Columns » Ernest Dumas

Health care optimism cause to worry



The history of health care reform the past 40 years imparts one lesson: Beware of an abundance of good news and optimism.

They are abundant this week. On top of the health industry's celebrated oath (not quite in blood) early this month to voluntarily reduce health-care costs on a gigantic scale, Sen. Max Baucus, the chairman of the Senate Finance Committee, said there was a “75 or 80 percent chance” that Republicans and Democrats would agree on a bill overhauling health insurance and covering just about everybody — well, except for an expendable 5 or 6 percent of Americans. The parties are very nearly there, he said.

Arkansas's Sen. Blanche Lincoln, a secondary player in the Senate health-reform game, said the committee would produce a bipartisan bill very soon and she implied that it would be one that she could vote for.

Those are not wholly good omens if you are one who believes like a vast majority of Americans that sweeping reform, and not more tinkering, is demanded. Baucus, Lincoln and the ranking Republican on the committee, the occasionally moderate Charles Grassley, have never favored sweeping change in anything, except in the magnitude of tax favors for the rich. 

All of this sounds eerily familiar. A few will remember Jimmy Carter's outrage over skyrocketing health-care costs when he was running for president in 1976. When he was elected, the insurance and pharmaceutical companies and the provider groups said they would cut costs voluntarily so there was no need for the government to act.  The government genuflected and costs continued to soar.

After sabotaging health reform in 1994 in the face of a vast national consensus for universal insurance, the industry said health costs would be slashed voluntarily. It never happened.

Now it's offering an implicit promise to cut costs, including premiums for people with pre-existing conditions, if the government will just force everyone into the for-profit insurance system.

In the next couple of weeks we will see the legislation that the Senate Finance Committee is crafting, described this week as a compromise. The other health-writing committee, chaired by Sen. Edward Kennedy, is insisting that there be a voluntary government-run option for people who cannot or might not want to pay for the private for-profit plans, but Baucus has been coy. Without it, neither universal coverage nor significant cost controls will be achievable.

Baucus is said to be dedicated to enacting a comprehensive health law that will be his legacy. He and Kennedy jointly promised it soon after the election.

The public by a 2-to-1 margin thinks a single-payer system based on the Medicare model and the template used by all the modern countries is the best remedy. That is why all of them provide better coverage at far less cost than the United States.

But President Obama says that would be too wrenching and that the U. S. will simply build on the private employment-based insurance system. That will be immensely expensive but it will work if there is a competitive option to for-profit plans.

Why should we be suspicious of Max Baucus' commitment?

Remember that it was Baucus who gave us the massive Bush tax cuts for the rich in 2001, which undermined the nation's fiscal stability, and it was he who gave us the Republican Medicare drug plan, which wrote the insurance industry into one of the most profitable enterprises in modern times at huge cost to taxpayers.

From 2003 through 2008 Baucus received more than $3 million in campaign gifts from the health industry and insurers, more than any current member of Congress except Sen. John McCain. Two former chiefs of staff for the Montana senator now are powerful lobbyists for the industry, including groups that are gearing up to fight any government insurance option to for-profit insurance.

But maybe the good Max Baucus, the one who has championed the children's health insurance program and letting people 55 and over buy into the regular Medicare program, will show up this time. His own medical problems — a heart pacemaker and injuries in a motorcycle accident — are supposed to have made a believer of him although all his costs were covered by the Cadillac plan that taxpayers afford members of Congress.

Baucus and Grassley will be the key players in the other central issue, which is how to raise the money to pay for the universal buy-in for either government or private coverage. Baucus is talking about taxing the employer premiums of job-based insurance as income and taxing soft drinks and liquor, which will not get the job done.

There is a surer and fairer way than taxing premiums (taxing soft drinks and liquor makes some sense and it would be of some help), and that is to extend the current 2.9 percent Medicare payroll tax to all adjusted gross income — the income of investors and brokers and high-salaried people as well as the wages of workers. For Baucus, Grassley and Lincoln that ought to play well with their constituents, though not with the people who finance their campaigns.


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