White House Responds To Howard Dean’s Criticism of Health Care Plan

The White House has been responding to yesterday’s attacks on the watered-down Senate health care reform bill from the left which I also discussed here. David Axelrod appeared on MSNBC:

Axelrod, responding on MSNBC, said: “I have a lot of respect for Governor Dean but he got on the phone with Nancy-Ann DeParle, our point person on the health care issue, went through point by point. She explained why he was wrong. And he simply didn’t want to hear that critique. I saw his piece in The Post this morning, and it is predicated on a bunch of erroneous conclusions.”

Asked his response to progressives who say “kill this bill now,” Axelrod replied: “I think that would be a tragic, tragic outcome. … I guess if you’re hale and hearty and have insurance, it’s fine to say, ‘Kill this bill.'”

Peggy Noonan, the columnist and former Reagan speechwriter, told Axelrod: “On the issue of health care, you are losing the left, you are losing the right, you are losing the center. That looks to me like a political disaster.”

“When you describe what’s in the bill, there’s strong support for it,” Axelrod replied. “We don’t think of the world in terms of left, right and center. We think of the world in terms of small business people, … senior citizens, … Americans who are looking for help on a problem that we’ve been trying to solve for a century.”

The White House Blog has been busy responding, starting with White House Communication Director Dan Pfeiffer:

Recently, a somewhat perplexing new line of argument has emerged about health insurance reform, with some folks suggesting the Senate bill is a “dream” for insurance companies.

If that’s the case, though, it must be news to them. The insurance industry has been leveraging its considerable resources in a ferocious effort to defeat this bill, including producing a report the day before the Senate Finance Committee vote that was so misleading the firm behind it had to walk away from it. And that’s not surprising, because this bill will finally wrest power away from the insurance industry and put it in the hands of American consumers.

  • Among the many provisions to end insurer abuses, lower premiums, and hold insurance companies accountable:
  • Insurance market reforms will prohibit abuses such as denying coverage for pre-existing conditions, charging exorbitant premiums based on gender, age, or health status, dropping coverage when people are sick, and imposing lifetime limits on benefits.
  • Consumer rights will be enhanced by requiring all insurers to provide effective appeals procedures including outside, independent review of appeals
  • New insurance exchanges will reduce premium increases by lowering administrative costs and increasing the leverage of individuals and small businesses in this insurance market.
  • Competition will also be enhanced by providing consumers comparative information on available insurance options giving them the tools to make more informed decisions and drive competition based on value and service.
  • Insurers will be held accountable for excessive overhead costs fueled by unreasonable executive compensation and profits.
  • Insurers will also be required to compete against cost-effective national plans selected by the federal Office of Personnel Management.
  • Wasteful taxpayer overpayments to insurance companies through private Medicare Advantage plans will be eliminated.

Jason Furman, Deputy Director of the National Economic Council, added:

As we move into the final stage of the historic push for health reform, opponents of reform are testing the age old adage that if you only say something enough times you can somehow make it true.  Yesterday, we heard a new version of the old, tired refrain that the health reform bills in Congress would raise taxes on the middle class.

So let’s set the record straight:

  • First, the health insurance reform bill being considered in the Senate does not raise taxes on families making less than $250,000 – in fact it is a substantial net tax cut for American families. The bill being considered represents a substantial net tax cut for middle income families. According to the independent Joint Committee on Taxation, the bill will provide nearly $450 billion in individual income tax cuts over the next 10 years.
  • Second, the excise tax levied on insurance companies for high-premium plans, the so-called “Cadillac tax,” will affect only a small portion of the very highest cost health plans – a total of 3% of premiums in 2013. The vast majority of health plans fall below the thresholds set in the Senate plan and would be completely unaffected by the provision. And those that are above the threshold would only face an excise tax on the generally small portion of the plan that exceeds the threshold. As a result, based on analyses by the Joint Committee on Taxation, only about 3% of premiums will be affected by this provision in 2013. In addition, the Senate plan provides special protections to plans held by workers in high-risk professions – like police and firefighters – as well as by those over 55.
  • Third, for the small sub-set of plans that are affected, the primary impact of this provision will be to increase workers’ wages. Getting a pay raise is not what most people would call a tax increase. Economists agree by taxing the highest cost plans this provision will lead insurance companies to be more efficient and provide quality care to consumers at lower prices (see this endorsement in a letter from a group of prominent economists – including three Nobel laureates and previous members of both Democratic and Republican administrations and this analysis by CBO 2009). Even a report commissioned by the insurance industry’s trade association acknowledged that: “[w]e expect employers to respond to the tax by restructuring their benefits to avoid it.” [PWC, 2009].  As a result, employers will be in a position to increase workers’ take home pay.

Nancy-Ann DeParle, Director of the Office of Health Reform, described the benefits of the measure and the blog also quoted Bill Clinton:

At last, we are close to making real health insurance reform a reality.  We face one critical, final choice, between action and inaction.  We know where the path of inaction leads to: more uninsured Americans, more families struggling to keep up with skyrocketing premiums, higher federal budget deficits, and health costs so much higher than any other country’s they will cripple us economically.  Our only responsible choice is the path of action.

Does this bill read exactly how I would write it? No. Does it contain everything everyone wants?  Of course not. But America can’t afford to let the perfect be the enemy of the good.  And this is a good bill: it increases the security of those who already have insurance and gives every American access to affordable coverage, and contains comprehensive efforts to control costs and improve quality, with more information on best practices, and comparative costs and results. The bill will shift the power away from the insurance companies and into the hands of consumers.

Take it from someone who knows: these chances don’t come around every day.  Allowing this effort to fall short now would be a colossal blunder — both politically for our party and, far more important, for the physical, fiscal, and economic health of our country.”

Ezra Klein also disagrees with Howard Dean’s evaluation of the Senate bill:

What’s so strange about Dean’s objection is that the exchanges in the Senate bill (pdf) do act as “prudent purchasers,” that is to say, they set limits on the plans that can enter in the exchange to ensure that people are getting good choices. The relevant section begins on page 131 of the Senate bill. “The Secretary shall, by regulation, establish criteria for the certification of health plans as qualified health plans.” A couple of pages of relevant criteria follow, including marketing requirements (plans can be disqualified for focusing their marketing in outlets that would bring them uncommonly healthy enrollees), broad provider networks, coverage of options used by low-income folks (community health centers, say), quality measures, quality improvement strategies, consumer ratings, standardized benefit packages, etc.

And then, a couple of pages later, the language gets stronger. On page 143, the exchanges are given power to certify insurance plans based on whether “the Exchange determines that making available such health plan through such Exchange is in the interests of qualified individuals and qualified employers in the State.” On 144, premiums, and premium increases, enter explicitly into the discussion. Any insurance plan that wants to increase premiums has to submit a written justification for their decision. It will have to post that information on its Web site. And if the exchange is not convinced, it can decertify the plan.

Don’t believe me? In his op-ed, Dean names John Kerry as the senator who has been working hardest on this question. This morning, I spoke to Kerry’s staff, who got me a statement from Kerry himself. “The prudent purchasing provisions in the Senate health bill will lower costs and increase affordable options for consumers,” Kerry says. “It’s strong language that will allow the exchange to deliver competitive prices and offer high quality care, and I’m thrilled to see national reform honor the best innovations already succeeding in Massachusetts.”

John Podesta has also made a case similar to the arguments above.

Update: Richard Eskow disagrees with some of the claims from the White House.


  1. 1
    Laura B says:

    RE: The Heath Reform Bill passed by the Senate

    I did not go to Harvard or Yale. I do not make mega millions, I am just an average citizen of the USA. I voted for President Obama. However, I see this bill as a tax on average folks. The President said, he would not support a mandate to force people to buy Health Insurance, yet this bill does that.

    The Insurance Companies are going to Police themselves. Many Hospital are called non-profit, yet many charge obscene prices for health care.

    It is so very simply, No Public Option, No Reform. I do not blame President Obama. He just cannot stop the train of politicians that will sell their soul for special interests. The Republicans, the Blue Dogs (Fake Democrats) etc…. Washington wants to keep business as usual. How can the government force people  to buy insurance, with no caps, not price controls.

    The point is not to get people to buy the insurance. The point is to tax everyone in this country so the Insurance Companies, the Pharmaceutical Companies, continue to get their Fat Checks.

    How sad, Change, just another buzz word.

    Laura B.
    Cape Cod, MA

  2. 2
    Ron Chusid says:


    Your description of the bill is not accurate. Plus you need to keep in mind that the plan is to make changes (such as restore the public option) during reconciliation with the House bill. It was necessary to pass something in the Senate to move on to this step.

    The mandate has been greatly weakened. It will not affect lower income people at all. For others it gradually rises to $750 per year. Considering that the uninsured do cost the taxpayers money, a modest tax on those who can afford to buy insurance but do not do so is reasonable.

    The insurance companies will not be policing themselves. The bill places tough new regulations on the insurance industry. One of the reasons we are in this mess is inadequate regulation.

  3. 3
    Lindsay says:

    But how does the government arbitrarily decide who can “afford” to pay for health insurance? Just because I make $45,000 per year, doesn’t mean I can afford another monthly payment. What if, like a majority of Americans, I am dealing with overwhelming debt? What if I am helping to support an unemployed family member? The government has no way of knowing an individual’s situation, and this plan does not seem to take this into account. And what about people who do not believe in traditional health care? Will they be taxed for their beliefs?
    I am a liberal, voted for Obama, and have supported health insurance reform totally…until this mandate came into the picture. I agree with all of the additional regulations for insurance companies. Sure, insurance companies might lose some money, but I’m sure insurance executives won’t be left lying awake at night wondering how they will put food on their family’s table. Why should it be up to middle-class Americans to make up for their losses?
    I think what really upsets me about this mandate is nobody is talking about it. A conservative family member brought up the idea of mandates and fines, and I dismissed it as unfounded conservative backlash. Only with digging was I able to uncover information about this (I’m more likely to get my news from Rachel Maddow then from Glenn Beck). Nobody in this whole post discusses the mandate and the fines. It makes it really easy to agree with what these politicians are saying when they only discuss the palatable points.
    I want to hear Obama talk about the mandate. I want to hear Rachel Maddow talk about the fines. Where are my liberals at? How is this justified? I am, for the first time, having a political identity crisis…

  4. 4
    Ron Chusid says:


    I fear you are under the impression that liberals back the mandate and conservatives have opposed it, which is not true. Initially the Republicans supported the mandates. Some of them have only recently come out against it, using any issue they could to oppose health care reform. Many liberals have been opposing the mandate. (Incidentally, both Rachel Maddow and Glenn Beck have opinion shows. While Maddow’s statements are far more factual than Beck’s, I would not use either as a true news source.)

    “Nobody in this whole post discusses the mandate and the fines.”

    I have written multiple posts on the mandates and the fines. All aspects of health care reform cannot be repeated in a single post.

    Here’s a few key things which will hopefully reduce your panic–but unfortunately this is very had to discuss specifically until we have a final bill:

    There would also be subsidies to help middle class people pay for the insurance to don’t look at this in terms of having to pay current market prices for health insurance. Without knowing your age and size of family I can’t give the specifics (and it differs in the House and Senate bills) but at $45,000 the subsidies would probably work out to be well over half the cost. On the other hand, consider how financially devastating it would be if someone in your family developed a serious illness and you have no insurance. The subsidies in the plan might make the difference and allow you to be able to purchase coverage.

    There has also been talk of an opt-out clause which would also enable people who still could not find affordable insurance to opt out without paying a fine. However, until we see the final bill I cannot say for certain if this would help you.

    Another thing to watch as they work towards the final bill is what the fines would be, and how high they would be for different income ranges. Initially the Senate bill had a very weak fine which would go up to a maximum of around $700 per year. Unfortunately some of the last minute amendments increased this, but it primarily hit upper income people harder. At $45,000 per year hopefully your maximum fine would remain well under $700 (and ideally they’ll drop the entire idea of mandates in the final bill but I’m not optimistic that will happen). The House bill also had larger fines, so it is not possible to say what the fines would be until we have the final bill.

1 Trackbacks

Leave a comment