Hurdles Remain in Obama’s Push to Revamp Healthcare
Monday, June 1st, 2009By Susan Page, USA TODAY
WASHINGTON — Now the policymakers who for months have been promising to overhaul the health care system have to start doing it.
HEALTH CARE: By the numbers
This year’s fast-track timetable on health care calls for leaders of key congressional committees to unveil legislation this month, debate it next month and pass it before leaving for the summer recess in August. Final passage would follow in September or October, before next year’s elections start to complicate things.
That, at least, is the plan.
“I’m not blowing smoke — this is coming together,” Senate Finance Chairman Max Baucus, a Montana Democrat and an architect of the legislation being drafted, said in an interview.
“I really think that the stars may be aligned here,” President Obama said in an interview on C-SPAN over the Memorial Day weekend.
Last month, Obama unveiled a commitment from insurance and pharmaceutical companies to curb rising costs. On Capitol Hill the next day, the Senate Finance Committee began talking specifics about how to pay for covering the uninsured. And in interest-group TV ads, even Harry and Louise, the fictional couple who helped sink the Clinton administration plan 15 years ago, have espoused the need for change.
So what could possibly go wrong?
Figuring out how to pay the $1 trillion-plus price tag, for one, not to mention the competing summertime priority of Sonia Sotomayor’s confirmation to the Supreme Court.
The prospects look promising, but the pitfalls that have undermined efforts since the Truman administration to guarantee health care coverage for nearly every American remain. “The stars are truly aligned this year, but the problem is there are many rogue death stars flying in the policy atmosphere as well,” says Robert Reischauer, who headed the Congressional Budget Office during the last big health care debate in 1993-94, which led nowhere.
Whether the federal government should expand its role in providing health care is a divide that liberal Democrats and the insurance industry, on opposite sides, call a deal breaker.
Perhaps the biggest question is whether powerful factions of the health care industry — from insurance companies to pharmaceutical makers to hospitals — will launch the sort of full-scale attack that kept the Clinton administration’s health care makeover from even coming to a vote in Congress. Many of the groups now espouse the need for change, but the difficult decisions on precisely what “reform” will include haven’t been made.
Of course, there also are forces pushing for what is the top legislative priority of a new president and the career-long cause of a veteran Democratic senator, Edward Kennedy of Massachusetts, who is battling a brain tumor.
One of them: The problem keeps getting worse. Health care costs are rising fast as the number of those who lack insurance, pegged by the Census at 46 million in 2007, is swelling. Over the past 12 months, the percentage of people who had health insurance provided by their employer or union fell by more than 3 percentage points, according to a daily national survey sponsored by Gallup and Healthways, a health management company.
The drop from 49.6% in April 2008 to 46.5% in April 2009 reflects a change for more than 6 million Americans.
Over those 12 months, the number of people who said they didn’t have health insurance of any kind rose by nearly 3 million. Blue-collar workers, the self-employed and those in households earning less than $50,000 have been among the hardest hit.
If nothing is done, government and other studies predict the number of uninsured and costs of health care will continue to rise. On the current course, the Congressional Budget Office projects that health care spending, now 16% of the nation’s economy, will more than double to 37% in 2050.
Expanding coverage and controlling costs will require vaulting a series of hurdles.
Here are five big ones.
1. Avoiding detours
The not-a-minute-to-wait timetable for congressional action this summer leaves little room for detours or distractions. While Obama wants the House and Senate to pass a health care bill by their August break, for instance, he also has set that as a deadline for the Senate to confirm Sotomayor to the high court.
The debate over her confirmation not only will consume some time but also could strain the bipartisan comity he hopes to forge on health care. And North Korea’s nuclear test last week underscored how a foreign policy crisis can command instant attention.
Congress rarely acts so quickly on major legislation, but policymakers call the compressed schedule critical if the bill is to pass during Obama’s first term. The Senate health committee is slated to hold its first public session on a bill in two weeks.
“If you don’t have it this year, you won’t have it for four years,” Iowa Sen. Chuck Grassley, the top Republican on the Finance Committee, warned in an interview. He noted that 2010 was a congressional election year and by 2011 the next presidential campaign would be underway, when politicians might be reluctant to cast tough votes.
“If we don’t get it done this year, we’re not going to get it done,” Obama said Thursday in a conference call aimed at rallying his supporters on the issue.
2. Defining roles
There is considerable agreement that the best path to universal coverage is for the government to require Americans to buy health insurance, just as drivers have to buy car insurance. A sliding scale of subsidies would help those who would have trouble affording premiums.
The biggest ideological debate is whether the insurance options Americans could consider should include a public, government-run plan that would compete with those offered by private insurance companies.
Include a public plan or there’s no deal, some liberal Democrats say. “The public option is a compromise by many Democrats who would like to have a single-payer system,” says Rep. Henry Waxman, chairman of one of three House committees with jurisdiction over the health care legislation. The California Democrat says the House bill will include a public option, arguing it would create a “healthy tension” to keep costs down and protect consumers’ interests.
Kennedy said last week that his proposal also would include a public option, though Baucus has been trying to find some middle ground. On Saturday, the two senators issued a joint statement promising their committees would have “similar and complementary legislation.”
The quandary: Include a public plan and there’s no deal, some Republicans and industry leaders say. They say a government plan’s reach would enable it to crush private competitors, creating a back-door path to a government-run health care system like those in Canada and Britain.
“Any activity in which I participate in which the referee and the player are the same person and I’m on the opposing team, I’m going to lose,” says Rep. Tom Price, R-Ga., chairman of the Republican Study Committee.
Both sides are floating compromises. Karen Ignagni, who heads the leading association of health insurance companies, suggests federal regulation of insurance markets nationwide, replacing a patchwork of state regulations and addressing some of the concerns of those who back a public option.
Meanwhile, Sen. Charles Schumer, D-N.Y., proposes that any government-run plan be required to comply with all the rules that apply to private ones, including a requirement that it be self-sustaining and establish a reserve fund. That would be an effort to level the playing field.
3. Paying the price
It won’t be cheap.
Kenneth Thorpe, a health care analyst in the Clinton administration and now a professor at Emory University, estimates the cost of expanded coverage at $1.3 trillion to $1.8 trillion over 10 years. Under congressional rules, the legislation can’t increase the deficit. That means other spending has to be cut or taxes raised to offset its costs within 11 years.
Peter Orszag, Obama’s budget director, has estimated that up to $700 billion over 10 years could be saved by making the health care system work better — eliminating duplicative treatments, changing the ground rules for how doctors and hospitals are reimbursed and moving to more electronic record-keeping. While past promises of savings often have proved elusive, Orszag, Baucus and others say they are possible and an essential first step.
One problem is that the task of implementing new policies and systems would require significant spending at the beginning with savings projected only down the road. Advocates have been working for months with the CBO, which calculates how much a proposal costs.
When it comes to raising money, all the options being floated are controversial, from taxing soft drinks to imposing a national sales tax. Senators from both parties balked when Obama proposed limiting the amount Americans could claim for charitable and other tax deductions as a way to boost revenue and help pay for health care reform.
Baucus has suggested curbing the tax break companies get for providing health insurance to their workers, a step that would increase taxes for those who have the most expensive plans.
However, Rep. Charles Rangel, D-N.Y., chairman of the tax-writing House Ways and Means Committee, said last month there was “no way” he’d support that. He and other critics worry that taxing health benefits would discourage employers from providing coverage. He didn’t suggest another way to raise the money.
Finding the money is particularly tricky at a time the recession has reduced tax revenues and the budget deficit is projected to soar to an unprecedented $1.8 trillion this year.
“It’s a game of dominoes,” says Ron Pollack, executive director of Families USA, which has been pushing for expanded coverage since the Clinton effort. “If you don’t get the financing, you don’t get the mandate. If you don’t get the mandate, you don’t get the subsidies. And if you don’t get the subsidies, you don’t get health insurance reform.”
4. Writing the rules
Passing a bill is likely to be easier in the Democrat-controlled House than the Senate. Senate rules enable Republicans to threaten a filibuster and force supporters to round up 60 votes to move forward.
That would leave Democrats with no wiggle room. Since Pennsylvania Sen. Arlen Specter switched from the GOP, Democrats count 59 senators. Al Franken would become the 60th if he wins the pending court case over Minnesota’s Senate contest.
Just in case, Democrats have put in place rules that would allow parts of the proposal to be included in a process called reconciliation — a procedure that can’t be filibustered and requires a simple majority to pass.
That prospect enrages some Republicans, who argue such an important issue shouldn’t be enacted on a shortcut that limits debate, though Democrats note a GOP majority used reconciliation to pass the Bush tax cuts in 2001.
The issue sounds arcane, but Republicans warn that if Democrats use reconciliation, nearly every GOP senator would vote against the plan. “This is too big for political gamesmanship,” says Utah Sen. Orrin Hatch, a member of the Senate health committee. “The partisan part of me says, ‘Oh, I hope they do that; they’ll have to live with every stinking problem that comes up’ ” in a system passed without significant GOP support.
5. Testing the coalition
Making specific policy choices will test the coalition that has been built around the general idea of revamping health care.
Fifteen years ago, vociferous objections from insurance companies, drug manufacturers, business owners and others helped defeat the Clinton plan, epitomized by the “Harry and Louise” ads sponsored by the Health Insurance Association of America that warned of the perils of change.
So Obama called it a “watershed event” last month when he was joined at the White House by lobbyists representing many of those groups as they promised to curb the growth in costs over the next decade and said change was essential. An odd-couple’s group including the National Federation of Independent Business, the American Hospital Association and Families USA have sponsored the new “Harry and Louise” ad that showed the same actors, older now, discussing the need to fix health care.
Many in the industry have concluded that some sort of bill is likely to pass, and they want to be part of the discussion to protect their interests. Chip Kahn, president of the Federation of American Hospitals now and a mastermind of the original Harry and Louise ads, says the leaders of trade associations and other groups reason, “Something’s going to happen here and they’ve got to be involved.”
The pharmaceutical industry is most concerned about avoiding government price controls on drugs, the insurance industry about competition from a public Medicare-style plan.
The question: Will the groups splinter when the most difficult trade-offs are decided?
Those trade-offs could be disquieting consumers, too. An effort to squeeze out savings by eliminating duplicative tests could make it harder for some patients to be reimbursed for a test they want. Capping the deductibility of insurance premiums would raise the tax bill for those with the priciest plans.
The debate last time demonstrated how quickly public support can evaporate if concerns are pressed about government “rationing” of health care, or limits on patients’ ability to choose their own doctors and hospitals. In January 1994, the Clinton reform plan was supported by 56%-38% in the USA TODAY/Gallup Poll. After six months of debate, that majority support had turned around to majority opposition, with 55%-40% opposed.
“There are lots of moving parts here, and everything is on the table,” Baucus says. “One challenge is education, getting people up to speed, and the other is keeping everybody together, talking together, working together. Now the rubber is going to start meeting the road. We’re going to have to start making choices.”
Health care by the numbers
U.S. expenditures on health care each year $2.3 trillion
Estimated expenditures in 2017 $4.3 trillion
Number of uninsured 46 million
Number of underinsured 25 million
percentage of Americans who couldn’t pay for medicines or health care their family needed in the past 12 months 18%
Bankruptcies in which medical debt is a factor One of two
Increase in individuals’ premium costs in the last 10 years 117%
Health expenditures per capita in USA $6,714
Health expenditures per capita in Canada $3,678
Health expenditures per capita in United Kingdom $2,760
Modern-day presidents who launched major, unsuccessful efforts to cover the uninsured 3
