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The death of Sen. Kennedy (D-MA) will be a turning point for healthcare reform.  The only question is which way things will turn.  Jim Cramer of TheStreet.com believes without Kennedy, Democrats simply don’t have the votes to get reform done.  He writes:

We have to acknowledge that his death does change the debate…The Dems only have 59 votes in the Senate — and the Senate is all that matters — and there will be no new senator emerging from Massachusetts because of the commonwealth’s law.

In contrast, Gregory Valliere of Soleil Securities Corp. expects “a renewed resolve” among Democrats to pass reform — even if it means using the 50-vote reconciliation process.   He writes:

Democrats know the window for reform will close by winter…We think they’ll get partisan and pass a measure as a tribute to Kennedy that will satisfy most of the liberals in the House with a quasi-public option, perhaps some type of national health cooperative. The right wing will howl, but the Democrats have the votes.

I lean more toward Valliere’s view.  Democrats — the President included — were already growing weary of Republican stall tactics on reform.  Now the Dems have a rallying cry.

There’s nothing like a reasonable argument against the dangers of healthcare reform.  And that’s what Betsy McCaughey delivers in this video interview – nothing like a reasonable argument against the dangers of healthcare reform.  From the Daily Show with Jon Stewart.

Stewart: “You have been accused — fairly or unfairly — of being the catalyst for this idea of death panels.  Now I know you never called it ‘death panels.’  Apparently, that’s the translation of what you had said in Alaska.”

President Obama took the top spot in Modern Healthcare’s annual “100 Most Powerful People in Healthcare” ranking, as voted by the readers of the magazine.  No argument from me.  The President is a pretty powerful guy.

The choice is a big improvement from last year, when readers voted then-Revolution Health chairman Steve Case numero uno.  I panned the choice of Case in a prior post.  This year, he didn’t even make the list.  (Case now serves on the board of Waterfront Media, which merged with Revolution Health last year).

So either the readers of Modern Healthcare read this blog, or Case’s “power” was ephemeral.  You make the call.

Here’s an interesting article from The Palm Beach Post about Florida’s failed six-year effort beginning in 1993 to fund the start-up of not-for-profit Community Health Purchasing Alliances for small businesses.  The effort has some parallels with proposed healthcare insurance co-ops and offers some important lessons.  Writes the Post:

Within the first year of the Florida program’s existence, participating employers saw their premiums drop an average of 25 percent. At the CHPAs’ peak in 1998, more than 91,000 people — half of them previously uninsured — got coverage through the alliances.

But by 2000, during Jeb Bush’s first term as governor, the CHPAs disappeared.

Hampered by lawmakers’ refusal to let them negotiate rates, and unable to help small businesses pool their resources effectively, the alliances weakened as insurers withdrew. The alliances also faced resistance from insurance brokers, who made lower commissions on products sold within the CHPAs than elsewhere.

While much uncertainty exists about how health co-ops would work on the national level, critics fear that, like the CHPAs, they would be too weak to provide a counterweight to the powerful for-profit insurance industry.

The wonders of Google also helped me to locate two reports on the status of CHPAs published in 1996 and 1998 by the Florida Legislature’s Office of Program Policy Analysis and Government Accountability. 

The 1998 report confirms the assertions in the Post article, adding that the number of uninsured covered through CHPAs in March 1998 represented just 1.6% of the state’s 2.8 million uninsured.  The 1996 report provided some color on the funding of the CHPAs:

All of the CHPAs depend on state revenue to cover their operating costs. In fiscal year 1994-95, the $275,000 each CHPA received from the state comprised from 58% to 94% of the CHPA’s total revenue. Without state funds, CHPAs’ expenses in that fiscal year would have exceeded their revenue by $85,000 to $293,000. Although each CHPA has established a reserve from start-up funds, these reserves could be depleted over the next few years if the CHPAs do not bring in additional revenues or reduce their expenses.

So writes Rolling Stone’s Matt Taibbi, outlining how healthcare reform might make things even worse than before.  Taibbi is an advocate of single-payer healthcare.  His advice in a series of videos (here): scrap watered-down reform and put single-payer back on the table.

Basically, he’s warning about the dangers of half-assed reform (as I’ve noted before), and I think he’s largely correct.  A strong public option would be an incremental step toward single-payer.  Unfortunately, we’re not going to get a strong public option — and that’s a big defeat for Obama in my view.

Btw, single-payer isn’t the only answer.  You can have meaningful universal coverage with a properly regulated private insurance industry.  But single-payer is a viable alternative to a failing U.S. healthcare system.

For more fun visit Infectious Greed and watch Taibbi take on an overmatched Maria Bartiromo.  (Also, be sure to note how many comments on this finance blog side with Taibbi and trash Bartiromo).

Liberals (myself included) have wanted President Obama to get tough on opponents of healthcare reform.  He’s showing signs.  From today’s edition of The Wall Street Journal.

On the Michael Smerconish radio show Thursday, the president said: “Early on a decision was made by the Republican leadership that said, ‘Look, let’s not give them a victory and maybe we can have a replay of 1993-94 when Clinton came in. He failed on health care, and then we won in the midterm elections, and we got the majority.’”

It was the most direct shot he has taken at Republican leaders, and it came as the president was trying to reassure liberal activists that his knees weren’t buckling, as one supporter suggested.

He also reiterated his support for a public option.

Yet further evidence that Republicans aren’t acting in good faith in the debate over healthcare reform comes from the liberal Center for American Progress, which reports that ”after 161 Republican amendments were accepted into the Senate HELP Committee bill, no Republicans voted for it.”  CAP also suggests that the Republican strategy is simply to block the reform effort.  Here are some highlights from the CAP scorecard:

• Sen. Enzi claims it would be more “effective” to dismantle health reform….
• Sen. Kyl came out against all health reform proposals—even those endorsed by the insurance industry…
• Rep. Boehner tried to tell President Obama…“Mr. President, scrap this bill.”
• Rep. Latta says that “Congress needs to slow down.”
• Sen. Pat Roberts said “slow down” and “whoa”;
• Sen. Coburn said “slow down, guys”;
• Sen. McConnell claimed, “it needs to slow down”;
• Sen. Wicker urged…“slow things down on health care”…
• Rep. Mike Pence and Rep. Charles Boustany have said…the GOP will “vigorously oppose” health reform.
• Rep. John Carter warned, “My colleagues on the Republican side are going to be fighting tooth and nail.”
• Sen. Voinovich has conceded that at least half of Republican opposition to health reform is about scoring political points….
• Sen. Grassley said, “I take pride in being an obstructionist.”…

My question is why does President Obama think he can win this crowd over through bipartisan compromise?

The fair-minded Jonathan Cohn of The New Republic outlines the challenges in keeping Obama’s central healthcare reform pledge: “If you like your healthcare plan, you will be able to keep your healthcare plan.”  Writes Cohn:

Absent additional policy changes, people who now get employer coverage might decide to drop it and instead get insurance through the marketplace [i.e., insurance exchange]. And — again, if nothing else changes — employers might start making different decisions, as well….Put it all together, and a substantial number of people might end up moving from employer coverage into the marketplace, in some cases because employers aren’t offering insurance anymore.

To be clear, many of these people will be changing insurance because it’s something they’ve opted to do, on their own. That’s perfectly consistent with what Obama, and other reformers, have said. And, by any reasonable standard, most of the people changing plans will be better off — a lot better off. But that doesn’t mean it’s what voters want to hear right now or that opponents of reform won’t scream about all the people “losing” their coverage.

Since the idea of co-op health plans in lieu of a public option is back in the news, I direct you to two prior posts on the topic.  Co-Op Health Plan Idea Raises Lots of Questions and Co-Op Health Plans and the Politics of the Surreal.  Read ‘em and weep.

The latest comments by Administration officials that the public plan isn’t essential are further indication Obama is willing to compromise.  That’s not news.  The Administration has been hinting for some time that it was willing to compromise on the public plan.

In fact, the Administration’s official position has been along the lines of the following: we need a public plan to help control costs, ensure choice and keep insurers honest, but we’re willing to consider other options to achieve the same goals. 

That’s a good line.  It would be even better if the Administration actually had some other options in mind.

My feeling all along has been that the public plan wouldn’t fly (despite the uncomfortable fact that most Americas favor a public option).  But here’s my question for the President:  Isn’t the public plan a bargaining chip and shouldn’t you get something in return for dropping it?

Jim Kessler, vice president of policy for the liberal think tank Third Way writes:

“I see nothing that is happening in these Town Hall meetings that would slow health care legislation unless Democrats fall into the trap of believing that the rabble is representative of their actual constituents. The birthers and the deathers are on one side and liberal activists are on the other side and for everyone else this is a revolting spectacle. The President must remain the adult, speak above the din to the American people, and remember that this all comes down to one thing: the middle class being able to articulate what’s in it for them.”