Passing Any Health Care Reform This Year Will Depend Upon The Battle Between Winners and Losers.
Health care reform is very hard. That's why Presidents Truman, Nixon, and Clinton have failed to make it happen. No matter what you do, some gain and some lose. However, the current system is increasingly painful too. The trick will be to spread the cost of improving the system enough to maintain political support. Whether Congress can pass any health care reform this year will be decided in the next few weeks. A lot will depend upon the how much the winners win and upon how much the losers lose.
At 5 p.m. yesterday, the Congressional Budget Office released preliminary estimates of Title I of the Senate HELP Committee's draft health reform bill. It would cost $1.042 trillion over the next 10 years to provide health insurance to between 16 and 17 million Americans who currently have none. Another 15 million would shift off of their employer's health insurance to the more generous federally subsidized insurance that would be offered to those up to 500% of the poverty. (See table on p.25.) Those subsidies would be available to singles with incomes of up to $52,950, couples up to $67,700, and families of four up to $106,015. Those numbers are well above the U.S. median incomes. (See Table 1.) That's quite a redistribution of income.
Paying for a $1 trillion health care reform will take a lot of money out of the pockets of health care providers and taxpayers. President Obama has proposed tax increases and Medicare cuts of that amount, but the majority of them have received lukewarm support at best, even from members of his own party.
President Obama's made a strong pitch for health care reform Monday before the American Medical Association Monday. He said in part:
"If you like your health care system and your doctor, the only thing reform will mean to you is your health care will cost less. If anyone says otherwise, they are either trying to mislead you or don't have their facts straight."
"Now, if you don't like your health care coverage or you don't have any insurance at all, you'll have a chance, under what we've proposed, ..."
In other words, the only way to have health care reform is to generate enough efficiency gains so those who like current coverage don't lose anything and so that those getting better coverage don't impose too much cost. That sounds like a stretch, but Robert Pear of the New York Times recently described how the White House gets there.
Something approaching 30% or $700 b. of the $2.2 trillion of U.S. health care costs fail to improve health outcomes, but squeezing out even half of that will take years. That doesn't mean we shouldn't try. Our current health care system is falling apart for anyone who can't pay, and 47 million uninsured is a politically unacceptable number.
It would be nice to think President Obama and Congress could solve this with one mega-bill this year, but I suspect we'll end up disappointed with a lowest common denominator bill that makes some lower cost improvements. Then we'll look for next year's bill and the bill the year after that.