Reining in runaway costs of health care

Posted: Tuesday, October 20, 2009

The following editorial appeared in the Kansas City Star:

Good for health care reform. It has outlasted the fury of the tea parties and the manufactured hysteria over "death panels." Prospects Congress will pass significant legislation this year are looking brighter.

Lawmakers now must craft a bill that not only makes health care more affordable and accessible but also curbs the soaring inflation in the industry.

The best way to hold down spending is to introduce competition through a public plan that would vie for business alongside private insurers.

Unfortunately, a public option isn't included in the bill that passed the Senate Finance Committee last week. That measure instead proposes a weak alternative - a system of non-profit health cooperatives.

But the insurance industry inadvertently lent support to the case for a public option when it released an analysis of the new bill. While seriously flawed, the analysis signaled the insurers' intent to pass along any extra costs they would incur in health reform to policyholders.

A robust public option would provide relief from the insurers' lust for obscene profits at consumers' expense. Most polls indicate a majority of Americans favor such a move. Congress must find a way to make it part of reform.

As negotiations proceed, lawmakers should stand their ground against fierce lobbying intent on weakening efforts to curb runaway medical spending. Specifically:

• They must preserve one of the best features of the Senate Finance Committee's bill - creation of a commission empowered to enact measures aimed at saving money and improving patient care in the Medicare program.

Republicans and some Democrats have huffed that such a commission - modeled after the nonpartisan panel that decides on military base closings - would tie the hands of Congress. Actually, it would empower Congress.

As Max Baucus, the Montana Democrat who chairs the Finance Committee, said this week: "I do believe too often Congress has too hard of a time saying no to providers."

Regrettably, that's been proven all too true.

Eager to secure the drug industry's cooperation, Baucus and the White House already have agreed to a deal that would bar the government from negotiating lower prices for Medicare drugs. That was a mistake Congress must undo.

• Lawmakers must protect another good provision of the Finance Committee bill - a 40 percent excise tax on high-end insurance policies.

The so-called Cadillac plans - those costing $21,000 or more for family coverage - provide a full menu of services with limited deductibles and co-pays. While valuable to patients who need frequent treatments, they also encourage overuse of medical services.

Money to finance health reform has to come from somewhere. If lawmakers yield to union pressure and scrap the proposed tax on gold-plated insurance plans, they'll have to find another revenue source.

• Congress must correct a central flaw of the Baucus bill. It leaves too many people uninsured - voluntarily or otherwise.

Subsidies proposed in the bill still make insurance policies burdensome for the working poor. A family of four making $44,000 a year would have to pay more than $3,000 in premiums, along with deductibles and co-payments.

At the same time, the bill provides too much cover for healthy people who prefer not to purchase insurance.

Adults who opt not to purchase a policy would have to pay a $750 fine. That's too low. The participation of healthy young people in insurance plans and exchanges is essential for holding down the costs of care for everyone else.

Watching Congress get this far has been akin to observing a bear lumber through a thicket. But comprehensive health care reform is closer to reality than ever before.

Congress must withstand the coming assault from interest groups and pass legislation that makes health care work better for U.S. residents.

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