HEALTH: Baucus Plan Highlights Importance Bipartisanship and Cost of Inaction
This post also appears on the National Journal's Health Care Experts Blog. where you can also see what other health policy analysts have to say.
On Wednesday, Senate Finance Chairman Max Baucus (D-MT) made clear that reforming our health care system is an economic imperative and that comprehensive health care reform should be a priority for Congress. I applaud his leadership, vision, and willingness to work with colleagues, stakeholders and the public to "get it done" in this Congress. He has laid down a key cornerstone in our pathway to a high quality health care system that works well for all Americans.
Senator Baucus emphasized two important messages on Wednesday: 1) The cost of "inaction is much more expensive" than reform, 2) We should approach health reform with a bipartisan attitude and endeavor to persuade "80 Senators" to support the final legislation. I believe the health care reform conversation would be well-served to continue to remember and echo these two points.
As for policy, the Baucus policy plan is extensive, so today I will simply highlight what I view as the most original contributions.
Counter-cyclical FMAP formula. As the economy weakens and people lose jobs and income, more Americans will become eligible for Medicaid or some kind of safety net insurance. This occurs just as states are compelled to reduce spending to match their recession-induced drop in revenues. (The vast majority of states have balanced budget requirements). Scholarship suggests that a 1 percent increase in the unemployment rate leads to roughly 1 million more Medicaid and SCHIP enrollees. Senator Baucus' proposal to make the federal share of (FMAP) responsive to fluctuations in the economy is a great way to strengthen state and personal finances and access to care when they are in most peril. Our current economic situation is an appropriate time to implement this improved policy stance.
Immediate access to care for the uninsured. I was intrigued by Senator Baucus' thoughts on providing the chronically ill uninsured with immediate access to care. As we think about how comprehensive reform may be sequenced or phased-in, this may be one way we could provide instant relief to the uninsured with the greatest health needs while we work to establish the infrastructure and rules of the new marketplace and other key delivery system reforms.
Focus on payment reform. While Senator Baucus' decision to place an emphasis on payment reform is not surprising given the Finance Committee's expertise and jurisdiction, nonetheless the comprehensiveness of his vision is impressive. We will not control health care costs until we fundamentally restructure the incentives—for both patients and providers—in our health system. Senator Baucus offers several valuable policy solutions that would help achieve this goal.
In addition to these new ideas, Senator Baucus gently emphasizes three policy concepts which I have long believed will be necessary to achieve bipartisan support for comprehensive health reform.
New marketplace. Senator Baucus recognizes the weaknesses of the current individual and small group markets and proposes a new market or "exchange" where individuals and small businesses can purchase coverage regardless of their health history or where they live. There is much to debate about how best to structure this new marketplace, but it is encouraging that Senator Baucus-along with President-elect Obama and a growing number of members of Congress- has identified this policy choice as a key pillar of reform.
Individual requirement to purchase coverage. Senator Baucus prioritizes individual responsibility and makes clear that requiring individuals to purchase coverage (once coverage is accessible and affordable) will make health insurance markets work far more efficiently and fairly. His framing of this issue re-creates space for a dialogue about how best to introduce a requirement to purchase coverage into the American health care system. This is an important and necessary conversation that will likely engender much debate, since some liberals and some conservatives alike have opposed purchase mandates for very different reasons. Chairman Baucus should be applauded for his leadership in re-igniting this essential policy conversation.
Reforming the tax treatment of health insurance. Perhaps Senator Baucus' greatest single policy contribution in his "call to action" is the decision to highlight the need to consider changing the current tax preference for employer premium contributions. He did not advocate or demand it. Yet, he did state simply and boldly that changing the tax code for health insurance may be necessary to improve incentives and provide a source of funding for coverage expansion and delivery system improvements. After a tough political campaign in which this issue and many surrounding it became confused in campaign tit for tat, Senator Baucus should be commended for his leadership on this issue.
Real health reform will never be easy. Opponents will always work tirelessly and concoct new arguments daily. Still, proponents of comprehensive health reform have had a good couple of weeks. First, Senator Barack Obama's election shows that a majority of voters want and expect comprehensive health reform to be an important part of our nation's agenda in the next few years. The incoming administration also views health reform as a priority and a key component of a broader strategic vision to stabilize the financial future of the American middle class. In addition, Congressional leadership is apparent unlike 1992. First, Finance Chairman Baucus has boldly stepped up to declare health reform an economic imperative, whereas former Chairman Moynihan was cool if not downright hostile to health reform as a key agenda item in 1993-4. This "call to action," combined with Senator Kennedy's prodigious and ongoing work and the bipartisan bicameral cosponsors of the Healthy Americans Act have all created far better pre-conditions for a national conversation than we had in 1992. Visionary business, labor, health stakeholder, and advocacy groups have also helped jump-start our essential health reform conversation. Senator Baucus has staked out a catalytic leadership role for himself at just the right time for our nation to act: now.