SCHIPing away at the need for health insurance

When Bill Clinton's health care proposal was foundering in the summer of 1994, a group of senators suggested that the administration put off trying to get universal coverage and insist instead on insuring all children. The idea was to make, at least, a down payment on reform.

The White House said no and pressed on with its doomed effort to get a bigger bill. The Republicans won control of Congress in the fall. It wasn't until 1997, thanks to the unlikely duo of Sens. Ted Kennedy and Orrin Hatch, that a children's health care program was finally passed.

One of the clearest signals President-elect Barack Obama has sent is his determination to learn from the Clinton years, and particularly from the former president's failures on health care.

When Tom Daschle, Obama's pick to be secretary of health and human services, returned to the Senate last week for his first round of confirmation hearings, he offered a long list of criticisms that others had directed at the original health care reform effort. This time, he said, would be different.

And this week, the House of Representatives is determined to prove Daschle right. It is scheduled to take up an extension of the State Children's Health Insurance Program (SCHIP), as the Kennedy-Hatch initiative is called, so that 10 million kids can get health insurance. Getting more children covered before Congress starts wrangling over the larger health care bill is good politics, and the right thing to do. Congress needs to act anyway, because the program expires March 31. It might as well act fast, and act generously.

The SCHIP bill is unfinished business from the Bush years, and Democrats have no better way to show, and quickly, how different their approach to government will be from the style and priorities that prevailed during the outgoing president's term.

President Bush twice vetoed an extension of SCHIP. He opposed the additional $35 billion the Democrats wanted to spend to cover more children and also disliked the tobacco tax they proposed using to pay for it. There are many big things people hold against Bush, but this one has always stuck in my craw. If "compassionate conservatism" - remember that phrase? - means anything, surely it should mean helping more kids go to the doctor when they need to.

Some advocates of universal coverage have argued that an expansion of SCHIP should be delayed so that the issue of covering kids can be taken up as part of a larger health proposal. The worry is that passing the most popular part of reform now (is there a more sympathetic group to cover than children?) would make it easier to delay the broader effort.

These are good faith concerns, but Congress would be right to ignore them. The economic downturn has made the expansion of SCHIP all the more urgent.

It's not just that sharp increases in unemployment add to the ranks of the uninsured. State governments are hurting, too, and they are responding to revenue shortfalls by shrinking health care programs.

According to Families USA, a group that pushes for fundamental health care reform, states have enacted budget cuts that will leave some 275,000 people without health coverage, including 260,000 children in California. By the end of this year, if further proposed cuts go through, the number losing health coverage nationwide could rise to more than 1 million, almost half of them children. Other states have reduced benefits to those they still insure.

All this makes the case for fiscal relief to the states in a stimulus bill more compelling. It also makes clear that universal health insurance coverage should be an urgent priority. But getting the children's program done in the meantime could create momentum for the larger program and reduce the size of the problem that needs to be solved in a comprehensive bill - 10 million kids now, the rest later.

Senate Majority Leader Harry Reid has not made any commitments as to when he would take up children's health care, though he has listed it as a priority. It would do the new president and members of the Democrats' expanded congressional majority no harm to move expeditiously on a proposal that is simultaneously bipartisan - SCHIP has always enjoyed significant Republican support - and embodies Obama's oft-stated commitment to "programs that work." This one surely does.

How often did Obama promise to "turn the page," implying that his presidency would be very different from President Bush's while also taking lessons from President Bill Clinton's shortcomings? Winning a quick health care victory for children would prove he's determined to do both.

Obama's Health Care Resolutions Can't Be Kept

Beware a politician’s promises.

In his pursuit of national health care reform, President-elect Barack Obama has repeatedly promised Americans two big things:

-- that if they like the health insurance they have today, nothing will change, and

-- that his health reform plan will save the typical American family $2,500 annually in health care costs.

Yet, if Obama sticks with the health proposals he has outlined so far, it is highly unlikely that either of these promises can be kept. And that’s putting it charitably.

The main problem is that Obama has proposed creating a new government-sponsored enterprise — a taxpayer-financed health plan, run by federal officials, that would “compete” directly with private health plans. Moreover, the “competition” would take place through a new “national health insurance exchange,” something the president-elect envisions as a kind of national shopping mall for coverage, managed by Washington.

Unfortunately, rigorous analysis indicates this approach would end up displacing much of today’s existing private health coverage. Millions of Americans, especially those now getting coverage provided by their employers, would lose the private insurance plans they have today.

A government-run health plan is, of course, not a new idea. A perennial favorite among “liberal” health policy wonks, the program’s most recent high-profile champions include Tom Daschle, Obama’s choice for secretary of the U.S. Department of Health and Human Services (HHS), and Senator Max Baucus, chairman of the powerful Senate Finance Committee.

In the Obama version, the new government health plan would be open to the uninsured and those ineligible for other government coverage, like Medicare and Medicaid. It would feature comprehensive benefits like those available in the Federal Employees Health Benefits Program (FEHBP), the program that covers members of Congress, federal workers and retirees.

It sounds reasonable, but there’s one little problem with using the FEHBP as a model: It offers no government health plan at all. The FEHBP promotes premium-saving competition among a wide variety of health plans, but they are all private plans, ranging from managed care plans to health savings accounts.

In the FEHBP system, all of the risks and liabilities are assumed by private-sector plans, not by the taxpayers. But under the proposed new government health plan, taxpayers would be saddled with all the risks, losses, and liabilities—just as with the recent series of big bailouts.

Worse, in the Obama version, government officials would not only participate in the national competition by entering their own plan, they would also set the rules for the competition itself. It would be like having an umpire who not only makes the calls, but also fields one of the teams on the field. Some “fair” competition.

But “fairness” is not the biggest issue. What really matters is how it would affect your health coverage.

When the Obama health plan was unveiled, the Lewin Group, a nationally respected and politically independent econometrics firm based in Virginia, put it under the microscope. Their October 2008 analysis estimated the plan would help 26.6 million Americans gain health insurance coverage. A good thing, to be sure.

But Lewin concluded that the proposal would produce some very unpleasant changes, as well. Many employers would stop offering private coverage, switching an estimated 18.6 million employees over to the new government plan. Overall, Lewin estimated, 21.6 million Americans would lose their existing private health coverage, while the ranks of those insured by government (i.e., taxpayers) — under Medicaid and SCHIP, as well as the new plan — would swell by an estimated 48.3 million. These are bad things.

More recently, in a special Capitol Hill briefing, the Lewin Group unveiled an updated analysis of the government plan, based on different design elements. They projected that the loss of private health insurance coverage could range from a low of 10.4 million to a high of 118.5 million, depending on such factors as the pool of eligible enrollees and the kind of payment rates adopted by the new government plan.

Employers make the key decision to keep or dump health insurance; employees have little or no say in that decision. That’s why no one can promise that “nothing will change” for individuals and families who like their existing coverage.

President-elect Obama promised many changes. But in health care, he promised that change would ensure patient choice of doctor and care, without government interference. He also promised that (1) those who want to keep their current coverage would have no problem doing so and (2) those without coverage would get the same kind of insurance available to members of Congress. These are wonderful promises. But they can’t be kept with the approach he has suggested taking.