Strangling health care reform in its cradle

Congress is about to recess without voting on a healthcare reform bill. As of this writing, the public option in most of the various committee bills has been so eviscerated that it is not clear that there will be anything worth voting for when the bills finally come to the floor. But maybe, if we can give our representatives an earful during recess, we can change that.

Pennsylvania Congressman Chris Carney, who is generally considered a member of the Blue Dog Democrats who have been largely responsible for weakening the bill, voiced specific concerns about healthcare reform in an article on page 3 of last week’s paper. We would like to discuss those concerns one by one and explain why we think it will take a stronger, not a weaker bill, to address them.

First, Carney said people should have the right to keep their current insurance. No one is proposing to take away that right. It is proposed, rather, to add a public Medicare-like option to the choices available. Without the bloated costs of administration, advertising, executive compensation, lobbying and profits of the private insurers, a robust public option can introduce real competition into the marketplace, causing private insurers to compete by lowering prices and improving benefits.

In 1993, 61 percent of all companies provided health insurance; last year, that was down to 38 percent. Additionally, a Hewitt Associates survey found that 19 percent of all companies plan to stop providing health-care benefits in the next three to five years. Without something like competitive pressure from a strong public option to keep premium increases down, this situation is only going to get worse.

You may currently have insurance through your employer, but what if they drop that insurance? What if you lose your job? If you become unemployed, can you afford to pick up the payments, which annually average $4,700 per individual or $12,700 per family of four? Thus “keeping your current insurance” is far from secure under the current system.

Carney also says he wants people to be able to keep their own doctor. Nobody is proposing anything different; the public option would pay bills, nothing more. But again, if you’re worried about being able to see the doctor of your choice, beware of the status quo. If your employer has to drop insurance coverage or you lose your job, you could very well wind up in the emergency room of the local hospital when you get sick and take whoever comes.

Finally, Carney is concerned about cost, and says he does not want to pay for healthcare reform on the back of middle-class taxpayers and small businesses.

One change the Blue Dogs have pushed through raises the payroll threshold below which employers are exempt from the mandate to provide health insurance from $250,000 to $500,000 (or $750,000 in some bill versions). This addresses Carney’s concern that an employer mandate might put some small companies out of business. Unfortunately, it simply shifts the burden of the mandate to buy health insurance from small businesses to small business employees. Another Blue Dog change eliminates subsidies that might have helped some of those employees afford the premiums.

Probably the worst Blue Dog change overturns proposals that the public option be able to reimburse providers at a Medicare-plus-x percent (the “x” varies in different committee versions) basis in its first years of operations. As noted above, a public option is useful to the extent it can provide a viable competitor, which can keep the private health insurers lean and honest. One of the ways it can do that is by providing a national system large enough that—like the VA system, Medicare and Medicaid—it has the muscle to negotiate deep discounts with providers. In the start-up phase, it will take a while for the public option to enroll customers, which means it won’t immediately have that kind of muscle. By taking away the first few years of guaranteed Medicare-based reimbursement rates, the Blue Dogs are proposing to strangle the public option in its cradle.

As for burdening middle-class taxpayers: a tax on the top 1.2 percent of income earners, those making over $350,000 a year, not exactly the middle class, is being proposed to help pay for reform. Meanwhile, middle-class families are already burdened with soaring out-of-pocket medical costs; the cost of doing nothing—or not enough—might prove to be the biggest burden of all.

It makes sense to be concerned about the cost of healthcare reform—but it makes no sense to care about cost and then weaken the public option to the point it can’t compete. A weak bill is probably worse than no bill at all. Use this recess to let your representatives know what you think.

Also in this issue:

• A house divided

Dr. Punnybone

Star Warts