Carter Bundy
As 40 Republicans and one Joe Lieberman dig in their heels to protect big insurance companies, it’s becoming clear that health reform is going to be watered down significantly.
There’s one major exception though, and it’s called “guaranteed issue.” If you’re uninsured, or are ill and can’t get the treatment you need now, in the future you will be able to get coverage and treatment.
Guaranteed issue victory
The House and Senate bills both have guaranteed issue, which goes a long way toward solving our national access problems.
Not only will almost all Americans have the security of coverage and treatment, but that security will enable people to pursue the jobs they want instead of being stuck in the job they have for fear of losing coverage.
That freedom means significant efficiency gains in the national labor market, something conservatives and business should embrace as enthusiastically as workers’ advocates.
There is a moral hazard problem associated with guaranteed issue, though. If people are guaranteed coverage even after they become sick, most rational consumers would never pay anything into the system until they become sick and are about to incur hefty bills.
That’s why the individual mandate is so important. Fortunately, the House and Senate bills do have an individual mandate, so the system won’t collapse when we guarantee insurance for all.
Paying for guaranteed issue
In turn, the individual mandate requires subsidies for lower-income and middle class Americans. One of the open questions about the current bills is whether we help make coverage affordable for the middle class by taxing, ironically, middle-class and lower-income workers with good benefits.
Most of these “Cadillac plan” workers make in the $20,000-$50,000 range, and many of them gave up raises to get decent coverage. Others fall into the Cadillac category simply because of a pre-existing condition, or because they work at a small company. Taxing the middle class and lower-income workers to subsidize other middle class and lower-income workers makes absolutely no sense.
The alternative is to apply a surtax to the millionaires who have gotten trillions in tax breaks over the last decade, almost all of whom have absurdly good health coverage. Seems like a pretty easy choice, both from a policy perspective and politically.
Setting standards
Minimum standards of coverage are an important aspect of guaranteed issue, and the House and Senate bills include them. By combining guaranteed issue and minimum standards, for the first time in American history, we’re poised to finally join the long list of countries whose citizens can get care when they’re sick.
By contrast, the libertarian proposal to allow cross-state shopping to increase “competition” merely means insurance companies will offer even less complete plans than they already do.
Blown chances on cost
Despite being on the verge of a major access victory with guaranteed issue and minimum standards, there are dozens of changes that should be made to our health care system that aren’t even on the table right now.
Here are four examples of how the obstructionist Republicans (plus Lieberman) and the often-too-timid Dems seem to have blown opportunities to start seriously containing costs:
• Delivery overhaul – The most glaring omissions from current proposals are systemic changes in how care is delivered. No one will entertain changes to our fee-for-service structure that often encourages costly treatment at the expense of cheaper (and less profitable) preventative care, early diagnosis or less costly treatment alternatives.
• Public option – Another opportunity to rein in costs is the public option, but that appears to be facing its own death panel in the Senate.
For all the Republican lip service about fiscal responsibility, they’ve consistently opposed the one piece of reform — a public option — that would have introduced real competition and lower prices in the private insurance market. But those private insurance company contributions don’t come without strings.
• Smart tort reform – Another critical cost-containment measure that is being left out is tort reform. Democrats won’t bring it up, and the Republicans’ simplistic approach of damages caps isn’t the answer. Caps haven’t been terribly effective in states like Texas, and caps remove an important incentive to practice safe medicine.
The tort changes we need give more protection to providers if they follow evidence-based standards of diagnosis and care. Dems should show leadership by forcing trail attorneys and providers to come together to fashion sensible reform to protect good-faith, talented providers while punishing negligent and reckless providers.
• The other elephant in the room – Beyond the obstructionist GOP, there’s another elephant in the room: No one is talking about real cost controls surrounding end-of-life care. That’s because proposals to do something about spending in the last six months of life (when about 2/3 of all health care costs are incurred) get called “death panels” by the same conservatives who hypocritically fight against Medicare.
We all know there’s wasteful end-of-life spending, but it’s untouchable. At a minimum, Congress should have the courage to make living wills mandatory.
Bottom lines
Don’t be fooled: Washington — especially Senate Republicans and Lieberman — punted on addressing the costs of health care.
The current watered-down Senate proposals do only one big thing: by including guaranteed issue, they solve most of the access problems facing the uninsured and the insured who get sick.
Despite the resistance to cost reforms by 40 Republican senators and one independent from Connecticut, guaranteed issue is still a major access victory worth keeping.
Bundy is the political and legislative director for AFSCME in New Mexico. The opinions in his column are personal and do not necessarily reflect any official AFSCME position. You can learn more about him by clicking here. Contact him at carterbundy@yahoo.com.