And the Health Care Debate Continues…

October 28, 2009

The Atlanta Journal-Constitution

By Ricardo Alonso-Zaldivar (AP)

Democrats are still struggling to find a strategy that will let them push a health care overhaul through the Senate and fulfill President Barack Obama’s goal of signing a bill this year.

A day after Majority Leader Harry Reid announced that the Democratic bill would include the option of a government insurance plan, moderates in his own party lost no time Tuesday in voicing their displeasure. Reid, D-Nev., needs every Democrat to break the filibusters Republicans are vowing to mount. But some of the moderates refuse to say whether they’ll stick with their leader on procedural votes, let alone those on the merits of the bill.

“We are a long way from reaching conclusion,” said Budget Committee Chairman Kent Conrad, D-N.D.

Speaker Nancy Pelosi is in a similar position in the House. Efforts to draft a consensus health care bill for a vote have been stalled for more than two weeks because of disagreements among Democrats.

There are nine weeks left in the year to deliver a bill to Obama’s desk.

Intense days and nights lie ahead, said Sen. Bill Nelson, D-Fla. Senators who don’t like the bill will find themselves the focus of a “prayer session,” said Nelson. “They will pray that the retribution of God doesn’t come down on them,” he joked.

Nonetheless, moderate Democratic senators who control the balance of power on health care were holding their ground. Republican opposition stiffened, and party leaders announced they would attempt to strangle the bill before formal debate begins.

Despite the obstacles, senior Democrats cast Reid’s draft legislation as a turning point. Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, said there is now a “sense of inevitability … that, yes, we’re going to pass health care reform.”

The government insurance option long ago emerged as the biggest flashpoint in both the House and Senate as Democrats try to pass legislation that extends coverage, bans insurance practices such as denial of coverage because of pre-existing medical conditions and slows the growth of health care spending nationally.

But before any substantive issue can be joined on the Senate floor, Reid’s first challenge is to gain 60 votes — the number needed to overcome a filibuster by Republicans — just to bring the bill up, a parliamentary maneuver so routine that a vote is rarely required.

But Sen. Mitch McConnell of Kentucky, the Republican leader, announced that in this case, even procedural votes will count. That’s because, in his view, the underlying bill would “cut Medicare, raise taxes and increase health insurance premiums.” He suggested Democrats could expect campaign commercials next year on the basis of the vote and recalled that Sen. John Kerry, D-Mass., was ridiculed in his 2004 presidential campaign for having once said he voted for a bill before he voted against it.

Sen. Tom Carper, D-Del., said he may seek changes on the Senate floor, a move likely to be welcomed by moderates. He backs a government role in states where one or two insurers control the market and premiums are high, along the same lines as a plan supported by Sen. Olympia Snowe, R-Maine.

That general approach, in which a lack of competition in an individual’s state would trigger a government insurance option, “is still alive,” said Sen. Kent Conrad, D-N.D.

While Reid is expected to eventually secure all 60 Democratic votes on the critical first test to bring the bill to the Senate floor, Sens. Ben Nelson of Nebraska, Mary Landrieu of Louisiana, Evan Bayh of Indiana and Blanche Lincoln of Arkansas all declined to say on Tuesday howthey would vote.

In an indication of the pressure Reid faces, Bayh said the majority leader had agreed to cut an earlier proposal for a $40 billion tax on medical device makers.

“He significantly modified that proposal in a way that I understand will not impact thousands of good-paying jobs,” said Bayh, whose state is home to Guidant Corp., a maker of cardiovascular devices, among other major industry players. Numerous officials said Reid had agreed to reduce the new tax to $20 billion over a decade. The officials spoke on condition of anonymity because no announcement had been made.

In the House, the principal stumbling block is disagreement among Democrats over how to set fees for doctors, hospitals and other health care providers participating in the public insurance plan.

Liberals want the government to set the rate unilaterally, pegged to the charges the government pays Medicare beneficiaries. Moderates want the government to negotiate with the providers in setting fees.

Pelosi favors the approach liberals want, but officials say she has all but concluded she cannot gain the necessary majority of 218 votes for it.

House Democrats also must resolve internal disagreements relating to abortion services and health care for immigrants before they can send the bill to the House floor for a vote.

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Fines Proposed For Going Without Health Insurance

September 8, 2009

My Way News

By Ricardo Alonso-Zaldivar

Americans would be fined up to $3,800 for failing to buy health insurance under a plan that circulated in Congress on Tuesday as President Barack Obama met Democratic leaders to search for ways to salvage his health care overhaul.

In advance of what Obama hopes will be a game-changing speech to lawmakers, the one idea that most appeals to the Democrats’ liberal base lost ground in Congress. Prospects for a government-run plan to compete with private insurers sank as a leading moderate said he could no longer support the idea.

The fast-moving developments put Obama in a box. As a candidate, he opposed fines to force individuals to buy health insurance, and he supported setting up a government insurance plan.

Democratic leaders put on a bold front as they left the White House after their meeting with the president.
We’re re-energized; we’re ready to do health care reform,” said Senate Majority Leader Harry Reid of Nevada.

House Speaker Nancy Pelosi, D-Calif., insisted the public plan is still politically viable. “I believe that a public option will be essential to our passing a bill in the House of Representatives,” she said.

After a month of contentious forums, Americans were seeking specifics from the president in his speech to a joint session of Congress on Wednesday night. So were his fellow Democrats, divided on how best to solve the problem of the nation’s nearly 50 million uninsured.

The latest proposal: a bipartisan compromise that Sen. Max Baucus, D-Mont., a moderate who heads the influential Finance Committee, was trying to broker.

Baucus, meeting with a small group of fellow senators, promoted a plan that would guarantee coverage for nearly all Americans at a cost to taxpayers of under $900 billion over 10 years.

Some experts consider that a relative bargain because the country now spends about $2.5 trillion a year on health care. But it would require hefty fees on insurers, drug companies and others in the health care industry to help pay for it.

Just as auto coverage is now mandatory in most states, Baucus would a require that all Americans get health insurance once the system is overhauled. Penalties for failing to get insurance would start at $750 a year for individuals and $1,500 for families. Households making more than three times the federal poverty level – about $66,000 for a family of four – would face the maximum fines. For families, it would be $3,800, and for individuals, $950.

Baucus would offer tax credits to help pay premiums for households making up to three times the poverty level, and for small employers paying about average middle-class wages. People working for companies that offer coverage could avoid the fines by signing up.

The fines pose a dilemma for Obama. As a candidate, the president campaigned hard against making health insurance a requirement, and fining people for not getting it.

“Punishing families who can’t afford health care to begin with just doesn’t make sense,” he said during his party’s primaries. At the time, he proposed mandatory insurance only for children.

White House officials have since backed away somewhat from Obama’s opposition to mandated coverage for all, but there’s no indication that Obama would support fines.

One idea that Obama championed during and since the campaign – a government insurance option – appeared to be sinking fast.

Click here to continue reading the full report from My Way News

Reform Needs Healthy Life Incentives

June 29, 2009

Wall Street Journal

by Scott E. Harrington

Much of the debate over health-care reform has focused on whether there should be a government insurance plan to compete with private plans. This focus is understandable given the stakes. Because equal competition between a public insurer and private plans is impossible, public coverage would crowd out private coverage and make a public, single-payer system inevitable.

Another important issue is the scope of regulation that will likely apply to private health plans regardless of whether a public plan is created.

Given budgetary and affordability concerns, the insurance market proposals by House Democrats and Sens. Edward Kennedy and Chris Dodd would permit some variation among plan benefits and cost-sharing provisions, such as deductibles and coinsurance percentages. The proposals otherwise would impose a regulatory straightjacket that would put upward pressure on health costs, thus undermining a major reform objective and creating additional pressure for government-mandated cost controls. Whether legislation being developed by Senate Finance Chairman Max Baucus will go as far isn’t clear.

The House Democrat and Kennedy-Dodd proposals do all they can to prevent health-insurance premium rates and coverage terms from reflecting the health status — and thus health-related behavior — of any insured person. Health status would not be permitted to affect coverage decisions, terms or pricing. Age-related variation in premium rates would also be significantly constrained in relation to risk.

Benefit design and marketing of coverage would be regulated in an attempt to keep insurers from rewarding healthier people. Retrospective “risk adjustment” would be employed to reallocate funds from insurers that experience lower medical costs to those with higher costs. If an insurer were to attract relatively more healthy people — or keep more people healthy — it would run the risk of paying some or all of the gains to competitors.

The proposals’ strong aversion to having insurance rates or coverage terms related to health status reflects the view that either the need for health care is immune from individual control, or that a person should not be financially responsible for behavior that contributes to poor health, or both. These views are difficult to reconcile with the consensus that unhealthy behavior contributes significantly to obesity, diabetes, heart disease and cancer, and thus accounts for a substantial proportion of health-care costs.

Regulation that seeks to divorce insurance rates and coverage terms from health status would deter potential innovation that might provide meaningful financial incentives for healthy behavior and lower costs.

Incentives for healthy behavior have traditionally been weak under employer-sponsored health insurance, in part due to federal and state regulation that constrains the ability to reward healthy behavior. Turnover among employees and policy holders also reduces incentives to make long-term investments to promote healthy behavior.

Health-care reform should seek to encourage rather than discourage private innovation to provide incentives for healthy behavior. Safeway’s program offering employee premium discounts related to tobacco use, weight control, blood pressure and cholesterol levels is a good example.

The Democratic proposals would retard or even strangle such innovation. Rather than strengthening incentives to invest in the long-term health of policy holders, they would make it more difficult to earn a reasonable return on such investment. They also send a message that a healthy lifestyle earns no financial reward for reducing medical expenses.

Financial incentives for healthy behavior have the potential to significantly reduce costs without reducing quality. A failure of health-care reform to permit or incorporate such incentives would make coercive government measures to control costs more likely. These controls might include limits on provider reimbursement, comparative-effectiveness or cost-benefit criteria that must be met for care to be reimbursed, or budget caps. The results would be less health — more obesity, diabetes, heart disease, and cancer — and eventually less health care.

An aversion to having health-insurance rates and coverage linked to individual behavior may be on the verge of becoming national policy. If that happens, the unintended consequences could be very costly.

Click here to read the full Opinion piece in the Wall Street Journal.