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Senate Still Has Time to Get Health Care Reform Bill Right

As the Senate takes up health care reform, it is hard to focus on anything else. There are plenty of other worthy topics, like Sen. Robert Byrd’s (D-W.Va.) milestone of service (and the absurdity of his position high up in the line of presidential succession). Or the fascinating struggles among Democrats over the proper role of the Federal Reserve System (and the appropriate level of Congressional meddling in the Fed’s deliberations and operations). Or the effect of the hacking of climate scientists’ e-mails on climate change legislation in Congress. Or the struggle over how to pay for Afghanistan, including how many ways we can parcel out tax increases on the wealthy.

[IMGCAP(1)]Those topics will wait until another day. The fate of Democrats in Congress, including the public judgment voters will make on their capacity to govern, rests on passage of some health care reform bill. Never mind polls showing public misgivings about reform (and especially pay little attention to Gallup surveys with questionable sample sizes and serious skews in party representation). Voters have given one party the keys to power in Washington, D.C., and expect action with no excuses. Gridlock would bring a sharp rejoinder from voters next year. Passage of any version of the health care reform bills on the table or in the air, on the other hand, would be a big trophy for President Barack Obama and his Congressional confreres, even if its main components are delayed or diluted.

As I have noted here before, the main contours of the health care plans on the table resemble both the moderate Republican alternative to the Clinton plan proposed by the late Sen. John Chafee (R-R.I.) and the Massachusetts plan championed by then-Gov. Mitt Romney (R), which was actually enacted into law. We know that the Massachusetts plan had issues as it was rolled out, including higher-than-expected costs and serious strains on primary care physicians as the newly insured came into the system and put new demands on them. It required major adjustments on the way.

But we also know from the best polls with robust samples of Massachusetts voters and physicians, conducted by Bob Blendon’s group at the Harvard School of Public Health, that support for the law has been extraordinarily high. Two years after implementation, 69 percent of residents supported the law, with 77 percent supporting subsidized coverage and 58 percent supporting the individual mandate. Even more striking, in a New England Journal of Medicine study released just a few weeks ago, 70 percent of practicing physicians, with little difference between primary care docs and specialists, supported the program, with just 7 percent saying they wanted the law repealed.

That does not mean that passage of any bill by Congress will result in a surge of popular support. Health care costs are going to rise over the next several years no matter what. The pattern that many people have experienced regularly — employers forced by their rising costs to adopt employee health plans that annually raise out-of-pocket expenses and deductibles and curtail coverage — will continue even without reform, but if a plan is enacted, voters may well blame Democrats for their increased costs. The plan may have exquisitely bad timing — costs first, benefits later. And it may prove to be unwieldy, uneven and unfair.

But if Congress can get some of the main components right — universal coverage that sharply expands the risk pool to reduce the costs for those getting insurance outside the contours of big employers, elimination of pre-existing conditions (including their manipulation by companies when someone suddenly gets huge medical bills) and real reform to eliminate lifetime and annual limits, and a real cushion resembling portability when people lose or change jobs — it will likely get a very positive public response. If Congress can do so by creating meaningful exchanges that promote real competition, it will be a huge step forward. And if some of the provisions that can reduce cost growth are included, this could be a milestone bill. These measures include a meaningful independent panel to reshape Medicare away from its destructive fee-for-service framework and toward a focused approach on the handful of chronic diseases that eat up a huge part of the health care dollar, a meaningful tax on gold-plated and wasteful health insurance plans, meaningful comparative effectiveness research and publication of best practices to guard against defensive medicine and frivolous or shaky malpractice lawsuits, and real incentives for preventive care.

Those are very big ifs. And there are many other explosive issues, from abortion to immigration, that make the process of getting to 60 votes in the Senate challenging to say the least. Have you noticed that I have not yet mentioned the public option? That is because I am in fundamental agreement with Paul Starr, the Princeton sociologist (and author of a Pulitzer Prize-winning history of American health care) that the monomaniacal focus on the public option is a waste of time. The key here is getting real competition and reasonable insurance plans through the exchanges. The public option was one way to try to do so, but neither the only way nor an absolutely essential one. Under the right circumstances, an exchange with only private insurers can work just fine.

A national exchange would be the best way to do this — Republicans are right that forcing consumers to buy plans within a given state stifles competition and leads to wide variation in price and coverage; at the same time, a national exchange could reduce or eliminate the kinds of wide variation in protection for consumers, including many with none, that exist in states.

An intriguing alternative has been floated by Sen. Tom Carper (D-Del.): a national nonprofit plan, not run by the government but with funding seeded by the federal government, available where private plans don’t cut the mustard.

If that idea doesn’t make it, ramping up the timetable to get exchanges going quickly and providing serious financial incentives to states to create exchanges with meaningful regulation of the market for private insurers, including standards for the medical loss ratio to ensure that a reasonable portion of every dollar in insurance goes to pay for benefits, would be more workable and meaningful than any public option the Senate can achieve, if it can achieve one at all.

There is a lot of work to do. But after all, the Senate has a full three and a half weeks before Christmas to do it.

Norman Ornstein is a resident scholar at the American Enterprise Institute.

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