Weekly Newsletter: June 1, 2009
Up Next: “Most Liberal” Health Bill
This week Congress returns from its Memorial Day recess to begin a new phase of the debate surrounding health reform. Democrat proposals are scheduled to be introduced—and possibly considered in Committee—during this work period and before the July Fourth recess. Likely first out of the starting gate will be a proposal by Senate HELP Committee Chairman Ted Kennedy, which will reportedly be released this week. Press reports have provided some insights into the bill’s broad outlines, with a Washington Post reporter observing that “in many respects it adopts the most liberal approaches to health reform being discussed in Washington.”
Many Members may be concerned by the rumored details of the HELP Committee proposal. Reports indicate the bill would represent major expansions of government-run health insurance—a new federal entitlement to long-term care, significant growth in Medicaid, “low-income” subsidies to families making $100,000 per year, expansions of the State Children’s Health Insurance Program (SCHIP) to “children” as old as 26, and a public health insurance plan into which all physicians participating in Medicare will be compelled to participate. Members may be concerned the proposal would also eviscerate individuals’ current health insurance options, by placing price controls on private health care companies and requiring government-run Exchanges to “negotiate” with these same entities–measures that could lead to rationing of health care at the hands of government bureaucrats.
The Message from Massachusetts
Just before the recess, the Boston Globe ran an article highlighting the lack of beneficiary access to physicians in Massachusetts as a result of the state’s health reform initiative. A study of 15 major metropolitan areas found that Boston had an average waiting time for non-urgent appointments of 50 days—“more than three weeks longer than in any other city studied.” Wait times had increased over the past five years, such that despite an “abundance of top-notch medical specialists,” Boston had the longest appointment wait times for many physician sub-groups, including obstetricians and family practitioners—some of whom claimed waiting times of more than a year.
The Globe’s findings were confirmed by a study published last week in the journal Health Affairs, which examined the Massachusetts health reform plan’s effects more than two years after its implementation. While the survey of Massachusetts residents found that the rate of uninsurance had declined, insurance does not always mean access—reports of unmet need for most health care measures “had moved closer to pre-reform levels” by the end of 2008. Moreover, one in five residents—and nearly one in three participants in government-run health programs—reported difficulty finding a provider accepting their “insurance.”
The study concludes that “cost pressures have the potential to undermine the [coverage] gains under reform.” In agreeing with this conclusion, some Members may further be concerned that a federal system of government-run health insurance like that established in Massachusetts will not only lead to coverage losses, but could bankrupt the federal Treasury in the process.
Medicare: So Good Seniors Need Other Health Insurance
Just before the recess, another survey appeared in Health Affairs, this one focused on beneficiary satisfaction with Medicare. The survey, authored by researchers from the liberal Commonwealth Fund, asserted that Medicare beneficiaries had greater satisfaction with their care and fewer financial hardships than individuals with private insurance—leading the researchers to conclude that a government-run health plan could benefit many Americans.
However, many Members may note that the fatal flaw of both the study—and its conclusion—lie in a key passage: “The vast majority of Medicare fee-for-service beneficiaries hold some form of supplemental coverage, through either employer-sponsored retiree plans, private Medigap plans, or Medicaid. Beneficiaries’ experiences undoubtedly reflect the combination of Medicare and supplemental coverage.” Data from the Medicare Payment Advisory Commission confirm that among the non-institutionalized population, fewer than one in ten Medicare beneficiaries rely solely on Medicare for health coverage. The survey made no attempt to distinguish satisfaction solely among those beneficiaries without other supplemental coverage—perhaps because those beneficiaries are so few in number.
Some Members may not be surprised that the study’s authors failed to highlight that Medicare’s meager benefit structure compels most seniors to obtain supplemental coverage for health expenses. However, some Members may also be concerned that—would the authors’ proposal come to fruition—many more Americans could be forced into a government-run health plan where bureaucrats would restrict access to life-saving treatments.
Article of Note: The Real Cost of Health Reform
Yesterday’s Washington Post featured an op-ed by Maya MacGuineas of the New America Foundation focusing on the budgetary impact of health reform legislation. She challenges the White House’s assertion that “health reform is entitlement reform”—particularly given that only about a third of the cost of entitlement expansions being discussed will be paid for by health-system savings. The op-ed also rebuts the notion that health reform as currently discussed will help slow cost growth, arguing that “expanding insurance coverage would increase health care spending by those who acquire insurance and add to overall health inflation”—as is currently occurring in Massachusetts.
Many Members may agree with MacGuineas’ opinion that expanding entitlement programs will not slow cost growth, and could well be a recipe for budgetary disaster. Members may also note that while the creation of Medicare in 1965 resulted in an explosion of costs significantly above original government projections, the private competition within the Medicare Part D prescription drug benefit has resulted in costs nearly 40% below original estimates—suggesting that the big-government solution to health care reform advocated by the Democrat majority is precisely the wrong approach to controlling costs.