Ambitious Health Reform Plans Take Shape in Senate

Congressional leaders continue to advance plans for a major health care system overhaul next year, although many of the features remain undefined.

Congressional Democrats—especially in the Senate—have increased their push since the election for a major expansion in health care access. The stepped-up effort comes as President-elect Barack Obama has largely held back from discussing his own health care plans, devoting most of his public statements to the country's worsening financial crisis.

“There is no way to fix the economic crisis without fixing the health care system,” said Sen. Max Baucus (D-Mont.) last month at a press conference where he outlined his approach to overhaul health care. His health care proposals have been closely watched because Baucus chairs the Senate Finance Committee, which has jurisdiction over Medicare and Medicaid.

A key feature of Baucus' plan would allow those who already have health insurance through their employers to keep their coverage but would add a nationwide insurance exchange for those who are unable to get coverage or who have lost their insurance. The insurance exchange would be a centralized registry of nationally available insurance plans that meet minimum coverage guidelines, provide affordable options, and do not bar coverage for people with preexisting conditions. The exchange plans would be available to any American who needed insurance. Other aspects of the Baucus plan would permit Americans aged 55 to 64 to “buy in” to Medicare coverage and would broaden Medicaid so that it was available to all Americans living below the federal poverty level.

The Baucus plan also would encourage collaborative care among health professionals and make changes to Medicare's physician payment system. The sustainable growth rate formula would be replaced with a system based on quality of care provided. Although many of the details of such a quality-based approach were not spelled out, the Baucus plan would create new systems for tracking and rewarding positive patient outcomes and add more quality-of-care measures.

Among the more controversial features in the Baucus plan is the source of some of the funding for what will be a costly reform. Baucus said financial assistance to encourage more medical students to become primary care physicians—another facet of his plan—will likely come from cuts in federal reimbursements to specialty physicians, mainly within Medicare.

Another feature likely to generate controversy is a potential requirement that all Americans either obtain private coverage or sign up for government-assisted health insurance.

“This step is necessary for insurance-market reforms to function properly and to end the cost shifting that occurs within the system,” Baucus said.

Among the people for whom the mandated coverage approach is likely to be controversial is Obama, who strongly opposed a similar mandate proposed by his primary campaign opponent, Sen. Hillary Rodham Clinton (D-N.Y.).

The expectation of many congressional observers and health care advocates that the Senate will take the lead on health care reform—reversing its role as the place where the 1993 health care debate ended—is also based on the efforts of Sen. Edward Kennedy (D-Mass.).

Kennedy's staff has been holding meetings since the summer on the health care expansions that are most-needed and most likely to succeed early in an Obama administration. Although details of Kennedy's approach haven't been made public, he signaled his commitment to the issue by identifying senators who would help him advance legislation early in 2009.

“I will also continue to lay the ground work for early action by Congress on health reform when President Obama takes office in January,” Kennedy said in a written statement after returning to Congress in mid-November. “We've been making real progress in our discussions about a consensus approach, and I'm optimistic we'll succeed.”

That consensus approach will require the support of at least some Senate Republicans, several of whom also have highlighted health reform as overdue. Sen. Mike Enzi (R-Wyo.), for example, has repeatedly called for full insurance for “every single low-income child who needs insurance” through future legislation to reauthorize the State Children's Health Insurance Program, an idea that was rejected by President George W. Bush as an overextension of the program.

The efforts of Senate Democrats to lay the groundwork for early action and to involve Republicans aim to avoid traps that doomed the 1993 overhaul effort led by former President Bill Clinton. His health-reform team debated the plan in private and handed Congress a complex, fully crafted plan with little room for negotiation. That approach quickly fell apart as interest groups fought against provisions that conflicted with their goals.

The House of Representatives is expected to take a lower-profile role in health care reform, in part because of Rep. John Dingell's (D-Mich.) loss of the chair of a key committee to Rep. Henry Waxman (D-Calif.). Dingell has introduced universal health care legislation every year since he took office and calls universal access the defining goal of his career.

Waxman has a strong interest in health care, but it may be the Democrats' large majority in the House that will help them pass any type of health care access expansion on which they can agree.

One potential hurdle for any health care overhaul is funding concerns raised by so-called Blue Dog conservative Democrats. This voting block gained members after the November election, and its leaders have insisted that any new spending be offset by cuts elsewhere or tax increases.

Baucus, Kennedy, and other congressional leaders have answered some calls for financial restraint by touting an expansion in access to health care as a key step to addressing the ongoing financial downturn by controlling cost increases in health care, which for years have far exceeded inflation. It's an approach echoed by many health care reform advocates.

“As the economy worsens, and growing numbers of businesses and families are unable to pay fast-rising health care costs, it is essential that we move expeditiously to enact health care reform,” said Ron Pollack, executive director of Families USA (see Enrollment Spike Pressures Medicaid's Strained Budget).

The Baucus plan, “Call to Action: Health Reform 2009,” is posted at<http://finance.senate.gov/healthreform2009/home.html>.▪