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Lou Cannon: States Need Senate Help on Health-Care Overhaul
At breakfast with George Washington one morning, Thomas Jefferson is said to have taken the Father of Our Country to account for agreeing to a bicameral Congress. Washington asked why Jefferson had poured his tea into his saucer. Jefferson replied that he was cooling it. Washington said, “Even so, we pour legislation into the saucer to cool it.”
This story is probably apocryphal, but let’s hope Washington was right. The expensive health-care overhaul introduced in the House last week badly needs a senatorial cooling before it reaches the desk of President Barack Obama. The states especially need the Senate’s help, for the House bill could add significant fiscal burdens on states at a time their coffers are empty. Under the House version, states that have chosen to provide added health benefits for the poor beyond the federal guidelines would be required to maintain them in perpetuity, no matter the condition of the economy.
“We’re concerned that we may be locked into a level of spending that we may not be able to meet,” said Minnesota state Sen. Linda Berglin, D-Minneapolis.
Minnesota provides health coverage for families who do not have access to employer-subsidized insurance and cannot afford private insurance, but the state, like many others, is struggling to maintain its social programs in the wake of sinking revenues and rising unemployment.
The National Conference of State Legislatures is lobbying on several fronts to see that the interests of states are protected. Along with the National Governors Association, it is trying to guarantee that any mandated extension of Medicaid, the federal-state program that provides medical coverage for the poor, is matched by additional federal funds. The House bill would extend Medicaid, which now covers those below the poverty line (currently $22,050 annually for a family of four), to adults and families living at 133 percent above this level, and provide the states with additional funds for doing so. But it provides no immediate aid for the many states that are now on their own providing health care for poor people well in excess of this level.
“The states that are doing more have most to lose,” said Joy Wilson, NCSL health policy director. “You tend to get punished for getting out in front.”
Washington, one of these out-front states, was forced this year by a budget squeeze to slash by 42 percent a 2-decade-old program that provides assistance for the working poor. State Sen. Karen Keiser, D-Kent, the Washington Legislature’s leading health expert, said this was a necessary alternative to reducing Medicaid and losing federal funds.
Keiser advocates a public insurance plan as an option in the federal health overhaul. This is a principal and controversial feature of the House version of the legislation, which would finance health coverage for the uninsured with added taxes on the wealthy, payment reductions for medical providers, and requirements on employers to offer health insurance. One little-noticed feature of the 1,018-page bill would treat states as employers and require them and all their subdivisions — presumably, even the tiniest hamlet — to provide insurance to every state and local government employee.
In addition, employers who did not provide health insurance would have to pay a penalty to the government equivalent to 8 percent of wages. Business groups denounced this provision as a job killer, since it would discourage hiring, particularly of unskilled workers, at a time those very workers are at risk of falling off the last rung of the nation’s economic ladder. Even though several moderate Democrats have shied away from the House draft, House Speaker Nancy Pelosi, D-Calif., almost certainly has the votes needed to get it through.
It’s a different story in the Senate. Although the Senate health committee passed a bill on party lines Wednesday, all eyes are on the finance committee, which is expected to produce a bipartisan version that is more conservative than the House bill on several counts.
It’s unclear if the differences can be bridged, despite the high priority accorded health-care reform by Obama. Former Senate Majority Leader Tom Daschle, D-S.D., an expert on the issue, recently put the chances of enactment at no better than 50-50.
Public support for reform, on which the administration is counting, is broad but not deep. Polling on a dozen health-care alternatives, Gallup showed support for all of the alternatives, but also found that Americans are worried about increasing the budget deficit to pay for health-care reform. The House bill, variously estimated at costing between $1 trillion and $1.5 trillion over 10 years, is unlikely to allay these concerns.
The two broad aims of reform are to extend health insurance to most of the estimated 47 million uninsured Americans while also reducing the costs of the most expensive health-care system in the world. Health care now gobbles up 17 percent of the nation’s economic output, and health-care spending has for decades risen faster than inflation in good times and bad. Current national health care expenditures of $2.2 trillion a year are projected to reach $4.4 trillion annually by 2018. This suggests health-care reform, while desirable in its own right, is also an economic imperative for a nation saddled with debt and deficits as far as the eye can see.
Some states have long tried to make a difference. Early in the 20th century the Progressive movement — strong in California, Minnesota, North Dakota and Wisconsin — called for catastrophic health insurance. In 1945, California Gov. Earl Warren, a Republican, proposed a state insurance plan that was torpedoed by the California Medical Association.
Massachusetts made a stab both at universal coverage and cost-cutting in a plan proposed by Gov. Mitt Romney, a Republican, and passed, with changes, by a Democratic-controlled Legislature in 2006. This plan went into effect in mid-2007 and has become a talisman for health-care reform, at once an inspiration and a cautionary tale.
The best news about Commonwealth Care, as the Massachusetts plan is known, is that it managed to insure about 350,000 of 500,000 uninsured state residents. The not-so-good news is that it has failed to control costs, in part because of unfortunate timing. The plan went into effect a few months before the beginning of the Great Recession, which sent unemployment and Medicaid rolls soaring. Massachusetts is now one of at least 22 states that have cut back on health-care spending as revenues have cratered. The Legislature pared $196 million from the 2010 health-care budget. Gov. Deval Patrick, a Democrat, cut several million more from the bill (HB 4129) before he signed it. Public health and mental health programs took a big hit; a program that provided medical coverage for 28,000 low-income immigrants was eliminated by the Legislature over Patrick’s objections.
Connecticut Gov. M. Jodi Rell, a Republican, may have had Massachusetts in mind this month when she vetoed HB 6600, a bill to provide universal health coverage in her state. Rell said the plan would cost $1 billion a year, and observed that Connecticut faces an $8.85 billion deficit over the next two years.
With the recession continuing and unemployment likely to rise even after it ends, states have gone as far as they can go. Despite a broad consensus that health-care reform is needed, states cannot now afford to shoulder additional financial responsibilities to accomplish this goal.
“It’s all about the money,” Wilson, the NCSL lobbyist, said in discussing which version of the health-care reform is likely to prevail. Obama has pledged that the health-care overhaul will not add to the deficit. It’s hard to see how this pledge squares with the House bill, but that’s why we have two houses of Congress. We are now in need of the cooling power of the Senate saucer.
— Summerland resident Lou Cannon is a longtime national political writer and acclaimed presidential biographer. His most recent book — co-authored with his son, Carl — is Reagan’s Disciple: George W. Bush’s Troubled Quest for a Presidential Legacy. Cannon also is an editorial adviser to State Net Capitol Journal, which published this column originally.
Comments
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» on 07.22.09 @ 10:25 AM
State coffers are “empty” because the current bi-partisan group of inept scoundrels
have not - like Cannon’s beloved Ronald Reagan - raised new revenue to meet urgent statewide needs.
Making progress on essential national health care reform should not be held hostage by the dysfunctional incompetence of all the factions in Sacramento.
If Obama and Congress can reach consensus on general health reform at a reasonable price, they should go forward, for the good of the country, even if Sacramento sinks into the sea.
Lack of health insurance pushes more middle class families into bankruptcy than
all other causes. Who insures Mr. Cannon? Who insures the Legislature?
Maybe if the Legislature and Governor’s office expense accounts, benefit coverage, and per diems were frozen, they would look at things like a truly balance budget or
national healthcare reform from a different, non-lobbyist perspective.
Why doesn’t Mr. Cannon figure out how to make that happen? That would be a
greater public service to Californians than all his other columns, combined.
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» on 07.22.09 @ 12:19 PM
Publius make the all-too-often-heard liberal comments. All the health care “problems” result from past decisions made by Republicans. He might want to know that 80% of Americans are covered. Of the 47 million or so that dont have coverage, many chose not to purchase care that they could affort, many are illegal aliens, and the remainder do have health coverage (Medi-Care/Medi-Cal).
Let’s not allow the government to control another aspect of our private lives. I don’t want to stand in line for my health care nor do I want to have some government worker telling me what health care I can and can’t have.
It problem can be attis the right-wing fault
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» on 07.22.09 @ 06:45 PM
Publius, though I agree with your compassion, who is going to pay for it? When you are a producing economy that is creating wealth and expanding faster than services from government can consume that wealth generation, everybody wins, rich, poor and middleclass. Our country stopped being a producer and turned down the road of consumption decades ago. We have been borrowing ever since to make up the difference. That practice came to an abrupt end last summer after the commodities looters foisted $4 a gallon gasoline on a very precarious market. So you want to tie another brick on our ankle while we are drowning? Good God man, I know from your responses on many posts here, liberal as they may be, that you are not that stupid. Where is the money going to come from? How do you pay for yet another boat sinking entitlement when our economy is grinding to a halt? Fix the damned insurance industry, reform tort law and return the 20 million illegal immigrants in this country to their home land. That is change you can believe in and it won’t cost a penny, but it will save a boat load. While your at it take a look at all the laws, restrictions and unfair trade practices that cripple our ability to be a producer economy, starting with the central ingredient, energy production.
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» on 07.23.09 @ 05:33 AM
Try getting sick , changing insurer ( anybody making job changes out there ?) and see what your options become . We are the only major industrialized nation that allows one to work all ones life and still lose your home because greedy health insurance companies need to make 250 % more profit than 10 years ago . That tired old wank about standing in line or having some beaurocrat determine your treatment is just not heard in the countries with universal coverage . We rank 2nd in % of GDP spent on heathcare & 37th (between Costa Rica & Slovenia ) in quality of care . Those rankings mandate change .
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» on 07.23.09 @ 06:06 AM
Why is it that nearly every other industrialized nation in the world can afford universal health care, but the United States cannot? For those of you who say we cannot afford it, the simple fact that the entire populations of other less wealthy nations have access to affordable health care belies your argument. Let’s be honest at least and forego hypocrisy. The simple truth is that, up to now, we haven’t valued universal health care enough to afford it. There are too many of us who do not want to pay for someone else’s health care.
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» on 07.23.09 @ 07:44 AM
The product of health insurance is to provide you with medical coverage when you need it.
Unlike other businesses that need to provide you with their product in order to make any money, health insurance companies actually make more money for themselves when they restrict and do not pay claims.
In other words, they make more money when they do NOT provide the product that you have paid them for.
Read the 50 to 70 pages of your health insurance contract.
Pay particular attention to the section entitled “limitations and exclusions”.
People’s health is not a product that needs to be left to the whims of money motivated CEO’s and stockholders.
If that is your thinking, you might as well have your police and fire department protection based on insurance premiums you pay.
Then you can go to the police and fire protection insurance page for ‘limitations and exclusions’ on whether or not the police or fire department would come out to your house in the event of an emergency.
The point is, you would never think of discriminating against another citizen if he was the victim of a fire or crime.
So why would you be ok with health insurance companies discriminating against fellow citizens who have pre-existing medical conditions?
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» on 07.23.09 @ 08:15 AM
If the federal government had had the courage to oust the health insurance industry and enact a single-payer system such as an enhanced Medicare for All with everyone in the same comprehensive plan with choice of any private or public doctor anywhere, the money saved (25% minimum) on multimillion dollar CEO salaries, stock holder dividends, advertising, administration, devising ever changing health plans that cost more and provide less, lobbying funds and campaign contributions, etc would be enough to cover 100% of the population. Yes, in a recession the government would have a higher expense in helping to cover the poor than during good times. You have to have a rainy day fund for this. Other savings that help pay for the care are from preventive care and negotiated prices. Information technology will improve quality more than save money. Mal practice insurance costs may go down because of everyone having access to high quality care. They won’t have to sue for care. Also best practices can be shared.
In California, the single-payer system (SB 921 [Kuehl] at the time) was modeled by the then highly respected Lewin Group . If it had been enacted in 2006, instead of paying premiums, employers would have paid about 8% of payroll and employees about 3.75% of payroll after exempting the first $7000 of income thus making this progressive. Those with unearned income would also pay into the system. All medical care from prevention to treatments in and out of hospital and including dental, vision, prescriptions, and mental health and substance abuse was prepaid with no co-pays or deductibles and no worries after you were sick or injured.
The LA school district figured out if would have saved between $127 and $279 million depending if it paid 100% of their employee and retiree bills or had the employee pay some. State and local governments would have saved $900 million the first year. Average family spending would have been reduced by $2,448. Employers providing health insurance would have seen a decline of 16%. Doctors and hospitals would have been paid well and in a timely manner for 100% of services. This is win, win, win!
Single-payer is sustainable and fair. Simply put, the healthy, the wealthy, the middle class, and current government spending help pay for the poor and the sick and injured so that the medical care infrastructure is at the ready for all of us all the time. But it costs us all less. We are already paying $1,200 each for the uninsured and underinsured per year.
The only group sacrificed under a single-payer system is the private health insurance industry. Only 4% of the American people believe private health insurance does a good job so there is no love or respect lost here. Private health insurance discriminates and bankrupts you when you are down and out. Private health insurance is inhumane and obsolete.
President Obama could have been on the bully pulpit, with his high approval rating, his intelligence, his persistence and convinced all of America that single-payer such as HR 676 and S 703 were the best bills to control cost, provide real choice (choice of any doctor whenever and wherever you needed), improve quality of care, improve health outcomes, be good for business and governments,be fair, and be sustainable over time. Single-payer was scored by the CBO and GAO in the early 1990s and showed to save billions over other reforms. Single-payer needs to be scored and compared again at the federal level. Every state that has modeled single-payer shows savings, improved quality, and 100% coverage for comprehensive care.
The whole of American society will win with single-payer health care. Children will miss fewer days of school, employees fewer work days, and our jails will have fewer mental health and substance abuse cases.
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» on 07.23.09 @ 11:39 AM
Cost questions are real, and should be closely considered. Yet even the WSJ and
Forbes have repeatedly pointed out that Americans spend more for medical service
than any other advanced nation on earth. Yet we only rank around 20th for life
expectancy and newborn survival rates.
That suggests that a lot of people are getting over-treated, but that many, many more are being under-treated.
A recent, widely-quoted New Yorker Magazine analysis indicates that two adjacent
communities in Texas offer the widest gulf on dollars per capita for medical services.
But the study indicated that the poorer community’s longevity rates and general
physical quality of life was no worse than the rich community’s, because health
services were better allocated and managed.
It’s not a “Republican” problem, but a question of fully allocated costs. It’s generally
much cheaper in the long-term, to effectively treat medical conditions early, and
properly, than it is to wait for un-insured or under-insured to stagger into ERs w.
life-threatening conditions that take them out of the work force permanently.
Hubert Humphrey and Walter Judd, both Minnesota congressmen, had this same
debate fifty years ago. Obama is right. We can TALK about this forever. But if we
really want to address the problems, something should be done, and soon.
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» on 07.23.09 @ 02:08 PM
First, I’m really sick of hearing about how other countries can afford it and we can’t. When we stop defending those countries and they fully fund their own defense, their “affordable” health care systems would collapse if not their entire economies. Second, these so called successful systems are NOT affordable in that these same countries are reeling under exploding costs and deficits (imagine what happens if you add a defense cost on top of that!) Stop reading talking points and do your damned homework. Third these other countries must ration care far more extensively than we do in order to rein in these enormous cost escalations (not to mention all their best doctors end up over here). And lastly, if you cannot do your homework and want to be an Obama puppet then I suggest you go live in one of these so called successful healthcare countries. Go on now try it there first and see how that works out for ya (right, like you want to pay 60% of your income in taxes). Then tell me how you extrapolate what kicked your butt over there in a country of 30 million to a country of 300 million.
Regulate the legalized racketeering/extortion business (insurance) and treat them as a public utility.
Rein in superfluous and costly litigation through tort reform.
Get the AMA to allow more doctors to compete in the field.
Kick the 20 million illegal aliens out of the country and let them lobby for health care in their own country.
And finally, realize your health is your business not mine. If you can’t take care of yourself then maybe you might be motivated to change your lifestyle and see to it you can. Healthcare is not a right, it’s not an entitlement and the only guaranty you have in life is death.
And yes I have had to deal with tragic and costly health care issues in my family and the last thing I ever thought was sticking someone else with the bill.
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» on 07.23.09 @ 09:11 PM
Poll Still Finds Public Support for Health-Care Reform: While a majority of Americans still think health-care reform is needed now, some of that support has wavered slightly as Congress wrestles with the details of producing a reform package, according to the July Kaiser Health Tracking Poll. Fifty-six percent of Americans continue to believe that health reform is more important than ever, despite the country’s economic problems. And by a better than two-to-one margin (51 percent to 23 percent), Americans think the country would be better off if Congress and President Barack Obama enacted health reform, the poll found.
Aside from the savings created by the prevention and wellness program, medical IT, foreseeable potential stem cell effect, mental stress relief and massive job creation, ending subsidies for the private insurers and payment reform and so on could be enough to meet the goal of deficit-neutral.
Public school, public insurance policy, and public clean energy act are the natural parts of life in the free nations.
Thank You !
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