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With Reform Jammed, Pelosi Moves Forward On Insurance Industry Antitrust Bill

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Speaker of the House Nancy Pelosi (D-CA)

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As I reported yesterday, House Speaker Nancy Pelosi is planning to move ancillary health care measures through the House, which she hopes will augment comprehensive legislation if and when House and Senate leaders figure out how to move ahead on a bill. One of the issues said to be under consideration was a repeal of the health insurance industry's anti-trust exemptions.

A House source confirms that, the week after next, Pelosi will likely move ahead with legislation to accomplish such a repeal.

Pelosi hinted strongly that such a move was afoot at her weekly press conference this morning.

"We must pass this legislation, and we must take whatever time it takes to do it," Pelosi said. Some things we can do on the side which may not fit into a bigger plan. That doesn't mean that's a substitute for doing comprehensive [reform]. It means we will move on many fronts. Any front we can."

"Some of these sidebar issues are issues that are very important, they can be done, they can move quickly, and that's not about one thing before another," Pelosi added. "It's about time."

As I noted last night, there are a number of strategic and substantive rationales for the move. It can improve the comprehensive bill in the eyes of the House (making it easier for her to ultimately get a successful vote on the Senate's legislation). It turns up the pressure on all parties --but particularly the Senate--to make sure that a final, comprehensive bill passes. And it helps upend the narrative of a health care logjam.

As Pelosi put it: "You go through the gate. If the gate's closed, you go over the fence. If the fence is too high, we'll pole vault in. If that doesn't work, we'll parachute in. But we're going to get health care reform passed for the American people."

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January 28, 2010 2:04 PM   

I think that this should be up for a vote in the Senate as well.

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January 28, 2010 2:11 PM   

Pelosi is practially the ONLY gutsy and smart Democratic leader left in America. She should GO FURTHER WITH THIS APPROACH: pass the anti-trust exemption, and make sure some Senate Dems introduce it and force a vote there; ditto with something like importation of drugs. And, frankly, the real NUCLEAR OPTION in health reform would be to push forward on easy to understand and very popular rules saying the insurance industry must take all comers and charge similar rates to all and not cap benefits. Dems seem not to want to do this in isolation because they understand that it would not "work" in some ideal-systemic sense without subsidies and mandated coverage for the uninsured. But so what? Politics is about creating the right conflicts and riding them to a better place. Pass the regulations on insurance that the middle class wants, and then the insurance industry will start pressing its friends in the Senate to pass more comprehensive reform including subsidies for the uninsured! And if, for some reason, only the regulations pass and the insurance industry starts raising prices, that will soon create popular and business pressure for a more comprehensive solution.

In short, if the Senate will not work with the House to get it all done now, do ENTERING WEDGES that create disequilibria that favor further political action down the line, and that divide groups now opposed to real reform. I hope someone reads this and gives it to Speaker Pelosi. She seems the only Democrat in America smart enough to get it when it comes to political combat and setting up the right battles over time.

I would say the White House, too, but they seem out to lunch when it comes to politics. Good policy can be linked to good politics -- but too much egg-heady focus on getting policy right without paying attention to public support and dividing enemies is just dumb. Democrats have been doing that for decades. It is a loser politically -- and losers get thrown out of office, as the Democrats are going to find out within months.

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January 28, 2010 3:03 PM    in reply to Theda Skocpol

You know our politics has become frustrating when it's got the Harvard professors using all caps!

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January 28, 2010 3:29 PM    in reply to Theda Skocpol

Damn right.

And Harry Reid better better schedule this bill so that the Republican filibuster starts a week before Congress' loooooong summer recess.

I can't wait to watch the Republicans and blue dog Democrats hold town halls this summer and field questions from the TeaBaggers as to why their Senators are opposed to free market competition for the health insurance industry.

This is going to be a long hot summer.

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January 28, 2010 4:04 PM    in reply to Theda Skocpol

Amen to that.

Interestingly, if Pelosi runs rings around Harry Reid, it might just save Harry's seat in November.

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January 28, 2010 7:07 PM    in reply to Theda Skocpol

More to the point: where and what are the savings in terms of HC insurance costs? How does more fragmented carrier competition provoke provider cost cutting?

I called the HC staffer for a lead House proponent of lifting the exemption. The staffer was unable to articulate the rationale behind this move in terms of how it wd save money. Phone calls to the Consumer Federation of America on this issue, go answered. Their earlier Senate insurance expert testimony did not show how lifting the exemption wd cut HC insurance costs. The only thing this appears guaranteed to do is open the doors to interstate sales of HC insurance.

rand dawson wondering-in-Oregon

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January 28, 2010 7:54 PM    in reply to Theda Skocpol

So you want to make the health-care system more broken, so that down the line (when?) people will be forced to fix it?

Like how Bush and Republicans thought allowing federal budget deficits to explode, with the thinking that it would then force congress to cut spending (yeah right). Or their thinking that allowing programs such as Medicare or social security to languish would force reform down the line.

By the way, what you are suggesting the Democrats do is exactly what Republicans and Rush Limbaugh accuse them of. Making the current system even less acceptable as a Trojan horse for single payer.

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January 28, 2010 2:19 PM   

Show'em how it's done, Nancy!

A good move.

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January 28, 2010 2:20 PM   

I actually don't find this that encouraging. Wouldn't a bill like this require 60 Senate votes and a long, cumbersome debate? And if that eats up time, when will they find the space or will to take up a comprehensive reconciliation bill of fixes?

I would be a lot more comfortable if Pelosi were to move quickly on securing the reconciliation bill. That would give me some confidence that the comprehensive bill could pass the House and we could finish this debate. Passing standalone, normal-order pieces of legislation just reeks of the "break it up" approach and could signal that we aren't actually getting anything comprehensive.

That being said, I really trust Pelosi's judgment, so hopefully she'll prove me wrong.

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January 28, 2010 2:41 PM    in reply to Aksh486

Sometimes, it takes two or three or more sessions of Congress to get a bill enacted. There are a lot of laws on the books today, particularly laws that are narrow in scope like this one, that are there by virtue of sheer persistance by people who introduce it session after session after session until the resistance finally wears down, the political atmosphere changes or there's just a collective decision to oil that squeaky wheel and get it to STFU already. And simply by introducing the bill repeatedly, you can make a radical, stupid idea seem reasonable by sheer habituation.

That's what's always worried me about the Republican ANWAR drilling obsession. It's just the kind of thing that can end up getting enacted this way.

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January 28, 2010 2:45 PM    in reply to The Commenter Formerly Known as NCSteve

Fair enough, but when will they pass the comprehensive bill? I just worry that there isn't much time to do it, so I'd rather see them get to the meat of the problem first since if we have only narrow majorities or no majorities in Congress next year, there's no hope for a comprehensive bill.

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January 28, 2010 3:39 PM    in reply to Aksh486

I still think that the House knows that they must and will pass the Senate bill, but are still angling for extra mileage from the Senate. I see the logic like this.

If the House does not pass the Senate bill then every Democrat has a stake in health care reform. If no HCR bill passes, all Democrats will get raped at the polls. Dems will likely lose both houses of Congress.

If the House passes the Senate bill now, then Democrats will take the victory now and there will be no political will to address health care any more this year.

The only way this bill moves to the left ANY is if it moves before the house passes the Senate bill. For a change, the house is the one holding HCR hostage and the Senate is calling their bluff so far.

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January 28, 2010 4:57 PM    in reply to Aksh486

There should be a few GOP votes for this idea, since they generally claim to be pro-competition.

The concern is that those people, in the name of further competiton, may demand that the trade off is allowing companies to bypass state regulations on scope of coverage, commonly referred to as mandates. Right now its why NY and Ill insurance costs more than KY and is seen as more generous. Eliminating mandate restrictions was and is the end all be all to the GOP "plan" in terms of expanding competition, and it would be really bad for a lot of folks unless it was coupled to Federal mandates of coverage you can only get in the comprehensive bill.

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January 28, 2010 2:21 PM   

You go girl!

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January 28, 2010 2:25 PM   

Before it gets to teh Senate, the House GOPers have to vote on it. Same for all her other measures. It is partly about that.

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January 28, 2010 2:40 PM   

nancy you are becoming a great SPeaker of the House. You are on the right track and keep firing away and force the seante and obama to show concrete action to make our lives better!

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January 28, 2010 2:41 PM   

Ancillary? Ooh, sounds dirty! That's pure Pelosi, alright.

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January 28, 2010 2:43 PM   

Political wedges are all well and good but I'd much rather see the House pass substantive policy first. They need to pass the Senate bill. Then they can put the Republicans on the line for unpopular votes.

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January 28, 2010 2:48 PM   

Straight from the TEA party recommended - republican HCR plan. Good girl, Nancy. Now, you're learning.

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January 28, 2010 2:49 PM   

This is exactly the kind of bill to put forward right now. It's right, it's necessary, and it puts Republicans and Conservadems on the spot.

Try completing this sentence: "I voted to keep health insurance companies immune to anti-trust laws, because..."

Or this: "I want to ensure that health insurance companies can continue to collude and fix prices, because..."

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January 28, 2010 3:05 PM    in reply to chimpale

And the health insurance companies love their anti-trust exemption. So they are sure to pressure the Rs and the Conserva-Dems to oppose it. It needs to be framed and sold as a simple change and a matter of fair play. That's how the tax increases in Oregon were sold.

Something like:

Since 1945 health insurance companies have not been required to compete like other businesses. It may have been a good idea in 1945, but today it means higher premiums, lower coverage and a bad deal for all Americans. Call your (Congressperson) and ask (him) to vote to restore fairness in the insurance market.

It worked in Oregon - even in the some of the more conservative counties the vote was close.

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January 28, 2010 4:52 PM    in reply to Powkat

In fact, it wasn't meant to be a true exemption in 1945 - it was supposed to mean that state regulations would be paramount, with the understanding states would actually regulate competition in some meaningful fashion. What it became as healthcare became much more commidified and businesslike in the 70s and 80s (managed care) is a huge loophole where states could be bought off for next to nothing to pass toothless regulations.

I'm just amazed it hasn't driven people nuts before this. Now, as long as Dems don't cave by giving the GOP the unfettered interstate competiton/race to the bottom on mandates, this is a great thing.

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January 28, 2010 8:07 PM    in reply to calbearinillinois

Yeah, like how life insurance has been a race to the bottom across state lines, or computers, or cars. Oh wait, buying across state lines has increased quality and lowered prices in every other industry.

But I suppose you assume the consumer is stupid and will buy the worst policy at the highest price if given the opportunity? If so, why offer the public option, the dumb consumers would not pick it anyway.

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January 28, 2010 9:03 PM    in reply to Alex Carson

Yeah, like how life insurance has been a race to the bottom across state lines, or computers, or cars. Oh wait, buying across state lines has increased quality and lowered prices in every other industry.

Do you know someone who's been denied life insurance coverage for a pre-existing condition? Perhaps someone who's claim of death has been denied? Have life insurance premiums been skyrocketing? Could denial of life insurance coverage lead to one's death?

Apples and oranges.

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January 28, 2010 11:14 PM    in reply to chimpale

Do you know someone who's been denied life insurance coverage for a pre-existing condition? Perhaps someone who's claim of death has been denied? Have life insurance premiums been skyrocketing? Could denial of life insurance coverage lead to one's death?

What? Is that an argument? Are you agreeing or disagreeing with me?

I'd tend to assume you're agreeing with me, because health insurance has been suffering these problems and people cannot buy it across state lines, while life insurance and every other form of insurance can be purchased across state lines and does not suffer the problems you listed.

On the other hand, you might be making a confused argument against offering insurance across state lines. But, you really aren't, because all you've done is point out that health insurance is not life insurance, which arguably invalidates my comparison, but in fact offers no argument against offering insurance across state lines.

Finally, health insurance rates are skyrocketing because health spending is skyrocketing. It's skyrocketing in every country, but more-so in the US, because people in the US consume more health care and more advanced treatments than those in other countries (and we are a few decades ahead on the obesity curve). If you want to stop the increase in health care costs, you need to stop people consuming so much health care, and slow down the deployment of expensive new treatments like stem cells, gene therapy or designer drugs for rare diseases.

Really, the best way of bending the cost curve down is eating out the R&D budgets for new treatments. If you squeeze out a new drug treatment from being developed, you've saved that R&D money, and the money that would have had to go to purchasing said drug. Given that the US has (relatively) long patent terms for drugs, and therefore is responsible for a big cut of the profit and R&D budget for big pharma, strictly limiting spending here would actually help Europe's drug spending as well, as it would limit the number of new drugs they have to pay for.

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January 29, 2010 1:20 PM    in reply to Alex Carson

Costs would be lower if Big Phrama would stop spending more money on advertising than research and stop tweaking existing drugs instead of researching new ones.

It would be good if Medicare could negotiate for lower drug prices and consumers could buy overseas

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January 29, 2010 2:59 PM    in reply to Powkat

Advertising is what, less than 1% of their R&D and clinical testing budget? I've seen a lot of fallacious comparisons where people look at just the pure R&D budget, but fail to look at the immense and far greater cost of testing a given compound in double blind multi-stage studies. Clinical testing accounts for most of the cost, so anyone ignoring it is purposefully misleading people.

The truly ironic thing is that Democrats are staunchly against tort reform and quick to condemn any drug company that puts a drug out there with bad, unforeseen, side effects (even if they are limited to a very small number of people). You want to reduce drug prices, but simultaneously want the most advanced drugs you can get, with the highest margins of safety possible (entailing gigantic stage 3 clinical trail cohorts). LOL!

No, limiting advertising wouldn't do much of anything for drug costs. It might limit drug spending by reducing consumption.

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January 28, 2010 2:52 PM   

I often wonder why I keep hearing so many misogynistic remarks about Speaker Pelosi. Even seemingly reasonable commentators frequently reference her as some sort of beastly joke; always with the undercurrent that this (snicker!) woman thinks she can eat with the big dogs, but she just keeps making an ass of herself.

But I never wonder for long. She is effective; she is fearless, and let's face it, she's dangerous. She didn't get to be Speaker by not being so. And somewhere there is a pile of bodies, of the opponents who played her cheap.

So it's right out of the Republican playbook to marginalize her in every way possible.

What makes me want to spit is when I hear non-Republicans unwittingly repeating the meme.

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January 28, 2010 2:58 PM    in reply to Barry Champlain

I think Pelosi is terrific. It's those Calcified Cretins in the Senate that remain the problem. I do like how Obama repeatedly praised what the House has done this year and ostentatiously omitted such praise for the Senate. Whether the Sen Republicrats care about Obama's words in anther matter. I think it's gonna take a big f-ing stick to get their attention. It CAN be done with focused and repeated Pres public pressure but I haven't any of that yet. Last night was a bit subtle for general effect, though the insiders surely heard him.

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January 28, 2010 4:01 PM    in reply to wbgonne

Over the past year I've developed quite a bit of respect for Pelosi. Hell, make that over the past month! Not that long ago she was looking like just another wimpy wannabe. She really seems to have come into her own during the HCR (HIR?) free-for-all.

This is good. Make the bastards (of both stripes) vote on it.

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January 29, 2010 8:51 PM    in reply to Barry Champlain

Yeah, I'm sure you really cared when people were dumping on Hillary and Palin with the same sexist jokes. *ahem*

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January 28, 2010 2:56 PM   

Buetler, you can't help writing yourself into your news stories...Why the "I"???

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January 28, 2010 3:04 PM    in reply to tchamp77

Who cares, what's wrong with that? Because AP doesn't do it?

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January 28, 2010 3:08 PM   

Brilliant...how can the so-called republicans argue against an open market. I've long wished for this approach. Let's see Agent Orange Bohner argue against eliminating pre-existing conditions. Or dropping people once they actually get ill. It's easy to throw out a made-up term like Obamacare and use it to gin up fear. But they can't fight the real issues. When polled individually all these things score high no matter the party.

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January 28, 2010 4:57 PM    in reply to hey norm

Maybe not brilliant, but pretty close. My fellow progressives fell into the false logic of "If we don't do it all at once, we might as well not do it all."

Much as I loathe it, the reality is that's not how American culture and politics work. The only way to destroy the power of the health insurance industry is to chip away at the most politically-indefensible building blocks of that power, one at a time. The anti-trust exemption is one. Next we should go after the ERISA loophole.

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January 28, 2010 4:42 PM   

Bravo Speaker Pelosi! Some of the best news I've heard. Bully good.

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January 28, 2010 6:02 PM   

There is not gonna be a comprehensive bill. The Senate is not gonna do reconciliation to fix the bill. I suspect that other Sen. Dems have privately informed Sen. Reid that they are not gonna do it. Nelson,Landrieu,Lincoln and Bayh have already publicly said it. Lieberman and Jim Webb have publicly hinted at it. Baucus probably can't be counted on. 3 more and it's over.

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January 28, 2010 6:54 PM   

Set federal standard practices for insurance companies so that one state is not more attractive than another state, then let insurance be bought across state lines. Add to that ending insurance companies anti-trust exemption, make the tax fixes, and maybe squeeze in medicare buy in. Pass it in the House, throw it to the senate. If the GOP want to filibuster, let them look like fools. Then readjust and pass it reconciliation style. This allows repubs to oppose the very things they SAY they support, and gives time to garner the 50 votes needed for reconcilitation. Just an idea. I was wondering if there is an expiration date for the senate bill that has passed. Is there a certain amount of time the House has to pass it, or can they pass it anytime?

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January 28, 2010 7:41 PM    in reply to patmcgrowen

Insurance is primarily regulated by the states.

If federal minimums are established, some states would still have tougher regulations.

Unless you want to take away the power of states to regulate insurance altogether, which would end a regulation system which has been very successful overall for decades.

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January 28, 2010 8:05 PM    in reply to Eric Jaffa

No, state by state piecemeal regulation has not worked well. What it has done, is allow some insurance companies to establish pricing power (quasi Monopoly) status in some states. Meanwhile, proposed federal regulations would be far better than most states regulations, as you pointed out, so state by state regulation has in fact not worked well.

Unless you're posting from the perspective of a very profitable insurance company which is the go-to option in a given state, then I must agree that state by state regulation has worked very well.

By the way, health insurance is the only product I know of that cannot be purchased across state lines. Imagine how much life insurance would cost if that were the case! Most states would have no final burial insurance for the elderly as AARP offers nationwide. But for some reason, in the fantasy land of many progressives, increased competition leads to higher prices and lower quality (ostensibly because the consumer is very stupid).

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January 28, 2010 10:23 PM    in reply to Alex Carson

By the way, health insurance is the only product I know of that cannot be purchased across state lines. Imagine how much life insurance would cost if that were the case!

So, what is the mechanism that makes health insurance cost less to everyone if an insurance company can sell policies to a larger customer base? Considering that each state already has from a half dozen to a dozen health insurance providers to choose from, is there really any reason that you would see lower prices by removing the borders between Aetna of Florida, Aetna of Georgia, Aetna of Alabama, Aetna of Mississippi, and Aetna of Louisiana? Substitute BCBS, Humana, CIGNA, or UniteHealthcare for Aetna.

Removing the anti-trust exemption can ensure competition. But, providing a large company a greater pool of wealthy customers doesn't.

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January 28, 2010 10:55 PM    in reply to chimpale

Wow, at least six insurance companies in every state. Amazing, what a wide variety of choices! And you're right, many states have essentially identical companies, all the more reason to allow people to buy insurance from any provider in the US instead of just the neighboring state or region.

The mechanism by which more competitors leads to lower prices is known as competition. It works with life insurance, home insurance, unemployment insurance, why not health insurance? You ever watched TV lately? Car insurers are in a battle to offer the lowest price, and car insurance is vastly cheaper than it was just a decade ago. And if smaller markets lead to better insurance, why not divide California into a number of small markets? Why not limit every insurance company to the customers of a single county?

And, on the simplest level, larger markets allow people to choose something else besides Aetna, BCBS, Humana, Cigna or United Healthcare even though presently those may be their only choices. Imagine that, the ability to choose between multiple different providers instead of essentially identical ones.

I don't see how the number of wealthy customers matters. Are you saying more wealthy customers will lead to higher prices, or lower prices? Last I checked, cost of insurance is not based upon your income, but your relative risk (smoking is factored in even in states which do not allow medical underwriting/pre-existing condition exclusions). I wasn't aware that insurance companies have begun only covering people of a certain income, I think you might be confusing them with Medicaid.

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bk

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January 29, 2010 1:56 AM   

I doubt that the republicans will vote for this. Did you hear all the republicans voted NO to "pay as you go" in the Senate today???? Unbelievable. They can't even vote for something that is fiscally conservative because Obama asked for it. Sad.

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January 29, 2010 6:31 AM   

The House should pass. the. damn. Senate. bill.

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February 6, 2010 3:03 PM   

I can't seriously argue with better health care for Americans, the only concern I have is the way she seems to want to bulldoze it in one way or another.

Online Shopping For Insurance

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