Health Care Reform Efforts By President Obama Face Several Difficulties

Main Category: Medicare / Medicaid / SCHIP
Also Included In: Health Insurance / Medical Insurance
Article Date: 03 Mar 2009 - 4:00 PDT

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Efforts by President Obama to reform the U.S. health care system are "likely to be fraught with detours, potholes and perils" based on initial concerns about related provisions in his fiscal year 2010 budget proposal, as well as the current federal deficit, CongressDaily reports (Edney, CongressDaily, 3/2). The proposal, which Obama released last week, includes a $634 billion reserve fund to help finance an expansion of health insurance to all U.S. residents. The proposal would finance half of the reserve fund with increased revenue from tax changes and half with reduced spending in health care programs. Among other spending reductions, the proposal would decrease subsidies for health insurers that operate Medicare Advantage plans (Kraske, Kansas City Star, 3/1).

According to CongressDaily, "Republicans have long obstructed any efforts to trim additional Medicare Advantage payments for private insurance providers." In addition, Republicans "did not take kindly to the idea" of the tax changes, and Democrats "also expressed reservations," CongressDaily reports (CongressDaily, 3/2). Obama also seeks a "major expansion of the federal commitment to health care even though the government can barely afford the health insurance programs it has," the New York Times reports.

Obama on Thursday will host a White House summit on health care, during which he plans to release a broad outline for a proposal to expand health insurance to all residents. Melody Barnes, director of the White House Domestic Policy Council, said, "Health costs are exploding," adding, "We are in a crisis. The circumstances are dire. That's driving people to conclude that we have to come up with a solution, and the time is now." According to Barnes, Obama will have "all the relevant players together" at the summit. She added, "Nobody will own the table, but everyone will be around it. There will be people at the table who in the past were opponents of health care reform."

John Rother, policy director of AARP, said, "The purpose of the White House forum is to launch the whole health reform initiative -- not to unveil a detailed plan, but to reinforce the need for change. It's an opportunity for Obama to take ownership of the issue again" (Pear, New York Times, 3/2).

Concerns
Senate Health, Education, Labor and Pensions Committee ranking member Mike Enzi (R-Wyo.) said, "The president said repeatedly during his campaign that Americans who like the health insurance they have would keep their existing plans in his administration," adding, "His budget proposal undercuts that promise."

America's Health Insurance Plans President Karen Ignagni said, "Unfortunately, this proposal would force seniors enrolled in Medicare Advantage to fund a disproportionate share of the costs to reform the health care system," adding, "A cut of this scale would jeopardize the health security of more than 10 million seniors enrolled in Medicare Advantage and would turn back the clock on innovative payment incentives to improve the quality of care that patients receive."

The National Business Group on Health said that lawmakers should seek to eliminate waste in health care programs and reduce medical errors, rather than make the tax changes and decrease subsidies for health insurers that operate MA plans, to reduce spending (CongressDaily, 3/2).

Val Halamandaris, president of the National Association for Home Care and Hospice, said, "We support the president in his desire to bring the benefit of health care coverage to all Americans," but "it must not be accomplished on the backs of the homebound elderly who are so sick with multiple complex medical problems" (New York Times, 3/2).

Health Care Reform Commission Possible
On Sunday, White House Office of Management and Budget Director Peter Orszag during an appearance on ABC's "This Week With George Stephanopoulos" said that Obama might establish a commission on entitlement reform, or broader health care reform, to take some of the authority over the development of legislation from Congress. Under such a commission, the Obama administration and lawmakers would reach an agreement on legislation, and Congress would vote on the bill without amendments. Such a commission "would move a lot of the decision-making away from ... Congress ... towards a group of more politically insulated and technically skilled people," Orszag said, adding, "We will be exploring all of these ideas with the Congress" (Allen, The Politico, 3/1).

Congressional Health Care Reform Efforts
In related news, Senate Finance Committee Chair Max Baucus (D-Mont.) on Thursday will meet with committee members to establish a timeline for work on health care reform legislation. According to the Times, Baucus might "move in tandem" with Senate HELP Committee Chair Edward Kennedy (D-Mass.), whose aides have met twice weekly with stakeholders to seek a consensus on the issue.

House Energy and Commerce Health Subcommittee Chair Frank Pallone (D-N.J.) also plans to hold a series of hearings on health care reform after the White House summit. He said that congressional leaders "have been looking for guidance from the administration" on several issues, such as an individual health insurance mandate and the establishment of a new public health insurance plan (New York Times, 3/2).

On Friday, several dozen Republican health care and press aides participated in the first of a series of "health care boot camp" sessions presented by the House Republican Conference. According to CQ Today, the session, led by Heritage Foundation chief lobbyist and government relations expert Michael Franc, involved a "lesson on how Democrats bungled their 1993 and 1994 effort to overhaul the health care system" (Armstrong, CQ Today, 2/27).

Omnibus Appropriations Bill
In other budget news, the Senate on Monday plans to consider an omnibus appropriations bill (HR 1105) that includes the FY 2009 Labor-HHS-Education appropriations bill and the eight other unapproved FY 2009 appropriations bills, CQ Today reports. Since October 2008, the federal government has operated under a continuing resolution that will fund most Cabinet departments and federal agencies at FY 2008 levels until March 6. The omnibus appropriations bill would fund those departments and agencies from March 7 until Sept. 30, the end of the fiscal year.

Senate Democrats hope to pass the bill by Friday (Clarke, CQ Today, 2/27). Orszag on Sunday said that Obama would sign the bill, despite his promise not to approve legislation that includes earmarks (Elliott, AP/Philadelphia Inquirer, 3/2).

Opinion Pieces

• Clive Crook, Financial Times: The reason Obama included the health care reserve in the budget was because he "knows that the president who gives the U.S. universal healthcare is assured of his place in history alongside [President Franklin Roosevelt]," Financial Times columnist Crook writes. He adds, Obama "means to do it." Crook continues, "One may question the timing, and the method as well, no doubt, once the administration says what that will be," but "the goal is worthy, one that any centrist can endorse." However, when Obama "turns to financing this historic initiative, ... he moves left," according to Crook. He continues, "Take this budget at face value, and when Mr. Obama talks about 'a new era of responsibility' he does not mean: 'We are all in this together.' He means: 'The rich are responsible for this mess and it is payback time.'" Crook continues, "Leftist Democrats are thrilled, and rightly so," as the budget "has three themes: health care reform, public investment and unflinching redistribution." According to Crook, "This is indeed a new social contract: we get, they pay." He adds, "Tactically speaking, Mr. Obama may have overdone it" (Crook, Financial Times, 3/1).
  
  
• Doyle McManus, Los Angeles Times: "Until last week, there was still skepticism in Washington that the president really meant to tackle all of his big domestic goals at the same time: health care reform, alternative energy, education projects, plus a tax hike on the well-off to pay for it all," but Obama's budget proposal "made it clear that he expects action on all of his priorities this year -- beginning with health insurance," Los Angeles Times columnist McManus writes. He continues, "Obama's innovation was outlining how he would pay for his health plan before he had fully formulated the plan itself." Obama's proposal "was cast as a way to put the nation on a sounder long-term fiscal trajectory and also help working families enjoy higher take-home pay," McManus writes, adding, "Obama wants his proposal to be seen as a fiscally responsible, pro-business economic necessity, not a touchy-feely big-government scheme." According to McManus, several lessons Obama learned from the failed health reform effort of former President Clinton in the 1990s includes having Congress design a plan based on principles he has proposed; guaranteeing U.S. residents continue to have choice in coverage and providers; and focusing on controlling costs (McManus, Los Angeles Times, 3/1).
  
  
• Sally Pipes, New York Post: Obama "intends to spend all [the] money" in the proposed $634 billion health care reserve included in his budget "on the basis of several pernicious myths common in the health care debate," which will "ultimately hand the health care system over to the government and lead to rationing," Pipes, president and CEO of the Pacific Research Institute, writes in a Post opinion piece. She continues, "For most folks, health insurance is simply too expensive" and "ramping up funding for government health programs, as Obama proposes, won't make insurance cheaper. In fact, it could cause private insurance to become more expensive." She writes, "Taken as a whole, Obama's health plan is predicated upon the misguided notion that government can deliver care more efficiently than the private sector." According to Pipes, as the costs for his health reforms mount, Obama will be forced to employ the same strategies that Canada and Britain have to cut spending. That means the rationing of health care (and significantly higher taxes)" (Pipes, New York Post, 3/2).
  
  
• Rep. Paul Ryan (R-Wis.), Wall Street Journal: "Obama deserves credit for his recent efforts to build a bipartisan consensus on entitlement reform" but "we can't solve the entitlement problem unless we acknowledge why the costs are exploding, and then take action," House Budget Committee ranking member Ryan writes in a Journal opinion piece. During the last congressional session, Ryan proposed a bill (HR 6110) "that would bring permanent solvency to Medicare, Medicaid and Social Security," he writes. Ryan continues, "By transforming these open-ended entitlements into a system with a defined benefit safety net for the low-income and chronically ill, in conjunction with an individually owned, defined contribution system for health and retirement, we can reach the goal of these programs without bankrupting the next generation." He adds, "It would also show the world and the credit markets that we are serious about our debt and unfunded liabilities" (Ryan, Wall Street Journal, 3/1).

Broadcast Coverage
ABC's "This Week with George Stephanopoulos" on Sunday included a discussion with Orszag about the president's budget proposal (Stephanopoulos, "This Week with George Stephanopoulos," ABC, 3/1).

CBS' "Evening News" on Sunday reported on the debate between congressional Democrats and Republicans over Obama's FY 2010 budget. The segment includes comments from White House Chief of Staff Rahm Emanuel; Arizona Sen. Jon Kyl (R); Ryan; former House Speaker Newt Gingrich; and Orszag (Dozier, "Evening News," CBS, 3/1).

NPR's "All Things Considered" on Sunday reported on the debate (Welna, "All Things Considered," NPR, 3/1). NPR's "Weekend Edition Sunday" also reported on the debate and the week ahead in Congress (Welna, "Weekend Edition Sunday," NPR, 3/1).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation.

© 2009 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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