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Health Care ‘Storm’ Certain to Be Major ’04 Campaign Issue

A “perfect storm” continues to batter the U.S. health care system, and there’s a danger that the Bush administration’s favored barrier against it — medical malpractice reform — will never get built. [IMGCAP(1)]

The National Coalition on Health Care, the broad-based group that first used the storm image to describe the combination of rising costs and shrinking insurance coverage, now estimates that 45 million Americans lack health insurance — up from the federal government’s estimate last year of 41.4 million.

The coalition, comprising corporations, unions and pension plans, based its new calculation on data showing that health insurance costs rose by 12.7 percent last year and will go up by 15 percent this year, causing employers to drop workers from coverage.

In addition, the weak economy is causing increasing numbers of workers to lose their jobs — and insurance coverage — and states are cutting back on Medicaid coverage.

The nine Democratic presidential candidates appearing last week at a forum sponsored by the Children’s Defense Fund made it clear that the health insurance crisis will be a major issue in the 2004 presidential race.

They were unanimous in accusing President Bush of pushing tax cuts for the wealthy instead of health coverage for workers and the poor, and all of them vowed to expand coverage by freezing or eliminating his cuts.

The administration has proposed — and the Congressional Republican budget resolution contemplates — spending a mere $89 billion over 10 years to provide a tax credit for the purchase of health insurance, but that’s a fraction of what it would cost to cover 45 million people.

The administration claims that its major initiative for cutting rising health costs — capping malpractice awards — would save between $60 billion and $108 billion a year by eliminating the need for doctors to perform unnecessary tests and procedures solely to avoid lawsuits.

But that proposal, which passed the House, now looks moribund in the Senate because of a withdrawal of support from its only Democratic sponsor, Sen. Dianne Feinstein (Calif.).

The House bill — and the administration proposal — calls for a $250,000 cap on noneconomic damages (“pain and suffering”) in malpractice jury awards, the level currently in place under California law.

“I believe that California’s Medical Injury Compensation Reform Act has helped limit the growth of medical malpractice premiums and a national version of this bill could help address the malpractice premium crisis, which is threatening access to health care patients around the nation,” Feinstein said March 20.

However, Feinstein determined that a compromise was necessary to have any hope of passing a malpractice bill in the Senate, which requires 60 votes to overcome a threatened filibuster from allies of the trial lawyers’ lobby, mainly Democrats.

Feinstein worked out such a compromise with Senate Republican leaders Bill Frist (Tenn.) and Mitch McConnell (Ky.), ardent malpractice reform advocates, setting the cap at $500,000 but allowing states to set or retain lower caps.

The compromise also contained a “catastrophic exception” to the cap in cases of severe disfigurement, physical disability or death.

That might have covered such recent cases as a Minnesota woman’s double mastectomy after a misdiagnosis of cancer and a young Mexican girl’s death in North Carolina after receiving a lung transplant from a donor with a incompatible blood type.

Feinstein said that “unfortunately, the medical associations do not support our proposals for noneconomic damages.” Aides say she was referring to the California Medical Association and the American Medical Association, although the AMA denied opposing it.

Frist aides and some health care lobbyists claim that Feinstein’s withdrawal does not necessarily doom malpractice reform. “It’s premature to say it’s dead,” one lobbyist said. “Frist is not giving up the ghost.”

But other lobbyists, both Republican and Democratic, say “it’s over” unless, after the Iraq war, public attention refocuses on doctor strikes that have occurred in such states as West Virginia, Pennsylvania, Nevada and Florida — and Bush’s post-war approval ratings surge.

If malpractice reform fails, Bush’s only bid for a major health care accomplishment before the election would be a Medicare prescription drug bill, whose chances of passage lobbyists estimate to be reasonably good.

Experts expect that to get a bill, however, Bush will have to give up on the idea of giving limited drug coverage to seniors who remain in standard Medicare fee-for-service plans and offering more for those who join managed care plans.

Like malpractice reform, a drug benefit bill will require 60 votes and the leading Democratic negotiator, Sen. Edward Kennedy (Mass.), is likely to insist not only on coverage for all seniors, but also a funding level greater than the $400 billion allocated by Republicans over a 10-year period.

Passing a prescription drug benefit is virtually a political imperative for both parties — but especially for Republicans, who need to show that their control of both Congress and the presidency can achieve results.

Still, passing a drug benefit for seniors will not quiet the “perfect storm” roaring through the health system and battering low-income workers and their families. It will be addressed eventually, after it’s a major issue in 2004.