Has Harry Reid Torpedoed Reform?

Health care reform ran into new BIG trouble this week with a series of comments from Senate Majority Leader Harry Reid.

On Tuesday, Reid leapt into the middle of reform negotiations, telling Senate Finance Committee Chairman Max Baucus that Democratic leaders had major concerns about the draft Senate Finance bill’s proposed taxation of some health benefits and the exclusion of a strong public plan.

The immediate result was the effective suspension of bipartisan negotiations on the Senate Finance draft, with Republican Senators Chuck Grassley and Orrin Hatch both saying that bill markup would have to be delayed indefinitely until the conflict was resolved.

Yesterday, Reid tried to soften his comments in conversation with Senate Republicans, but later indicated that taxing health care benefits was still unacceptable, leaving Senate Finance members wondering how else to help pay for the trillion dollars (or more, perhaps much more) that they estimate as the ten-year cost of reform.

Reid’s comments reflect the findings of a series of straw polls in which various senators’ constituents were asked if they supported taxing health care benefits (Surprise! They didn’t want any new taxes), as well as an aggressive union-led campaign against the idea.

Reid’s intervention may very well have torpedoed reform. It leaves Senate Finance with few choices for funding reform, and virtually none that are likely to attract any bipartisan support.

Even if Senate Finance members are able to find other funding solutions, killing taxation of health care benefits will remove from the Senate Finance draft one of the very few provisions that might have resulted in slowing of overall health care cost increases. Leaving tax deductibility of benefits in place will continue to encourage the belief in those lucky enough to have generous employer coverage that health care is “free,” and in turn pander to providers eager to invest in high-priced resources that increase costs for everyone else. Meanwhile, Reid’s insistence on a strong public plan as an alternative cost control mechanism is likely to end support from moderate Republicans and centrist Democrats and to generate huge (and well-funded) opposition from insurers and providers. And, as the Clinton administration discovered sixteen years ago, any slowing of legislative momentum can be fatal to reform.

Roger Collier was formerly CEO of a national health care consulting firm. His experience includes the design and implementation of innovative health care programs for HMOs, health insurers, and state and federal agencies.  He is editor of Health Care REFORM UPDATE.

13 replies »

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  2. The insurance companies need to be regulated!! I am a registered nurse in Nevada. I was in a severe car accident in 1988 and as part of my settlement, I left my medical care open for the rest of my life to avoid insurance problems with preexisting conditions. The policy covers all care related to my injuries but not for other medical care. I have always had insurance through a group insurance through my employer. I have just been forced to retire as my injuries have progressed to the point that I can no longer work as a nurse. The price of Cobra is ridiculous and I cannot afford it. I have spent three months trying to find insurance. per the Nevada Association Of Insurance Underwriters, I contacted an insurance broker to help me. No insurance company will accept me because of my injuries and they don’t care that the injuries are covered by other insurance. We did find one company that would take me with an exclusion but would surcharge my premium by 100%, making the payment $1000.00 per month. Who could afford that? I am in need of surgery on my ankle injury which is covered, however, I am worried about having any other problems as I am 52 years old. I did accept a limited medical policy until my Medicare kicks in. I need major medical. I can’t be the only person having these problems. This is so unfair. If I didn’t have the insurance for my ankle surgery, what would I do??

  3. The whole point is that if you had insurance which made routine care affordable, there’d be less catastrophic cases. That $150 it costs to go see the average doctor without insurance these days? 1/2 the after-tax weekly salary of somebody making $20,000/year.
    Primary and urgent care is too expensive. It causes people to wait until they need catastrophic care, ultimately costing the system more.
    Giving people access to catastrophic insurance, but not to preventative care would only make the situation worse.
    If we treat illnesses before they spin out of control, and before hospitals are ethically obligated to treat patients, then we have a cheaper health care system. The reason the European systems work better than our systems (I’m referring to Swiss and German systems), patients get less end of life care but more up front care to manage illnesses, doctors aren’t rewarded for “doing everything possible” and instead are rewarded for doing “everything practical,” the profits of insurance executives are great limited, the power of Tort attorneys is greatly reduced, and medical education beyond college is essentially free. Everybody gives up, and gets, things in that model. That’s called a fair deal.

  4. It will take years to undo the doodoo left behind by insura and government do gooders. The pontification on this blog is more of the same illness that has afflicted health care. Keep it simple stupid.
    If people want cost effective care, empower the doctors to provide it. Very simple. The losers will just have to suck it up.

  5. No body should buy a service contract for their TV. As presently constructed, “insurance” is only a service contract. People need insurance for catastrphic care, not urgent care or dental care. Those items are discretionary and suject to overutilization. The co-pay is the brakes on utilization, but the CMS plans have no such braking element.
    Anyone can afford catastrphic coverage, and, remember, coverage does not mean care. Screening a large population for rare stuff has never and will never cost less than caring for the few who get the disease.

  6. MD as hell, I agree with you about end of life care. However, I take issue with
    The public doesn’t exactly have an option. Work for a company that doesn’t provide health care benefits, and have a pre-existing condition? Explain to me how “afford it or don’t have it is going to work?” Let’s say you have somebody making $10.50 an hour. Insurance premiums which buy a plan which can pay health care providers cost $1,000 a month or so. So they’d be spending over two-thirds of their after tax income to buy health insurance.
    The result is people not following (see MS patients becoming non-compliant en masse at the moment: (http://www.upi.com/Health_News/2009/06/19/Many-MS-patients-not-filling-prescriptions/UPI-31731245388651/). What happens to these patients is that they wait until it is too late to access the system, they arrive in hospitals with terminal illnesses and we spend hundreds of thousands of dollars trying to make up for the ten grand or so we failed to pay for in the first place. (See Nikki White: (http://www.post-gazette.com/pg/06339/743713-84.stm).
    Explain to me how a public option administered through a non-profit is going to make this situation worse? Simply put, it won’t. You’ll get paid for the doctor’s visits the patients skip out on at the moment, and that care will prevent really bad situations from happening.
    What is likely to happen is Medicare rates plus 5% for the public option. Doctors will get paid, because a public option wouldn’t compensate its actuaries with stock options, the largest incentives for the current regimen of delay, deny, and over-treat would be gone. Because the health care reform bills include the first steps in changing our system to an effectiveness–read per patient–model, the most outrageous and ineffective treatments (cataract surgery in the terminally ill, feeding tubes in Alzheimer’s patients, chemo and surgery in stage V cancer patients, etc) will likely be eliminated.
    So in short, everybody has to give up something: patients have to give up end of life treatment, doctors have to give up a little bit of pay, insurance companies have to give up a little bit of profit, hospitals have to give up some indigent care reimbursements, and lawyers have to give up the ability to sue every doctor in sight. I call that a fair deal that is worth supporting.
    I do think that Tort Reform and student loan forgiveness may be included in the bill. Though I am not positive on that.

  7. Give em Hell, Harry.We need a computer in every patient room and a chip in every patient. Click AUTOMATIC. Cheap care is there, very quick with one click. Save very much money.

  8. Claudette,
    You should definitely fight state by state, since that is where insurance regulation happens. The public has an option right now…pay for it or don’t have it. And who is “WE”?
    I am healthcare. I work for the patient unless hired by an employer or a worker’s comp company. The patient is responsible for the bill, just like at McDonald’s. I don’t care if I get paid today or even soon, but I should get paid in full at some time.
    If you (WE) make healthy choices over your lifetime, you will be able to fight alot longer, since you will be healthier and live longer (collectively) and have more money for signs and TV commercials and not waste time in the doctor’s office or ED.
    Anger management is not primary care, but playground justice is free. Bring on the fight. You cannot enslave healthcare providers for service to you. In the end you will have nothing.


  10. If congress wanted to really bring changes, they would
    eliminate employer based coverage all together.
    Require that everyone buy coverage on their own.
    Only than will the consumer be completely aware of the
    cost. this will increase competetiveness among the physicians.

  11. Healthcare reform should be dead. CMS and Congress need to fix Medicare first. If they can do that then they will know what to do for the country. If they are not going to fix Medicate first, then it remains as I have said previously: It is all about getting all the money in healthcare to use to avoid the politcal pain of rationing care. If the gov’t has all the money, then they can spread out the pain. Furthermore, if they require all people to have coverage, then they have greatly expanded their revenue stream.
    Congress should determine how much federal money to spend on the dying patient. Death and dying are issues for the country, not just healthcare providers. We dialyze to many people too long. We put PEG tubes into people who should die with dignity. We remove cataracts from the soon-to-be dead.
    And Congress must address tort reform. Period.
    It is over-utilization and wrong priorities that drive healthcare costs.
    The patient must be responsible for his/her costs and utilization. The patient use and expectations must be addressed. Change the patient and the lawyers and you change the system. Don’t change the patient and the lawyers and you have this system.

  12. It sounds like Senator Reid’s message is the same as my late father-in-law would have suggested if he were still here – Let the rich pay. That’s not likely to win any support from Republicans if bipartisanship is still a goal. Besides, there aren’t nearly enough rich people to tax to cover the cost of expanding the entitlement to health insurance.