Wednesday, April 22, 2009

Progress on Key Health Care Reform Issues?

I recently posted on what I see as a growing consensus for finding the money for health care reform—albeit only about half of it.

I also see some consensus on what a health care reform structure could look like--or not look like.

Proposals for a public health plan that would compete in the under-age-65 market look to me to be out--particularly one that would pay Medicare rates. I do expect the House to include it in their version of health care reform and for advocates to be forceful in their advocacy in the coming weeks but it has far less support in the Senate where the real deal would be done. Simply, there are too many implications and risks inherent in the idea for not only Republican Senators, but more importantly, moderate Democrats. The biggest being the potential for a public health plan to dominate the market. Proposals to neuter the idea by even advocates lead one to question, “Then why do it in the first place?” [See: A Public Health Plan That Looks Just Like a Big HMO---Why?]

I don't see a consensus in the Senate emerging that includes a public health plan alternative that would have the potential to grab huge market share.

However, there are still a number of other really big undecided health care reform issues:
  • Mandates—employer or individual? Still strong opposition to both—particularly from the employer community for an employer mandate out of fear the value of ERISA would be lost in the face of what would be growing benefit mandates. It is possible a partial individual mandate that focused on people with incomes high enough to truly afford coverage, as well as those who are eligible for employer-provided care but not taking it, could emerge.
  • Insurance Exchanges and Insurance Underwriting Rules? Even an Obama campaign-like health bill could leave something close to 20 million uninsured (Lewin, October 2008). That means lots of potential for anti-selection as individuals could still avoid coverage. Trust me, the recent health insurance industry's offer to abandon underwriting won’t apply to any post-reform system with millions still uninsured. But I would not count out efforts to waive underwriting rules for a one-time national open enrollment, similar to the original Medicare Part D enrollment, aimed at minimizing the anti-selection risk. It also appears that the original open-enrollment as part of the Massachusetts health law has not produced serious anti-selection issues from those who signed-up.
  • Will There Be Teeth in Cost Containment Programs Like Pay-for-Performance and Comparative Effectiveness Research? – No teeth, no savings, hard to find the rest of the money.
  • Which Providers and Beneficiaries Will Suffer What Cuts and How? – While I have suggested that the first $800 billion to pay for health care reform is in reach that still leaves us about $800 billion short. We won't get over the line without measurable provider and beneficiary sacrifice. This is the big one.
Recent post: Halfway to Paying for Health Care Reform? A Growing Consensus for Taxing Health Insurance Benefits Produces Lots of Money
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