With Democrats on the verge of pushing a $940 billion health care reform measure through Congress and toward the desk of President Obama, under a self-imposed deadline, the major issue for health care in America remains unsolved. Insurance coverage will expand -- and so, probably, will health care costs, already a sixth of the American economy.
This health care reform does far too little to rein in the crisis of escalating insurance and care costs. Democrats take heart in Congressional Budget Office projections -- some based on future moves that Congress may or may not make -- that the new law will reduce federal deficits by $138 billion over the next ten years. But the expansion of coverage is estimated to cost an additional $200 billion per year by 2019 and some of the planned cost-offsetting measures already already are questioned, such as a tax on "Cadillac" health insurance plans now being softened under pressure from organized labor, a traditional pillar of Democratic Party support.
Even the insurance industry is wary, complaining that Congress has done little in this bill to slow the growth in costs.
Many of the provisions in "Obamacare" also are in the Massachusetts health reform plan often cited as a model for universal coverage. Under that state expansion, though, costs haven't worked out the way they were supposed to. The program is $47 million over budget and costs are 27 percent higher than the national average. Health insurance premiums are increasing at the rate of 30 percent a year. Hospitals are in turmoil and three of the state's four major health insurers lost money.
And if access and waiting times are issues in Canada, so too in Massachusetts -- doctors are reluctant to accept new patients, and the average wait for an appointment is now 44 days. That doesn't offer much support for the argument that sick people will use expensive emergency rooms less often because universal coverage will give them access to a doctor.
Nationally, the major public concern over health care has been the annual sharp increases in insurance premiums. There is no evidence, under this measure, that slowing those increases will happen. There are mandates and regulations likely to increase costs, not diminish them.
Universal health insurance coverage is a good moral goal, as are the bill's measures to create high-risk insurance pools and ban denial of coverage for pre-existing conditions. But expanding coverage is a goal that should follow cost controls and not, in an era of staggering governmental deficits and debt, worsen the cost problem for taxpayers and businesses, especially small businesses.
There are three major cost-offsetting measures in the Democrats' bill: trimming Medicare and other federal health programs by $500 billion, increasing taxes on individuals making more than $200,000 and families making more than $250,000 a year, and the union-alarming tax on expensive health care plans. The goal is to make that pay for coverage expansion, adding some 32 million Americans (of about 45 million now uninsured) to the ranks of the insured through individual and employer insurance-purchase mandates, expansion of Medicaid eligibility for low-income Americans and tax credits for middle class households.
But the bill delays implementation of many provisions so initial-year costs won't cause "sticker shock," and the Senate version to be adopted also includes several programs that call for Congress to provide unspecified, open-ended funding "such as may be deemed necessary." There's also no reform to discourage the overuse of expensive medical practices just to avoid potential lawsuits, and the expansion will lead more people to use medical services, taxing the ability of the current system to deliver them and perhaps driving up cost.
Drug companies, hospitals, doctors and insurers would gain millions of new customers, although hospitals will need to be more efficient to absorb new Medicare regulations and insurers will see more federal regulation.
Buoyed by CBO projections, Democrats have grown increasingly confident of gaining the 216 votes needed to "deem and pass," probably on Sunday, the package of older bills and new amendments that would send this reform to the White House. That will not end the debate. There are 38 states already poised to sue the federal government if residents are forced to buy health insurance, the real impact on costs will emerge over the years -- and the politics will heat up again, in November.