mitch McConnell of Kentucky, said the long-term care program was “only one of the unwise, unsustainable components of an unwise, unsustainable law.” He and other Republicans in Congress want to repeal the entire law.

Advocates for older Americans and people with disabilities expressed disappointment at the decision, and Ms. Sebelius said Americans still had an “enormous need” for long-term care insurance. “At $75,000 a year for a nursing home and $18,000 a year for home health care, most families cannot afford to pay out of pocket,” she said.

The program was intended for people with severe disabilities who wanted to live in the community, though benefits could also have been used to help pay for nursing home care or assisted living. It would have been financed with premiums paid by workers, through voluntary payroll deductions, with no federal subsidy. Premiums were supposed to have ensured the solvency of the program over 75 years.

But Ms. Sebelius said she agreed with actuaries who feared that “not enough young, healthy people” would enroll. “This could have led to a vicious cycle where premiums would have to be set higher and higher to cover the likely costs of benefits, leading fewer and fewer healthier people to sign up for the program,” Ms. Sebelius said.

Two early critics of the Class program — Senator John Thune of South Dakota and Representative Charles Boustany Jr. of Louisiana, both Republicans — said they had been vindicated.

“The Obama administration ignored repeated warnings about the financial solvency of this massive new entitlement and suppressed information on the viability of the program,” Mr. Thune said.

In an interview, Mr. Boustany said that “in their haste to get the bill passed,” President Obama and Congressional Democrats ignored warnings about the program’s financial risks.

When Congress was developing the program in late 2009, Senator Kent Conrad, Democrat of North Dakota and chairman of the Budget Committee, described it as “a Ponzi scheme of the first order” because it required an ever-increasing stream of premiums to cover the cost of benefits. Connie Garner, who helped devise the long-term care program as an aide to Mr. Kennedy, said she was “very, very disappointed” by the decision. “The program could have been made to work” if the administration had tried harder, Ms. Garner said.

Operating in secret with no public accountability while laden with ties to special interests, the Super Committee is tasked with identifying $1.2 trillion in cuts to federal spending by November 23rd.

Co-chair Senator Patty Murray (D-Washington) has said cuts to everything, including Medicare, Medicaid and Social Security, are on the table. This is unacceptable.

Donate now to help us stop the Super Committee from destroying our social safety net.

We must say, “No!” to the Super Committee. With one month left before they give their recommendations to Congress, we need to tell the members of the Super Committee that we will not let them gamble with our health and welfare.

We are calling for a national day of action on November 3rd for single-payer supporters to make calls, send emails, hold demonstrations at Congressional offices and/or Occupations, or join National Nurses United’s rally in DC in the final weeks leading up to the Super Committee’s proposal.

For every $10 you donate, we will be able to ship a package of signs and postcards to single-payer supporters in preparation for their actions on November 3.

Help us flood politicians’ offices with our simple message: we refuse to let you threaten the lives and livelihoods of millions of people for profit and greed.

We must hold the Super Committee accountable, but we need your help to do it. Please donate now–anyone who becomes a recurring donor at $10 or more a month will receive a free Martin Luther King Jr. poster.

We need Wall Street, the health insurance industry and investors out of healthcare; replaced by a publicly financed single-payer, improved Medicare-for-all system. Doctors, health providers and patients should decide healthcare–not Wall Street.

Adara Scarlet’s story.

Dr. Flowers explains why Wall Street should be ashamed of themselves for putting profits before people’s necessities.

Healthcare has already been proclaimed the central issue of the 2012 Presidential election, just like it was hailed the central issue of Obama’s presidency. It was also a central issue during the 2010 election, and the 2008 campaign. So why don’t we ever hear the end of it?

Our leaders still have not solved the problem with our nation’s healthcare crisis. Even with the passage of Obama’s Affordable Care Act, there will still be millions of Americans under-insured and without insurance.

America’s healthcare debate showed there are only two ways we’re willing to go: expand the for-profit health insurance industry by mandating everyone buy insurance, with its over-priced premiums, co-pays, and deductibles; or expand Medicare for all, providing universal healthcare through a single-payer system that lowers costs.

In a for-profit model you’re essentially paying for healthcare, as well as CEOs’ rising salaries, massive administrative costs for denial-of-claims departments, and those DTC advertisements we all love so much.

In the non-profit single-payer healthcare model individuals and businesses pay less in taxes than they’re currently paying in co-pays, premiums and deductibles. The administrative costs are also less, because medical records and “billing” would be on a National Healthcare Card. With a single-payer healthcare system everyone has a better healthcare plan — and access to it — than most anyone could afford now.

Lessons in America’s healthcare debate

Poll after poll shows the majority of doctors, nurses and consumers support expanding Medicare for all. During the “Healthcare Debate” a 2009 CBS/NYTimes poll reported that 59% of Americans agreed that the government should provide national health insurance.

Single-payer healthcare was also the deciding factor in Democrats winning the 2008 election and losing it in 2010. In ’08, many thought Obama would make demands for a system that covered everyone. Indeed, during the campaign a video emerged from 2003 where then-State Senator Obama proclaimed to the Illinois AFL/CIO: “I happen to be a proponent of a single-payer universal health care program.” To leave out any confusion, Obama followed that with the movement’s own mantra “everybody in, nobody out.” Many hoped that was a signal of change to come.

Sure, there was change, but not the kind most were expecting. Soon after taking office, he then said this: “If I were designing a system from scratch, then I’d probably set up a single-payer system … Medicare would be an example of a single-payer system, if everybody was in Medicare. But the problem is we’re not starting from scratch. We’ve got a system in which most people have become accustomed to getting their health insurance through their employer.”

Obama’s explanation simply doesn’t stick. Not only is Medicare a part of the system, expanding Medicare for all would have more people paying into it as Baby Boomer after Baby Boomer turns 65. Moreover, employer-based health insurance is one of the worst aspects of private insurance. In-doctor networks cause people to become trapped in their jobs. Doctor / patient relationships are also immediately destroyed when insurance plans change.

Why are Democrats and Republicans not making the right choice between healthcare and health insurance? It’s because they’re getting paid way too much to support the problem and not the solution.

According to the Center for Responsive Politics “about $31.6 million in contributions to candidates and committees during the 2010 election cycle” (and nearly $30 million during the 2008 cycle) came from the pharmaceutical and health industry. As Senate Finance Committee Chair Max Baucus said in 2009: “single-payer is off the table.” Apparently, the insurance and pharmaceutical giants paid for the table.

The Democrats’ base lost all hope, and by 2010 the Democrats lost their majority in Congress, essentially because they didn’t stand up for real reform. Americans don’t tolerate half measures and compromise when it comes to healthcare.

Real change starts with a single-payer

A single-payer, universal healthcare system can be set up so that it’s publicly funded yet privately delivered, particularly through the example of Medicare. No matter how many Tea Party candidates rant about “Obamacare,” or universal healthcare being “socialism,” doctors and nurses will not be government employees in a single-payer system.

For those who say, “I don’t want the government rationing care!” Right now, the insurance industry is profiting from denying them care they’re paying for. A single-payer system will give you more freedom of choice: your choice of doctor, the ability to afford the medicine you need, and access to more care. This means no co-pays, no premiums, no deductibles, no out-of-pocket costs and no medical bankruptcies.

For those who are concerned about the “publicly funded” part, I have one question: do we really want to mandate or even continue to implement a health insurance system where we pay such high premiums, co-pays, and deductibles that it leaves millions of people under-insured, or without healthcare altogether?

States lead the conversation

Candidates can win elections on a single-payer, universal healthcare platform.

California passed single-payer healthcare at the state level twice, but it was vetoed by then-Governor Schwarzenegger in ’06 and ’08. Vermont passed a single-payer healthcare bill this year, signed by Governor Peter Shumlin, who recognized local organizing efforts by the Vermont Worker’s Center. Vermont’s success, still in progress, appears to set the standard.

In a hotly contested debate this year, Rep. Kathy Hochul (D, NY) stood up in support for Medicare and won in a special election against the Republican challenger Jane Corwin, who supported Medicare cuts. This election, as mentioned by the New York Times, was in “one of New York’s most conservative districts.”

One fact remains: the insurance and pharmaceutical industry can pay off national candidates, but they can’t pay off millions of Americans suffering through medical bankruptcy or living with the burden of having no healthcare at all.

Passing single-payer universal healthcare bills at the state level would far exceed the ACA’s best qualities, but it will take standing up for single-payer and good ’ole grassroots organizing to get it done. This localized approach to organizing only makes the national movement stronger.

There are now groups in 23 states working on organizing around single-payer bills at the state level. If we can learn anything from the previous election cycles, and can understand the impact of state bills on national policies, it’s this: healthcare remains a central issue, and a single-payer plan is a winner.

Josh Starcher is a Volunteer Coordinator for Healthcare-Now! NYC.

As ThinkProgress previously reported, Vermont Gov. Peter Shumlin (D) made history earlier this year when he signed into law legislation that would make his state the first state to lay the groundwork for a single payer health care system. In order to enact this system, the state needs a waiver from the federal health care law, which it will be able to obtain in 2017. Rep. Peter Welch (D-VT) has introduced legislation to move the waiver date up to 2014, an idea President Obama has endorsed.

Now, another governor is looking to take advantage of flexibility in Obama’s health care law in order to establish a single payer system. Gov. Brian Schweitzer (D-MT) announced yesterday that he will be seeking a waiver to set up his own universal health care system in his state modeled after the single payer Canadian health care system that began in the province of Saskatchewan:

Gov. Brian Schweitzer said Wednesday he will ask the U.S. government to let Montana set up its own universal health care program, taking his rhetorical fight over health care to another level. [...] The popular second-term Democrat would like to create a state-run system that borrows from the program used in Saskatchewan. He said the Canadian province controls cost by negotiating drug prices and limiting non-emergency procedures such as MRIs.

Local news station KRTV covered Schweitzer’s bid for a new universal health care system for his state. Schweitzer said that under his ideal system patients can still buy private insurance if they want to, but that it’ll be a “lonely place over there at Blue Cross Blue Shield” due to the superior public health insurance he plans to provide. Watch it:

Schweitzer’s announcement to seek a waiver and design his own system was met with curiosity by GOP state Sen. Jason Priest, who responded, “I don’t want to reject it before I see the details. I am just glad he is thinking about it.”

The Obama administration asked the Supreme Court on Wednesday to hear a case concerning the 2010 health care overhaul law. The development came unexpectedly fast and makes it all but certain that the court will soon agree to hear one or more cases involving challenges to the law, with arguments by the spring and a decision by June, in time to land in the middle of the 2012 presidential campaign.

The Justice Department said the justices should hear its appeal of a decision by a three-judge panel of the United States Court of Appeals for the 11th Circuit, in Atlanta, that struck down the centerpiece of the law by a 2-to-1 vote.

“The department has consistently and successfully defended this law in several courts of appeals, and only the 11th Circuit Court of Appeals has ruled it unconstitutional,” the Justice Department said in a statement. “We believe the question is appropriate for review by the Supreme Court.

“Throughout history, there have been similar challenges to other landmark legislation, such as the Social Security Act, the Civil Rights Act and the Voting Rights Act, and all of those challenges failed,” the statement continued. “We believe the challenges to the Affordable Care Act — like the one in the 11th Circuit — will also ultimately fail and that the Supreme Court will uphold the law.”

On Monday, the administration decided that it would not seek review from the full 11th Circuit. Its Supreme Court petition was not due until November.

Also on Wednesday, two sets of plaintiffs who had won on the core issue in the 11th Circuit filed their own request for Supreme Court review.

“Time is of the essence,” wrote Paul D. Clement, a former United States solicitor general who represents 26 states in the case, urging the justices to move quickly to hear a case on the law, the Affordable Care Act. “The grave constitutional questions surrounding the A.C.A. and its novel exercise of federal power will not subside until this court resolves them.”

The 11th Circuit, in a decision issued in August, ruled that a part of law requiring the purchase of insurance — the so-called individual mandate — was an unconstitutional exercise of Congressional power.

The majority decision, written by Chief Judge Joel F. Dubina and Judge Frank M. Hull, said, “We have not found any generally applicable, judicially enforceable limiting principle that would permit us to uphold the mandate without obliterating the boundaries inherent in the system of enumerated Congressional powers.”

But the court ruled against the plaintiffs on two other points. It said its ruling on the individual mandate did not require “wholesale invalidation” of the law, and it upheld the law’s expansion of the Medicaid program.

The petition from the 26 states and a second one, from the National Federation of Independent Business and two individuals, sought review on the issues they had lost in the 11th Circuit.

Almost all of the usual signs indicate that the court will agree to hear at least one challenge to the law: a federal appeals court has struck down a major piece of federal legislation, the lower courts are divided about its constitutionality, and all sides, including the federal government itself, agree that review is warranted.

It is less clear which case the justices will agree to hear and which issues they will focus on. Simply agreeing to hear a case does not guarantee that the Supreme Court will decide the constitutionality of the individual mandate, the question at the heart of the challenges. The court could agree with some lower courts that some or all of the plaintiffs lack standing to sue or that the central issue is not yet ripe for decision.

The United States Court of Appeals for the Fourth Circuit, in Richmond, Va., for instance, ruled this month that it was premature to decide the central question, citing a federal law allowing suits only after certain taxes and penalties are due.

A fourth challenge to the law was heard last week by the United States Court of Appeals for the District of Columbia Circuit.