Politico: BLUE DOG BLUE SHIELD/Blue Dogs Pulled in Two Directions

[flpoljunkie]

BLUE DOG BLUE SHIELD: Mike Ross has become a darling of the insurance industry, as Dan Eggen writes in The Washington Post: “On June 19, Rep. Mike Ross of Arkansas made clear that he and a group of other conservative Democrats known as the Blue Dogs were increasingly unhappy with the direction that health-care legislation was taking in the House.

"The committees' draft falls short," the former pharmacy owner said in a statement that day, citing, among other things, provisions that major health-care companies also strongly oppose. Five days later, Ross was the guest of honor at a special "health-care industry reception," one of at least seven fundraisers for the Arkansas lawmaker held by health-care companies or their lobbyists this year, according to publicly available invitations.”

http://www.politico.com/huddle/

House Democrats have proposed a sliding scale of subsidies so that new health insurance mandates don’t impose a disproportionate — and ultimately unaffordable — burden on working- and middle-class families. Without that feature, Democrats would risk a serious backlash if costs become too great and households rebel against the health care mandate. And the House maneuvering is important as a preview of the larger battle ahead in the Senate, where the Finance Committee is proposing far less generous subsidies.

The impact is real. For a family of four earning from $77,000 to $88,000, the new language from the House Energy and Commerce Committee could require an additional $770 a year — or three-quarters of Obama’s “Making Work Pay” tax credit. For those closer to the poverty line, such as a family of four earning $44,000 to $55,000, the relative impact would be even greater.

Reducing the subsidies would help scale back the cost of the plan by almost $60 billion over 10 years — a major goal for the Blue Dogs. But Congressional Budget Office estimates show that most — if not all — of these savings are effectively given away by the same moderates under pressure from local hospitals and Blue Cross-Blue Shield plans to blunt the public plan option.

The government-backed plans now would be required to negotiate prices with providers such as hospitals rather than to build on the existing, lower-cost Medicare payment system. CBO had predicted that a public option could provide coverage, on average, about 10 percent cheaper than private alternatives. But much of this savings would now be sacrificed, making it harder to compete against private plans such as Blue Cross-Blue Shield.

“We saved rural hospitals from disaster,” Rep. Mike Ross (D-Ark.) said in announcing the deal Wednesday. But Medicare cost data show a more mixed picture. Many rural hospitals in Blue Dog districts — including Ross’s own —enjoy better-than-average Medicare margins, and critics suggest that the whole focus on hospital payments was at least partially orchestrated by the Blue Cross plans that want to kill the public option.

“Negotiate Rates With Providers” is the first issue cited, in fact, in one of the Blue Cross-Blue Shield lobbying campaign sheets demanding a more level playing field.

http://dyn.politico.com/printstory.cfm?uuid=CE31646C-18FE-70B2-A8F7FD5D86C0D713

[Supersedeas]

1. lots of speculation about Kay Hagan's ties to BCBS of NC