Debate Over Healthcare Reform Moves Into Final Phase

Now that the broad outlines and many of the details of healthcare reform are in sight, pundits are fiercely debating whether it is going to help or hurt. I am not talking here about Republican talking heads and bloggers, who are reflexively opposed to any Democratic bill and offer no alternatives. I am referring to centrist and left-wing observers who are taking positions on the current legislation.

On balance, as Paul Krugman of The New York Times points out, the House measure unveiled this week is appealing for what it does. It would cover 96 percent of nonelderly American citizens, adding 36 million more people to the ranks of the insured. It would provide government subsidies to households earning up to 400 percent of the federal poverty level. Krugman exaggerates the strength of the "public option" in the bill; but for many progressives, any public plan is better than none.

I would add that requiring all but the smallest employers to cover their workers or pay up to 8 percent of their payrolls in healthcare contributions is a major step forward. So is the sliding scale cap on maximum out-of-pocket health expenditures by individuals and families. And while the fine print on the proposed insurance exchanges will make all the difference in their success or failure, I like the idea of progressively opening up the exchanges-which will initially accommodate only individuals and small firms--to companies with up to 100 workers by 2015.

Krugman urges progressives to get behind this bill, and he believes that most will. But not all. There is still a group of Congressional Democrats, advocates of a single-payer measure, who are withholding their support. Miles Mogulescu, an entertainment attorney and activist, articulates the viewpoint of many on the left in a Huffington Post column that excoriates the Washington politicians for watering down the public option so far that it will have virtually no impact on the insurance market. In his view, this public option "gives political cover to progressives and liberals in the House and Senate to vote for mandates that will use the power of the federal government to force uninsured individuals to buy inferior and over-priced private insurance or be fined by the IRS." He's not sure that he'd support this measure.

Stanford University health economist Victor Fuchs, whom I would classify as a centrist-pragmatist, notes in a New England Journal of Medicine essay that whatever happens in Congress, a "true remedy" for the health care crisis "wouldrequire major changes in the financing and organization of care;such changes currently have little support from either politiciansor the public. But a start must be made." At a minimum, he says, reform legislation should create insurance exchanges; wean us away from the employer-based insurance system by eliminating or reducing the tax exemption for company-provided coverage; appoint an expert commission to devise ways of changing the method of Medicare reimbursement; and ensure continued funding (beyond what the Administration has already won) for a quasi-independent institute to do technology assessment.

The first three of those recommendations are already embodied in either House or Senate legislation, and the insurance exchanges, at least, will be in the final bill. As for the fourth, we can expect continued pitched battles over comparative effectiveness research and its link to insurance coverage. But unless we can get a handle on the explosion of new technology, there's little chance we will be able to control costs.

Overall, Fuchs believes the legislation is moving in the wrong direction by expanding employer-based coverage and raising the eligibility limit for Medicaid. He'd prefer an approach like that of the Wyden-Bennett bill, which would have everyone buy insurance in the individual market with contributions from employers and government subsidies. But that bill is going nowhere currently, as he acknowledges. So perhaps what's on the table now is our best bet for moving us along the road to reform.