If You Can’t Be with the One You Love, Love the One You’re With: Health Reform in America 2010

By Catherine M. Dunham

Barack Obama ran for President on a centrist, relatively cautious, health reform platform that promised to reduce the number of uninsured people, improve health care quality, and encourage efficiency and effectiveness in the delivery of health care.  As he entered office, he placed health reform as a high domestic priority, second only to economic stabilization.  Hopes and expectations escalated.  The fact that Democrats controlled both the House and the Senate contributed to the belief that major structural reform was on the way, far more ambitious than the President’s original platform.

The reform would include universal coverage, with both employer and individual mandates, in addition to significant expansions to Medicaid and Medicare.  Reformers believed that an employer mandate would require that larger employers make a substantial contribution to the cost of an employee’s health insurance premiums, with a significant penalty for those who did not comply.  The individual mandate, it was hoped, required that everyone who could find affordable insurance must purchase it.  The individual mandate would also be enforced with significant penalties for those who did not comply.  Provisions for major expansion of the Medicaid program, a state and federal partnership providing care to poor and disabled people, would bring over 15 million new uninsured people into coverage.

Quality would be improved, again it was hoped, by the support of research to better distinguish health care practices that actually worked from those that didn’t, and put that knowledge to work in shaping care and financing policies.  The new Administration also made the cost of health care a central economic issue early in 2009.  Health care costs have risen at two and three times the inflation rate for the past twenty years. The costs of Medicare, Medicaid and health insurance for public employees was squeezing all funding flexibility out of local, state and federal budgets to the detriment of other high public priorities such as education and job creation.

Many in the progressive community saw moving to a “single payer” system as a logical and fair solution to the cost, equity and quality problems.  In many other industrialized countries, oversight and financing of health care is delegated to government or quasi-governmental entities that regulate and negotiate the shape, cost and quality of services, pharmaceuticals and medical equipment.  Physicians, hospitals and other caregivers are reimbursed for their services through a predictable and transparent process.

In contrast, the United States has a mix of public and private plans that vary from state to state, even from county to county. Little or no public input exists. Our market-driven system has resulted in a situation where over 40 million uninsured Americans have no coverage on a given day (perhaps double that number over the course of a year), primarily because of the cost of coverage, and another under-insured 65 million Americans struggle to afford the quality of coverage that will protect them from financial ruin.  We spend substantially more and get less in terms of quality, equity and life expectancy.

But a “single payer” approach favored by progressives (physicians, too!) was dismissed early on by congressional Democratic leaders as being politically infeasible. Progressives then pinned their hopes on winning a “public option” in the array of new coverage plans to be required in the new system.  They thought that a public option would have the advantage of lowering overhead costs associated with traditional insurance industry marketing, exclusionary underwriting, and profits models. The hope was for a public option to compete with private plans to drive down the overall cost of premiums.  One example of this approach was the Federal Employee Health Benefits program.

But the length and nastiness of the year-long debate on features of a bill exposed deep divisions among Democrats, presented an easy target for Republicans, became a source of concern among the public at large over cost and size, and an organizing principle for a new political force in American politics, the right-leaning tea party movement.

The final version of a bill, if there is to be one, will be drawn from the separate bills that the House and Senate passed in late-2009.  The prospects for a “public option” are dim.  The employer mandate has been shrunk to a modest requirement for large employers to contribute to coverage of their employees, or pay a minimal fine.  There is troublesome new language regarding access to abortion services.

What, then, is to like in a probable compromise from among watered down versions of health reform?

Insurers will no longer be able to drop or deny coverage to people who develop serious or chronic illnesses.  Most low- and lower-middle income families should be able to afford decent insurance coverage.  Over 30 million Americans will be newly covered.  Investments will be made to effectiveness research so that investments in care and prevention can be made more wisely.  This package represents significant progress that justifies support.

Despite leadership by President Obama, as well as House and Senate Democratic Party leaders and others, reform will not reduce the flow of money and control to powerful industry groups such as insurers, hospitals, pharmaceutical companies and physicians. These are battles for another day.  The President and the Congress probably underestimated the political difficulty of advancing the cause of reform in this economic environment. The war between interest groups over the details of the legislation has grown tiresome.  It is time to move on to other pressing priorities related to jobs, the economy and peace.  We need to take the gains of anticipated legislation and use them as building blocks for a more affordable and higher quality health care system for all Americans.

Catherine M. Dunham is President of the Access Project, a national health reform research and advocacy organization. In 1988 she was an architect of one of the first state universal health plans in her capacity as policy coordinator for then-Massachusetts Governor Michael S. Dukakis.