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A Clean Bill of Health?

Question: What is your opinion of the House healthcare bill?

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Jacob Hacker: Well, I think the major strengths of the healthcare bill passed by the House of Representatives is it makes a very strong commitment to affordable coverage. It does two things that are going to essential if we're going to have affordable coverage. It regulates the insurance companies quite significantly to make sure that they're providing coverage to everyone who needs it and not just cherry-picking the healthy.

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The other thing it does, which I think is equally crucial, is it puts in place measures to make sure that that coverage would be affordable. There are two that I think need to be emphasized above all else. One is it has real money for subsidies to provide health insurance, to make it more affordable for people to buy health insurance. The bottom line is no matter what the government does to try to bring down premiums, you're going to have to pay a pretty substantial amount of the premium for middle-class and less affluent Americans if they're going to be able to afford our super-expensive coverage.

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Then the second thing that it does is it creates a competitor to the private insurance plans in the form of a public health insurance option. There has been some concern that this public health insurance option isn't as strong as it should be. It's certainly not as strong as I originally had advocated or had wanted, but it's still a pretty good plan. It's going to be created by the federal government, it's going to be run by the Secretary of Health and Human Services in the same way that the Medicare program is. It will be available to Americans in every exchange, so if they're not getting coverage through their employer or if they work for a small employer that can't afford to get coverage on its own, they're going to have access to this public health insurance plan. And the public health insurance plan has a lot of tools available to innovate in the payment for and delivery of care to help bring down costs.

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So I think it's a really strong element of the bill. If you take those two things together, the commitment to regulating the insurance industry and the emphasis on affordability, you have a very secure foundation for building in the coming years. I mean, we certainly are going to have to address much more forcefully than even the House bill does to long-term cost containment problem. The only way I think we're going to bring down costs over the long-term is to create real countervailing power in the market. That means countervailing power to the insurance companies from a strong public health insurance plan and countervailing power on the part of insurance companies in this public insurance plan. These are the providers of care. This doesn't mean just ratcheting down rates, it means changing the way in which care is paid for and, thereby, the way in which care is delivered. That's going to take time, but I think that that's—that you need to have that secure foundation such as the House bill has to be able to move in that direction.

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If people aren't guaranteed affordable care and affordable coverage, then it's very hard to address the underlying drivers of care. So much of the cost gets shifted from people who aren't insured to people who are insured. Providers figure out ways to move the payments from one insurer to another. The insurance companies complain that they can't bring down care costs systematically because they're having this turning of people in and out of coverage, so you need to have a secure foundation in the form of broad commitment to affordable coverage if you're going to really address the big drivers of cost.

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Question: What do you expect to happen to the bill in the Senate?

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Jacob Hacker: Well I think there's no question that the pressure in the Senate to pull back from where the House is is going to be very strong. But I actually am optimistic and think there is a real possibility that the Senate bill will be pretty good too and they'll go to the conference committee with two strong bills able to bring together those bills for a very good final product. The problem in the Senate side is pretty clear. It is that you don't just need a majority. If you're going to go through the normal Senate process, you need to 60 votes. You have to overcome a filibuster and that means that the center of political gravity isn't a Democrat in the sort of roughly the middle of the party. It's a very conservative Democrat or a moderate Republican from Maine, like Olympia Snow or Susan Collins.

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So that's the reality that's faced and that's why everyone's recognized from the beginning that the Senate is going to be the tougher nut to crack; however, Harry Reid basically has said, "Look, we want to have a good bill. If that requires that we really build on our on own majority, the partisan Democratic majority, so be it. He's trying to put together a strong bill and get a favorable read on that bill from the Congressional Budget Office and move forward to try to bring in wavering Senate Democrats and the two independents that caucus with the Democrats. We hear lots of speculation about whether he can do it, but I think that if he moves forward, as he moves forward, the pressure on those wavering Democrats is going to be very strong to at least support a debate on this issue. I mean, after all, this is something the House has moved ahead, Americans want healthcare reform, President Obama was elected on this issue and it really would be amazing to me, but perhaps it's not inconceivable, if Senate Democrats or those who caucus with them actually stood in the way of their being a debate.

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All they have to do is say, "Okay. We'll let debate go forward. We will support a motion to end a filibuster but we won't necessarily vote for the final bill." So this is, to me, the right and honorable path for those Democrats who have concerns about the bill, it's to say, "I may not want to vote for it in the end, but I support the idea that we should have a democratic process where the votes of the majority are allowed to be heard."

Recorded on November 9, 2009
Interviewed by Austin Allen

Yale political science professor Jacob Hacker grades the 2009 House healthcare bill and predicts its fate in the Senate.

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