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Powerhouse Coverage Coalition—How Much Juice Does It Really Have?

By John Reichard, CQ HealthBeat Editor

January 18, 2007 -- Analysts who have seen passions wax and wane in Washington over the decades for universal health coverage are taking seriously the broad coalition of diverse groups announced Thursday seeking dramatic action to cover the uninsured.

Stuart Altman, the Brandeis University professor who is perhaps the most famous analyst in academia when it comes to assessing such debates, opined Thursday that the coverage plan announced by the coalition of 16 of the most powerful powers-that-be in health care "is a great moderate bill which I think is what it needs to be" to succeed politically. "I think it's a very positive first step, and it's a big first step," Altman said.

Massachusetts' recent coup in bringing diverse political forces together to pass a program of virtually universal coverage in that state succeeded in large part because it attracted moderates from both parties, Altman said.

Formally known as the Health Coverage Coalition for the Uninsured, the group includes the following members: the AARP, the American Academy of Family Physicians, the American Hospital Association, the American Medical Association, the American Public Health Association, America's Health Insurance Plans, the Blue Cross and Blue Shield Association, the Catholic Health Association, Families USA, the Federation of American Hospitals, the Healthcare Leadership Council, Johnson and Johnson, Kaiser Permanente, Pfizer, United Health Foundation, and the U.S. Chamber of Commerce—a particularly noteworthy "get" by the coalition.

"The chamber is a very powerful organization," Altman said. "They now realize this current system is really killing them. They realize they're paying a huge hidden tax" in the form of higher premiums caused by inefficient spending on care for the uninsured that gets passed on to the employer, Altman said.

Small business was particularly potent in defeating President Clinton's health plan for universal coverage. That the chamber, which represents many small businesses, supports the new plan puts a powerful player behind a dramatic expansion in coverage.

Paul Ginsburg, president of the Center for Studying Health System Change, said the chamber's support is a "very positive" development for the plan, which relies on government programs to cover many more uninsured children and tax credits to foster wider coverage in private plans of adults with modest or moderate incomes.

The plan could help small businesses compete against large employers for workers because more employees in smaller workplaces would get tax breaks to buy health insurance, Ginsburg said.

Assessing the current debate on the uninsured, analysts see a greater willingness on the part of health care players to compromise if their own pet plan isn't adopted. In past debates, health care players preferred the status quo to compromise if their own particular plan wasn't adopted, said Altman, who turned that observation into what later became known as "Altman's law." Altman said that was the case the last three times a major health care overhaul was the topic of hot debate in Washington—in the Nixon, Carter, and Clinton administrations.

One of the coalition's members, Families USA Executive Director Ron Pollack, boasted Thursday that a hallmark of the new plan is that it reflects willingness to compromise. None of the players in the coalition is getting the coverage plan that is their first choice, he said.

Ginsburg said he sees that dynamic as a hallmark of the recent debate over covering the uninsured, including the new program in Massachusetts. Many of the attempts to increase health coverage in the past few years have been "trying to repeal that [Altman's] law," he said.

People are trying to apply lessons learned from the failure of the Clinton health plan, Ginsburg said. "People not settling for half a loaf has been the major reason we don't have more government programs to cover the uninsured," he said.

Altman said he thinks the coalition may represent a repeal of his law—but only as far as it goes. The plan would only cover about half the uninsured, he noted. Attempts to cover the other half would be much more likely to dispel the mood of compromise, he said. He said for example, that a broader effort would entail tax breaks for middle-class Americans to buy coverage, leading employers to drop coverage. Trying to keep that from happening could trigger attempts to mandate coverage by employers, he said, in turn causing those employers to turn against wider coverage attempts.

A major question, Ginsburg said, is: "Is this spirit of compromise going to hold throughout?" He noted that "not everyone who has a say is in this group." Big Labor is missing from the coalition. The AFL-CIO and the Service Employees International Union were involved with an earlier part of talks about joining the coalition but opted not to back the plan.

Ginsburg notes the coalition could break up over the details of how to pay for the plan, which would cost some $45 billion to cover children and an unspecified additional—and certainly very large—sum to cover uninsured adults.

Big Labor wants coverage plans to go much farther, as do other advocacy groups, including the Children's Defense Fund (CDF). Altman noted that big unions represent a strong coalition for wider coverage, so their absence is not insignificant. CDF said its own plan would cover all nine million of the nation's uninsured children while the coalition's plan would still leave some four million uninsured kids without coverage.

Conservatives may balk at the costs of the plan. "The common theme is health care is expensive and they'd like a federal bailout," American Enterprise Institute analyst Joseph Antos said of coalition members. "Everybody would like a federal bailout, but the only problem is that a federal bailout means the taxpayers pay for it. So it's just moving the money around as opposed to really getting at the hard job, which is addressing the high and rapidly rising spending on health care; there's tremendous inefficiency. These groups are really not addressing that directly."

But Ginsburg noted that a tough budgetary climate does not rule out government action to widen coverage. The last major expansion of coverage came at a time when pressures to balance the federal budget were great, he noted. The State Children's Health Insurance Program was passed as part of the Balanced Budget Act of 1997. "When there's a lot of money sloshing around, perhaps there's an opportunity."

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