Health Care Reform Could Actually Take Place This Year

Can a health care plan make it to the president's desk this year? There are lots of skeptics out there, including those who fear or believe that he has bitten off way too much with his ambitious agenda. It is easy to be skeptical given past history; the infinite complexities in our patchwork, crazy-quilt, mixed public-private health care system; and the hurdles imposed by our political system of checks and balances.

But there are many reasons to believe that this is the year for serious change in the health care system. First, as the president's health policy summit showed, the major actors in the field are genuinely ready to sit down at the table and deal--this is not window dressing or public relations, but a recognition that this is the chance to have an impact on change and that if reform does not happen in this Congress, the change will be incremental and likely more deleterious to the providers in the system.

Second, the world has changed significantly since the 1994 flameout of the Clinton health care initiative in a way that makes the public climate for serious reform much more favorable. Back in 1994, there were 37 million uninsured; now there are more than 45 million. But in addition to them, we have at least as many Americans who have been uninsured sometime in the past five years and found it to be a harsh and painful experience, especially those who fell back on the bed of nails that we call COBRA, or the Consolidated Omnibus Budget Reconciliation Act.

There are many others who have watched what happened to friends, relatives or neighbors who worked for Enron, Global Crossing or one of the airlines that went into Chapter 11 and renegotiated employee health plans, or who now work for General Motors, Chrysler or one of their suppliers or dealers. And there are those who know retirees from these or other comparable companies who have seen or will see much-diminished health plans from those that they have had and counted on.

No matter how much is on the plate, the first year is the time to seize the moment and move on major change.

Now add to these groups the largest one--people who have good jobs, good employers and no reason to fear the loss of their health insurance, but who have the same recurring story. Every year, the human resources person comes to them and says something like this: Our insurance has gotten too expensive. We are changing the plan. Maybe a new insurer, maybe not. But new conditions, higher co-pays, higher out-of-pocket expenses, new doctors, a new pharmacy benefits manager with a different slate of acceptable drugs, new forms.

With the yearly turmoil and high costs, many more people are willing to take a leap of faith because the status quo is not acceptable.

Third, we have a president and vice president who are creatures of the Senate and a White House chief of staff who is a creature of the House. They have a much deeper understanding, from the beginning, of how to operate within Congress than the Clinton administration had in its first two years. That means an understanding that no matter how much is on the plate, the first year is the time to seize the moment and move on major change. And an understanding that you have to let Congress play a major role working out details, with some administration guidance and boundaries.

Fourth, we have a crisis that is, as White House Chief of Staff Rahm Emanuel famously said, an opportunity. We have seen it work already on the health front, with a huge chunk of money in health spending accomplished via the stimulus package--add in the State Children's Health Insurance Program, and we have nearly $225 billion in health sweeteners, including the big down payment of health information technology and a sharp expansion of those insured via Medicare and Medicaid, before we have even begun to negotiate the big health reform plan. Without the economic crisis, we would have had no money available to do such things; the current need to stimulate the economy and to ease the suffering of the unemployed made big spending items like these appropriate.

Of course, there are still major obstacles in the way of reform. If insurers, pharmaceutical companies, physicians and hospitals are willing to deal, what they are willing to give up and will demand in return may not fit into a workable package and may not fit with what lawmakers and groups like AARP will find acceptable. The wheeling and dealing to get the many groups on board may produce a package that is more unwieldy than coherent and comprehensive. The whole is not always greater than the sum of the parts.

And there may not be a whole. The negotiations could break down, perhaps over the question of whether there is a public plan to compete with private insurance plans. The costs may be simply too prohibitive to move in more than incremental ways. The insurance companies are willing to move past the pre-existing condition hurdle, but only if the risk pool is broadened to include everybody. Getting to universal mandated insurance is a big leap to take, and the experience in Massachusetts, a state where the change was far easier than in most because of demographics and existing policy, offers some cautionary notes about applying the principles to all 50 states at once.

President Barack Obama's budget outlines ways to make a huge down payment on a plan, but a core part of the administration's tax package is on life support. Finding an alternative source of funding to the reduction in deductions for charitable contributions and other itemized deductions will not be easy. But implementing major health reform without paying for it will be much, much harder.

Then there is the continuing dysfunction in our politics. There is little chance that House Republicans will be willing even to come to the table to play on health reform, even if Democratic leaders invited them (itself a bit of a stretch). Many Senate Republicans are much more open to change, including conservatives like Chuck Grassley (Iowa) and Bob Bennett (Utah). But so were Senate Republicans like John Chafee (R.I.) in 1994, until the overall climate changed and all Republicans stepped away from any negotiation.

This year is different; we will see in a few months how different it is. But the odds are better than ever that something significant could happen, if not in one big vote than in a series of steps that will add up to major change.

Norman J. Ornstein is a resident scholar at AEI.

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