Friday, November 21, 2008

The Healthy Americans Act--Wyden-Bennett Bill--Still in Play

A recent letter from 15 Senators to President-Elect Obama caught my eye.

The letter was from Senators Ron Wyden (D-OR), Bob Bennett (R-UT), and the other 13 Senators on their health care reform bill--7 Democrats 7 Republicans, and one independent--to President-Elect Obama reminding him of the progress this bipartisan group has already made toward health care reform.

As readers of this blog know, I am not optimistic that we can get any big comprehensive health care reform bill done in the next two years. That doesn't mean I don't want to see it happen as badly as anyone else.

The Democrats, even with 60 votes, will never get health care reform done by themselves. It certainly won't be done bypassing the 60-vote rule in the Senate and thinking 52 or 53 votes could change 16% of our economy.

The kind of real bipartisanship that can send the signal to the American people that we are headed in the right direction on so risky an enterprise as health care reform will need 70-80 Senators and like bipartisan majorities in the House. Without it, the naysayers will pick its bones apart.

Parliamentary maneuvering won't get this huge job done.

In the least, health care reform will take bipartisanship--and it will likely take statesmanship.

Democrats want to get everyone covered sooner rather than later.

Republicans don't want to build a new system on the same base they, and most people, see as contributing to our out-of-control costs.

Wyden-Bennett is in no way perfect health care policy. The give and take of a health reform process would make that impossible. Tough cost containment is lacking like it is in most of the health care reform plans I have seen. But Wyden-Bennett does begin to restructure the system in a way that can give us hope the incentives for more appropriate spending will begin to be in place. The Healthy Americans Act is, within the context of the political art of the doable and respect for what both sides are looking for, elegant policy if I have ever seen it.

Wyden-Bennett is elegant health care policy because it draws from many of the best ideas on the right and the left, lays out a practical road map, and pays for itself.

But it also takes on some tough issues. While it has been modified to allow employer plans to continue, it does change the tax system to make health care more of an individual responsibility. This is very much the vision of Republicans, including John McCain's.

Many employers are dubious about risking changes to the employer-based system. As someone whose career has been built on ERISA, I can understand benefit managers whose job security might be threatened, and insurers who would be reluctant to call for something that might threaten their client's job security. But why would CEOs and CFOs concerned about competing in the global economy not be onside with a plan that caps their obligations?

One of the more intriguing opponents are the labor unions. With wages relatively flat, one of their prime reasons for their being are the benefits they have negotiated, and fight an uphill battle to protect, for their members.

But wages have been largely flat because health care costs are burning up the available money employers have for compensation--cash or benefits. Workers are worried they would have less health insurance security. But no plan I know of has come up with the structure and funding to assure far more health insurance security to people than we have today. That would put the focus in labor negotiations back where it should be--on wages.

Wyden-Bennett achieves perhaps the most important goal in health care reform--it is revenue neutral early on. It is so largely, but not entirely, because it rearranges existing tax preferences and premium support.

With the fiscal realities we are facing, I do not see how we have any chance at health care reform without some statesmanlike rearranging of what we spend on health care today.

We have the Baucus plan, (which interestingly left tax changes on the table) the upcoming Kennedy bill, and likely many other health reform plans.

But no other idea really starts to change, rather than build upon, a system we all agree is unacceptable. No other idea has the bipartisan support out of the box that Wyden-Bennett does.

No other plan likely has as big an uphill battle as Wyden-Bennett because it is so different. Incremental change is always the apparent path of least resistance--and in the end the least satisfying.

But why not try to get health care reform right?

This from the Lewin Group's report on the Healthy Americans Act:
We reviewed the cost and coverage impacts of the Act. Our key findings include:
  • The program would cover 246.8 million people. Over 99 percent of Americans would have coverage;
  • National health spending, projected to be $2.3 trillion in 2007, would actually decline by $4.5 billion despite the expansion in private coverage, due to savings in administration($29.8) and increased price competition for insurance ($54.9);
  • The annual rate of growth in national health spending would be reduced by about 0.86 percent. Savings over the 2007-2016 period would be $1.48 trillion, which is 4.5 percent of spending over this ten-year period (Figure ES-1);
  • All new federal program costs, $812.9 billion, are fully funded with: $516.9 billion in premium payments net of subsidies; Employer assessment revenues of $89.3 billion; State and federal share of savings to Medicaid of $153.5 billion; Reduced disproportionate share hospital (DSH) payments of $18.8 billion; Increased Social Security tax revenues less offsets of $13.1 billion; and Elimination of selected business tax credits ($22.9 billion).
  • State and local Government safety-net program savings of $22.4
  • Employer health spending falls by $309.8 billion (from $428.8 billion). This amount will be passed-on to workers as wage increases under the cash-out; and
  • Overall, increases in family premium payments are offset by the increase in wages and subsidies provided under the plan.
The Healthy Americans Act in Detail as well as the Lewin Study.
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