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Obstacles Abound to Obama's Health Care Reform Efforts

Congress is poised to modify and supplement the President’s plans.

As President Barack Obama begins his term of office, AARP Segunda Juventud examines how the changes heralded by the new White House leadership will impact older Hispanics. Part II: Health Care Reform.

Michael Ramirez, owner of an East Los Angeles pharmacy, has recently seen sales plummet—the result, he says, of a worsening economy’s effects on a medically underserved Hispanic community. “I know there are certain people who can’t afford their medicines anymore,” Ramirez says. “People are losing their jobs, losing insurance...and things aren’t going to get better in the foreseeable future.”

In fact, Hispanics are far more likely than all other Americans to lack health insurance. More than 34 percent of Hispanics are uninsured, compared to 12 percent of white non-Hispanics and 18 percent of black non-Hispanics, according to the Centers for Disease Control and Prevention (CDC). And 29 percent of Hispanic adults aren’t filling a prescription for cost reasons, according to the Consumer Reports National Research Center.

More than one-fifth of all uninsured Americans are 45 to 64 years old, when chronic illness becomes more prevalent, according to the CDC. Even when eligible for Medicare, many older Americans struggle to pay the plan’s deductibles and copays. Others face the “doughnut hole” in Medicare’s prescription drug coverage, a gap between the plan’s standard benefit and its catastrophic coverage that forces them to spend thousands of dollars on prescriptions.

While more than a third of the nation’s nearly 3.4 million Hispanic Medicare patients are poor enough to qualify for government aid in covering Medicare’s copayments and deductibles, other older Hispanics could benefit from President Barack Obama’s proposed fixes for Medicare—among them, allowing Medicare to negotiate for cheaper drug prices, re-import drugs sold at lower prices in other countries, and put more generic drugs on the market.

Reform a Priority 
Obama made health care reform a priority in his campaign. Now he’s pressing Congress to move quickly, asking lawmakers to give him an approved bill to sign before they take their summer break in August.

But his ambitions to cover the nation’s millions of uninsured—expected to grow to 48.9 million in 2010—to strengthen and protect Medicare, and to lower the cost of health care for all Americans face major obstacles.

One is money: Obama’s health plan could cost the U.S. government $1.4 trillion from 2010 to 2019, according to an analysis by the nonpartisan Lewin Group.

Obama has asked Congress for a $630 billion “down payment” on the plan in his first budget. He wants about half of the down payment to come from revised Medicare and Medicaid payments. Much of that money would come from what independent experts at the Medicare Payment Advisory Commission (MedPAC) say are billions of dollars in excess payments to Medicare Advantage Plans.

Medicare Advantage Plans offer those eligible for Medicare a range of private plans to choose from, but the Obama administration, backed by both MedPAC and Government Accountability Office reports, say the federal government is overpaying private insurance companies—about 14 percent more per patient than under traditional Medicare coverage. These overpayments to private insurance companies are costing each person on Medicare an extra $3 a month.

The president hopes to save $177 billion over ten years by trimming payments to Medicare Advantage Plans. The rest of the down payment would come from revising payment systems to reward doctors and hospitals for the quality, rather than the quantity, of care they provide and from limiting tax exemptions for the wealthiest Americans.

But Republicans—and some conservative Democrats—are balking at the size of Obama’s $3.6 trillion budget, which sets all of the president’s spending priorities. The president’s first budget aims to keep many of his campaign promises to restore Bush administration cuts in social programs, give middle class Americans a new tax break, promote renewable fuels, and set the stage for a health care overhaul.

Democratic congressional leaders are considering a legislative tactic that would allow them to win approval of the health care reform plan without GOP support. But the White House and many health care advocates, including AARP, are hoping for a bipartisan effort.

“How it moves forward may well depend on whether members of Congress feel pressure from constituents to move forward,” says Judith Feder, a professor of public policy at Georgetown University and health care reform activist.

Rep. Charles Boustany (R-LA), a former surgeon who sits on the House Ways and Means Committee, one of several congressional panels that will craft the health care plan, says Congress must work with Obama “to lower costs in a responsible way while improving quality.

“There are areas where we agree, and together we should start with where we agree rather than where we disagree,” Boustany says.

Another obstacle to reform is the delay in appointing a secretary of the Department of Health and Human Services (HHS). Obama’s first pick, former Senate Majority Leader Tom Daschle, also appointed to head the new White House Office of Health Reform, withdrew after his failure to pay some taxes was disclosed.

Obama then chose Kansas Gov. Kathleen Sebelius to fill the top job at HHS. But antiabortion lawmakers may resist her confirmation because, as governor, she vetoed bills restricting abortion. More recently, the discovery of her $8,000 tax error puts her appointment in jeopardy.

In any event, because Obama didn’t appoint Sebelius to head the Office of Health Care Reform along with HHS, she would lack the power that Daschle would have had as a health care “czar.” Instead, Obama named Nancy-Ann DeParle, former director of the Health Care Financing Administration, a precursor to the Centers for Medicaid & Medicare Services, to lead the Office of Health Care Reform.

Key Reforms Proposed

Yet the absence of an HHS secretary hasn’t stopped Obama from taking action. Gathering information is one step. Dr. Elena Rios, president and CEO of the National Hispanic Medical Association, was among dozens of advocates, health care industry representatives, labor and business leaders, and lawmakers who attended a White House forum in March, where the president outlined his goal: universal health care coverage. Obama said he wanted to consider ideas from Congress, the health care industry, and anyone else affected by the proposed changes.

“The forum was not about details of the plan,” Rios says. “It was about working together.”

Still, Obama has discussed some key reforms, both on the campaign trail and after taking office. They include expanding Medicaid, the government health program for the poor, to cover families and individuals below a certain income level, perhaps up to 150 percent of the federal poverty level, and helping other people with somewhat higher but still limited incomes buy insurance.

He has also emphasized the need for strengthening federal regulation of insurance markets so people can get affordable coverage regardless of any pre-existing medical conditions, providing small businesses with subsidies to help them cover their workers, and creating a health insurance exchange that would offer individuals and small businesses a choice of health insurance plans comparable to those now available to members of Congress and federal workers—all goals supported by AARP, according to Paul Cotton, an AARP lobbyist.

“Everyone would have access to good benefits,” says Feder, a candidate for several open positions on Obama’s health care team.

Congress is likely to modify and supplement the President’s plans. One proposal would allow people age 55 and older to buy into Medicare. This would likely benefit many Latinos because they are losing their jobs, and corresponding health care coverage, at a faster rate than the general population. Older Latinos are also more likely than other workers to be employed by small businesses that don’t offer health care.

Consensus Difficult

Although political opposition to a massive health care overhaul has diminished since President Bill Clinton tasked his wife, now Secretary of State Hillary Clinton, with the job in 1993, some powerful interests are expected to dig in their heels to many of the administration's proposed changes.

Likely to spark controversy is a plan to create an independent “Federal Health Board,” which would make coverage decisions for federal health programs, including Medicare. The board would have the power to reduce or deny payment for new drugs and procedures, based on their effectiveness.

Insurers are nervous about any attempts to create a national plan that would compete with private insurers. Already, America’s Health Insurance Plans—an industry trade group—and the Blue Cross and Blue Shield Association say they oppose the creation of a national plan.

Some doctors, too, are concerned. They worry the reforms would result in a reduction of fees and curtailment of some expensive procedures. But many physicians also understand that health reform may benefit them, because under the current system they can no longer provide good care when so many of their patients are uninsured.

In addition, some liberal Democrats are criticizing Obama for building his reforms on the way most Americans get their health care now—through their employers. Those critics prefer a “single-payer” plan whereby the government pays all health care costs with revenues collected through taxes, much like Medicare.

Adoption of a single-payer health care plan, though, may be politically unrealistic. Its opponents call it “socialized medicine” and say it would strip patients of control over their health care. Even some of the most powerful liberals in Congress who might support a single-payer plan in theory, such as Sen. Ted Kennedy (D-MA) and Rep. Henry Waxman (D-CA), understand it can’t pass so are instead working on a more palatable solution.

Nevertheless, by putting the issue at the top of the agenda from the start, Obama has a better chance of pushing through health care reform—and popular opinion is markedly different more than 15 years after the last attempt to overhaul the nation’s health care system.

“There’s been a major shift in people’s thinking since then,” says Rios. “We can no longer afford to have our health care costs go up and up, and at the same time have increases in the [numbers of] uninsured.”

A Call for Change

Dr. Yanira Cruz, president and CEO of the National Hispanic Council on Aging, looks forward to working with the new administration to expand health coverage that ensures all Americans have high-quality, affordable health care coverage. “During this process, it will be important to look at Medicare to see what is working,” she says.

Cruz supports Obama’s commitment to increasing the “cultural competence” of health care workers so they better understand Hispanic communities. She also says she hopes the reforms will lead to better preventive care for Hispanics, who are more likely to suffer from chronic diseases like diabetes, which strikes one in three Latinos 65 and older.

“We need to pay attention to the aging of this population,” says Cruz. Change, she says, is imperative.

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