WASHINGTON–Congress has begun drafting legislation designed to reform the U.S. healthcare delivery system, an initiative that could dramatically reshape the nation’s health insurance industry.
It is a debate radically altered June 2 by the decision of President Barack Obama to outline certain principles he insists should be included in the bill–most controversially a so-called “public option.”
As envisioned by the president’s liberal supporters, including Sen. Edward Kennedy, D-Mass., such a system would be government-run. It is being promoted as a means of ensuring competition and therefore lowering rates for customers.
In comments to Democratic senators at a White House meeting June 2, Obama said that it was important to include a public plan option and that such a plan could help control health costs.
Several senators who attended the meeting said the president “spoke very enthusiastically about a public plan” that would compete directly with private insurers.
But it has generated intense opposition both from the industry and from Republicans in Congress.
For example, in a response to the President’s call for the public option, all but one of the Republican members of the Senate Finance Committee sent a letter June 5 to the President calling a public option requirement a “divisive issue” that would stand in the way of enacting a bill with bipartisan support.
“At a time when major government programs like Medicare and Medicaid are already on a path to fiscal insolvency, creating a brand-new government program will not only worsen our long term financial outlook but also negatively impact American families who enjoy the private coverage of their choice,” the letter said.
The letter contended that “Washington-run programs undermine market-based competition through their ability to impose price controls and shift costs to other purchasers.”
Requiring private plans to compete with government-run programs “would create an unlevel playing field and inevitably doom competition,” the letter also said.
Speaking for America’s Health Insurance Plans, spokesman Robert Zirkelbach says reform is needed, citing the estimated 47 million Americans who don’t currently have healthcare coverage.
But he notes the concessions the industry is already making to facilitate universal coverage and says that adding a public plan would be counterproductive.
The industry has proposed guaranteed coverage for pre-existing conditions and phasing out the practice of varying premiums based on a person’s health status, he noted.
But to make that work, he says, there needs to be a personal coverage requirement to get everyone into the health care system.
AHIP shares the concerns that providers and employers have raised about the potential impact a government-run plan would have on the U.S. health care system, he explains. He notes that Medicare and Medicaid currently underpay providers for services and that those costs get passed through the health care system, requiring employers and consumers to pay higher premiums.
Zirkelbach contends that “a government run plan would exacerbate this cost-shift,” citing data that as many as 119 million people would move from the private system to a government-run plan and “effectively end the employer-based health care system as we know it today.”
Moreover, he said, a government-run plan “would turn back the clock on innovative programs to improve patient care.”