Democrats want to focus on increasing the access to health care insurance, while Republicans want to focus on cutting insurance premium and care delivery costs.
Politics aside, these are the stated policy differences that clearly emerged at Thursday's so-called health care summit chaired by President Obama, and attended by leaders of both houses of Congress.
Here's a bit more than 25 words of commentary. This time, on the Democrats plans.(Click here for commentary on he Republican plan.)
It is difficult to point to one Democratic plan. There is the bill passed in the Senate, the bill passed in the House, and President's outline of a bill that he brought to last Thursday's summit.
But these bills share some characteristics. There would be an individual mandate to purchase health care-with a financial penalty for not enrolling. Most people, more than 60 percent, would still be covered through their employers-with financial penalties for those who don't provide coverage. There would be a basic package that would provide comprehensive coverage well beyond catastrophic care only-well care, screenings, and prevention. Health insurance exchanges would help individuals and small businesses afford coverage by creating a competitive market and pooling purchasing power. Subsidies would help individuals and families afford premiums. Medicaid would be expanded-as bad as Medicaid may be, it's better than the no insurance for millions of the working poor. Changes in Medicare would move to payments for outcomes rather than fee for service. There would also be a move towards reducing fraud and abuse, reducing the size of Medicare Advantage programs-a kind of privatized Medicare that offers more benefits in a managed care model, and the wide spread use of electronic records.
Last November, the non-partisan Congressional Budget Office scored the Senate bill, which later passed that body. (I will focus on the Senate bill, because the Democrats' loss of their 60-vote supermajority in the Senate means that action will require that the House pass a version close to the Senate version, which could then be passed by reconciliation, a process that requires only a simple majority in the Senate.) The CBO scoring concluded that, by 2020, the Senate bill would reduce the deficit by $81 billion compared to $68 billion for the Republican plan while insuring 94 percent of the population. The Republican plan would insure 3 million more people, holding the percentage of uninsured constant while increasing the absolute number of the underinsured.
It is true, as Republicans pointed out at the Summit, that the premiums for people on the individual market would go up. But because of the higher minimum standards, they would be getting more for their money. Underinsurance is a major problem, and the inability to pay medical bills is a leading cause of bankruptcy even for those with basic coverage. And, in part, higher premium costs would be offset by government subsidies.
Overall, average premium costs, when both individuals and groups are lumped together, would be almost 10 percent lower.
As noted, the Republican proposal, which focuses on costs, does not appreciably expand coverage. The Democratic plan, which expands coverage to 94 percent, would still leave an estimated 23 million uncovered. Among the uninsured would be millions of the young and presumably healthy who might decide that the fines for no coverage would be less than the cost of premiums. A third of the uninsured would be undocumented residents, i.e., illegal aliens.
From a political perspective the idea of providing insurance for undocumented residents is toxic, as is the idea of increasing penalties for people who forego insurance to make the penalty greater for foregoing insurance than signing up for it.
From a policy perspective, the uninsured will remain an impediment to lowering costs, on average, for all. It is precisely because the young and health do not utilize health care services, that having them insured-and in the same pool as high utilizers-will lower costs. They will pay into the system but not-while they're young-draw out of the system. This is analogous to people not receiving Social Security benefits paying FICA taxes that fund the benefits of Social Security beneficiaries. Moreover, since coverage for pre-existing conditions would be banned, uninsured people could enroll when they get sick without previously contributing with their premiums to lowering the costs overall, while sopping up expensive care. And not providing coverage for undocumented residents means they will continue to utilize high cost services such as emergency rooms when they get sick rather than have the well care that might prevent or reduce high cost care. They would also not be contributing by paying into the system with insurance premiums. (The idea that prevention lowers costs is controversial. Some argue that it increases costs, but saves lives. For example, if you uncover cancer with a screening, it could mean expensive treatment, but if you wait until the cancer is advanced, the patient could die before he or she consumes extended and expensive care.)
I'll admit my biases here. I'd support universal Medicare for all, in effect, a single-payer system; but a look at other universal systems has convinced me that private systems could supply universal coverage-France and Switzerland, for example-as long as the system is run on a non-profit basis.
Whether we choose to go the Republican route, and focus on costs, or the Democratic route and focus on coverage the penalty for doing nothing will be great.
In today's New York Times (February 28, 2010), there is a timely article, "The Cost of Doing Nothing On Health Care," that points to the consequences of no health care reform.
According to the Commonwealth Fund, $13,000 is today's annual cost of insurance for a family. But if we do nothing, by 2020, this will increase to $24,000, about a quarter of today's median family income.
Many companies might give up offering insurance. For those that still do, there could be a tradeoff in lower salaries, a reduction in other benefits, and an increase in employee contributions.
The Urban Institute estimates that the uninsured will grow from 50 million to between 57 and 66 million by 2019. Families USA estimates a Malthusian future in which 275,000 will die over the next decade because of a lack of insurance.
And the Commonwealth Fund points to the price we are currently paying for not enacting comprehensive health care in the past. Richard Nixon had a plan for health care in the 1970s, and Bill Clinton in the 1990s. If we had enacted the Nixon plan-based on a cost reduction of 1.5 annually in costs-we could be spending $1 trillion less a year. Clinton's plan would have saved us $500 billion annually.
So as they say on a dangerous highway: Proceed at your own risk. That's the American way.
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Click here to read the first chapter of my book, Nasty, Brutish, and Long: Adventures in Old Age and the World of Eldercare (Avery/Penguin, 2009). It provides a unique, insider's perspective on aging in America. It is an account of my work as a psychologist in nursing homes, the story of caregiving to my frail, elderly parents--all to the accompaniment of ruminations on my own mortality. Thomas Lynch, author of The Undertaking calls it "A book for policy makers, caregivers, the halt and lame, the upright and unemcumbered: anyone who ever intends to get old."
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