Will Health Care Reform Live Up to Buildup?
The buildup in Washington for health care reform over the past few months reminds me of the Neil Simon play Proposals.
Much of the first act revolves around the characters anticipating the arrival of a man at a Poconos lake cottage. His description grows increasingly alarming—and hilarious.
By the time he steps onto the stage at the end of Act I, the audience feels as if it knows him before he utters his first word of dialogue.
Many of the characters in the health care reform drama have been engaged in happy talk so far. Both parties and a long roster of interest groups seem to agree on the need to extend coverage, enhance quality and lower costs simultaneously.
An actual bill has not yet emerged. But Sen. Max Baucus, D-Montana and chairman of the Senate Finance Committee, told reporters at a National Press Club briefing Friday, April 24, that the outlines for legislation have already been sketched.
He was referring to a white paper he released in November titled “A Call to Action.” You can find the full document on the committee Web site at finance.senate.gov
The paper is based on several hearings held by the panel in 2008. This year, the health care pace has quickened. The Senate Finance Committee and Health, Education, Pensions and Labor Committee have been holding talks for months with representatives from the health care, business and policy communities.
Baucus conveys a sense of urgency. Now is the only time for the next several years to undertake this effort: A new president and new Congress are in place, and no one faces an election for more than 18 months.
“We have a tremendous opportunity to very significantly reform our health care system to make it work a lot better for virtually every American,” he said. “I’ve never attempted something so challenging. I relish it. It’s a lot of fun.”
The schedule will be lightning fast by Washington standards. Baucus said a bill will be on the Senate floor by July. The House likely will proceed at the same clip.
Baucus and other reform leaders are reassuring large businesses that want to continue to offer health care benefits to attract and retain employees.
“We’re not going to change the way self-insured companies handle health care for their employees,” Baucus said. “Any person who has health insurance can keep it.”
President Barack Obama favors that approach. “He wants to build on the employer-based system,” Nancy-Ann DeParle, director of the White House Office of Health Reform, said at an April 15 press briefing at the Kaiser Family Foundation in Washington.
But here’s where things will get difficult. It will cost an enormous amount of money to cover the approximately 47 million Americans who lack health insurance.
At a House Education and Labor subcommittee hearing on Thursday, April 23, Rep. Rob Andrews, D-New Jersey, estimated that the tab would be $150 billion to $200 billion annually.
Obama’s proposals to repeal tax breaks for the top 5 percent of earners and phase out subsidies for a private-sector Medicare program would cover about 40 percent of the bill, according to Andrews.
“This is where the rubber really meets the road is paying for insurance for uninsured people,” Andrews said.
He then pressed representatives of business groups on how they would fund the gap. A lawyer, Andrews pursues a Q&A in a tough but friendly manner, as if it were a deposition.
He hinted that a pay-or-play proposal will have to be included in health care reform in order to cover the costs.
But that idea sets corporate teeth on edge. Michael Langan, a principal at Towers Perrin HR Services in Valhalla, New York, told Andrews not to take heart in the fact that Massachusetts companies by and large have not dropped their coverage following the pay-or-play mandate imposed by the state as part of its health care reform plan.
He said the minimum coverage level was set so low that virtually every business avoided penalties. But as costs increase for a state, they will be passed on to businesses.
“The bar will only be raised over time to the point where it will erode employers’ resolve to offer their own plans,” Langan said.
Translating pay-or-play into legislative language will put a premium on nuance.
“What does ‘play’ mean? You have to come up with a package that equals ‘x,’ ” said Randel Johnson, vice president of labor, immigration and employee benefits at the U.S. Chamber of Commerce. “And who’s going to define that ‘x’?”
When Congress gets down to those details, health care reform happy talk may turn into grumbling. We can only hope that the final product is more successful than Proposals, which closed after 77 performances on Broadway.














