Growing health-reform challenge for next president

by Lesley Politi on October 15, 2008

WASHINGTON (AP) — Barack Obama and John McCain both have big-ticket proposals to change how people obtain and pay for health insurance. A long history of failed health-reform plans shows how difficult it is to achieve that goal. And the job only got tougher for any future president with the financial meltdown.

Despite the worsening economic picture, though, neither candidate has signaled any intention to scale back his plans. And the head of the Senate Finance Committee, which would have a big say in just about everything the next president hopes to accomplish on health care, says he won’t let the current financial crisis stop the committee from tackling it.

“While some suggest that the current economic situation might thwart efforts to overhaul America’s health care system, I believe the state of the U.S. economy makes the need for health-care reform even more urgent,” said Sen. Max Baucus, D-Mont. “The Finance Committee will move forward on comprehensive health reform early next year.”

Still, with the federal government sinking ever deeper into debt and a $700 billion financial rescue package being implemented, many question just how much either presidential candidate can hope to deliver.

“Do we have the money to be our brothers’ and sisters’ keeper? The answer is no,” said Uwe Reinhardt, an economics professor at Princeton University. “We have to worry about Goldman Sachs. That’s where we are.”

Both presidential candidates insist their health-care plans would not add to the national debt, but independent analyses suggest otherwise. The private Tax Policy Center, for example, puts the price tag for Obama’s plan at $1.6 trillion over 10 years and for McCain’s at $1.3 trillion over that time.

Robert Laszewski, a health policy consultant, believes the odds of enacting costly health reforms in this tough economic environment are “zero,” and said the onus is on the candidates to show how they can pull it off.

“They owe us more of an explanation than they gave us at the debates,” he said.

Sen. Charles Grassley of Iowa, the ranking Republican on the Senate Finance Committee, agrees with Baucus that health reform can’t wait. But he’s primarily focused on taking steps that would lower health-care costs, such as speeding the use of electronic record-keeping for patient medical records, directing more resources to illness prevention and lowering the cost of malpractice insurance.

“I know that taking care of the uninsured is really an issue by itself, but you make that job easier to the extent you get health-care cost under control,” Grassley said.

McCain and Obama have remarkably similar stances on cost-cutting measures, such as greater use of electronic medical records and greater coordination of care. Those steps don’t require large sums of money up front. They also will take many years to reduce health care costs.

“They’re not controversial with the stakeholders. That should tell you something about how impactful they will be,” Laszewski said. “If you want to get at health care costs, you’ve got to … step on some toes. Neither McCain nor Obama are stepping on any stakeholder toes in terms of slowing costs down.”

Where the two candidates do step on toes is with their proposals to provide more people with health insurance.

McCain has proposed a tax credit of $2,500 for individuals or $5,000 for a family that buys health insurance. The credit would replace the tax break people now get for obtaining health coverage through their employers. McCain also wants to let people shop across state lines when buying insurance, which would let consumers bypass states where insurance is more expensive and comprehensive.

Previous Congresses have rejected both concepts. The tax credit idea is comparable to what President Bush proposed in 2007, which went nowhere. And the notion of letting people, through trade associations, shop for insurance plans from any state failed to generate the 60 votes needed to stop debate in the Senate in 2006. At the time, Democratic lawmakers said that states worked for years to enact consumer protections such as coverage for treating alcoholism and cervical cancer screenings, and it would not be right for lawmakers in Washington to take that away.

Obama, meanwhile, wants the government to subsidize the cost of health coverage for millions who otherwise would have trouble affording it.

The Democrat would set up a kind of government-run shopping mall that would negotiate prices and benefits with private insurers.

One choice would be a government-run plan. No participating company could turn someone away because of pre-existing cancer, heart disease or diabetes. Nor would someone have to pay a higher monthly premium based on those conditions.

The government would subsidize the cost for many who buy coverage through this exchange. Obama would cover some of the costs by raising taxes on those households with incomes exceeding $250,000. He also would require all but small businesses to make a “meaningful” payment for health coverage of their workers or contribute a percentage of payroll toward the cost of the public plan offered through the exchange.

Obama has also proposed expanding Medicaid for poor adults and the State Children’s Health Insurance Program.

Drew Altman, president and CEO of the Kaiser Family Foundation, said the next president will get a vigorous debate on health care next year if he seeks it. Regardless of economic conditions, Altman is betting the next president will have to phase in any changes he seeks, rather than implement sweeping reforms.

“Coming up with the money to pay for health reform and expanding coverage was always a huge mountain to climb,” Altman said. “It just got much higher.”


Source: Associated Press

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