Mandatory health insurance debate begins

By ELLEN BECK  |  June 11, 2003 at 6:47 PM
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WASHINGTON, June 11 (UPI) -- Sen. John Breaux expects to wrap up a bipartisan agreement soon to reform Medicare using private insurance plans and then, he said, he is ready to begin persuading his centrist colleagues on Capitol Hill to support the idea of mandatory health insurance for all Americans.

The Louisiana Democrat has teamed up with the New America Foundation, a non-partisan public policy group; the Commonwealth Fund, a non-partisan public health research group, and Blue Shield of California. Together, on Wednesday, they outlined a strategy to provide the nation's 41 million uninsured with health care coverage -- while preserving choice for consumers who want and can afford more, and making the private sector a key participant.

Those same ingredients also have kept Republicans and Democrats together as they work through obstacles to Medicare reform. In fact, in some respects, the proposed mandatory plans resemble Medicare reform legislation.

Breaux is a longtime key player in health care issues and is known for being able to work both sides of the political fence. He helped the Senate Finance Committee reach a deal on a bipartisan bill to allow preferred provider organizations to participate in Medicare. That deal would give seniors a prescription drug benefit as well as more choices. It also would retain traditional or basic Medicare but also offer a government-subsidized drug benefit.

An almost equally divided Senate means neither party can bull through its own plan, but Breaux brought together centrist lawmakers from both sides to craft a politically acceptable bill. The PPOs would bid for Medicare business within a set U.S. region -- 10 states -- and be paid by the government. The bill comes up for committee approval Friday and could face a Senate vote as early as next week.

There is now $50 billion in the budget for the uninsured and President Bush has supported using refundable tax credits for working poor families that buy insurance.

Proposals by the Commonwealth Fund and Blue Shield to cover the nation's uninsured also would use PPOs and health maintenance organizations to provide a government-subsidized basic health insurance package. It would be a minimum plan and everyone in America would be required by law to carry at least that much health insurance coverage.

"The health care system in America is fundamentally broken," Breaux said, adding the country's health care itself is of the highest quality.

"The problem is the fact that not everyone can avail themselves of that quality in America," he said.

Policy experts make the analogy that mandatory health insurance should be like mandatory auto insurance and believe most Americans will agree. Mandatory health insurance, however, contains one additional step: although everyone must have it, they would pay for it according to their financial ability. That means imposing a financial obligation on businesses currently not providing health insurance to workers and on the uninsured.

The Blue Shield version would cost about $75 billion more than the government spends on health care now. Employers would have to offer either a minimum basic health care insurance plan or a better package, or pay an assessment of 7 percent of their payroll to the government to fund a basic nationwide coverage program.

Blue Shield calls its basic program an "essential benefits" package and it would offer HMOs and PPOs partly subsidized by the government but run through private insurers, much like the Medicare reform plan.

Employers that offer their workers insurance now would save $27.9 billion under the Blue Shield plan. Employers that do not offer insurance would have to kick in $40 billion. People who are insured but self-employed, and employees who have employer-sponsored coverage, would pay $15.7 billion less because of subsidies. Employees who are not insured would pay $11.1 billion, rated on their ability to pay. Non-workers also would be required to carry insurance and could buy the minimum coverage program, with payment based on annual income.

The poorest people who qualify for Medicaid would remain in that program. The government also would pay the insurance cost of the 14 million people nationwide who are qualified for Medicaid but do not participate.

There is a guilt component as well, levied on companies that do not offer health insurance to their workers.

Blue Shield Chairman Bruce Bodaken said big business is tired of paying higher health care premiums that include a subsidy for the uninsured because other employers do not offer it.

"Forty million Americans without coverage today can receive good health care for less than $150 per month," Bodaken said of the Blue Shield plan.

The Commonwealth Fund plan also would create new minimum coverage -- called the Congressional Health Plan -- by allowing the self-employed, workers at small businesses and anyone who has been without insurance for six months to tap into the HMO and PPO options of the Federal Employees Health Benefits Program. The federal government would provide tax credits if premiums cost more than 5 percent of a person's income -- jumping to 10 percent for people in higher income brackets.

Medicare would expand to cover adults age 60 and over who do not have access to other plans. Medicaid and the State Children's Health Insurance Program would expand to help insure more of the working poor. Businesses that do not offer coverage to workers would be assessed up to $1 per hour worked or 5 percent of their payroll to fund the minimum coverage plan.

"We do want the best health care system in the world," said Karen Davis, president of the Commonwealth Fund. "We need to make it a shared responsibility."

The bottom line: There would be $70 billion in new federal spending on health care, but businesses already providing coverage would save $20 billion.

There are fundamental issues to be worked out and some potential problems. For instance, how will working poor families that cannot afford to buy either employer-sponsored or private health coverage afford the premiums, co-pays and deductibles in the PPOs and HMOs of the basic coverage plans? It's a worry of senators in the Medicare reform debate as well.

Small businesses often want to provide health care coverage for workers but simply cannot afford it. Under the new legislation, they would be required to pay the 5 percent or 7 percent payroll assessment, but the question is whether they can even do that much. How business reacts to any plan will be crucial to its success.

Mandatory insurance also needs a watchdog element to ensure all Americans finally are covered. Suggestions included a "Big Brother" government idea of requiring people to provide their insurance status on their income tax returns. That would give the government at least a partial list of who is not insured. Another idea would enroll automatically any uninsured person seeking health services. However, that could discourage people from seeking needed health care for fear of being dumped into an insurance plan they could not afford.

Another unknown: Policymakers assume that businesses already offering insurance coverage to workers will continue to do so. But if these businesses are offering more generous benefits than the basic package provides, how many would reduce their offerings to match the basic coverage plans? That could increase out-of-pocket costs for their employees who want additional services. Some companies simply might drop their coverage and choose to pay the 5 percent or 7 percent payroll subsidy.

Perhaps an even more basic issue: Just what will "minimum coverage" include in the basic plans? That might be highly irritating to American consumers, who traditionally have wanted all the whistles and bells that health care technology can provide but are reluctant to pay the higher costs to get it.

On all these issues, the Blue Shield and Commonwealth plans are good starting points for debate, but Breaux said such major system changes cannot be accomplished this year or even in 2004. He said he is hopeful a plan might be ready for debate by the beginning of the next Congress.

The New America Foundation is seeking 10 major policy papers that analyze providing a mandatory, but privately administered insurance program.

Meanwhile, there still is work to be done persuading Americans and lawmakers that mandatory health insurance is a responsibility for everyone, and a need as much as mandatory education is for children.

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