Congressional Debate on Health Care Heats Up

A long table of witnesses at a Senate Finance Committee Tuesday could agree on the need for expanding health care coverage, especially for small businesses and individuals. But the 15 witnesses and senators clashed repeatedly over how much of a role the government should have in providing that coverage.

The lineup at the hearing—all in favor of some sort of reform—marked a change since the Clinton White House attempt to overhaul the health care system, when many business groups opposed the idea.

“We simply cannot fix our broken economy without fixing our broken health care system,” said Jennie Chin Hansen, president of AARP, at the hearing chaired by Sen. Max Baucus, D-Mont.

Much of the debate Tuesday focused on whether the government should offer its own insurance plan in competition with private plans. A government-sponsored plan, advocates say, could save money through economies of scale and by not needing to make a profit or spend money on marketing. That plan could help provide more competition in the insurance marketplace, especially for the more than 46 million who can’t get or afford coverage now. But insurance companies complain that a government plan could drive them out of business by taking away too many of their consumers.

The witnesses, who represented consumer, business, insurance, labor and state interests, spent more than three hours arguing about whether a government-sponsored plan could compete on a “level playing field” with private insurance.

“I think it’s more descriptive to say it’s a Washington-directed unfair competition plan,” said Sen. John Cornyn, R-Texas.

Republican lawmakers said a so-called public plan would lead to a rationed national health care system as private insurers went out of business. And many doctors and hospitals would not participate in a government plan—just as with Medicare—because of lower government reimbursement rates, said Scott Serota, president of the Blue Cross and Blue Shield Association. He predicted “a devastating impact on access” to medical care.

Serota said Medicare originally was supposed to pay doctors market rates but now pays less than that—leaving private insurers and the employers who buy their coverage to pick up extra costs shifted onto them because of the federal shortage.

But Sen. Chuck Schumer, D-N.Y., said a government plan is needed. “The bottom line is we need someone who is not a private insurance company to be in the mix,” he said.

The Federal Employees Health Benefits plan and a new Massachusetts state “exchange” that helps match up individuals and small businesses with insurance coverage also were touted as good models.

Len Nichols, director of health policy at the nonpartisan New America Foundation, said some sort of public plan is important because people don’t trust for-profit insurance companies.

But Karen Ignagni, head of the trade group America’s Health Insurance Plans, said major changes are afoot that would help consumers. For instance, consumers would no longer be denied insurance because of preexisting conditions, women and those who are sick wouldn’t be charged more for premiums, and all consumers would be guaranteed access to coverage. And all of that would be subject to new government regulation, under health reform.

“We’re not asking any individual to trust us,” Ignagni said. “We’re asking them to trust the government.”

Several witnesses pushed for expanded health coverage for people now left out of the system—such as workers between ages 50 and 64 who have lost their jobs or poor adults who don’t qualify for Medicaid. The committee will look at options like expanding the Medicare and Medicaid systems to cover some of those people.

AARP’s Hansen said it’s important that the coverage actually be affordable. More than 7 million Americans between 50 and 64 have no coverage—a 36 percent increase since 2000.

“Having them under the tent but not able to afford it provides no access,” she said.

But Sen. Orrin Hatch, R-Utah, said adding older Americans to Medicare would bankrupt the system.

Hansen called for “creative ways to look at subsidies to make it possible” for them to have coverage. Ideally, she said, older consumers would be charged no more than twice what younger people are for premiums. But other panelists said that might raise the premiums too high for younger consumers. Hansen said even being charged five times as much would be better than current rates for older Americans.

AARP also is pushing for improvements in Medicare’s prescription drug coverage, including closing the gap in coverage under Part D, known as the “doughnut hole,” and improving the subsidy for the poor. AARP also backs a new transition benefit that would provide help to patients as they return home after a hospital stay to avoid problems that cause expensive readmissions to the hospital.

Several lawmakers asked about changing the Medicaid system so that it encourages people to get care in their communities or at home instead of in institutions, especially for those at the end of their lives. Andy Stern, president of the Service Employees International Union, said health care reform is a great opportunity for changing the incentives so that people can get cared for where they would prefer—at home.

As the hearing began, a series of audience members stood up and began shouting that they want a “single payer”—or centralized government health insurance system. “Let me get this straight, there are 15 seats at the table and not one for single payer?” the first protester said. After the third interruption the eight protesters were taken out of the Dirksen hearing room by police. Baucus said he wanted to hear all views, including the single-payer advocates. But a centralized government health system has gained little traction on Capitol Hill.

But one issue that is a hot topic was not tackled Tuesday by the panelists—how to pay for reform. Sen. Jim Bunning, R-Ky., said he worried that people with employer-sponsored insurance would end up paying significantly more, under a new system. The committee will hold hearings next week on financing and will meet for a “walk-through” where Senators discuss what reform legislation should include. Four other House and Senate committees also are working on health care reform.

Tamara Lytle was a correspondent and Washington bureau chief for the Orlando Sentinel from 1997 to 2008.