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by Tamara Lytle, AARP Bulletin, May 13, 2009
The Issue: Create a government-sponsored health insurance plan
Why do it: About 47 million Americans don’t have insurance, mostly because it’s unaffordable or unavailable. A “public plan” would compete with private insurance plans, and President Obama contends it would help reduce costs. After all, it could be offered more cheaply because of the government’s buying power and the fact that it wouldn’t need to turn a profit or spend millions on advertising.
Why not: A government plan with those advantages might draw so many customers away from private insurance that those companies fail. And if a public plan underpaid doctors—as health care providers claim Medicare and Medicaid do—health care providers might drop out of the program and then patients would have fewer physicians and fewer choices.
Who likes it: Consumer groups and many Democratic lawmakers, such as Charles Rangel of New York, chairman of the Ways and Means Committee, who says it will be part of the legislation the House passes. The White House says Obama backs the idea but is keeping an open mind.
Who doesn’t: Many Republican lawmakers, private insurance companies and their trade group, America’s Health Insurance Plans (AHIP), and businesses, which say a public plan would undermine the market. The Pharmaceutical Research and Manufacturers of America (PhRMA), which represents big drug companies, says the Medicare prescription drug benefit is proof that a new government plan isn’t needed to lower costs and improve health care access. It contends that the Medicare drug benefit has been successful using only private insurance companies.
The Issue: Require individuals to have health insurance and employers to provide help getting it
Why do it: Many uninsured people end up in the emergency room with expensive medical problems because they didn’t get treated earlier. This causes unnecessary costs and health problems. Most parties agree that a major overhaul of health care won’t work until everyone has insurance coverage. Moreover, expanding the pool of people buying health insurance adds younger people who do not need expensive care and will help keep insurance prices lower. An employer mandate with a “pay or play” option would force businesses to provide insurance for workers or pay into a system that would cover the uninsured.
Why not: Healthy younger workers without a lot of income, who often choose not to be covered, might not want to bear the cost. And businesses complain that their health care costs are already so high they can’t compete globally. Some states have considered an individual mandate, though most have balked at the expense of subsidizing those whom it requires to have coverage, but who can’t afford it.
Who likes it: Insurance companies and AHIP support the idea of everyone being required to have coverage and have offered to make care more accessible if that happens. They say they would stop refusing to insure people with preexisting medical conditions and also wouldn’t charge patients higher premiums based on gender or current health status. Most proposals still would allow insurance companies to charge more for older people but just how much more is in question.
The American Medical Association believes wealthier individuals should be required to have coverage and people who can’t afford insurance should get government subsidies.
Who doesn’t: Labor unions and consumer groups are likely to oppose a mandate on individuals if employers aren’t required to ante up as well. Small businesses oppose an employer mandate, contending that it would be so costly they would have to lay people off. (Because it's so expensive for them, many small businesses don’t offer their workers health coverage now.) The U.S. Chamber of Commerce opposes a mandate on employers.
The Issue: Help workers ages 50 to 64 get health insurance
Why do it: Insurance premiums are expensive and often unavailable for this age group because they tend to have more medical problems. But the faltering economy has triggered widespread layoffs, forcing many Americans ages 50 to 64 to lose their jobs and thus their employee health insurance. In the most recent figures, 7.1 million adults in this age group had no coverage.
Why not: It’s expensive. Allowing those 50 to 64 years old to buy into the Medicare system could bankrupt that program if they were allowed the same subsidies as Medicare beneficiaries. Without any subsidies, most in this age group could not afford to buy into the program. And asking insurance companies not to charge them so much more, based on their age, could mean that younger workers have to pay more.
Who likes it: AARP. And Senate Finance Chairman Max Baucus, D-Mont., who has proposed letting people ages 55 to 64 buy into Medicare.
Who doesn’t: Some health care insurers say they must continue to charge older patients more for coverage or they will have to charge younger people too much.
The Issue: Spending more than $1 trillion for a major overhaul of health care that improves access to coverage and quality of care
Why do it: Health care costs are climbing so fast they are consuming more than 17 percent of the total economy. These costs are hurting businesses that offer coverage to their employees. And more and more Americans are without basic medical treatment because they don’t have access to affordable health care.
Why not: Almost everyone involved agrees that health care reform is important—and expensive. Where will the money to fund it come from?
Who likes it: To come up with $634 billion of the $1 trillion-plus needed for major reform, President Obama proposed cutting Medicare payment rates to medical providers and raising taxes on the wealthy. Lawmakers will spend the next month or two hashing out other ways to pay for reform. Some Republicans like Sen. John McCain of Arizona have proposed capping or eliminating the tax deduction for health care coverage that employers get for providing insurance. Others want to require employees to pay taxes on the value of their employer-financed health coverage.
Who doesn’t: Republicans, including Ohio's John Boehner, the House minority leader, have criticized Obama’s proposal for raising taxes (on the wealthy) during a recession. Medical interests are concerned about cuts to their reimbursements.
The Issue: More government regulation of health care
Why do it: If the government requires everyone to have some minimum health care coverage, it likely will have to define and regulate what that coverage must include and how people can get it.
Why not: Many people fear a centralized government program that has too much control over medical care.
Who likes it: Consumer advocates and small businesses say the current system doesn’t work because individuals and small companies can’t find affordable coverage. Many of them would welcome some type of government-regulated “exchange” where they could combine their purchasing power to buy coverage and dilute their risks. (Massachusetts has such an exchange.) AHIP has said it welcomes more government regulation as long as everyone is required to buy coverage.
Who doesn’t: Conservatives say that they fear more government involvement in insurance could lead to more red tape and inefficiencies.
The Issue: Reducing health care costs
Why do it: Health care costs are rising so fast they are gobbling up ever larger portions of the federal budget, family incomes and business spending. Those costs tripled between 1990 and 2007, and if no changes are made, health care costs will account for 25 percent of the nation’s economy by the year 2025, according to the Alliance for Health Reform. The dozens of cost-cutting proposals include rewarding doctors and hospitals in the Medicare program for a patient’s recovery and health rather than the number of services performed.
Why not: While most people say it’s necessary to cut costs, they don’t agree on how it should be done. Although some ideas win wide support, many others have both supporters and detractors. For example, something called “comparative effectiveness”—gathering scientific data to figure out which medical approaches work best—could save money, according to the Congressional Budget Office. And the Blue Cross and Blue Shield Association supports the idea. But some Republicans and medical providers fear this kind of analysis could take treatment choices away from doctors and patients.
Who likes it: A group of powerful private interests—including the American Medical Association and the American Hospital Association—just announced a plan to lower the growth rate of health care spending to 1.5 percent a year. While the nation’s medical costs would still rise, they would do so much more slowly, saving the nation $2 trillion over 10 years. The group, which gave few concrete details of the plan, estimates that a family of four would save $2,500 a year in the fifth year of the cost-cutting program. The saving would come from such changes as standardizing insurance claim forms to cut paperwork, managing chronic illnesses and cutting back on unnecessary tests.
Who doesn’t: Certain interest groups oppose cost-cutting proposals that would affect them. Medical providers are leery of cuts that would reduce how much they are paid; insurance companies and AHIP are unhappy about an Obama proposal to cut the federal subsidies given to private Medicare Advantage programs, which are more costly than the traditional Medicare program.
Tamara Lytle was a correspondent and Washington bureau chief for the Orlando Sentinel from 1997 to 2008.
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