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Although the administration has not conceded publicly that enactment of its ambitious vision for reform seems unlikely in this polarized environment, many signs point in that direction. Beyond the fissions dividing Democrats, recent public opinion surveys, particularly among people with insurance, show that Americans are increasingly conflicted over the party's proposals.1 Survey respondents acknowledge the need to constrain health care spending but worry about the cost of reform and extending government's reach. The public's anxiety is compounded by the steps the administration and Congress took to rescue the economy from collapse, which increased the federal deficit to $1.58 trillion in 2009 — about three times the deficit of the year before. On August 25, the administration announced an increase of $2 trillion in its 10-year deficit projection, bringing the new total to about $9 trillion.
Corralling Democratic legislators with diverse views into agreement on a reform plan may take all of Obama's impressive powers of persuasion. The party has broken into separate camps over the scope and timing of reform. One favors comprehensive change, even if it means going it alone as a party; another counsels slowing the process, asserting that voters' primary concerns are the recession, rising unemployment, and the mounting federal deficit. A third camp, represented by Senate Finance Committee Chairman Max Baucus (D-MT), is striving to reach a bipartisan compromise that would require scaling back the cost and the scope of reform.
The reform proposals emerging from three House committees (Education and Labor, Energy and Commerce, and Ways and Means) and the Senate Health, Education, Labor, and Pensions Committee reflect the position of the first camp — embracing comprehensive change that would cost more than $1 trillion over 10 years. The contents of these bills are the basis of the divide within the Democratic party and the strong Republican opposition. The measures would require all citizens to carry coverage and would provide income-related premium subsidies to families with incomes up to four times the federal poverty level ($88,200 for a family of four), the cost of which would amount to more than half of the total package.2 The measures would also expand Medicaid for low-income people, create a public plan to compete against private insurers, require carriers to enroll all applicants, and create a health insurance exchange to allow people without access to employer-sponsored coverage and employees of small businesses to purchase more affordable coverage.
House Democrats, wielding their 257-to-178 majority, could probably enact such a measure, once their leadership settles on a compromise with the party's 51 conservative Blue Dogs, who have demanded a less expensive measure. But Senate Democrats' views vary widely on the wisdom of pressing for comprehensive reform with little or no Republican support. Liberal senators say they are preparing plans to enact a reform bill by making use of a parliamentary tactic known as "reconciliation," which requires a simple majority of 51 votes rather than the 60 votes needed to overcome a filibuster. The senators pursuing this approach recognize that it may be the only way to win passage of legislation that includes both a large expansion in coverage and the creation of a public insurance option. The reconciliation strategy can be used only for bills that affect federal spending or revenues; using it would probably require Senate Democrats to split their proposed legislation into two bills and seek enactment in a politically charged environment.
The camp favoring a slowing of deliberations fears that Democrats may pay a political price for their haste, particularly if their proposal draws no Republican support. Some of the House's Blue Dog Democrats who represent districts formerly held by Republicans fall into this camp. Senator Joseph Lieberman of Connecticut, an independent who usually votes with Democrats, has urged delaying consideration of comprehensive reform "until the economy's out of recession." Appearing August 23 on CNN's State of the Union news show, Lieberman said, "There's no reason we have to do it all now, but we do have to get started. And I think the place to start is cost, health delivery reform, and insurance market reforms." Lieberman said it would be "a real mistake" to jam through a total plan without any Republican support and with public concern growing. "It's just not good for the system, frankly, and it won't be good for the Obama presidency."
The prolonged negotiations involving six senior members of the Senate Finance Committee are the last hope Democrats have to secure some Republican support for reform. Baucus has ruled out any possibility that a bill emerging from his committee will include a public insurance option. After an August 20 conference call with the senior committee members, Baucus told the media that the senators' discussions had "an increased emphasis on affordability and reducing costs." Senator Charles Grassley of Iowa, the Finance Committee's ranking Republican, has expressed greater skepticism about the likelihood of Senate passage of a Democratic-led reform bill this year.3 Grassley, who faces a reelection race in 2010 and the possibility of a more conservative opponent in the GOP primary, said he would "absolutely not" vote for a reform bill supported by only three or four Republicans.
Although the committee has not introduced a bill, Democratic and Republican members agree on many issues that would lead to fundamental changes in the way private insurers operate and would greatly reduce the number of individuals without coverage. The committee's negotiators have yet to reach agreement on how to bring down the cost of the bill. Republicans are pressing to reduce the size of tax credits designed to make insurance more affordable for families with incomes below three times (rather than four times) the federal poverty level. Democrats would rather extract savings from Medicare and Medicaid through measures such as reducing the growth of provider payments, encouraging greater coordination of care to improve the efficiency of service delivery, and bundling payments for episodes of care.
The most formidable challenge facing Democrats favoring comprehensive reform is finding the money to pay for the bill. Obama has insisted that he will sign only a reform bill that does not add to the federal deficit. There are four possible avenues that could be taken to pay for reform: reducing the growth of Medicare, reducing the growth of Medicaid, restructuring the current tax incentives (about $250 billion a year) that flow mostly to higher-income employees because their premiums are exempt from taxation, and increasing other taxes. A recent survey showed that most Americans are willing to expand coverage but reluctant to pay for it through increased taxes.4 The administration has proposed reducing the growth of Medicare and Medicaid by about $500 billion over a decade. On August 24, Republicans — rarely enthusiastic Medicare supporters but eager to position the party as strongly opposed to Democratic reform efforts — issued a "Seniors' Health Care Bill of Rights" opposing any steps that would reduce Medicare spending.5
Democrats find themselves suddenly facing a much steeper climb toward reform. Their arguments that the health care system is on an unsustainable spending path and that now is the time to act are being overshadowed by growing discomfort among some voters that government has already overextended its reach and by charges that the elderly will be put at a disadvantage. Many of the arguments (that reform would create "death panels" and lead to the rationing of health care on the basis of age, for instance) are unfounded, but they are helping to fuel the discontent. Although many Democrats would view a less expansive reform bill as tantamount to defeat, such an approach would reflect the long-standing pattern of U.S. policymaking on health care, which has favored incremental steps rather than comprehensive leaps.
Source Information
Mr. Iglehart is a national correspondent for the Journal.
This article (10.1056/NEJMp0906676) was published on August 26, 2009, at NEJM.org.
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