Wednesday, May 6, 2009


The Senate Finance Committee held another session on health care reform issues this week, focusing on ways to move towards universal coverage.

The major news—at least as reported—was the non-event of total lack of agreement on the public plan option.

Most Dems on the Committee are for it, the Republicans are opposed. Senator Charles Schumer attempted to offer a compromise which would allow creation of a public plan, but with a more level playing field than prior proposals. Schumer’s suggestion, for a plan subject to the same regulatory requirements as private plans and with no government subsidy (for example through an initial appropriation), produced little enthusiasm. AHIP’s Karen Ignagni reiterated the insurance industry’s position that any public plan would overpower the private market, force insurers out of business and reduce coverage options. Given the skepticism already expressed by newly-minted Dem Arlen Specter and a number of other centrist Dems, the public plan concept appears to be in trouble.

As with the previous session on improving the efficiency of health care delivery, the Committee invited a dozen or so representatives of insurers (including Ms Ignagni), employers, consumers, and policy groups to provide their—very disparate—opinions. Not surprisingly, most of these individuals pressed their own agendas: The Chamber of Commerce, Business Roundtable, and NFIB representatives supported universal coverage but were appropriately conservative about changes to the insurance system. The AARP representative focused on Medicare affordability and subsidies. The representative of the Kaiser Commission on Medicaid and the Uninsured focused on Medicaid expansion. And so on.

The more interesting testimony was provided by two policy experts from different ends of the political spectrum: Stuart Butler of Heritage Foundation and Len Nichols of the New America Foundation.

Butler expressed the usual conservative fears about government involvement. He then proposed putting much of the burden for reform onto states, but in accordance with federal guidelines and with some federal funding, along with the replacement of the current employer coverage tax exemption by an individual tax credit. Nichols also (but much more cautiously) expressed concerns about employer-sponsorship, along with (in the long run) replacement of Medicaid by subsidized insurance exchange coverage. Butler (obviously) was opposed to the public plan option, while Nichols suggested a softer option akin to self-insured state retiree plans.

With the next Finance Committee session devoted to funding, we are likely to see more discussion of the elimination of the employer tax exemption. ( If reform is to happen, funding has to be convincing, especially now that the Administration has expressed support for pay-as-you-go legislation.)

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