Critical Condition

And Now, the Kaiser Geyser

Politicians just can’t help themselves. Even with all the public outcry about special vote-buying deals in Obamacare, they have put even more of them in the latest iteration. No doubt these provisions are trade-offs for reluctant Yes votes when the final bill comes to the House floor for a vote.

A new deal was tucked into the reconciliation bill for the benefit of Tennessee — which knows all too well that government-run health-reform plans can quickly swamp cost projections. So the bill includes tens of millions of extra Medicaid dollars for the state to help assuage nervous Tennessee Democrats such as Rep. Bart Gordon — who, perhaps not coincidentally, just announced he is a Yes vote. Surprise, surprise.

The Cornhusker Kickback is out of the fix-it bill, but UConn and the Louisiana Purchase stayed in. And a new one has been added, which we’ll call the Kaiser Geyser. This deal seems to bring special benefits to the dominant player in California’s HMO-intensive health sector — Kaiser Permanente, headquartered in Oakland.

Here’s how it works: The Senate bill puts a new tax on health-insurance products, but the reconciliation bill would give non-profit HMOs of the same type as Kaiser Permanente a special break so they only have to pay 50 percent of the tax, while their competitors pay the full freight. Besides Kaiser, other non-profit HMOs that would benefit are the Group Health Cooperative, based in Seattle, and Tufts Health Plan, in Boston.

These HMOs already have advantages because they are exempt from federal income taxes. Now they would be exempt from half of the new excise tax as well. But there’s more: The reconciliation bill also makes it much easier for fully qualified HMO plans like Kaiser, Tufts, and Group Health to get certain quality bonuses through Medicare.

There are a lot of things wrong with this: The government is providing big tax incentives for people to join HMOs, which many people hate, and it seems to be singling out a particular kind of health plan, the biggest one of which is based in California, for favored tax treatment and bonus payments.

Don’t they ever learn?

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