Washington Readies Health Care Takeover

Published August 1, 2009

The first Democratic health care reform bill has come out of the Senate hopper in the form of a 615-page tome from Sen. Edward Kennedy’s (D-MA) Health, Education, Labor, and Pensions Committee.

The normally genteel Sen. Orrin Hatch (R-UT) called the bill “the most liberal bunch of gobbledygook I’ve seen in my life—a complete liberal mishmash of ideas.”

After months of speculation about what would be in the bill, the release of the actual legislative language triggered a cascade of criticism.

Criticism Abounds

“The current proposal for ‘fixing’ health care relies on a lot of the usual patches,” said Scott Gottlieb, M.D., a fellow at the American Enterprise Institute. “It increases political, rather than individual, control of medicine, through a collection of new commissions, boards, and agencies. The plan before [the Health, Education, Labor, and Pensions Committee] shifts to the government, and probably Medicare, more of the clinical decisions properly left to people and their doctors.”

The U.S. Chamber of Commerce, National Federation of Independent Business, National Retail Federation, and other business groups came out strongly against the bill’s employer mandate, calling it a new tax that will cost jobs and ultimately put a heavier burden on workers.

America’s Health Insurance Plans, the nation’s biggest health insurance organization, protested the bill’s inclusion of a new public insurance option. Labor unions said they are worried about Congress levying taxes on employer benefits.

AMA Conflicted

The American Medical Association got in a battle with itself over the public plan option.

It issued a statement saying, “The introduction of a new public plan threatens to restrict patient choice by driving out private insurers, which currently provide coverage for nearly 70 percent of Americans.”

Then it backed down some, “clarifying” its earlier statement by saying, “The AMA opposes any public plan that forces physicians to participate, expands the fiscally challenged Medicare program or pays Medicare rates, but the AMA is willing to consider other variations of a public plan that are currently under discussion in Congress.”

More Proposals Coming

The Senate Finance Committee is expected to present its own health care reform bill soon, and it is expected to include a revised public plan in the form of government-organized insurance “cooperatives.”

Finance Chairman Sen. Max Baucus (D-MT) is trying to appease moderates with it. “It’s got to be written in a way that accomplishes the objective of the public option, even though it itself is not public,” Baucus said.

The idea could work if it follows guidelines offered by conservative House Democrats, who want to make sure Medicare payment rates are not used as the basis for reimbursement, that the plan is self-sustaining and does not rely on taxpayer dollars, and that it would have to follow the same rules and regulations as the private plans, including establishing a reserve fund. Should subsidies be provided for the purchase of health insurance, they must be available for the purchase of public and private plans equally, the conservative Democrats say.

But why would we need a public plan if it is required to follow exactly the same rules as private plans?

Proponents Resolved

Despite the objections and concerns, many proponents of the plan are balking at the idea of compromise.

Sen. Charles Schumer (D-NY) insists the co-op must meet certain conditions: “It has to have a significant infusion of federal dollars right from the start, so it has the clout to compete against the insurance companies.”

House Speaker Nancy Pelosi (D-CA) said House Democrats strongly want a government-run insurance plan to be part of any health care overhaul, and she called for a “level playing field” for public and private health care providers. But how can it be a level playing field when there is a “significant infusion of federal dollars,” as Schumer called for?

It’s absolutely vital that Congress draft its final version carefully, not least because it will have consequences for millions of Americans for decades to come. Hasty action to rush these bills through will almost certainly lead to catastrophic mistakes and oversights—and patients will suffer as a result.

Grace-Marie Turner ([email protected]) is president of the Galen Institute.