POLITICO (Washington) -- If Congress were to take a vote on a health reform bill today, Democrats and Republicans would find a surprising level of agreement — so much so that the broad outlines of a consensus plan already are taking shape.
Sick or healthy, rich or poor, all Americans would be guaranteed access to health insurance.
In fact, they’d probably be required to purchase it — perhaps through mandates in the law that would include stiff tax penalties for anyone who tried to opt out.
Newly created insurance marketplaces would make finding a plan as easy as shopping for cheap airfare. People could keep their coverage, even if they switched jobs. And they might be able to choose between private insurers and a government-backed plan.
But here’s the catch — none of this would come free, with the wealthiest Americans likely to face higher taxes to help pay for coverage for all.
It’s hard to believe that only three months ago, health care advocates worried that President Barack Obama would drop the health reform issue from his first-year agenda. Now, with an August deadline to pass a bill, a compromise that once seemed unimaginable is considered quite possible, both sides say.
Congress this week begins a two-month sprint to pass legislation overhauling the health care system — an aspiration that has eluded generations of American politicians. The task is exceedingly complex and faces the legislative equivalent of an Ironman triathlon, tested at every stage by monied interests, political alliances and an estimated 13-figure price tag.
So there’s no guarantee every piece is going to fall into place just like this or even that a final compromise will be forged. But here’s a look at what could be expected in a bill — and what details have yet to be resolved:
The guiding principle of congressional efforts remains universal coverage, or something close to it. This means not just finding a way to cover 50 million uninsured Americans but also making the system more stable and affordable for those who already have insurance through their employer. Now, losing a job means losing coverage.
Why it looks likely: Lawmakers view universal coverage not as much as a moral imperative but as an economic issue. If the aim is to lower insurance premiums for everyone, then the young and the old, the sick and the healthy must be funneled into the system as a way to spread the costs of high-risk patients.
The unresolved fight: how to compel participation in the system and how to pay for it. Last month, Senate Finance Committee Chairman Max Baucus (D-Mont.) said “we’re going to try to get as close as we can” to universal coverage, and the Congressional Budget Office estimates the proposals would reach about 95 percent of Americans. But the package of options for achieving even near-universal coverage requires lawmakers to find hundreds of billions of dollars in new tax revenue and spending cuts — money that it hasn’t found yet.
If there was such a thing as a sure bet in the bill, this would be it: the creation of an insurance marketplace, or “exchange,” where individuals and small employers could compare plans side by side, find options with a minimum benefits package and buy coverage. Insurers would be required to take all comers, regardless of pre-existing conditions. Proponents say it would give individuals a place to find affordable insurance that could go with them from job to job.
Why it looks likely: It is the cornerstone of Democratic and Republican health care proposals. Experts from the conservative Heritage Foundation and the liberal Center for American Progress endorse it. Federal lawmakers already participate in an exchange called the Federal Employees Health Benefits Program — and they have been promising for years to provide the same choices to voters.
“That has to be the one thing that is close enough to a guarantee as you can find,” said David Merritt, a health policy expert at Newt Gingrich’s Center for Health Transformation.
The unresolved fight: how to structure it. The CBO, which has been reviewing the legislative proposals to determine their fiscal impact, hinted in a report last week at the scope of options under consideration. They could be “private online clearinghouses similar to Orbitz” — the online travel-booking site — or they could involve more government involvement.
Obama and congressional Democrats are considering an overhaul that could exceed $1 trillion over 10 years, and spending cuts will get them only so far. That means some people will take a tax hit. The hot target at the moment: levying a tax on health benefits provided through employers, which currently aren’t subject to taxation.
Why it looks likely: It’s a cash cow. The deduction on health benefits is worth more than $200 billion annually. Baucus does not want to eliminate the deduction, but he has floated a cap that would tax plans worth more than a certain amount. Liberal and conservative academics support the change. And congressional Republicans have advocated eliminating the tax-free status of employer insurance, giving the idea bipartisan credibility (although the GOP would want to return all the money to individuals in the form of tax credits).
The unresolved fight: Unions hate it. They fought for years for generous health plans, and their workers would most likely have to pay taxes for the first time on their benefits. As a candidate, Obama ran against the idea of taxing health benefits. It could also endanger his pledge not to raise taxes on individuals earning less than $200,000 annually. Still, White House aides have sent signals that Obama would not veto a bill that changed the tax treatment of health benefits.
Democrats and Republicans agree that government must do more to nudge Americans into buying insurance. Republicans favor incentives and perhaps an automatic enrollment system in which families would be signed up and would have to actively decline coverage. Or it could mean mandates on individuals to buy insurance or face tax penalties and on employers to offer insurance or make a payment to the government. At the very least, Americans are likely to see government exert far more pressure on those who do not have insurance to buy it.
Why it looks likely: The economics of an overhaul don’t work unless the government does everything it can to funnel people into the system.
The unresolved fight: how large of a stick the government should wield in encouraging Americans to buy insurance.
Establishing a public insurance option to compete with private insurers remains one of the most contentious aspects of the reform debate. Democrats maintain a public plan will keep private insurers honest while Republicans argue that it would create another bloated government entitlement. But even some in the GOP say a bill will include at least a public “fallback” plan, which would be put in place if private insurers did not do enough to cut costs and improve access. Republicans backed this structure in the 2003 bill on Medicare prescription drug coverage.
Why it looks likely: Democrats hold the cards. They have a popular president, dominate the House and claim a near-filibuster-proof majority in the Senate. Plus, they can still use “reconciliation,” a procedural tool that allows them to pass a bill with 51 votes if an agreement isn’t reached by October 15.
The unresolved fight: Democrats are unlikely to settle for a “fallback” option, so they will continue to push for as robust a public plan as possible. But expect to see Republicans, physicians and private insurers resist this for as long as they can.
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