John Yarmuth sat hunched coolly forward, arms crossed and resting on the arcing half-moon desk before him. It was a recent Wednesday morning, and he seemed annoyed, having just opened his five minutes of floor time admonishing some Republican colleagues, who had four times attempted to adjourn the meeting. Yarmuth accused them of blocking discussion on health care reform and, thus, as he put it, disrupting the business of the American people.
The second-term representative from Kentucky’s 3rd District, who is typically cool to the point of seeming indifferent, began questioning Dr. David Gratzer, a senior fellow at the Manhattan Institute for Policy Research in New York City. Gratzer, a critic of government-sponsored health coverage whose areas of study are the United States, Canada and Western Europe, had been called before the House Ways and Means Committee, one of three in that chamber negotiating exactly how — or whether — the American health insurance system will be revamped in the coming months.
President Barack Obama mandated this health care debate, first on the campaign trail and then when he ascended to office. He has argued most vigorously for what politicians are calling the public option, a provision that would allow the government to offer low-cost coverage a la Medicare. The debate has intensified in recent weeks, with Yarmuth and Senate Minority Leader Mitch McConnell emerging on opposite sides: The Democrat is the mouthpiece for the House plan, which includes the public option; the Republican is leading the opposition.
Yarmuth asked Gratzer how many countries are in the world. A couple people snickered, and the doctor tried to make a joke about doing poorly in high school geography class. But Yarmuth wasn’t biting.
“About 190, give or take a few,” Yarmuth said, cutting him off.
As Gratzer stammered, Yarmuth asked how many industrialized nations have some form of government-sponsored health care. Moving along this line of questioning with intent, he asked whether there are nations with both a government-sponsored health plan and private insurance. Gratzer stepped into the trap. He said that yes, most industrialized countries have a mixed system, Canada being the exception.
“So what you and other opponents of the public option have chosen to do is single out Canada as the one example, even though it’s an outlier, of the supposed plans that we’re trying to model,” Yarmuth said. “Is there anything else that we’ve modeled, other than hockey, that we’ve tried to take from the Canadians in this country?”
This was classic Yarmuth, bracing and direct, but still the guy with the joke. And he made his point.
Several factions are vying for control of health care reform on Capitol Hill. House Democrats last week released an 850-page draft of a bill that includes the public option. Its intent, as the messaging goes, is to introduce competition to private insurers in a way that would force them to lower premiums, extend coverage and generally behave a little less like brutes. The Senate’s effort — led by Finance Committee Chairman Max Baucus, D-Mont. — may include a member-operated health care cooperative, although the public option is also still on the table. Baucus said Thursday that a draft could be ready in the second week of July.
Meanwhile Republicans, led by McConnell, R-Ky., have issued a soft plan of “reform” that includes changing liability laws to reduce lawsuits and encouraging wellness programs, but lacks anything resembling actual change.
For the first time, Yarmuth and McConnell are playing high-profile national roles — together. Speaker Nancy Pelosi, D-Calif., handpicked the Democrat to serve as communications adviser for the House effort. In the past two weeks he has touted the public option on Fox News, Fox Business Channel, various radio programs and in print media, including a story in Congressional Quarterly that called the Yarmuth appointment a “significant gesture” by Pelosi to build Democratic support.
For his part, McConnell has for the last three weeks given daily Senate floor speeches railing against all Democratic plans. He accused Democrats of having a “rush and spend strategy,” and compared health care reform with Obama’s stimulus package, which the Democratic majority passed quickly and without much debate (far from the case here). He argued that a public option would violate the sanctity of the free market rather than encourage much-needed competition, an approach that seems more ideological than pragmatic.
Both men represent a state where 15 percent of the population is uninsured, family premiums have increased 61 percent since 2000 and, over the same period, there has been a steady decline in employer-based health care, mainly among small businesses. All that is from a report released Friday by the U.S. Department of Health and Human Services, which offered a state-by-state assessment of the various crises in health care.
“Unfortunately the reports are a clear demonstration that there are problems with health care in every state,” HHS Secretary Kathleen Sebelius said during a conference call with reporters Friday. There are some 50 million Americans without health insurance, according to current estimates, and millions more whose coverage doesn’t extend far enough.
The more bad news about health care we hear, the clearer the reform mantra will sound. It seems to be working.
Most Americans say they want health care reform. As well, most people don’t believe that the public option is a menace to capitalism, the first step toward socialism, or a doomed strategy that will result in long lines and lower quality care, as opponents have argued.
In several recent polls by the Kaiser Family Foundation, the majority of respondents, when given the choice, consistently preferred a public option — over health savings accounts, subsidies for the uninsured and the status quo. A recent New York Times/CBS News poll found 72 percent approval for Obama’s plan. A majority also said they believed the government would do a better job managing health care than private insurers, and that they would be willing to pay higher taxes so everyone would be insured.
“We know that there is some urgency about this from citizens across this country,” Sebelius said. “Since 2000, health insurance premiums have doubled,” adding that HHS has found an inverse decline in quality of care.
Yarmuth press secretary Trey Pollard said his office has received about 1,500 comments from constituents regarding health care reform, with about 70 percent in favor of the public option. Though asked, McConnell’s office did not provide similar statistics, nor did they grant a request for an interview with the minority leader.
The fine points of the various reform proposals also are emerging, particularly the House Democrats’ plan. There, the public option would reimburse costs comparably with Medicare, which covers some one-third of Americans (according to the U.S. Census Bureau, about 83 million people receive some form of government health care). The Senate bill that is likely to emerge may require both consumers and employers to purchase health insurance at some level. As well, premiums purchased through employers that exceed $17,000 a year may be taxed as income in the Senate bill.
Cost estimates for a public option — a 10-year plan — have lingered at just over $1 trillion, a figure near what both houses of Congress may ultimately be able to stomach, members have said.
Likely to be just as controversial is how the federal government would fund such a plan. The Obama administration said it has identified as much as $900 billion in potential savings through efforts to curb fraud and waste in Medicare — a move officials say will not affect services. During a recent appearance on the Fox Business Channel, Yarmuth said a new tax on those earning more than $250,000 a year would also help fund a public option.
“We’re talking about what is essentially $100 billion a year for 10 years,” he said. “That’s about 20 percent or less of what we’ll spend on defense during the same period of time, so you have to put it into perspective.”
For the most part, the medical community opposes the public option. The American Medical Association, which represents a variety of medical professionals, has issued statements of late encouraging reforms to Medicare reimbursements and medical liability laws. It advocates “AMA principles of pluralism, freedom of choice, freedom of practice, and universal access for patients.” In general, a lot of AMA literature on health care reform makes reference to conservative code words like the afore.
Ted Okon, executive director of Community Oncology Alliance, a national group that studies and advocates issues relating to cancer care, said Congress should put off the public option and first focus on reforming Medicare — specifically, finding a better balance between reimbursements for drugs and services.
“Our perspective is that we currently have a public plan now in Medicare that pays for approximately 45 percent and climbing of all of the cancer care in this country,” he said. “Medicare, which is a very large public plan ... is decidedly broken for cancer care.
“With that as a backdrop, we are not coming out against the idea of having a public plan, but we are very much against having a public plan that pays Medicare rates or nominally above Medicare rates, as the House proposed, until Medicare is fixed. You have essential services that are just simply not reimbursed.”
Humana opposes the public option. Yarmuth said he meets with representatives of the Louisville-based health care giant regularly, and believes the company is positioned well to compete with government-sponsored insurance.
“I disagree with them on this issue — they don’t want a public option,” Yarmuth said. “We disagree. But what I’ve also said is that ... the notion that private insurance companies will not be able to compete against the public plan is really belied by companies like Humana, who have spent an enormous amount of money and time trying to figure out how they can add value for their customers beyond just the premium and paying the bills.”
Tom Noland, a Humana spokesman, said the government should focus on improving technological aspects of health care. Better access and wider distribution of detailed information about doctors and hospitals would foster a more informed consumer, he said, and a uniform system of payment could reduce administrative costs currently being passed to customers. The company has a program in Florida called Availity, which provides a single payment pipeline and has reduced costs both for Humana and its competitors.
Noland said in a public option, the government would effectively thwart competition rather than inspire it, because it is too big an entity to create a level playing field. He cited examples of cost shifting by doctors and hospitals that are underpaid by Medicare and pass the extra cost of services on to consumers, a private sector “safety valve” that would be eliminated with the government setting prices dramatically lower than insurance companies.
Missing from the debate is any frank discussion of a single-payer system, in which the government would be responsible for all health care, and private insurance — the very animal that clawed the way to our extant catastrophic situation — would go away.
“I’m disappointed that the politicians seem to not be listening closely to the people,” said Dr. Garrett Adams, Kentucky coordinator for the group Physicians for a National Health Program. “There’s strong evidence that the types of plans that are being discussed now, that include the insurance companies, will not work. There are at least seven state plans that were based on this kind of model, and they don’t work.”
Those states include Massachusetts, which passed legislation in 2006 that mandated health insurance and included government subsidies for those who could not afford private coverage. But that effort has largely failed to provide universal coverage, according to recent media accounts.
Adams and others point to H.R. 676, the National Health Insurance Act sponsored by Reps. John Conyers, D-Mich., and Dennis Kucinich, D-Ohio, which would nationalize health care. It has received tepid congressional support — Yarmuth is a co-sponsor — and has receded to the territory of liberals and idealists, lambasted by moderates and conservatives as socialist, albeit inaccurately.
“Honestly, it would be a revolutionary change, but I think it’s necessary,” Adams said. “That’s my strong opinion. We have such a critical need for improvement that we need a revolution in health care, and I don’t think the public option is that. And I’m strongly opposed to any plan that continues to support the health insurance industry because I think it’s an industry that has failed us.”
The public option is as far as Washington appears ready to move toward single-payer. But passing a bill that includes it remains a challenge.
“There are two major problems,” Yarmuth said. “One is that special interests in the health care industry are the largest contributors to both Republicans and Democrats in Congress. That’s the No. 1 pragmatic one. And the second one is that there are people, a lot of Republicans are out right now trying to use scare tactics ... But far more people now know that there is a serious problem in the health care system and we really can’t afford not to reform the system.”
According to the Center for Responsive Politics (www.opensecrets.org), Sen. Baucus — the Democrat leading the Senate’s legislative effort from his post atop the Finance Committee — is the top recipient of campaign funds from the insurance industry between 2004 and now. McConnell is second.
Nate Silver, who runs the website FiveThirtyEight.com, posted an intriguing analysis last week that indicates moderate Democrats are the ones most likely to be swayed by PAC money when it comes to the public option, among them Majority Leader Harry Reid of Nevada and Sen. Mark Warner of Virginia. Silver also found that industry money given to Republicans is unlikely to have swayed any votes, perhaps more an indicator of ideological support than any attempt to buy a position.
Silver said Senate Democrats would need at least 12 more votes to have a shot at passing a bill that includes the public option.
“To be clear, not all of the opposition to the public option is the result of special interest money,” Silver wrote. “Most Republicans probably oppose it on general principle, and there are a couple of Democrats, like Maria Cantwell of Washington, who have yet to come around to it even though they’ve taken almost nothing (in Cantwell’s case, literally nothing) from the insurance industry. But the money is why, even with 59-60 votes in the Senate and a president with high approval ratings, Democrats are facing an uphill battle on the issue.”
The Public Option
This policy is a cornerstone of the Obama/House Democrats’ plan. It is intended to function like Medicare and be offered to middle-class workers and their families, with small businesses also capable of buying coverage through exchanges. This concept is planned to provide the market with competition and keep consumer costs low. President Obama wants to focus on instituting temporary provisions to make health care coverage more affordable for Americans who have lost their jobs. Obama has said he also hopes to increase health care coverage for children, computerize America’s health records, and develop information on effective Medicaid interventions.
This plan is estimated to cost somewhere between $50 billion and $65 billion per year after full implementation. The Obama administration hopes to cover this cost through a $630 billion reserve to be accumulated over 10 years through such methods as reducing Medicare overpayments to private insurers, reducing hospital readmission rates, decreasing the itemized deduction rate for high-income families, and requiring drug companies to increase Medicaid discounts from 15.1 percent to 22.1 percent.
The Co-Op
Originally formulated by Sen. Kent Conrad, D-N.D., this option seeks to establish a middle ground between Republicans who fear that a public health care option will represent a government takeover of the insurance business and Democrats who think public health care is the only way to keep insurance companies honest.
Conrad’s plan proposes the establishment of cooperatives, owned and operated by their members, which would negotiate rates with health care providers while adhering to the same licensing and regulatory requirements as private insurance companies. This option is set to function in the same way as rural electricity, farming and telephone cooperatives, and has gained a great deal of traction with senators on both sides of the aisle.
One possible model for the plan’s implementation is to create a national structure with state affiliates, funded with $3 billion in federal startup money. Conrad has expressed a desire for the co-ops to develop as “strong, national entities.” There has been some disagreement on this point. Sen. Charles Schumer, D-N.Y., opposes the establishment of smaller organizations around the country and proposed the creation of one national co-op to compete against insurance companies. Schumer said this entity would need at least $10 billion behind it, emphasizing the stranglehold he believes insurance companies possess in many areas of the country.
While President Obama still heavily supports his own proposal for a public health care option, members of his administration have said they are open to the co-op option.
Single-Payer
This plan proposes that one government-run organization be established to collect all health care fees and pay out all health care costs. It has been called a “global budget” plan and is intended to allow hospitals to cover their operating expenses via an annual lump-sum payment, eliminating the need for hospital bills to each patient. It would also eliminate the current amount of administrative waste generated by the tens of thousands of different payers in the system.
One of this option’s greatest proponents is Rep. John Conyers, D-Mich., who introduced H.R. 676, or “The United States National Health Care Act.” It has since accumulated 83 co-sponsors, and has become a major component in the health care debate as single-payer advocacy groups have stepped up to have their voices heard. Conyers himself testified on June 10 in front of a congressional committee on education and labor, discussing the pros and cons of the single-payer option. Conyers extolled the benefits of the option, saying “a single-payer system will allow us to cover everyone without spending anymore money than we do now.”
