Thursday, November 15 , 2018, 2:45 am | Fair 44º


Lou Cannon: States Need Senate Help on Health-Care Overhaul

Obama bets on the House, but states balk at expense and breadth, and seek Senate relief

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.”

Lou Cannon
Lou Cannon

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.

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