Sunday, August 30, 2009

Editorial - Majority Rule on Health Care Reform

With the death of Senator Edward Kennedy, the Democrats do not have the votes just among their 57 members (and the two independents) to break a filibuster, and not all of these can be counted on to vote in lock step. If the Democrats want to enact health care reform this year, they appear to have little choice but to adopt a high-risk, go-it-alone, majority-rules strategy.

So how much of the proposed health care reforms could plausibly fit into a reconciliation bill? The answer seems to be: quite a lot, though nobody knows for sure.

Knowledgeable analysts from both parties believe that these important elements of reform will probably pass muster because of their budgetary impact: expansion of Medicaid for the poor; subsidies to help low-income people buy insurance; new taxes to pay for the trillion-dollar program; Medicare cuts to help finance the program; mandates on individuals to buy insurance and on employers to offer coverage; and tax credits to help small businesses provide insurance.

Even the public plan so reviled by Republicans could probably qualify, especially if it is given greater power than currently planned to dictate the prices it will pay to hospitals, doctors, drug companies and other providers, thus saving the government lots of money in subsidies.

Greater uncertainty surrounds two other critical elements: new rules requiring insurance companies to accept all applicants and charge them the same premiums without regard to medical condition, and the creation of new exchanges in which people forced to buy their own insurance could find cheaper policies than are currently available.

Republicans claim that they want to make medical insurance and care cheaper and give ordinary Americans more choices. But given their drive to kill health reform at any cost, they might well argue that these are programmatic changes whose budgetary impact is “merely incidental.” Democrats would very likely counter that they are so intertwined with other reforms that they are “a necessary term or condition” for other provisions that do affect spending or revenues, which could allow them to be kept in the bill.

Another hurdle is that the reconciliation legislation covers only the next five years, while the Democratic plans are devised to be deficit-neutral over 10 years. The practical effect is that the Democrats will almost surely need to find added revenues or budget cuts within the first five years.

Another Senate rule, which applies whether reconciliation is used or not, requires that the reforms enacted now not cause an increase in the deficit for decades to come, a difficult but probably not impossible hurdle to surmount.

Clearly the reconciliation approach is a risky and less desirable way to enact comprehensive health care reforms. The only worse approach would be to retreat to modest gestures in an effort to win Republican acquiescence. It is barely possible that the Senate Finance Committee might pull off a miracle and devise a comprehensive solution that could win broad support, or get one or more Republicans to vote to break a filibuster. If not, the Democrats need to push for as much reform as possible through majority vote.

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