On What Just Happened to Medicare for All in California—and the Organizing We Need to Win
by Michael Lighty - Portside - February 8, 2022
The recent demise of the Medicare for All style reform bill in California, AB 1400, reveals some answers., Flickr/cc/California Nurses Association
Why is a healthcare system—Medicare for All—that costs less described as "too expensive?"
Why hasn't the overwhelming popularity of Medicare for All—85% of Democrats, 66% of independents and 52% (!) of GOP support it—translated into legislative majorities?
Why is Medicare for All, a version of which is utilized in 50 countries around the world, presented as 'untested?'
The recent demise of the Medicare for All style reform bill in California, AB 1400, reveals some answers. The Wall Street Journal, who haven't met a for-profit healthcare model they don't like, suggest that if Medicare for All cannot be done in California, it won't happen in the United States. And the opposite is more likely true: if we can do it in California, Medicare for All will be adopted nationally.
AB 1400, also known as "CalCare" sponsored by the California Nurses Association/NNU, was the latest version of a single-payer bill to be considered in the California Legislature designed to help lead the US towards Medicare for All. Since the 1994 ballot initiative for single payer that was heavily defeated—it received fewer votes than the petition signatures gathered to put it on the ballot—numerous single payer bills have passed one or both houses of the legislature, and those that made it to the Governor's desk were vetoed.
Many advocates were encouraged when Gov. Gavin Newsom campaigned in support of the prior bill, SB 562, since the lack of gubernatorial support had proven fatal to reform efforts. As a result, the Healthy California Now coalition of organizations sought to hold Newsom to his promise and to utilize the Healthy California for All Commission he sponsored to move a single payer agenda. The pandemic delayed that Commission's work, but it is on track to release a report in April likely favorable to what they term "unified financing," having issued reports that demonstrated the unsustainability, inequities and expense of the present healthcare system compared to the cost and coverage advantages of single payer.
Rather than wait and rely on the Governor's leadership, advocates sought to rally around a bill as the preferred organizing strategy and a necessary policy step to apply for the approvals from the Biden administration necessary to finance a state single payer program (known as ACA Section 1332 waivers).
The resulting bill AB 1400 faced significant hurdles in the California Assembly, which has a large contingent of pro-corporate Democrats, despite a nearly three-fourths Democratic majority (which has been eroded by early retirements). To protect its profits and power, the healthcare industry—the insurance companies, corporate hospital chains, and prescription drug corporations, which can charge whatever they want, choose our doctors, and restrict access to treatments—rolled out a series of lies:
- Expensive and unproven approach to health care (only the US relies upon commercial insurance to allocate healthcare)
- Removes consumer choice (of health plans, such as it is)
- Threatens California’s ability to respond to future public health emergencies (as if the present system has done such a great job addressing Covid-19)
- Californians need a stable health care system we can rely on (which is why we need single payer).
The Assembly Speaker required the AB 1400 author, Assembly member Ash Kalra, to develop a financing plan as a condition to move the bill through the legislative process. After eight months of work, Kalra complied in late December. With the introduction of the financing plan, known as ACA 11, the debate focused on the taxes necessary to replace the current premiums, co-payments, and deductibles: the media narrative adopted the industry perspective and highlighted the supposed costs of single payer.
No one mentioned that the "private taxes" workers and employers pay for healthcare are the greatest financial burden faced by the middle class, as the Commission had shown. Nor did we hear about the much greater expense of the present system ($517 billion in 2022!) even though it provides less benefits, is hugely inequitable, and includes out of pocket costs of $2000 per year from each Californian just for the administration of the commercial insurance system. AB 1400 proponents didn't utilize the very favorable studies and analysis provided by the Commission—the Los Angeles Times pointed to one study after the fact, but it's not just "supporters" who assert single payer will cost less (see researchers from UCSF review of 22 financing studies, 20 of which show savings from single-payer).
The bill moved to the Assembly Health Committee, where it passed 11-3 in early January. Time was of the essence, since for the bill to advance to the state Senate, it had to pass the Assembly by January 31st.
At this point significant changes in AB 1400 were made to how the bill's policies would be implemented. Rather than go through the legislature this year never to return, amendments were adopted that required the bill's governing board to apply for the necessary federal support, review and certify the sufficiency of the financing plan, and report back to the legislature which would have to vote again by July 1, 2024, to implement the resulting program, and send the financing plan to the voters for ultimate approval. In short, AB 1400 expressed the intent of the legislature and set up a process for implementation that depended on legislative votes and on winning a ballot initiative.
Given existing provisions in the California constitution regarding the size of the state budget and revenues devoted to education, a ballot initiative seemed inevitable to most observers, but many advocates presented a successful adoption of AB 1400 this year as "enacting CalCare," which was not the case.
So how much of a setback is Assembly member's Kalra decision not to bring up AB 1400 for a vote? Rather than risk a double-digit defeat and solidify a negative position among colleagues whose support he needs and expects, Ash Kalra opted to fight another day. Advocates expressed outrage and a sense of betrayal. It's appropriate to hold elected officials accountable by forcing them to go on record on a bill, if we are prepared to act electorally to replace them, including having a fund and organizing strategy for credible primary challengers. That wasn't the case here. AB 1400 has been characterized as the only true single payer bill in California history, yet all of its provisions were subject to federal approval and further state legislative review.
In fact, the "first step" established by the amended AB 1400 can still be taken by the Governor with legislative authorization if necessary and incorporating the Commission's analysis and the key principles put forth in AB 1400. Once the federal support and approval for financing and program is secured by the Newsom administration, the California Legislature could approve it and send it to the ballot. The timeline would be at least as soon as in the amended AB 1400. There can be a convergence of state legislative and executive approaches.
Much has been accomplished. AB 1400 supporters organized the most comprehensive grassroots digital lobbying campaign ever, building a key infrastructure for future campaigns. The bill received significant endorsements, though the organizations including unions, that provide campaign funding and volunteers to elect Democrats did not make AB 1400 a priority. Organizational capacity to take on the industry was insufficient. There is also not a sufficient working-class base, particularly in non-union workplaces and during labor disputes, demanding single payer as the solution to the on-going healthcare crisis, and especially to the inequities exposed by the pandemic. We need to bring the diverse healthcare reformers who are in Sacramento everyday urging immediate improvements to pressure legislators for single payer. We need to be able to persuade and if necessary, force politicians to guarantee healthcare—not simply adopt "universal coverage" with all its gaps and disparities—whether they or their donors want to or not. That takes greater organizational and institutional support, and base building, in addition to activist mobilization.
The message environment matters, and single payer proponents are not winning the media narrative. Our slogan could be "We Care, They Scare. Better Healthcare, Not Bigger Profits." We must educate and inoculate voters, which takes door-knocking, earned media and paid ads, funded by tens of millions of dollars over a few years. Once the industry funded TV campaign begins against a ballot initiative—and we can expect based on recent ballot fights $200 million to publicize their lies about high costs, taxes, unreliability, lost jobs and limited choice under single payer—we'll need to be on TV, too.
This year in California we can establish the building blocks for single payer—seeking federal support, covering undocumented residents, setting up the infrastructure to set a state healthcare budget and rates, establishing a "single payer" for prescription drugs, and unwinding the for-profit domination of the state's low-income health program, Medi-Cal.
We need a healthcare justice coalition guided by a strategic assessment of what it will take to win with the ability to communicate effectively against the industry's lies. Can one bill do it all? Maybe not. But strategic organizing can.
Editor's Note -
The following two hot-links will take you to podcasts that explore the significance of what happened to AB 1400 in the California Assembly, and will give you some new insights.
- SPC
https://www.kalw.org/show/your-call/2022-02-01/universal-healthcare-legislation-dies-in-ca
https://www.kqed.org/forum/2010101887613/single-payer-healthcare-bill-dies-in-state-assembly
Is This What Winning Looks Like?
Modern Monetary Theory, the buzziest economic idea in decades, got a pandemic tryout of sorts. Now inflation is testing its limits.
By Jeanna Smialek - NYT - February 6, 2022
Modern Monetary Theory, the buzziest economic idea in decades, got a pandemic tryout of sorts. Now inflation is testing its limits.
Stephanie Kelton, proponent of Modern Monetary Theory, at home in Stony Brook, N.Y.Credit...Emon Hassan for The New York Times
The sun was sinking low over Long Island Sound as Stephanie Kelton, wearing the bright red suit jacket she had donned to give a virtual guest lecture to university students in London that morning, perched before a pillow fort she had constructed atop the heavy wooden desk in her home office.
The setup was meant to keep out noise as she recorded the podcast she co-hosts, a MarketWatch production called the “Best New Ideas in Money.” The room was hushed except for Ms. Kelton, who bantered energetically with the producers she was hearing through noise-blocking headphones, sang a Terri Gibbs song and made occasional edits to the script. At one point, she muttered, “That sounds like Stephanie.”
What Stephanie Kelton sounds like, circa early 2022, is the star architect of a movement that is on something of a victory lap. A victory lap with an asterisk.
Ms. Kelton, 52, is the most familiar public face of Modern Monetary Theory, which posits that if a government controls its own currency and needs money — to make sure its citizens have food and places to live when, say, a global pandemic pushes many out of work — it can just print it, as long as its economy has the ability to churn out the needed goods and services.
In the M.M.T. view of the world, “How will you pay for it?” is a vapid policy question. Real-world resources and political priorities determine how much lawmakers can and should spend.
It is an idea that was forged, and put to something of a test, during a low-inflation era.
When Ms. Kelton’s book, “The Deficit Myth,” was published in June 2020 and shot onto best seller lists, inflation had been weak for decades and had dropped below 1 percent as consumers retrenched in the pandemic. The government had begun to spend rapidly to try to prop up flailing households.
When Ms. Kelton appeared on a Bloomberg podcast episode, “How M.M.T. Won the Fiscal Policy Debate,” in early 2021, inflation had bounced back to around 2 percent.
But by a chilly January afternoon, as ducks flew over the frosty estuary outside Ms. Kelton’s house near Stony Brook University, where she teaches, inflation had rocketed up to 7 percent. The government’s debt pile has exploded to $30 trillion, up from about $10 trillion at the start of the 2008 downturn and $5 trillion in the mid-1990s.
The good news: The government has had no trouble selling bonds to fund its spending, contrary to the direst projections of deficit scolds.
The bad news: Some economists blame big spending in the pandemic for today’s rapid price increases. The government will release fresh Consumer Price Index data this week, and it is expected to show inflation running at its fastest pace since 1982.
And that may be why Ms. Kelton, and the movement she has come to represent, now seem anxious to control the narrative. The pandemic spending wasn’t entirely consistent with M.M.T principles, they say — it wasn’t assessed carefully for its inflationary effects as it was being drawn up, because it was crisis policy. But the situation has underlined how hard it is to know just where the economy’s constraints lay, and how difficult it is to fix things once you run into them.
Last summer, Ms. Kelton called inflation a temporary sign of “growing pains.” By the fall, she painted it as a good problem to solve, compared with a continued weak economy. As it lingers, she has argued that diagnosing what is causing it is key.
“Can we blame ‘MMT’ for the run-up in inflation?” she tweeted rhetorically last month, just hours before her podcast recording.
“Of course not.”
The economy is the limit
To understand how M.M.T. fits in with other dominant ways of thinking, it’s helpful to take a trip to the beach.
In economics, there’s a school of thought sometimes called “freshwater.” It’s the set of ideas that became popular at inland universities in the 1970s, when they began to embrace rational markets and limited government intervention to fight recessions. There’s also “saltwater” thinking, an updated version of Keynesianism that argues that the government occasionally needs to jump-start the economy. It has traditionally been championed in the Ivy League and other top-ranked schools on the coasts.
You might call the school of thought Ms. Kelton is popularizing, from a bay that feeds into the East River, brackish economics.
M.M.T. theorists argue that society should feel capable of spending to achieve its goals to the extent that there are resources available to fulfill them. Deficit spending need not be constrained to recessions, even theoretically. Want to build a road? No problem, so long as you have asphalt and construction workers. Want to feed children free lunches? Also not a problem, so long as you have the food and the cafeteria workers.
What became Modern Monetary Theory began to percolate among a small group of academics when Ms. Kelton, a former military brat and one-time furniture saleswoman, was a graduate student.
She had a gap period between graduating with a bachelor’s degree from California State University, Sacramento and attending Cambridge University on a Rotary scholarship, and her college economics professor recommended that she spend the time studying with L. Randall Wray, an early pioneer in the set of ideas.
They hit it off. She remained in Mr. Wray’s circle, and he — and Warren Mosler, a hedge fund manager who had written a book on what we get wrong about money — convinced her that the way America understood cash, revenues and budgeting was all backward.
Ms. Kelton earned her doctorate at The New School, long a booster of out-of-mainstream economic thinking, and went on to teach at the University of Missouri-Kansas City. She, Mr. Wray, who was there at the time, and their colleagues mentored doctoral students and began to write academic papers on the new way of thinking.
But academic missives reached only a small circle of readers. After the 2008 financial crisis punched a hole in the economy that would take more than a decade to fill, Ms. Kelton and her colleagues, invigorated with a new urgency, began a blog called “New Economic Perspectives.” It was a bare bones white, red and black layout, using a standard WordPress template, that served as a place for M.M.T. writers to make their case (and, in its early days, featured a #Occupy[YourCityHere] tab).
The theory picked up some fervent followers but limited popular acceptance, charitably, and outright derision, uncharitably. Mainstream economists panned it as overly simplistic. Many were confused about what it was arguing.
“I have heard pretty extreme claims attributed to that framework and I don’t know whether that’s fair or not,” Jerome H. Powell, the Fed chair, said in 2019. “The idea that deficits don’t matter for countries that can borrow in their own currency is just wrong.”
Ms. Kelton kept the faith. She and her colleagues held conferences, including one in 2018 at The New School where she gave a lecture on “mainstreaming M.M.T.”
Rohan Grey organized the conference and a media reception afterward at an Irish pub (“‘Shades of Green,’ monetary pun intended,” he said). It was attended by organizers, academics, “lay people” and lots of journalists. At the happy hour — which lasted until 1 a.m. — Ms. Kelton was mobbed when she walked in the door. “She was already on her way to super celebrity status at that point,” said Mr. Grey, an assistant professor at Willamette Law.
When she gave presentations on her ideas, Ms. Kelton would occasionally display a quote often attributed to Mahatma Gandhi: “First they ignore you, then they laugh at you, then they fight you. Then you win.”
And her star was rising more broadly. She advised Bernie Sanders’ presidential campaigns in 2016 and 2020, getting to know the Vermont senator. He never fully publicly embraced M.M.T., but he nevertheless advanced policies — like Medicare for All — that reflected its ideals.
She amassed a following of tens of thousands, later growing to 140,000, on Twitter. Her first handle, @deficitowl, prompted ardent fans to gift her wise bird figurines, some of which are still on display in her home office. She cultivated a small coterie of prominent journalists who were interested in the idea, most notably Joe Weisenthal at Bloomberg. She signed a book deal. She was regularly talking to Democratic lawmakers, sometimes in groups.
Her idea percolated through Washington’s media and liberal policy circles. Mainstream economic predictions that huge debt loads would come back to haunt nations like Japan had not played out, the anemic rebound from 2008 had scarred society and called the size of the crisis response into question.
Ms. Kelton and her colleagues were ensuring that their theory on benign deficits was an ever-present feature of the blossoming debate.
Then the pandemic hit, and suddenly the theoretical question of just how much the government could spend before it ran into limits faced a real-world experiment.
The $1.9 Trillion Floor
Without thinking about paying for it, Donald J. Trump's government quickly passed a $2.3 trillion relief package in late March 2020. In December, it followed that up with another $900 billion. President Biden took office in early 2021, and promptly added $1.9 trillion more.
They weren’t being driven by M.M.T. — nobody with meaningful power at the time had fully embraced the idea, given the political potency of “fiscal responsibility” — but they were effectively proving its point. The idea that a government issuing its own currency has to pay for its ambitions is misplaced.
Proponents took a victory lap.
“It took a virus to kill the deficit myth,” Ms. Kelton tweeted in March 2020, as that first relief package wound through Congress. She pushed for continued big spending in early 2021 (“$1.9T should have been a floor, not a ceiling in negotiations,” she wrote).
She trolled the Harvard economist Lawrence Summers as he warned that the big spending might be inflationary, cautioning that the stimulus overshot what the economy was prepared to produce. When the package passed, she said in a media interview that the plan “went beyond anything I would have anticipated.”
At first, the results seemed to be the confirmation that she and her colleagues had been right. The economy rebounded faster than anyone had hoped. Many of deficit hawks’ worst nightmares did not come to pass: Rates on government debt remain extremely low, and the dreaded bond vigilantes never came knocking.
Still, as inflation surges, the headlines declaring that the theory had “won” need some caveats.
Ms. Kelton and her colleagues make clear that the pandemic relief packages did not follow one of M.M.T.’s key tenets — they did not try to account for resource constraints ahead of time. In an M.M.T. world, the Congressional Budget Office would have carefully analyzed possible inflation ahead of time, and lawmakers would have tried to offset any strain on available workers and widgets with stabilizing measures and tax increases.
The theory’s basic idea on inflation — as Ms. Kelton tells it — is that the best defense is a good offense.
As 2021 demonstrated, however, the economy is a big, complex entity, and it can be hard to predict. Many economists, both mainstream and M.M.T. ones, did not think that the March 2021 package would be inflationary.
But homebound consumers, flush with cash, spent their money far more heavily on goods than they typically do, and it took them longer to shift back to services than just about anyone expected. That roiled supply chains, pushing up prices for cars and furniture and precipitating the heady inflation that now has America in its grip.
Ms. Kelton supported the $1.9 trillion package that passed last March, and she stands by that. She just questions how much of the inflation now is really coming from the demand it drove. Plus, she argues, you know what is worse than inflation? A crawling recovery.
One of M.M.T.’s big ideas is that the Federal Reserve, which in the United States is in charge of trying to keep prices under control by raising interest rates to lower demand, should not be the one-stop shop for economic management. Raising rates now would cool off investment, the logic goes, and how is that helpful at a moment when we don’t have enough factories or cargo ships?
The problem is that the alternative to a Fed response is, at the moment, not obvious. The Biden administration’s attempts at tamping down price increases — longer port hours, release of strategic petroleum reserves, calling out corporate price gouging — have mostly tinkered around the edges of the issue.
Those kinds of precise moves to counter inflation are what M.M.T. economists would recommend, though. Ms. Kelton laid out other suggestions M.M.T. economists have made in a recent blog post. Among them: Medicare for All, cutting the Pentagon budget, repealing some tariffs and unclogging the ports.
Not exactly “easy peasy,” to borrow a phrase of hers.
“M.M.T. was already pretty marginal,” said Jason Furman, a Harvard economist, noting that, in his view, most policymakers and prominent academics ignored it already. Even if policy in the pandemic effectively embraced the idea that you do not have to pay for your spending, that idea, he said, was also Keynesian.
And the M.M.T crowd, while dismissing the Fed’s role, has not come up with a clear and obviously workable idea for how to stem inflation, he argued, adding, “If you were open-minded, this would discredit it still further.”
In Washington, the suite of ideas has clearly been dealt a setback. Deficit concerns have returned. Mr. Biden’s sweeping policy agenda has not passed because Senator Joseph Manchin, a West Virginia Democrat and member of his own party, has opposed it on concerns about government debt and inflation.
Despite that, some of M.M.T.’s proponents are still sounding celebratory.
“We’ve won the debate on the intellectual level — there are no flaws,” Mr. Wray said.
Flaws or not, there are questions.
Questions like: “Did Congress ‘experiment’ with MMT, and does the run-up in inflation mean that MMT has ‘failed’?”
That is how Ms. Kelton put it in a Substack post — she upgraded from WordPress last year — that she called “How Do You Solve a Problem Like Inflation,” complete with “Sound of Music” art. (The Von Trapps, who famously fled Nazi-occupied Austria in 1938, would have known a thing or two about inflation.)
She published the 3,715-word riff hours before I was scheduled to visit her at her home in Stony Brook. The question she notes that “some people” have been asking is the main one I posed to her in an initial conversation.
During our first talk, she never broke her cool when questioned about the inflationary moment and what it says about her theory. She laid out her response methodically. Times are weird, supply chains are constrained, decades of corporate consolidation make it all worse. True M.M.T. policy would have thought about inflation in the first place, with tax increases or other stabilizers built in.
She was also emphatic. And that tone carries over to the post, if type style expresses tone. Has the M.M.T. experiment failed? “The answer,” it declares, in bold face, “is an unequivocal no.”
Why let someone else shape your narrative, when you could shape your own?
https://www.nytimes.com/2022/02/06/business/economy/modern-monetary-theory-stephanie-kelton.html
How Libby, Montana, got Medicare for All (new 10 minute video)
Deep in Health Bill, Very Specific Beneficiaries
WASHINGTON — Buried in the deal-clinching health care package that Senate Democrats unveiled over the weekend is an inconspicuous proposal expanding Medicare to cover certain victims of “environmental health hazards.”
The intended beneficiaries are identified in a cryptic, mysterious way: individuals exposed to environmental health hazards recognized as a public health emergency in a declaration issued by the federal government on June 17.
And who might those individuals be? It turns out they are people exposed to asbestos from a vermiculite mine in Libby, Mont.
For a decade, Senator Max Baucus, Democrat of Montana, has been trying to get the government to help them. He is in a position to deliver now because he is chairman of the Finance Committee and a principal author of the health care bill.
Working for a 21st consecutive day, the Senate on Sunday pushed toward a final vote on Christmas Eve on the bill, which would provide health insurance for more than 30 million Americans. Democrats said on Saturday that they had secured the 60th vote needed to pass the bill, and a 60-to-40 procedural vote early Monday morning was the first in a series testing their ability to maintain party unity on the issue.
David Axelrod, a senior adviser to President Obama, appeared on television talk shows on Sunday with other White House aides in an effort to reframe the debate and to rally Democrats around the bill. Despite polls that show declining public support for the measure, Mr. Axelrod said it would prove to be popular once people learned more about it.
“People understand we’re on the doorstep of doing something really historic that will help the American people and strengthen our country for the long run,” he said.
Mr. Axelrod said the provisions benefiting specific states, like Nebraska, and favored constituencies were a natural part of the legislative process.
“Every senator uses whatever leverage they have to help their states,” Mr. Axelrod said on the CNN program “State of the Union.” “That’s the way it has been. That’s the way it will always be.”
Republicans said they would resist the legislation with every tool available, and they denounced the deal struck on Saturday. “This process is not legislation,” said Senator Tom Coburn, Republican of Oklahoma, referring to a variety of special-interest provisions. “This process is corruption. It’s a shame the only way we can come to a consensus in this country is to buy votes.”
Mr. Baucus defended the assistance for those affected by the asbestos site in his state. “The people of Libby were poisoned and have been dying for more than a decade,” he said. “New residents continue to get sick all the time. Public health tragedies like this could happen in any town in America. We need this type of mechanism to help people when they need it most.”
Items were inserted into the bill by the Senate majority leader, Harry Reid, Democrat of Nevada, to get or keep the support of various lawmakers. He needs support from all 60 members of his caucus to overcome a Republican filibuster and pass the bill by his self-imposed Christmas deadline.
Senator Ben Nelson, Democrat of Nebraska, was the critical final Democrat to endorse the bill. He obtained tighter restrictions on insurance coverage of abortion, and additional Medicaid money and other benefits for his state.
Another item in the package would increase Medicare payments to hospitals and doctors in any state where at least 50 percent of the counties are “frontier counties,” defined as those having a population density less than six people per square mile.
And which are the lucky states? The bill gives no clue. But the Congressional Budget Office has determined that Montana, North Dakota, South Dakota, Utah and Wyoming meet the criteria.
Another provision would give $100 million to an unnamed “health care facility” affiliated with an academic health center at a public research university in a state where there is only one public medical and dental school.
Senators and their aides said on Sunday that they were not sure who would qualify for this money or who had requested it.
Dr. Atul Grover, the chief lobbyist for the Association of American Medical Colleges, said he believed that Commonwealth Medical College, a new school in Scranton, Pa., was a likely candidate.
Reached at home on Sunday, Dr. Robert M. D’Alessandri, the president of the medical school, said initially, “We meet the conditions” in the Senate proposal. But then he said he was not so sure.
The Senate health bill, like one passed by the House last month, would impose tough new restrictions on referrals of Medicare patients by doctors to hospitals in which the doctors have financial interests. The package assembled by Mr. Reid would provide exemptions to a small number of such hospitals, including one in Nebraska.
Under the original Senate bill, doctor-owned hospitals could qualify for this exemption if they were certified as Medicare providers by Feb. 1, 2010. Mr. Reid’s proposal would move the deadline to Aug. 1, 2010.
Molly Sandvig, executive director of Physician Hospitals of America, which represents doctor-owned hospitals, said the change would benefit Bellevue Medical Center, scheduled to open next year in Bellevue, Neb.
Under the proposal, Ms. Sandvig said, “doctor-owners can continue to refer Medicare patients to the hospital” in eastern Nebraska.
“Senator Nelson has always been a friend to our industry,” she said. “But doctor-owned hospitals in other states were not so fortunate. They would not meet the Aug. 1 deadline.”
Another provision of the bill would increase Medicare payments to certain “low-volume hospitals” treating limited numbers of Medicare patients. Senator Tom Harkin, Democrat of Iowa and chairman of the Senate health committee, said this “important fix” would help midsize Iowa hospitals in Grinnell, Keokuk and Spirit Lake.
Another item in Mr. Reid’s package specifies the data that Medicare officials should use in adjusting payments to hospitals to reflect local wage levels. The officials can use certain new data only if it produces a higher index and therefore higher Medicare payments for these hospitals.
Senate Democrats said this provision would benefit hospitals in Connecticut and Michigan.
Mr. Reid’s proposal also provides additional money to several states to help pay for the expansion of Medicaid to cover many childless adults and parents who did not previously qualify.
Senate Democrats said Saturday that the cost would probably be less than $100 million over 10 years. But the Congressional Budget Office said Sunday that the cost of this provision, benefiting Massachusetts, Nebraska and Vermont, “is approximately $1.2 billion over the 2010-2019 period.” Massachusetts and Vermont have been leaders in providing health insurance to their residents.
Nebraska, with help from Mr. Nelson, won a particularly generous arrangement under which the federal government would indefinitely pay the full cost of covering certain low-income people added to the Medicaid rolls under the bill.
Republicans derided this provision as the “Cornhusker kickback.” And they said it was typical of the favors Democrats had given to Mr. Nelson and a handful of other senators.
“You’ve got to compliment Ben Nelson for playing ‘The Price is Right,’ ” said Senator Richard M. Burr, Republican of North Carolina. “He negotiated a Medicaid agreement for Nebraska that puts the federal government on the hook forever. Not for six years, not for 10 years. This isn’t the Louisiana Purchase; this is the Nebraska windfall.”
https://www.nytimes.com/2009/12/21/health/policy/21healthcare.html?pagewanted=1&_r=2&hp
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