News & Events

Health bill is a step forward, so pass it now and fix it later

December 22, 2009

THE SENATE health bill has no government-plan option to keep a lid on the rates private insurers can charge. It offers no subsidies for illegal immigrants. Its restrictions on abortion coverage are nearly as draconian as the House bill’s. Even so, the Senate should pass it before breaking for Christmas.

The bill’s greatest achievement will be to provide coverage to 30 to 36 million Americans who now lack it. Following the example of Massachusetts, it will couple a mandate that everyone obtain insurance with subsidies to make coverage affordable. The bill will prohibit insurers from denying coverage – either through exorbitant premiums or outright rejection – to applicants with pre-existing illnesses.

To raise $871 billion to pay for subsidies and other expenses, the bill would reduce the growth in Medicare spending and tax high-premium insurance polices. The Congressional Budget Office says it will actually shrink the federal deficit by $130 billion over 10 years. Near-universal coverage should reduce pressure on Medicare, because fewer 65-year-olds will enter Medicare with a backlog of untreated conditions like high blood pressure and diabetes.

The bill’s supporters have struggled to explain how it will hold down the skyrocketing premiums of those Americans who are already insured. The bill offers no single solution for this. But it puts more money into comparative effectiveness research so doctors and patients can avoid costly treatments with little value.

In an acknowledgement that the current fee-for-service system creates perverse incentives for wasteful tests and procedures, the bill would fund wide range of pilot programs for alternatives. Some would reward hospitals that get good results at low cost. Others would penalize hospitals with high infection rates. These pilots, if successful, can lead to industrywide improvements.

The country has spent decades getting into its current health care fix, with exorbitant outlays and mediocre results. Congress has stymied proposals by Presidents Harry Truman, Richard Nixon, and Bill Clinton to put the system on better footing. Now, the overall benefits of the current bill far outweigh its shortcomings. After a core commitment is made to provide universal access to health insurance, Congress can go back and correct the initial bill.

This bill has flaws, but it’s time to make the commitment, and make history