Talking Health Care Reform on Capitol Hill

Published April 29, 2003

Given the over-load of information on Iraq, SARS, and assorted forms of TV reality shows, there exists a false sense nothing is happening on important health care issues.

First, it’s the Politics

Medicare and Medicaid reform, malpractice reform, health care tax credits, expansion of medical savings accounts, and assorted consumer-driven ideas all face obstacles from doctors, labor, lawyers, single-payer advocates, and insurers.

Democrats feel obligated to organized labor and need to score some health care victories that increase the government role while some Republicans are reluctant to compromise, given President Bush’s increased popularity. Everyone has some turf they would like to protect.

Citizens, read voters, however, want to see some progress now, particularly on the issue of prescription drug benefits, knowing full well legislation failing to be enacted this year has little chance during 2004, another election year.

On the Issues of Malpractice

The President wants Congress to limit non-economic damages, such as those for pain and suffering, to $250,000 and to limit punitive damages to “reasonable amounts.” The bottom line here is the involvement of the American Medical Association and Association of Trial Lawyers of America. A stalemate seems possible.

The malpractice reform bill, backed by the White House, passed the House last month, but it failed to garner the 60 votes needed to overcome Democratic opposition. While Democrats in the Senate insist the cap is too low, this chamber’s Republicans are looking to alternatives permitting larger awards in catastrophic cases.

On the Uninsured Population

The White House and several top-level Republicans, including Maine’s Senator Olympia Snowe, are pushing legislation allowing small businesses to band together through trade associations so small group employers can either buy health insurance or self-insure the way big employers do.

These association health plans (AHP) would escape the benefit and procedural mandates responsible for much of the health insurance premium inflation. Suffice it to say, this has drawn the opposition of governors, consumer groups, and insurance organizations like the Blue Cross & Blue Shield Association.

These critics say the legislation would do away with existing protections for consumers, health care providers, and small employers. Supporters contend AHP plans, exempt from those costly mandates, would result in lower-cost insurance which, in turn, would benefit a large portion of the uninsured population, particularly when coupled with tax credits. While a House subcommittee overrode Democratic objections and passed legislation on April 8, the bill still faces Democratic opposition in the Senate.

On Tax Credits

Here the White House is proposing to spend $89 billion in new tax relief over 10 years to help low-income and uninsured people buy health coverage. Congress has warmed up to the idea but cut the funding to $50 billion.

There’s a philosophical canyon here: Republicans like tax breaks to address the problem, while Democrats prefer to expand government programs. On the brighter side, there’s room for some compromise. The tax credits approach could be tied to an expansion of SCHIP, the state-run children’s health insurance program, in order to cover the uninsured parents of the kids who have coverage.

On Medicare

In an overhaul effort, the administration proposes to spend $400 billion over 10 years to provide a drug benefit and bring the health plan for seniors into the twenty-first century. Those folks staying in traditional Medicare would get some help with drug costs, while those switching to the consumer-driven model of Medicare would get a better benefit.

We can expect some action by early summer, with Republicans offering their own proposals providing the same drug benefit to all seniors, regardless of whether they are in private health or government health plans. Word on The Hill is Democrats could go for a compromise, but only if they get more money allocated for drugs and keep the old Medicare structure place.

On Medicaid

The administration proposed a new arrangement whereby states could get increased funds and more flexibility during the first seven years of a 10-year plan. But in the final three years, their subsidies would be reduced to make the plan “budget neutral” to the federal government over the 10-year period. State budgets are deep in red ink, with governors seeking more money, not more flexibility. Advocates for the low-income population oppose the plan as well.

On the PBOR

The Patients’ Bill of Rights, the annual favorite of Representative Charlie Norwood (R-Georgia), got some life support when Norwood introduced two new versions last February. One included the old patient protections, while the second contradicts the 1974 Employee Retirement Income Security Act, by stating ERISA doesn’t block lawsuits in state courts against health insurance plans exercising medical necessity decisions.

This may be the only bill on the table everyone on both sides of the aisle agree is not going anywhere, mostly because private sector health plans have self-regulated themselves to correct the abuses and because states have passed their own patient protection laws.

And, on Mental-Health Parity

This old favorite of Senator Pete Domenici (R-New Mexico) and the late Senator Paul Wellstone (D-Minnesota) requires annual and lifetime dollar limits for mental health benefits be the same as those for medical and surgical benefits.

It may have a chance, not as good social policy, but as a memorial to the late Senator. Domenici is now pushing the issue with Senator Edward Kennedy (D-Massachusetts). Their new bill would require parity in treatment, doctor visits, and financial requirements such as deductibles and co-payments. Insurers and employer groups oppose it, citing costs. Many states have already passed similar legislation.

Even with all the media distractions of late, the important domestic health care issues are out in the open and are being talked about. It appears the time has come where the talk will become the walk.

Conrad F. Meier is managing editor of Health Care News.

For further information, contact Heartland Public Affairs Director Greg Lackner at 312/377-4000, 773/489-6447, email [email protected]