debate to heat up in 2007
By Julie Appleby
Tuesday, December 19, 2006
WASHINGTON — Sen. Ron Wyden, getting a jump on his fellow
lawmakers, outlined an ambitious plan last week that he says
will guarantee all Americans health insurance similar to what
Congress now gets, and save money at the same time. The Oregon
Democrat's plan, the most wide-reaching health reform proposal
since President Clinton's in the early 1990s, comes as Democrats
are poised to take control of Congress amid speculation about
what that means for health care.
"There will be a gazillion flowers blooming because of the
pent-up desire to do something for the uninsured," says Bridgett
Taylor, Democratic staff member of the House Energy and Commerce
Committee, speaking last week at a press briefing.
Many observers, such as Drew Altman of the Kaiser Family
Foundation, expect Congress to focus on Medicare, prescription
drug costs and safety, as well as efforts to cover the
uninsured. All debate will play out against the background of
the 2008 presidential election, with both parties working to lay
claim to what they expect will be popular issues with voters.
Wyden's proposal may test whether the idea of broad health
reform can win centrist support after years in which such
proposals have been largely absent and considered too
politically risky. Many political observers expect Congress to
continue to shy away from big efforts.
"The health measures that Congress and the administration will
fight over in 2007 will be modest and will be as much about
positioning for 2008 as solving the nation's health care
problems," says Altman at the Kaiser foundation, a non-profit
Wyden's plan would rely on private insurers to offer coverage
that is at least as comprehensive as one of the standard plans
now offered federal employees, require all Americans to buy it
and tax employers to help pay for it.
His plan is one of many areas of health policy expected for
debate starting in January. Others include:
Some Democrats, including incoming speaker Nancy Pelosi, D-Calif.,
are expected to push to require the government to negotiate drug
prices for members of the new drug program. But there is
disagreement on how it would be done and whether it would result
in lower prices than the current method of having private
insurers negotiate the prices.
Other items to watch:
• Congress is expected to look at the amounts paid to private
insurers that provide alternatives to traditional Medicare, such
as HMOs. Some Democrats, including Rep. Pete Stark, D-Calif.,
are concerned that those alternatives, called Medicare Advantage
plans, are paid about 11% more than it would cost to provide
care under the traditional program, according to government
oversight reports. But efforts to reduce those payments are
likely to hit opposition from lawmakers who see Medicare
Advantage plans as important private sector options for
"The majority of Republicans and some Democrats are supportive
of Medicare Advantage overall, so it's not clear they can go
after them as much as Stark might like," says Andy Bressler, who
follows health policy issues for Bank of America.
• Another issue is financing for the program. Medicare's
hospital trust fund is quickly heading for financial trouble as
baby boomers age and health costs rise faster than inflation.
In the closing hours of Congress last week, lawmakers eliminated
a contentious, planned 5% payment cut for physicians who serve
Medicare patients. While that gives the new Congress more time
to figure out what to do about the overall program, it also
creates a bigger deficit, says Joe Antos of the American
• Many Democrats have pledged to do something about the
so-called doughnut hole in the Medicare drug benefit, in which
beneficiaries pay the full amount of their drugs before
government coverage kicks back in. But the Democrats have also
pledged not to pass legislation that costs money unless they
have a way to pay for it. Eliminating the doughnut hole would
cost millions, and it's not clear where that money would come
Democrats and some Republicans, notably Sen. Charles Grassley,
R-Iowa, have strongly criticized the Food and Drug
Administration and the pharmaceutical industry, expressing
concerns about whether drugs are given adequate safety reviews
before approval and why many drugmakers fail to do required
safety studies after their drugs hit the market.
"FDA will get a charge to deal with that more aggressively,"
Funding for a children's health program through the joint
state/federal Medicaid program is up for renewal and is expected
to pass. Observers including Antos and Bressler say they expect
Democrats will not only renew the program, but also put more
money into it so it can cover more children.
Congress may also consider funding pilot projects in the states
to experiment with new ways to cover the uninsured.
Wyden says his proposal to insure all Americans, which he plans
to introduce in January, would not cost any more than is
currently spent on the health care system, according to an
economic analysis done by The Lewin Group. It will slow the
rate of health care inflation, he says, saving $1.4 trillion
over a decade, and ensure that no one will lose health coverage.
"This will give people security so … they don't have to worry
that their (health insurance) coverage will not be there the
next day," Wyden said last week.
But few expect that broad federal efforts to cover more
uninsured will pass. Lawmakers are still skittish over the
resounding defeat of the Clinton health system overhaul proposal
"Politicians are still wary of repeating those mistakes," says
Mark Hayes, health policy director for the Republican staff of
the Senate Finance Committee.
In the coming year, federal efforts will run into two
constraints, says Uwe Reinhardt, an economist at Princeton.
"One is the president's veto pen and the other is the federal
deficit," he says. "The most Congress can get is small
incremental changes that don't cost a lot of money."