Remember Harry and Louise? In television ads in 1993 and 1994, they fretted at their kitchen table about a health reform plan designed by “government bureaucrats.” The spots, funded by the medical insurance industry, helped kill President Bill Clinton’s ambitious overhaul and set back reform efforts for 15 years.
Now, people’s insurance premiums are double what they were then, more people can’t afford them and economists agree that the system is headed toward collapse. So, this time, things were supposed to be different. Insurers have been backing health reform because it could give them millions of new customers from the pool of uninsured Americans who’d be required to get coverage, many with government subsidies. In exchange, insurers agreed to provide coverage to people with pre-existing conditions, eliminate caps on benefits and drop other noxious practices.
On Monday, however, that bargain showed signs of unraveling. The industry launched a torpedo at medical overhaul in the form of a study that purports to show that the key Senate version would raise premiums far more than if the system were left alone. Given the timing of the study--on the eve of Tuesday’s finance committee vote--it’s hard to tell whether insurers want to kill reform or cut a better deal. We hope it’s the latter.
While the study reaches some questionable conclusions its key point is valid. The deal with the insurers won’t work unless insurance companies can offset their higher costs with a lot of new customers, and those customers won’t sign up without meaningful penalties for failing to do so. The finance committee sets such low penalties--zero in the first year, $200 in the second, no more than $750 a year when fully implemented--that uninsured people would do better to pay the fine and sign up for insurance only when they get sick, which is unworkable.
Unfortunately, this isn’t the only way in which Congress is opting for politically popular schemes of dubious credibility. The Senate finance plan, for instance, pretends that doctors will absorb more than $200 billion in cuts to their Medicare pay, which Congress has repeatedly declined to do.
Much as constituents and other stakeholders don’t want to hear it, the reality is that genuine reform won’t be free or painless. It will just be cheaper and less painful than doing nothing, as events since Harry and Louise’s day so amply illustrate.
Blame for this lack of candor falls largely on Republicans, who have opted out en masse, preferring instead to deal President Barack Obama a political setback. They demonize every option, making those who favor reform fearful of telling the public the hard truth.
There are, nevertheless, several credible proposals in the reform legislation. The Senate gets part of the funding issue right by proposing to tax “Cadillac” medical insurance plans. The House has a “public option” that would provide competition to private insurers. But the former is not enough, and the latter is on life support.
Yes, change is unnerving. The real shame, however, will be if this opportunity is squandered because of political opportunism by opponents and political cowardice by advocates. Those who call for starting from scratch invite another 15 years of stalemate. As actress Louise Caire Clark said in this year’s version of the “Harry and Louise” ads, sponsored by pro-reform Families, USA, and the pharmaceutical industry, “A little more cooperation, a little less politics and we can get the job done this time.”
