Based on the President's description of his health care agenda
during the 2008 presidential campaign, Americans believe they were
promised three things:
- If they are satisfied with their current coverage, nothing will
- If they are not satisfied, or have no coverage, they will be
offered a plan at least as good as Members of Congress have;
- The cost of their family health coverage will fall by an
Against that backdrop, the Affordable Health Choices Act,
unveiled by Senator Edward M. Kennedy (D-MA), overturns all three
of these promises. It is a setback for bipartisan health care
The 615-page bill would transfer enormous power over health care
to Washington, including regulatory power traditionally exercised
by the states over the rules governing health insurance.
Within the federal government, much of the decision-making power
would be concentrated in the hands of the secretary of health and
human services (HHS), who would be given broad regulatory authority
over various aspects of health care financing and delivery.
In contrast to the more broadly worded committee working paper
unveiled earlier, in this bill Congress prescribes how
exactly the federal government would control and expand private
health insurance, how HHS would supervise state health insurance
market changes, and how the federal government would determine the
kinds of medical benefits and procedures to be covered by
"qualified" private health insurance plans.
Opportunities for Consensus
The earlier committee outline contained some health policy
proposals that could--depending on the details--attract broad
bipartisan support, such as a role for the states in enacting
health insurance market reforms (including "the option" for the
states to create health insurance exchanges to expand personal
choice and coverage) and providing direct assistance to low-income
persons to secure coverage.
The earlier bill draft leaked to the media last week outlined
the rights of patients to choose their doctors and to retain an
"effective" relationship with their physicians, as well as the
right of doctors and other medical professionals to judge what is
best for their patients.
On these points, there could be broad agreement among liberals
and conservatives alike in Congress.
Unfortunately, the latest version of Senate Committee bill
contains provisions that conflict with bipartisanship and
Americans' hopes for reform. Four are particularly controversial
and, if pressed, will derail successful reform:
1. A Public Plan That Would Compete with Private Health
Insurance. Under Title I, the bill specifies how the HHS would
assist the states in setting up a "gateway," the committee's
version of a "health insurance exchange." In establishing a
gateway, the states would be required to make "qualified health
plans" available to state residents, and in making available that
coverage, "a Gateway shall include a public insurance option."
In other words, the committee envisions a government-sponsored
plan competing with private plans on a supposedly level playing
field. That means government officials would ultimately be
responsible for one plan while setting the rules of competition for
all plans. It is impossible to believe that government officials
would set rules without stacking the deck in favor of their own
plan. It is hardly surprising, then, that under the public
insurance option, the authors of the Senate bill have a notation:
"Policy under discussion."
A public plan conflicts with the assurance that Americans
satisfied with their current coverage will not be affected. A
public health insurance plan would displace the private coverage of
many Americans, regardless of their personal preferences.
An independent analysis by the Lewin Group, for example, shows
that a public plan depending on eligibility and payments rates
could result in up to 119.1 million Americans being switched by
their employers from their existing coverage or transferred to
government-sponsored coverage so that employers can reduce benefit
costs. Thus a public plan, especially combined
with a mandate on employers to offer government-specified coverage
or pay a tax, would mean that millions of Americans would be pushed
out of the private coverage they have today.
2. Mandates on Businesses and Individuals. The committee
bill would impose "a shared responsibility" on both individuals
(under Section 161) and employers (under Section 163) to pay for
health coverage. These requirements amount to mandates,
though the penalties are not spelled out.
An employer mandate would be a regressive tax on business that
would be directly shifted to employees in the form of reduced
future wages or job losses. It would also spur many employers to
drop private coverage, paying the tax rather than having to buy
An individual mandate would force Americans to buy a set of
health benefits designed by the government or suffer some penalty.
Again, mandates without penalties are meaningless, but the
penalties are unspecified in the committee bill.
3. Federal Regulation of Health Insurance That Would
Undermine State Flexibility. In expanding coverage and
improving health care delivery, the federal government and the
states should enter into a partnership of equals; the states should
not be reduced to mere agencies of federal authority.
Under the committee bill, Congress and federal officials would
exert a high degree of control over health insurance, including
underwriting and rating rules, and would prescriptively organize
the market for competing health plans. That would limit the ability
of states to design rules and market rules that fit local
While the federal government certainly has a role in encouraging
states to make health insurance accessible and affordable rules for
all Americans, because of the radical diversity in state health
insurance markets, states rather than Washington are best suited to
design policies for universal coverage within their boundaries.
4. Federal Control and Standardization of Health
Benefits. Under Title I, Part III, the bill would create a
"Medical Advisory Council" (appointed by the secretary of HHS) to
make detailed recommendations on the "essential health benefits" to
be included in "qualified health plans." HHS would then submit the
report for congressional review. HHS's benefit determination would
be "applicable" for insurance coverage unless there was a joint
resolution of Congress disapproving such a report "in its
Senator Kennedy's proposal, understandably at this stage in the
process, is an "opening bid" that instead reflects a certain
political philosophy and the aspirations of certain constituencies.
But Senator Kennedy also seeks serious and lasting reform of the
nation's health care system.
For that to happen, the wise next step would be to redraft the
legislation in a way that commands broad bipartisan support. That
means seeking alternative ways of achieving the goals of those
provisions in the current bill that jeopardize a final agreement
and will encounter strong opposition from most Americans.
Robert E. Moffit, Ph.D.,
is Director of the Center for Health Policy Studies and Stuart M. Butler, Ph.D.,
is Vice President for Domestic and Economic Policy Studies at The