Without doubt, health coverage change is in the wind. Some form of change will be mandated by both federal and Ohio governments. Which way is the wind blowing and where will it drive the craft? Concrete strong indicators of initiatives have come from the Administrations of both President Barack Obama and Governor Ted Strickland. These signs signal that significant system change will not happen anytime soon but the health coverage system will be altered piecemeal.
FEDERAL INDICATORS: WHAT WILL CHANGE: PROMISES, PRIORITIES & PRECEDENTS
Determining what gets changed, when a particular change happens and how it comes about will flow from a blend of Obama's practical and ideological sides. He outlined his ideas for health care reform in the plan that he released early in his Presidential Campaign.
Promises
During his campaign, President Obama consistently listed health care among his top priorities. Since his election, he has continued to designate it as a priority. As concrete proof of its importance, and the first indicator of direction, Obama named former Senate majority leader, Tom Daschle as both Secretary of Health and Human Services and director of a new White House Office on Health Reform.
This unprecedented dual assignment gives Daschle both control over the day-to-day regulation of health and a major leadership role in any White House initiatives to change health care. It gives him a large stick to cause change. First, his department, through Medicare, is the largest single health care payor. When Medicare takes a major initiative, like not paying for medical mistakes, the private sector soon follows. Second, Daschle will also drive the team that develops the White House reform plan. Finally, as a former congressional leader, he has unique credentials and contacts to help craft a plan that has a consensus of lawmakers and the administration.
In his first Senate hearing as Secretary Designee, Daschle described the U.S. health care system as mediocre, expensive and all to often unavailable. Long a vocal advocate of reform, Daschle strongly supported the ill fated national health plan drafted by Bill and Hillary Clinton in 1993. Furthermore, as a Cabinet member, Hillary Clinton can add support and input to health coverage reform efforts that she has long championed.
Lawmakers have given health coverage reform a similar high priority. They submitted numerous change bills in the session that ended in December; many will resurface. Also, some lawmakers launched trial reform balloons even before the new sessions are fully underway. This includes both Senator Ted Kennedy [D. MA] and Max Baucus [D. MT], Chair of the Senate Finance Committee.
Finally, polls consistently show that voters place health coverage reform in the top several priorities, even in recent surveys where the economy clearly takes the top spot.
Priorities: The Economy & Health coverage reform
Job number one for the President and Congress is the economy. For the next year or so, whatever lawmakers do [or don't do] will be governed by or tied to our economic situation. Federal money will be limited for massive projects like universal health coverage after the unprecedented federal spending on economic recovery initiatives and the wars. Even before adding the price tag for the economic recovery package, the U.S. has a $1.2 trillion deficit.
The biggest issue relating to health care and insurance coverage is cost. Paradoxically, reducing the cost to the buyer and user will have a very high short term cost. The problems with the economy will not kill health care reform. Rather, health care will be classed as part of the economic problems and some solutions included in the economic recovery package.
Precedents: Some Lessons Learned
Obama and Congress will look to the past for an example of what not to do and how to proceed. The same instance gives both the negative and the affirmative model: The Clinton reform efforts of 1993. The lesson learned from that ill fated initiative: Health care system is an elephant [no political pun intended].
1. Do not eat the elephant all at once. Major systemic change causes too much upheaval and draws too much opposition. Over time, small pieces can redirect the whole system.
2. Take small bites. When the Clinton health coverage reform package died under furious and almost universal public attack, it did not disappear. Rather, its supporters merely unbundled it and passed parts of it in smaller increments. For example, the genesis of the following legislation can be found in the Clinton Plan: HIPAA, the Newborns' and Mothers' Health Protection Act, and the Women's Health and Cancer Rights Act.
Also, Congress has a favorite tactic for passing a costly or controversial item: attach it to another bill that is sure to pass. In its extreme, this is called a Christmas tree bill. Items not directly related to the bill, or so-called ornaments, are hung on the tree, the bill. When the bill passes, the ornaments ride along with little or no scrutiny.
Incrementalism is the key to health coverage reform changes. Current reform efforts will simply occur one item at a time over a long period. Rather than a major reform package, lawmakers and the administration will follow previous successful change models and pass pieces of the reform that eventually will result in systemic change. For example, the Economic Recovery And Reinvestment Act that recently originated in the House contains numerous projects, some of which were free standing bills in past sessions of Congress. A number of the ornaments relate to health coverage reform.
WHAT CHANGES CAN WE EXPECT & WHEN
What piecemeal changes to the health system can we expect to see? How will the changes be picked? President Obama will follow the same type of path that marked his campaign and the building of his administration: pragmatism mixed with idealism. An example of this mix can be found in his promise to "not practice Washington business as usual" and the reality of finding individuals who have the experience to "hit the ground running." The reality won and most of his team are people with prior Washington experience who served either in the Clinton or the Carter administrations.
In terms of health coverage reform, this balance of practical and ideal comes alive through the following principles. The items are "ideal" because they were part of the Reform Plan on which Candidate Obama campaigned. Each has an inherent "practical principle" or basis that affects its chances and the timeline for enactment.
Short Term Timeline: Within The First 100 Days Honeymoon Period With Congress
Note To Reader: We suggest that you first read the entire list of "Practical Deciding Factors" in the left hand column of the tables below. One or more of them can apply to each "Item or Issue."
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Practical Deciding Factors |
Item Or Issue |
Synopsis & Comments |
|
r Can stand on its own
r Requires no Congressional action
r No expenditures necessary or no discernable fiscal impact
r Part Of Economic Recovery Package, i.e., tied to generating jobs or business
r Clear Congressional Support
r Christmas Tree
|
Stem Cell Research: Reversing Bush Executive Order relating to embryonic stem cell research |
President Obama has long supported this issue. He voted for it as a Senator. It was part of his campaign health plan. Finally, it takes only a stroke of the Presidential pen. |
|
Health Care Information Technology:
Federal money would help defray the cost of creating electronic medical records.
This would facilitate sharing needed medical information and provide cost-saving efficiencies. |
Several bills were introduced in the past session of Congress that have laid the ground work for this concept. Health Information Technology [IT] investment was a centerpiece of Candidate Obama's plan to lower health care costs.
This would both create IT jobs in hospitals, physician offices and the computer industry. Thus, it has been included in the economic recovery bill that originated in the House. |
|
Increase Medical Research |
Foster increased research into the preventive care models, Alzheimer's, Parkinson's, cancer, heart disease, and improve research facilities at the Centers for Disease Control, universities and the National Institutes of Health. |
|
Invest In Care Delivery |
Government funds would go to enhance preventive and wellness services, increasing support for community health centers, and increasing the number of primary care providers in preparation for universal health care.
|
|
Temporary Medicaid Expansion
Increase money to states to cover the involuntarily unemployed through 2010.
Increase by 4.8 % federal share of Medicaid through 2010. |
The rationale for this expansion is two fold: help the state with their economic difficulties without creating new programs and help the financially disadvantaged and the newly unemployed. |
|
Temporary COBRA Expansion: Increasing coverage beyond 18 months for older workers and paying 65 % of premium for the first 12 months. |
As part of the economic recovery package, this COBRA expansion is intended to lessen the financial impact of job loss on older individuals who do not qualify for Medicare yet, including early retirees, buy-outs, and those who have difficulty transitioning to other jobs. |
|
r Vehicle Already Exists
r High priority of politicians and the voters |
State Children's Health Insurance Program [SCHIP]: Health insurance coverage funded by Federal Gov. through the Medicaid program on the state level. |
Continuation of SCHIP has been a priority of Congressional Democrats. Bills were twice vetoed by President Bush. It has become one of the first bills passed by the House in the new session of Congress.
Reauthorized for 4 years, SCHIP would serve as a base for Candidate Obama's plan of universal health care for children and could help usher in his proposed mandate that parents get health coverage for all kids. |
Intermediate Timeline: Before The Next Election In 2010
Why make certain changes before the next election? So the Congress and the Administration can show concrete progress on their promises while campaigning to maintain their majority.
House Ways and Means Health Subcommittee Chairman Pete Stark (D. CA) has warned that health care reform, other than the economic recovery package items, may need to wait until 2010. Also, Senate Finance Committee Chairman Max Baucus (D. MT) predicts floor consideration of a comprehensive reform package by mid next year.
However, many financial analysts see the financial downturn lasting beyond 2010. This would make it very difficult, if not unlikely, to find the money to fund major changes until the economy recovers.
|
Practical Deciding Factors |
Item Or Issue |
Synopsis Or Comments |
|
r Some but minimal financial impact
r Sets the stage for universal coverage |
Cover children up to age 25 under parents' plan. |
If the parent has coverage for children, the carrier would be required to cover young adults. This group represents a major portion of the uninsured generally because their entry level income does not support health insurance or it is not a priority for them. |
|
Medicare Negotiation of drug prices for all government health programs |
The underlying rational behind this proposal is the ability of the government to require cost data and the use of volume purchasing.
This has faced very hostile opposition from the drug manufacturers who fear the loss of margin and an accompanying inability to fund research.
Insurance plans also oppose this change because when one segment of the health industry loses money due to a government program [like Medicare and Medicaid], they pass that loss onto the private sector. |
|
Require carriers to disclose: % of premium that goes toward care versus admin., and quality data. |
This requirement is intended to foster a "prudent consumer" by making information available about the cost of care and efficient operations. It requires no tax support and little carrier expense. |
Long Term: Before The Next Presidential Election In 2012 & Beyond
|
Practical Deciding Factors |
Item Or Issue |
Synopsis Or Comments |
|
r Significant federal money required
r No current strong consensus on need nor a clear vision of the end product |
Employer Pay or Play |
By law, as in Massachusetts, employers are mandated to either offer health coverage or pay a set fee into a state fund. |
|
New "National Health Insurance Exchange" insurance program.
|
Small businesses & individuals without coverage can buy coverage that resembles the Federal Employee Healthcare Benefit Plan.
This proposal is similar to the model enacted in Massachusetts. It is principally funded with tax dollars and has exceeded budget every year it has existed. The deficit projected by analysts for 2009 is $1 Billion. |
|
Income Related Subsidy To Individuals For Insurance Purchase |
Subsidy would be limited to those who purchased an Exchange policy. This would require significant infusion of federal money. |
|
Entitlement Programs Reforms [e.g. Medicare and Social Security]
Mr. Obama's announced that he would hold a "fiscal responsibility" summit early in 2009 to address entitlement reform. |
According to the Medicare Trustees Report, the program faces an unfunded liability of almost $30 Trillion.
This type of reform proposal can face strong and hostile opposition if it contains any hint of benefits reduction. Historically, Seniors have quashed such efforts |
OHIO INDICATORS & ISSUES
Shortly after he assumed office, Ohio Governor Ted Strickland announced the goal of reducing the state's uninsured by 500,000. He convened a special panel and charged it to research and recommend health coverage changes for the state.
In July of 2008, Governor Strickland received the final report from the special panel. In many ways, the report's recommendations resemble the major changes that Massachusetts adopted and funded with tax dollars three years ago. To help broker change to the health coverage system, Strickland recently named former State Representative Jim Raussen, a Republican from Springdale to a special post in the Department of Development. Raussen was considered the Ohio House front person for Republican health coverage reform efforts.
In the last session of the General Assembly, Democratic legislators introduced 4 bills that outlined major systemic change. Furthermore, lawmakers from both sides of the aisle sponsored numerous bills that would change parts of the health care and coverage systems.
Governor Strickland and the General Assembly are now faced with the same mammoth constraint on his health coverage reform plans as President Obama: the economy. Ohio faces a $7 billion deficit in the budget for the new biennium that must be resolved before it begins July 1 of this year. In addition, any available monies must go to a higher priority: solving the problem of funding education after the old funding mechanism was invalidated by the Courts.
Ohio will receive some relief from the federal economic recovery package but not enough to offset the costs of its own major health coverage initiatives. Ohio will see health coverage change but most of it will flow from federal actions on items like SCHIP and Medicaid.
Some Caveats
- In politics, anything can and will happen. Politics is the epitome of Murphy's Law.
- Even though Obama has strong support from voters, Congress will march to its own drums. One thing to watch out for: Many pundits speculate that the Senate may move a reform initiative relatively quickly. The driver is Ted Kennedy. To recognize his long time commitment to and efforts on behalf of health care reform and in light of his health, his Senate colleagues could pass a Kennedy Health Reform bill in the near future.
- The time elapses, the greater the possibility that action taken will not resemble the plan of today. The future is full of contingencies, the unforeseen and change.
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