By Brian Schilling
In Washington, D.C., insiders know not to place any bets on pending legislation too early. When it comes to making law, the real work doesn't even start until bills are drafted and committees begin going through the details. Health care reform is now in this stage. Since June, all five of the Congressional committees charged with developing reform bills have done so. According to individuals on both sides of the aisle, the parties are in agreement on about 80 percent of what's at issue.
Nevertheless, it's still much too early to speculate on whether reform will pass, and if so, in what form.
Reconciling the five bills is likely to take several months, so even the most positive projections don't put a bill on the president's desk until after Christmas. Without making any predictions about the likely outcome of the debates that will surely follow, here's a short summary of the areas of agreement and the issues still outstanding.
Areas of Agreement on Health Care Reform
Controlling costs. More than any other factor, cost motivates the current debate about health care reform and there is broad, bipartisan agreement that pervasive waste, fraud, and inefficiency must be addressed. Specific proposals to address these issues range from testing payment innovations to promoting comparative effectiveness research to—controversially—setting up an independent commission that would have the authority to enact broad payment reform policies.
Wellness and disease prevention. Both parties support improving prevention and chronic disease management as an integral part of cost-control efforts. Chronic illnesses account for about 75 percent of the nation's health care tab.1 Options for improving care for the chronically ill include requirements that health plans cover care coordination and case management, tax breaks for employer wellness initiatives, supporting research, increased funding for public health programs, and extending coverage to at-risk, underserved populations.
Universal—or close to it—coverage. While the idea of achieving overnight universal coverage via an individual mandate remains controversial, both parties agree that the more people who are covered (and therefore paying into the system), the better. Thus, it seems likely that any successful reform effort will extend coverage to many millions of presently uninsured Americans. Expanding Medicaid, providing subsidies, and new employer mandates are among the possible options on the table.
Health insurance exchange. Allowing individuals and small employers to band together to buy health coverage through new national, statewide, and regional insurance exchanges has won support from both parties. Such exchanges would provide greater consumer choice and essentially extend large-employer clout and negotiating leverage to small employers and individuals.
nsurance reform. Both parties are critical of exclusions for preexisting conditions, lifetime benefits caps, and the practice of dropping enrollees who become very sick. Should reform succeed, look for these policies and practices to be more tightly controlled or abolished altogether. New rating bands will limit how much more—or less—insurers can charge people based on sex, age, and gender.
The employer's role. Since early in the presidential campaign, President Obama has pledged to build on the existing employer-based system of health coverage, but employers still need to pay attention. Obligations for employers will change if reform succeeds: most Hill watchers expect to see either an outright requirement that employers offer coverage or substantial financial penalties on employers that don't—the so-called pay-or-play approach.
A public plan. All indications are that the bills that ultimately emerge from committee for debate on the floors of the House and Senate will include some sort of a public plan. But that is by no means the end of the story. Would such a plan be created in the near future? Would it come into being in a few years only if certain other coverage and cost control targets are not met? Would states be allowed to "opt out" of the public plan? No one knows. The public plan option has become a fault-line issue for the insurance industry and the notion will face stiff opposition going forward. One compromise could be greater Medicaid expansions.
Paying for it. Most estimates find comprehensive health care reform will come with a $1.2 trillion dollar price tag over the next 10 years. That much money doesn't all come from a single source. Among the more talked-about ideas for generating funds are: levying a tax on expensive health plans, imposing a surtax on the richest Americans, and imposing a small tax on sugary drinks (an idea that, according to the New England Journal of Medicine, could help stem obesity, diabetes, and other serious health issues). In addition, hundreds of billions of dollars jn savings are expected to come from reducing Medicare overpayments, improving payment accuracy, and expanding hospital quality improvement programs.
Medical liability reform. Liability reform proposals range from capping awards to providing some sort of "safe harbor" against lawsuits for physicians who adhere to best-practice guidelines. Capping awards would have the immediate impact of reducing liability premiums, but wouldn't necessarily drive quality improvement. "Safe haven" laws might do the opposite: encourage doctors to adhere to guidelines, but do little to curb liability costs. No one expects that reforming medical liability laws will make a substantial dent in health care costs, but look for extensive wrangling on the issue just the same.
An Upside for Small Employers?
Small employers pay about 18 percent more than their large-employer counterparts for identical benefits, which makes it hard for many employers and employees to participate. 2 Some 52 percent of employees at small firms are uninsured or underinsured.3 And for small employers, the threat of having coverage rescinded entirely after a year of particularly high claims is a disturbing reality. But according to a new Commonwealth Fund report, the bills under consideration generally contain elements that would help small employers address these issues and gain access to affordable, comprehensive coverage.
The most immediate benefit for small employers and individuals would simply be the ability to secure affordable coverage through a new health insurance exchange. By banding together thousands of firms and millions of individuals, such an exchange would put small employers on an equal footing with their larger counterparts. That, in turn, would eliminate discriminatory pricing and other questionable practices, such as excluding employees for preexisting conditions, hiking premiums due to the illness of a single worker or dependent, or rescinding policies after a year of higher-than-expected claims. Gone too would be plans with substandard benefits. Any plan offered through the exchange would be required to offer a specified level of benefits.
Small employers could reasonably expect to see lower premiums too. The Commonwealth Fund's analysis found that the administrative efficiencies and negotiating power unique to a national health insurance exchange would enable it to offer single coverage for about 25 percent less than comparable private-sector plans. Other financial incentives likely to figure into any consensus reform bill include sliding-scale premium subsidies and significant tax credits to help offset premium costs.
Everything Now Hinges On…
With the Democratic party now firmly in control of the House, Senate, and White House, the future of health care reform may well come down to whether or not the party can unite around a bill that some members will not like. If it can, reform legislation could conceivably pass without bipartisan support. As reconciled, final legislation emerges over the next few months, it will become clearer whether votes on reform will fall neatly along party lines or whether—as was the case when Medicare, Medicaid and Social Security were established—the nation's two parties will find some common ground.
1 Centers for Disease Control and Prevention, "Chronic Disease Overview," Oct. 7, 2009, http://www.cdc.gov/NCCdphp/overview.htm.
2 M. M. Doty, S. R. Collins, S. D. Rustgi, and J. L. Nicholson, Out of Options: Why So Many Workers in Small Businesses Lack Affordable Health Insurance, and How Health Care Reform Can Help, (New York: The Commonwealth Fund, Sept. 2009), http://www.commonwealthfund.org/Content/Publications/Issue-Briefs/2009/Sep/Out-of-Options.aspx .