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Tuesday, July 22, 2014
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Published: Wednesday, 2/24/2010

Obama's health-care plan

ON THE eve of tomorrow's made-for-television health-care “summit” starring President Obama and congressional leaders of both parties, the White House is proposing a useful if limited new reform plan that would provide a foundation for constructive debate.

As he promotes his ideas, the President is right to challenge Republican lawmakers to advance their own concrete proposals for health-care reform, even though there is no reason to expect that exercise to prove any more productive than GOP obstructionism on the issue has been so far.

Mr. Obama's proposal would cover two-thirds of the 46 million Americans who lack health insurance. It would begin to restrain costs of medical care and insurance premiums that threaten to spiral out of control. White House officials insist that not only would the plan pay for itself, it even would reduce the federal deficit.

The measure properly would require all Americans to get health insurance. But it would, equally properly, subsidize the cost of mandated coverage for poor and middle-income households.

It would eliminate an anomaly in Medicare drug coverage that sticks some recipients with high costs. At the same time, it would extend the Medicare payroll tax to unearned income for the richest taxpayers.

It dumps the noxious “Cornhusker kickback” — a provision extorted by Sen. Ben Nelson of Nebraska that would force taxpayers across the country to pay for that state's expanded Medicaid program. But it would help all states with their costs to enroll new Medicaid clients.

The plan would prevent drug manufacturers from discouraging sales of generic versions of their products. And it would appoint a commission to find new ways to cut Medicare and Medicaid costs. That's all good.

The White House measure also has big problems. It omits a public option or nationwide insurance exchange that could provide real competition to private health insurers. It would cost a projected $950 billion over 10 years — $70 billion more than the bill the Senate approved late last year.

It would not require employers to insure their workers, forcing taxpayers to help shoulder those costs, although it still would require employers who opt out of coverage to pay a penalty.

The proposal would delay until 2018 — five years later than the Senate bill — a vital cost-containment measure: a tax on employer-provided “Cadillac” health-insurance plans. It also would exempt too many of the high-cost policies from the tax.

Another key proposal — allowing federal regulators to veto “unreasonable” rate increases for health insurance — would be politically popular but hard to administer. When a private health insurer such as WellPoint, which does business in Ohio, jacks up some premiums by 39 percent while reporting $2.7 billion in profits in the fourth quarter in 2009, the desire to say “stop” is understandable.

But most states already regulate insurance rate increases. Adding a layer of bureaucracy to that process would only stoke overblown rhetoric about the President's alleged desire to nationalize the health-care system.

Demands by Republican lawmakers that the President and Congress throw away a year's work on health-care legislation and start from scratch demonstrate their lack of seriousness. They clearly prefer having a political issue in November to a law that would help millions of their constituents.

Republicans have contributed important proposals to the debate: reining in excessive litigation that inflates medical costs, cracking down on fraud, broadening market incentives, giving states broader latitude to experiment, and allowing consumers to buy insurance across state lines.

But they are backsliding on previous commitments to key reform principles: providing near-universal coverage, ensuring that people with pre-existing medical conditions can get insurance they can afford, curbing Medicare costs, and restraining the growth of medical and insurance expenses for ill as well as healthy Americans.

Enactment of a sound health-care reform bill this year remains urgent. Despite its flaws, the President's proposal would greatly expand access to essential health care while beginning to contain its costs, without compromising its quality.

So would the Senate-approved version, which the House still could enact and send to the President. Either measure would be far better than no bill at all, however timid some Democrats have become about engaging the issue after recent GOP electoral victories in states such as Massachusetts.

A bipartisan bill would be preferable, but getting a good bill this year is what counts. If that means allowing Senate Republicans to filibuster long enough to demonstrate to Americans their disinterest in reform, and then taking appropriate steps under Senate rules to overcome their anti-democratic practices, that is what the President and the Democratic majority in Congress must do. They may not get another opportunity this good to enact real reform.



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