Economy Department with Ezra Klein

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Ezra Klein
Washington Post Business Blogger
Thursday, October 22, 2009; 12:00 PM

Trying to understand health-care reform, but getting lost in the weeds? Don't worry, Washington Post blogger Ezra Klein can help. From individual mandates to health care exchanges, Klein explains it all. He was online Thursday, Oct. 22 at Noon ET to take your questions on health-care reform, economic and domestic policy, the latest episodes of Top Chef and pretty much anything you can attach a chart to.

A transcript follows.

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Ezra Klein: It's noon. I'm starving. But before I can eat lunch, I have to finish this chat with all of you. Grumble grumble grumble. It's a good thing I like you all so much.

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Washington: Which house members opposed the bill to eliminate the anti-trust exemption for health insurance?

Ezra Klein: Don't know offhand. The amendment -- I think it was an amendment -- only went through the Judiciary Committee, and a couple of Republicans even crossed over to support it. Repealing the insurance industry's anti-tax exemption is good politics, though no one I talk to -- on either side of the issue -- actually thinks it'll have much of an effect on the insurance market.

Also, this seems like a good time to link to the Washington Post's handy-dandy congressional vote tracker. http://projects.washingtonpost.com/congress/

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Ashby, Mass.: Ezra,

I think one of the HC proposals defines Cadillac plans as anything costing 8k per individual. I am assuming this is based on premiums. I am confused as to how this will work. Is it based on what my employer and I actually pay for premiums? just the employer piece? is it market value or actual cost (maybe my employer gets a big discount?)? Also curious about regional differences and how that impacts premiums. For example, here in MA, the state requires carriers to cover more than, say, Georgia carriers have to cover. That makes MA premiums more expensive. Should that higher cost push MA citizens into "Cadillac" territory where HC benefits will be taxed at 40%, to subsidize/supplement citizens of Georgia? Really curious how this piece will play out. . . .thanks,

Ezra Klein: To the first question, it's the total cost of premiums. That is to say, what you and your employer pay combined. To the second question, there are provisions in the bill to deal with high-cost areas. Right now, areas like Mass, that have much higher premium costs, also have a much higher threshold before the tax kicks in. But as the bill is written, that protection ends after three years.

Relatedly, the regulations in the rest of the bill will mean that Georgia's insurers will have to offer more comprehensive coverage. So that should work to narrow the gap a bit.

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Herndon, Va.: I support health care reform, but I'm starting to wonder: Like Medicare Part D, are we about to pass something that is all dessert and no spinach? I see expanded coverage, restrictions on dropping coverage and no pre-existing conditions, but which parts of the bill(s) bend the cost curve and get us to sustainable health care of our citizens? Will we be paying for our lunch or kicking the can down the road?

Ezra Klein: Unlike Medicare Part D, we're paying for every cent of it, and more. The excise tax, for instance, raises hundreds of billions of dollars by taxing high-value health insurance. The Medicare Advantage cuts, for instance, actually trim the spending of a popular Medicare program. The CBO doesn't just predict that this bill will be balanced over the next 10 years. It predicts that it will bring in more money than it costs in the 10 years after that. There is, in other words, a lot of spinach here.

There's a tendency for people to attack this bill for 1) doing hard and unpopular things and 2) spending so much money that it will explode the deficit. But the reason the bill is doing 1) is so 2) doesn't happen, and as far as anyone can tell, that effort has been a success.

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Atlanta, Ga.: Ezra-

What do you think of the two health care reforms proposed by Delong and Feldstein mentioned in Douthat's NYT column on Monday? Is there any chance that after the Baucus bill passes, our health system could later be reformed with a combination of HSAs and single payer beyond 15%, like Singapore?

washingtonpost.com: The Catastrophic Option (NYT, Oct. 18)

Ezra Klein: Nope. It's nice blue sky thinking, but there's no evidence that anyone is at all interested in any reforms along lines anything like these.

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Washington, DC: OK enough about this politics stuff. Let's talk about Top Chef. What did you think of last night's Restaurant Wars and also why aren't you guys liveblogging Top Chef episodes at that food blog of yours?

Ezra Klein: On the live blogging, it's hard to say. We didn't start doing it this year, and then we never got back into the habit. But the episode was a blast! One thing you really get a feel for, however, is the caliber of the chefs. Bryan Voltaggio has a three star fine dining restaurant in Virginia. Kevin was nominated for a James Beard award. Michael Voltaggio was a key chef at a four-star restaurant in LA that was also nominated for a James Beard award. Jennifer worked at Le Bernadin for five years. This is miles beyond the competition offered in previous years, and it's made the cooking a real joy to watch.

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Tallahassee, Fla.: I read your blog on a daily basis and I know you've answered this question but its become relevant since my Mother is on the verge of losing her job and her health insurance. So when do the basic health insurance reforms like covering pre-existing conditions, eliminating lifetime caps, etc., go into effect in most bills before Congress right now?

Ezra Klein: Pre-existing comes next year, I think. Eliminating lifetime caps in the individual market is 2013.

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Washington, D.C.: I'm hungry too! What's the best inexpensive sandwich place in DuPont?

Ezra Klein: Anyone have a good answer to this?

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Washington, DC: Kinda of meta, but... I'm wondering if you have any historical/political perspective to offer on what comes next, after health reform.

If we do end up wrapping up health reform, is there still political space to take up another big ticket liberal-agenda item this congress? Where does the party's energy go from here for, say, the next couple of election cycles? Do we get serious about climate change? Is there a national equal rights struggle brewing? Will immigration reform be something this Administration tackles? A turn toward an overhaul of the crippled legislative process, perhaps?

Just wondering about what you think might happen when the dust settles and health reform becomes about rulemaking and incremental legislative changes... Does President Obama and administration have enough political muscle to take on another big fish before his next election or is this his Moby Dick?

Thanks!

Ezra Klein: I'm not terribly optimistic. Financial regulation is likely, but cap-and-trade's chances seem dim. It's just too good of an issue for Republicans, too bad of an issue for Democrats, and too near to an election. I could be proven wrong on that, of course, and I hope I am, but my read of the politics is pretty pessimistic.

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Jamaica Plain, Mass.: Hey Ezra--love your work, how'd you get so smart? You outwork everybody and make it look so easy. I have no idea how you do it.

Here's the question: Has anyone checked into Kent Conrad's dubious claim that reimbursement rates under the proposed public option would bankrupt his state's hospitals? To hear him tell it, he's just repeating what the hospital administrators have told him, but you would hope that he had some solid data before goes around repeating it to everyone. What do you know?

Ezra Klein: You'll make me blush saying things like that.

The claim isn't necessarily that dubious. I'm actually planning to report on this in some detail soon, but my preliminary answer is that, well, it's complicated. Rural hospitals get paid a lot less than urban hospitals. That's because their costs are much lower. But in order for rural hospitals to stay open, they need to be substantially overpaid -- a lot of these places simply aren't economically viable if the market was left to do its work. And Medicare's rates are not as high as they'd like for that.

Anyway, that's my current understanding. But more later, when I feel like I've got it firmly.

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Cleveland, Ohio: You've mentioned before that state-level public options would lack the bargaining power of a national public option. But why is this true? When dealing with hospitals or other providers, wouldn't only the number of potential customers (i.e. enrollees within the state) the public option could offer be relevant? Why would it matter that the public option also has millions of customers in other states who will likely never use the particular facility the public option is negotiating with?

Ezra Klein: There are a few reasons. The first is simple administration efficiencies, and national purchasing. Drug companies, for instance, aren't state-based in the way hospitals are, so that would change things. The other is that eventually, a big enough public option could do what Medicare does and set payment rates for services rather than negotiating with each provider individually. That could bring huge savings, but you have to be big enough to do it credibly. There are no examples I know of it happening on the state level.

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Washington, DC: C.F. Folks

I like their (cheap) sandwiches. So does Yelp. Hope this helps!

Ezra Klein: That's in answer to the good, cheap sandwiches request. Any others?

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Alexandria, Va.: If you had to guess, how do you think the House will decide on the three options presented by Speaker Pelosi yesterday...Public Option (Medicare+5), Public Option (Negotiated Rates), or Public Option (negotiation to trigger)?

Ezra Klein: I'd guess negotiated rates. But Pelosi will push hard for Medicare, as well she should.

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Nit-Picking: "Bryan Voltaggio has a three star fine dining restaurant in Virginia."

Volt is actually in Frederick, MD. :)

Ezra Klein: Touche.

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NY: Hey Ezra, So how do you feel about your name? I recently named my son Ezra...is he in for a life of hardship?

Ezra Klein: I love my name.

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Austin, Tex.: I'm curious about the level of comprehension in Congress of the Chinese currency peg to the dollar. Do many members of Congress (say more than 10 or 30) comprehend, intellectually, what the currency peg means? How it prevents normal trade re-balancing, etc.?

Ezra Klein: I would bet an enormous amount of money that very few do.

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Arlington, Va.: Will plans offered to federal employees (and congressmen) through FEHB be taxed under the "Cadillac" provisions in the proposed Senate health bill?

Ezra Klein: If they exceed the threshold, yes.

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Washington, D.C.: I liked your entry earlier on the sudden right-wing fascination with the dollar. Do you think the same dynamic holds true for the deficit? Both parties don't have inherent problems with running up the deficit, per se, they just do when the OTHER party spends money on THEIR priorities. The deficit is a pretty abstract concern that usually reflex general unease with the economy.

Ezra Klein: Yeah, Democrats freaked out about the deficit under Bush, and Republicans are tripping out about it under Obama. The problem isn't with deficits, per se, but the other side's deficits.

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Arlington, Va.: Ezra, re: the public option, who would be eligible for it if it is included in the bill? I am currently employed and get health insurance through my job. If I lose my job, would I be eligible? Or would I be stuck with COBRA payments to employer as my only option?

Thanks for explaining all of this.

Ezra Klein: If you lost your job, you would be eligible. If you didn't, you wouldn't.

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DC: Looking at the differences between the HELP committee bill and the Finance Committee bill, it looks like the Finance bill covered all the same areas but just added in how to pay for it. Surely there are some areas that the HELP committee was allowed to address that weren't under the finance committee's jurisdiction? Otherwise, couldn't one committee have just handled this?

Ezra Klein: In theory, HELP is really the committee for issues like insurance market reform and prescription drug issues. The "biologic" question, for instance, is only answered in their bill.

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New York, NY: How do you feel about the chances of a) meaningful financial reform, and b) ANY financial reform being passed? Was the decision to cut the pay of firms being bailed out a good sign of a turn away from the "give Wall Street anything it wants" attitude (a la Reagan firing the air-traffic controllers as symbolic of a sea change in who Washington stood for and against) or is it what it appears to be: a PR stunt to cover up the continued kid-glove treatment?

Ezra Klein: It depends how you define meaningful, of course. What people seem to think is that a lot of the macro stuff -- the too-big-to-fail question, leverage, resolution authority, etc -- is doing pretty well. The more consumer-oriented provisions seems to be floundering a bit. Chances are pretty good for some bill or another, but I don't know how good it will end up being. My guess is it'll be very uneven.

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Houston, Tex.: Ezra,

You have started to get back into food policy stuff lately. Obviously, there is no single policy plan that would fix our food system, but is there one idea that could do more good than others? If so, what is it?

Ezra Klein: I'd end the subsidy scheme, or substantially reform. We pump money towards corn, cows, soybeans, and various other commodities. We should stop it. I don't know how much that'll change the market, but once we can look at what it looks like without distorting subsidies, we can decide the direction to go in.

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Top Chef?: So who is your pick to win Top Chef, given the high level of all-around talent coupled with the breakdowns last night? And have you dined at Volt or Zaytinya? If so, give us a review!

Ezra Klein: I'm not a huge Zaytinya fan, though lots of people say I need to give it a third or fourth chance. If you do go there, don't order traditional Mediterranean foods like hummus. Go for things that look unique to the restaurant.. I've not been to volt.

As for the winner, I'm going with Kevin or Michael. If I had to choose one, it would be Kevin.

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New York, NY: Is there still a chance that Ron Wyden's free choice amendment will get added to the final bill and how would that happen?

Ezra Klein: Not in its original form. Some super watered down compromise, maybe. There is a chance that the exchanges will be opened to all employers.

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New York, NY: Hey Ezra, You've been very adamant in your belief that "Creed is not a good band" and Slate "should be burned to the ground" for suggesting so, but don't really offer any reasons for your strong opinions about it. While clearly not the best band, I would at least rate them a "decent" based on the catchiness of their hit songs ("Higher," "One Last Breath"). However, their music videos truly are terrible. You should Youtube the literal version of "With Arms Wide Open."

Ezra Klein: It's the videos, and the mock-Jesus poses, and the incredible, awe-inspiring self-regard. It's also the pathetic behaviors of the lead singer, who became known as not just a lech, but a sort of silly one -- would meet girls by IMing them, and that sort of thing. Not respectable all around.

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Washington, DC: What is a good cookbook to start with to learn how to work with tofu?

Ezra Klein: That's a good question, actually. Try Crescent Dragonwagon's cookbook, the name of which I forget.

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Final Senate Vote: If, and big if, the Democrats hold onto Snowe's vote, does that deny political cover to other Democrats to vote against the bill or to filibuster it?

Ezra Klein: Yes, definitely.

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Ezra Klein: I'm sorry folks, gotta cut us off a few minutes early today. Thanks for playing!

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Editor's Note: washingtonpost.com moderators retain editorial control over Discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions. washingtonpost.com is not responsible for any content posted by third parties.


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