NHPrimary.com: Dems like Medicare modeled health plan

NHPrimary.com: Dems like Medicare modeled health plan

Dems like Medicare modeled health plan
Published: Tuesday, January 22, 2008

By RICARDO ALONSO-ZALDIVAR
Los Angeles Times

WASHINGTON – Hillary Rodham Clinton, Barack Obama and John Edwards have been sniping at each other for months over health care, but there's one thing the top Democratic presidential candidates agree on: Americans of all ages should have the choice of buying a government-run insurance plan modeled on Medicare.

The idea, which would set up a competition between a new government plan and private insurance programs, has been overshadowed by the political horse race. But it's one of the most far-reaching and controversial proposals for making health insurance more affordable and more widely available.

Until now the government has guaranteed access to health care only for seniors and the disabled through Medicare and for the poor mainly through Medicaid. Under the proposals being advanced by Sens. Clinton, of New York, and Obama, of Illinois, and former Sen. Edwards, of North Carolina, the government would offer coverage for middle-class workers and their families, with comprehensive benefits comparable to those now provided for federal employees and members of Congress.

Participation in the government alternative would be voluntary, but the approach sparks widely differing reactions.

Mark B. McClellan, the former Medicare administrator in the Bush administration, called it a risky departure from the state-based reforms that the Democratic candidates have cited as their models.

What McClellan and other critics say they fear is that the government plan could underbid private insurers and, if large numbers of people sign up, it could eventually replace private coverage, including the employer-sponsored plans that now serve most middle-class Americans.

Despite these concerns, other respected experts say that giving people the option of joining a government plan might make for a sensible experiment.

"It could be a really fair way to test the market, both in terms of people's preferences and to see what kind of plan can be more successful over time," said health economist Marilyn Moon, a trustee of Medicare and Social Security during the Clinton administration. "It depends on the details, as these things always do."



For example, Moon suggested that a government plan could be used to test many of the latest ideas for reducing waste and improving quality, such as cutting payments for treatments of dubious value and rewarding hospitals and doctors that can document improved results in patient care.

"You could allow a government option as a way of setting a standard, as opposed to issuing lots of regulations that would apply to every insurer," she said.

Republican presidential candidates also have health care plans, but – in keeping with conservative principles – they rely on market forces, economic incentives and the private sector to increase access to medical insurance and try to rein in costs. None favors creation of a government alternative to private health-care programs.

GOP opposition is not the only political obstacle to the Democratic idea.

The insurance industry, one of the nation's most powerful lobbies, is against it. "It is a move to significantly expand the role of government and move people off private coverage and to public coverage," Karen Ignagni, president of America's Health Insurance Plans and the industry's top lobbyist in Washington, said.

Another critic is GOP presidential candidate Mitt Romney, who as governor of Massachusetts signed bipartisan legislation to provide coverage for all state residents – a model for the Democratic candidates.

"You can call (the government plan) an option, but if you don't put any restrictions on who can enroll, and you give the government leverage in terms of ability to negotiate prices, you create a situation that leads to a government-run system," said Lanhee J. Chen, Romney's domestic-policy advisor.

Clinton, Obama and Edwards dismiss the charge that they are trying to introduce the camel's nose of government-run health care under the tent of health reform.

"Hillary never supported a single-payer system, not even in the early 1990s," said Neera Tanden, Clinton's health-policy adviser. "She has always supported a plan to build on what we have in our healthcare system." (Only one Democratic candidate, Ohio Rep. Dennis J. Kucinich, favors switching to a full-blown government-run system.)

"The charge that this is socialized medicine is ridiculous," said Austan Goolsbee, a University of Chicago economist advising Obama. "This would remain one choice among many, and you don't have to pick it. You can pick a private option, or insurance through your employer."

The candidates' plans differ in some important provisions, and certain key details are not yet spelled out. But Clinton, Obama and Edwards follow the same basic framework.

As a starting point, they would create new insurance-purchasing pools through which individuals, families and businesses would have the option of buying coverage from a broad range of commercial insurers – or the new government plan.

Private insurers who wished to participate in the pools would not be allowed to turn people down because of previous health problems, and the insurers would be limited in how much they could raise premiums to account for a person's age and other factors that can affect health. All the plans in the pool would have to offer a minimum standard benefit package, which would likely be keyed to the government plan.

Individuals and families eligible for government subsidies through the candidates' health-reform plans would be able to use that assistance to buy either a private plan or the government coverage.

Businesses would be allowed to participate in the purchasing pools and enroll employees in the government plan. However, in Obama's plan, participation would be limited to small companies and individuals who don't have access to employer coverage.

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Most health-care costs are incurred by the sickest patients. In any given year, about 10 percent of the population accounts for more than 60 percent of health-care costs – a statistic that partly explains why insurers go to great lengths to avoid issuing policies to people with medical problems.

Edwards' policy director, James Kvaal, said he would insist on regulations to prevent private carriers from dumping their sickest patients into the government's care. "We will stop private insurance companies from competing by weeding out the sickest people," said Kvaal.

But what if those patients – weary of dealing with private insurers – sought out the government plan as a haven? Rules for insurers might not protect the government plan in such a situation. Instead, lawmakers might have to wade into the complex business of trying to adjust premiums between the government plan and the private policies.

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The candidates acknowledge that their plans are broad brush strokes for now, and important details would have to be decided with Congress. Nonetheless, the consensus among the three means that if a Democrat is elected, a new government insurance plan for the middle class could well be part of the strategy for tackling one of the nation's most worrisome problems.