Economy Department with Ezra Klein: Spiderman backs the public option

Ezra Klein
Washington Post Business Blogger
Thursday, November 5, 2009; 1:00 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, Nov. 5 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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New York, NY: Who do you think would be the best superhero spokesperson for comprehensive health reform? I mean, here's Superman on the subject.

...but Dr. Strange is...well, a doctor.

-Shadowbanker(Ecocomics)

Ezra Klein: Spiderman! People forget this, but Spiderman 3 was mainly about the need for universal health care. The Sandman had turned to a life of crime -- which eventually led to Uncle Ben's death, not to mention untold innocent lives and millions in property damage -- because he was unable to afford medical treatment for his daughter. If we'd had a saner system, his daughter would've been eligible for treatment and Uncle Ben would be alive today.

Plus, imagine Sandman and Spiderman appearing at a Health Care For America Now rally together. That's bipartisanship America can believe in.

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Sterling, Va.: Dear Ezra, Do you think it's fair for a current employer, or a prospective employer, to be able to access your credit report to make promotions and or hiring decisions? Especially in this horrible economy, who hasn't been late or missed a payment or two? As many as 70% of companies use your credit history as hiring criteria and many use it when deciding on promotions within your present employment if you're lucky enough to still have a job. If you're unfortunate enough to be laid off tomorrow and you don't have a 700+ credit score you're unemployed, or under-employed for the rest of your life. Is that fair? Your credit score makes sense to use for a loan of course, but how outrageous is it that is being used for hiring and firing decisions?

Ezra Klein: I wasn't actually aware employers could do that, but it seems like a problem. I just had the odd experience of going through a home-buying process without any existing credit. I don't mean I had bad credit, just no credit. I've always used a debit card. My hunch is that more and more people are going to fall into this category over time, particularly as the credit industry's reputation gets worse and worse, and alternatives like debit cards and prepaid credit cards cleave the convenience of plastic from the temptation of debt.

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Arlington, Va.: While I can't say I am surprised by your latest post, its blatantly dishonest to talk about the democrat plan, since there is no consensus on what plan is actually the one going forward. The plan has had the public option added and taken away more times than anyone can count. It has version that use extremely shady math, such as taking in payments for multiple years, but not paying out right away, leading to flawed statistics. Get a plan to the house and senate floors, then you can compare the two for cost savings. Otherwise the comparison is pointless.

washingtonpost.com: Congressional Budget Office Thrashes Republican Health-Care Plan

Ezra Klein: The plan under discussion is the unified legislation introduced in the House of Representatives. You can read the bill text online. It will doubtlessly change as it travels through the amendment process, but your argument here is that CBO shouldn't score anything, and the public shouldn't discuss anything, until the day the House and Senate agree on a single version and send it to the president's desk for signature. I could see certain advantages to that approach, but given your evident orientation on this topic, I don't think it's quite what you have in mind.

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Lansing, Mich.: Articles have been written the last few days about health insurance reform getting pushed back once again into next year.

What are you hearing? What are your thoughts?

Ezra Klein: Wouldn't surprise me. I'm predicting that the House and Senate finish on Christmas Eve, or thereabouts, but I wouldn't put a lot of money on it.

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Providence, R.I.: Always enjoy reading your blog, Ezra, awesome work.

I had a question on something that always puzzles me: How come the top federal income tax bracket is what it is ($250K single/$375K married or something like that)?

Why don't we continue to have higher brackets from there? Is it just how things have evolved, or is there a real reason? Do you think it would be good to add higher brackets?

Also, how do you like working at The Washington Post so far? Is it weird being at a much bigger news organization?

Ezra Klein: I'd love to see much higher brackets with much smaller variations in tax rates. That way you avoid the "cliffs," where income over, say, $500,000 is taxed at 10 percent more than income beneath that limit. No reason we can't have a 42 percent bracket at $500,000, a 43 percent bracket at $600,000, and so on.

Also, I've really enjoyed being at the Post. People call me back faster, and that's added a lot to the blog, in my opinion. But at the same time, my workday is much as it's always been: I come in, write my blog, and go home. If I worked on the paper, I think my life would've changed a lot more.

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Washington: More of a comment.

If I am an employer faced with the prospect of uncontrolled future medical health insurance costs, I would kill to have the government bear the cost of insurance and limit my exposure. How many employers are opposed to that kind of reform? Ans. only health insurers!

Who do the R's actually represent?

Ezra Klein: Employers are actually heavily opposed to that kind of reform. It's why they don't support single-payer, or on the other side, Wyden-Bennett. Figuring out why this is is something of a parlor game among health-care wonks. Some believe it's because they distrust the government and like to keep control. Others think it's because their health care policies are decided by their HR divisions, and their HR divisions want to keep providing health-care benefits so they don't lose power. Others think it's because they just haven't thought about this very hard.

But the fact remains that employers could have been the difference between very good health-care reform and a more modest, incremental approach, and they failed us, and themselves.

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Alexandria, Va.: "No reason we can't have a 42 percent bracket at $500,000, a 43 percent bracket at $600,000, and so on."

Yes, a more complicated tax system. That's just what we need.

Ezra Klein: Marginal tax rates are not complicated. Computers long ago mastered multiplication. Loopholes, deductions, exemptions, and so forth are very complicated. The issue is not that it's hard to figure out someone's tax burden given a table of marginal tax rates. It's that it's hard to figure out what income is taxable given thousands of pages of exemptions and trap doors.

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Washington, DC: Ezra:

My sister will turn 23 in March 2011 and will then be kicked off my parent's health insurance. She'll still be a full time college student, but the coverage she'll get through her school doesn't cover prescription drugs. The problem is, she has severe juvenile arthritis, which is controlled by a drug costing several thousand dollars per month. With it, she's able to play soccer. Without it, she's barely able to walk.

My understanding (mostly from reading your blog) is that #1, the health reform bills will allow children to stay on their parent's insurance until age 26 and #2, regulations like these come into place almost immediately.

Am I right about this?

Ezra Klein: Yep!

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San Ramon, Calif.: Hi Ezra,

What are the odds that the government will actually take action to break up the "banks" that caused this crisis? Seems to me like good politics--doing something similar was good enough to get Teddy Roosevelt onto Rushmore, after all. If the real problem for financial reform are the small, local banks in every congressman's district, there shouldn't be a problem with this, right?

Also, I was wondering what you thought about my theory of why Obama isn't more popular. I think it's largely a PR problem. People are afraid of what's going on in the economy, and the best way of combating fear is knowledge. If Obama were giving daily or semi-daily press conferences about the economy and explaining exactly what Summers, Geithner, Bernanke, et al were doing to fix things, I tend to think that he'd have more support and that there would be less anxiety. Admittedly, health care is sucking up the headlines and the right's media operation is far superior, but still...

Ezra Klein: Virtually zero.

As for Obama's popularity, it's hard to say. The evidence suggests that press conferences and speeches have virtually no impact on poll numbers, though you're obviously talking about a much more aggressive effort than has been tried. I tend to believe that these things are largely structural, and people will like the president better if unemployment drops.

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Chicago: Why is Five Guys so famous in DC? They just opened a franchise near my home in Chicago, and it seems average at best (except for the Cajun fries).

Ezra Klein: I'm a defender of DC food, but Chicago really has us beat. That said, it's possible your Five Guys isn't as good as our Five Guys.

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A very important question . . . : So what happened on TC last night? I actually went to bed early & didn't see it. Did anyone go home or was it a reunion filler episode? I haven't seen the post-show usual write-ups.

Ezra Klein: Reunion filler episode. Marcel is a jerk.

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Lupercal, Deltona, Fla.: Hey Ezra. Twofold question.

1.) You've argued that the Mass. reform was a huge success a couple of weeks back. But you only addressed the coverage part. Do you have any data about the cost aspect? Is the program over budget? Are premiums down? Would that be the same thing as out of pocket costs?

2.) I kinda breezed through the country by country costs for unit care you posted the other day. I'm not fretting much because I'm assuming that those delivery system changes, although unadvertised, will be addressed by MedPac. Am I right? What's the status on MedPac anyhow? It hasn't been scuttled has it?

Ezra Klein: 1) Mass never really did cost. Average premiums costs are down, according to economist Jon Gruber, over what they would've been without reform. Much more promising is that Mass is now going after cost control aggressively, and even calling fee-for-service into question. That backs up reformers who say that a universal system has incentives for cost control that a fractured system doesn't.

2) MedPAC won't have that sort of pricing power.

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Palo Alto, Calif.: Hi Ezra, Austin Frakt comments that insurers will have access to relevant information that's not included in risk adjustment models, making the public option "game-able".

However, you've pointed to other counties (The Netherlands) using risk adjustment successfully. What provisions make for a good risk adjustment models, and are we likely to end up with them?

Ezra Klein: I wrote up a thing on the Netherlands awhile back that got into this, but they learned you need to go really deep with risk adjustment. They bring actual medical use and prescription drug needs into play. They do extremely real time adjustment, in other words. But they also have non-profit insurers and a much more united system and a much more regulation-happy government.

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San Francisco, Calif.: You say it will be even tougher to get a good climate bill out of the Senate than it was to get good health care reform. Your peers Yglesias and David Roberts echo you. Since so much of the future rests on climate change, isn't it time for us to start working on strategies to change the Senate?

Ezra Klein: I'd certainly say so. Anyone got any ideas?

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Chicago: Ezra, do you predict that the funding mechanisms of both the House and Senate HCR bills will be included in the final bill? That is, a tax on the wealthy (higher than the current $1 million threshold) and a tax on so-called "Cadillac plans" (but higher than the current proposal) to mollify the unions and others? Wouldn't that be the best approach, at least politically?

Ezra Klein: I think so, and substantively. The question is whether they'll be willing to break the inane $900 billion limit Obama laid down. That was, imo, the biggest unforced error his administration has made.

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Columbus, Ohio: Hey there,

Foodie question for you: I want to cook my beautiful vegetarian girlfriend a nice dinner tonight for her birthday. I was thinking the Top Chef recipe for duo of mushrooms, candied garlic, smoked kale, and turnip puree. The description is "While most of his competitors made a bunch of dishes barely passable as entrees, Kevin Gillespie wowed Natalie Portman and her guests with his hearty vegetarian dish." What do you think?

Ezra Klein: Sounds great. And unlike the other dishes, it was actually a hearty meal. But I'd add a grain. You could really enrich the dish by integrating the mushrooms into some sort of risotto, or putting a dollop of saffron rice pilaf (add in almond slivers, etc) on the side. That said, I haven't seen Kevin's actual recipe, so there might be conflicting flavors in there that I don't know about. Tell me how it goes.

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Washington, D.C.: The GOP is currently holding a rally at the Capital that is apparently pretty large and well organized. Currently speaking is Jon Voight. Because if you want insight on health policy, you've GOT to have Jon Voight.

Ezra Klein: Agreed. My blog really suffers from an absence of Jon Voight.

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Washington, DC: Any book recommendations? Read anything good lately? Or maybe some books that have impacted your life?

Ezra Klein: I've been reading Michael Chabon's Manhood for Amateurs, and really enjoying it.

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Los Angeles: Hey Ezra! I'm a long time reader of yours and appreciate all your insight into this health care mess. But I have something of vastly greater importance to discuss.

UCLA Bruin Men's Basketball 2009-10. Will they make the tourney or is this purely a rebuilding year? How far can they get? Your thoughts?

Ezra Klein: My knowledge of basketball is comically poor. I'm actually trying to brush up: Just got Bill Simmons' book in the mail yesterday, and have been making a real go at Wizards fandom this year. Too bad they sucked so much against the Cavs the other night.

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Baltimore: My wife and I were recently debating the role that the stringent FDA drug approval process plays in terms of adding to health care costs. Do you have any information about how serious of an issue this is?

Ezra Klein: Not much of one in the grand scheme of things.

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San Diego, Calif.: Ezra, After Sen. Baucus released his mark-up, but before the Finance Committee hearings, you posted about some subtle ways the Baucus bill attempted to 'bend the curve' of health care costs. One example that I remember you citing was a demonstration project within Medicare to test payment systems that could be alternatives to fee-for- service. Overall the examples you gave were evidence for why the-public-option-as-distraction may prove effective.

Did those reforms make it through the Finance Committee? And are they likely to pass just as quietly into the Senate bill and then into the final legislation?

Ezra Klein: The reforms did make it through Finance, and I imagine they'll be in the blended bill. There's not a lot of controversy over the delivery system stuff, and I imagine it'll pass into law pretty easily.

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Towson, Md.: You've argued that health care reform depends crucially on the exchanges. What are the odds that more people might be able to access the exchanges over time?

Ezra Klein: I think the odds are pretty good. The problem is that it might be a very long period of time. In Baucus's bill, I think we were talking 2022 before the exchanges opened up to all employers, and there was no provision to open them up to more individuals.

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Re: Republicans and COB: You missed the point on why I was disappointed with your last post. The review from the CBO doesn't achieve what you want, but that doesn't make it a failure. It does what the GOP wants, make small cost changes overall and reduce spending. Other articles are far more unbiased about it, such as this one.

Everyone has said the house plan has virtually no chance of passing in the senate, so treating that as the most likely final plan is misleading.

Ezra Klein: I consider covering very few people and doing virtually nothing on cost a huge failure. The GOP might not, but that suggests that they've failed to understand the dimension and scope of our problem.

Meanwhile, the Senate plan surpasses the GOP plan as well. CBO says it covers 94 percent of legal residents (as opposed to GOP's 83 percent) and saves far more money. If the GOP doesn't want to solve this problem, they don't have to. But my point in that post is simply that they are not solving this problem, and should not be allowed to pretend otherwise.

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Pullman, Wash.: Which do you think will hold down costs more, the public option not connected to Medicare rates like the one in the house bill, or a strong trigger with a public option at Medicare rates?

Ezra Klein: That's a good question. I guess it would depend on the nature of the trigger.

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Ezra Klein: Thanks, folks!

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