Tuesday, April 21, 2009

Rahmulus and Remus

Rome wasn't built in a day. Neither will a bill on health care reform. But Congress has about a five-week stretch to start building legislation, according to White House Chief of Staff Rahm Emanuel.

Rahm Emanuel is a legend in many respects but we're only half-joking when comparing him to the founders of Rome fathered by the God of War, Mars. But only half.

Emanuel appeared on "This Week with George Stephanopoulos" and health care reform came up surprisingly often in a short conversation. "I think, in this next five weeks, you'll see tremendous effort at the committee level to get that done," he said of writing reform legislation. In other words, by the beginning of June, the parameters of a bill should be established. In fact, Senate Finance Committee and Senate HELP Committee Chairmen Max Baucus and Ted Kennedy wrote an April 20 letter to President Obama saying they will mark up a bill in early June.

There were a number of interesting tidbits to come out of the conversation between Emanuel and Stephanopoulos. The first question asked by Stephanopoulos was a response from the White House Chief of Staff to a New York Times front page story on Obama having "soft hands" when it comes to taking on the special interests in Washington. To read the full story, click here.

After mentioning the banking services industry, Emanuel went straight to health care and the proposal in the President's federal budget for competitive bidding among Medicare Advantage plans which are paid at 115% of the rate paid to traditional Medicare:

"In the area of health care reform and getting costs under control, we said to the insurance industry, we're eliminating your subsidies and only going to pay you 100 cents on the dollar, but not 115 cents on the dollar, and you're going to compete for that money. And that saves the taxpayers about $170 billion."

Emanuel then moved to an extremely important point on health care reform that may seem obvious, but made more significant coming from the gatekeeper to the President.

In response to Stephanopoulos' question on whether President Obama would consider a proposal to tax health benefits, he said the first objective of any reforms are to lower costs. Lower costs, not raise revenue, and not expand coverage. "We set the goals. The goals are getting health care costs under control."

He continued: "First of all, what we have to do is squeeze out all the basic costs in the system, before we talk about any other type of revenue. There's a lot that has to be changed. Unfortunately, I know a little about health care reform from my family. The fact is, we had all the wrong incentives in the health care system. And if you change the incentives toward medical I.T., which we put in place, the resources to start basically having a way to control costs there; if we change the way the doctors are paid -- so, rather than fee for service, we pay for outcomes; and reward people who take care of themselves and get their health together."

Emanuel explained that Obama was opposed to the idea of taxing health benefits during the election and it isn't the priority for health reform--getting costs under control is. "What you have to do, as he believes, is make the cuts in the system that we have today because we're overpaying for a lot of things; and second, is change the incentives before you get to immediately going to a default position that you have to raise taxes."

Washington translation: taxing health benefits is very much on the negotiating table.

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