Advertisement

Vast Differences Must Be Bridged on Healthcare

Vast Differences Must Be Bridged on Healthcare

By Mort Kondracke - October 15, 2009

Having let Congress have its way in writing health care reform legislation up to now, President Barack Obama needs to weigh in heavily if he wants to sign a bill by Christmas.

Vast differences - in cost, coverage, ideology and pay-for techniques - need to be bridged among five measures approved by two Senate and three House committees.

Democratic leaders in each chamber are trying to reconcile their own bills, draft final versions, get them scored by the Congressional Budget Office and put them on the floor.

Obama should not wait for a House-Senate conference to put his stamp on the process. He needs to fashion a final product - and one that can win 60 votes in the Senate.

That means resisting intense pressure to move left of the measure just produced by the Senate Finance Committee.

Obama needs to hold on to its cost-saving mechanisms - and should even move right to tempt more Republicans to support reform.

He ought to offer Republicans their favorite provisions - medical malpractice reform and the possibility of buying insurance across state lines - to see whether he can make the final legislation more bipartisan and also save money.

Legal reform, possibly in the form of specialized "health courts," would reduce the practice of "defensive medicine," the ordering of extra tests and treatments to avoid being sued.

And allowing small businesses the chance to form pools and buy insurance anywhere in the country in a regulated market would create competition among insurance companies and lower costs.

These are admittedly long-shot possibilities. It may be all Obama can do to resist pressure from liberals, labor unions and all sorts of health lobbies to create a public insurance option, "protect" consumers from higher costs and create more "carve-outs" to help favored states and special interest groups.

One such group, America's Health Insurance Plans, the insurance lobby, has brought down an avalanche of ridicule, with even Obama aides unfairly accusing it of trying to torpedo the entire reform effort.

In fact, AHIP - like other groups representing doctors, hospitals, device manufacturers and seniors - was merely trying to affect the reform process when it issued a report claiming that elements of the Finance bill would significantly raise premiums.

One AHIP assertion surely deserves Obama's attention: An estimated 17 million Americans would not be required to buy insurance under the Finance Committee bill, yet they would be allowed to do so the minute they get sick. That would inevitably raise costs.

On the other hand, AHIP also objected to one Finance provision that almost all cost-control hawks want to retain in final legislation: an excise tax on "Cadillac" insurance plans.

As the bipartisan Concord Coalition pointed out in one of the best "road forward" reports yet, "Current tax preferences create perverse incentives that encourage higher health care spending.

"They are also regressive and unfair to those attempting to purchase their own insurance."

Ideally, either employees should lose their tax exclusion for employer-paid insurance plans and get money to buy their own insurance, or the self-employed and unemployed should get a similar tax break.

Congress is afraid to go that far, but the Finance Committee's tax on high-priced insurance is an attempt to raise revenue to pay for reform and control health spending by limiting the coverage that employees can have for free.

An odd coalition - AHIP, Republicans and organized labor - is against the excise tax, but Obama should insist on keeping it in final legislation.

As the Concord Coalition wrote, "not only would the excise tax ... raise $201 billion over 10 years," but "it would also serve as a constraint on plan premiums - thereby encouraging insurers to exert downward pressure on provider costs."

Moreover, because of the way the excise tax is indexed to inflation, it would result in significant savings beyond the first 10 years.

Concord also urged retention of the Finance Committee's independent commission designed to control Medicare costs, adding it was "concerned that limitations on the commission and its jurisdiction would wind up impeding its effectiveness."

Indeed, House Democrats are out to kill the commission - and AARP, drug, hospital and other lobbies won exclusions in the Senate that Obama should eliminate.

Concord also urged more aggressive efforts to change the "perverse" fee-for-service payment system that encourages providers to order more procedures and the avoidance of "gimmickry" to make reform look less expensive than it will be.

And it urged, "Avoid Medicare for all" - creation of a public insurance plan that, like Medicare, fails to control costs.

Obama has to persuade liberals to forgo a public plan and accept a "trigger" to create one if reform fails to control costs. But he's got one powerful argument: A public plan can't pass the Senate.

Mort Kondracke is the Executive Editor of Roll Call, the newspaper of Capitol Hill since 1955. © 2007 Roll Call, Inc.

Keeping Your Health Law Plan May Mean Premium Hike
Ricardo Alonso-Zaldivar · November 14, 2014
Calling the Bluff on Obamacare
Froma Harrop · November 13, 2014
Obamacare vs. Scaliacare
E.J. Dionne · November 13, 2014

Mort Kondracke

Author Archive

Follow Real Clear Politics

Latest On Twitter