It’s official: healthcare reform is now the number one domestic policy issue in Congress.
And it’s no wonder why: President Obama has moved off the sidelines and into an active, lobbyist role.
Not a day goes by recently when he does not address the public, press and other lawmakers about the need for a reform package: “If we do not fix our health care system,” he told the American Medical Association (AMA) last Monday, “America may go the way of G.M.”
If only crafting a viable plan were as easy as making speeches!
Legislators in both the House and the Senate are hard at work, attempting to hammer out the details. To date, there are no less than three separate reform bills in the pipeline. And each one has unique features when it comes to proposed benefits and financing arrangements.
What challenges do lawmakers face in passing reform legislation?
As We See It, there are three major issues for legislators to address as they attempt to reconcile their different plans.
First: Now is the time to determine what main features the reform package will contain.
The common components that continue to be on the table include:
- An individual mandate for all (or most) individuals to have health insurance with a minimum level of benefits;
- A “pay-or-play” requirement, where employers either provide insurance options to their employees or make an annual payment to the federal government;
- New subsidies and expanded eligibility for the existing Medicaid program;
- New insurance exchanges that would either be 1) mostly private, or 2) government-run and tightly regulated;
- A public insurance option, aka “the public plan,” to be offered through the exchanges alongside the private plans; and
- A federal health board to regulate the exchanges and determine appropriate benefits and reimbursement levels.
Second: Legislators must come to grips with the cost of reform.
For some time now, experts have estimated that a reform package with many of the most popular components (individual mandates, new subsidies) will cost upwards of $1 trillion over the next decade. This is in addition to the $1 trillion that the government currently spends annually on our healthcare system.
This past spring, the Obama administration identified revenue sources to cover about half of the total dollars needed for reform. The President assured critics, including some Blue Dog, (conservative) Dems, that the remaining dollars would be secured, and that significant tax increases were unlikely.
Bad news for President Obama: Recently the Congressional Budget Office (CBO) released several hard-nosed financial analyses of the reform plans in committee.
Just last week, for example, the CBO reported that a proposal by Senators Edward Kennedy (D-Ma) and Christopher Dodd (D-CT), both leaders of the Senate Health, Education, Labor and Pensions Committee, would cost $1 trillion over the next ten years and only reduce the number of uninsured by a net 16 million people.
The Result? This “universal coverage” legislation could, in effect, leave 36 million folks uninsured by 2017, while forcing the United States further into debt.
We say kudos to the Congressional Budget Office for staying the course and telling it straight. We’re glad that CBO Director Douglas Elmendorf and his staff have not given into pressure to paint a rosy picture for legislators.
At the same time, these reports have complicated matters for congressional Democrats. Lawmakers are now scrambling to find the right combination of new taxes, benefit cuts and delivery-reform initiatives that will make the cost (and outcome) of their plans more reasonable.
Check back tomorrow for details about the new taxes being considered.
Third: Lawmakers must figure out what role private insurers and other industry groups will play in a reformed healthcare system.
If anything, private insurers are gaining steam as the debate continues.
Last month’s promise by major players in the health plan, hospital, physician and union world to voluntarily cut overall costs by $2 trillion over the next decade certainly didn’t hurt this group’s reputation.
(Nevermind that the groups later admitted that they don’t actually have a plan for accomplishing this goal. Somehow this second announcement just wasn’t considered as newsworthy.)
And according to this article in the Chicago Tribune Review, most of the reform plans on the table would further solidify the role of private insurers in healthcare.
- If an individual mandate were enacted, for example, private insurers would receive a slew of new customers.
- It’s no wonder that private insurers continue to fight the public insurance option tooth-and-nail since it would deprive them of some of this new revenue.
- As a side note: Insurers also complain that the public plan would drive them out of business, as it would be impossible for them to compete with the low premiums offered. We countered this argument before, here and here.
The influence of the private insurance industry is not to be underestimated as the legislative process advances.
America’s Health Insurance Plans (AHIP), the main political advocacy organization that speaks for this group, continues to build its arsenal. Just last week they launched a new blog to focus on “reform.” They’ve also attracted the support of the AMA, which is a member-based organization of 225,000 physicians.
To be fair: the AMA has never been a leader when it comes to progressive healthcare reform. They’ve fought every major reform effort introduced over the last 70 years! And they only represent about 25% of physicians practicing in the U.S. today, although they speak as loudly as though they represented a solid majority.
As a side note: There are a number of other professional provider organizations that support the public plan, or even a single-payer insurance option.
- A coalition of 215,000 physicians with members from the American Academy of Family Physicians, the American Medical Student Association and the National Physicians Alliance recently pledged their support for the public option.
- Physicians for a National Health Plan has 16,000 members and advocates for a single-payer health plan.
Hammering out the details of a reform package is not an easy task. And the process opens the door to partisan criticisms, negative ad campaigns, and the potential for voter backlash.
Luckily for President Obama, it looks like the public is standing firm in its support of a healthcare overhaul.
Tomorrow we’ll look at recent polling on healthcare reform, and at the tax options being considered to fund the initiative.