As we noted in our wrap up of last week's Senate Finance proceedings, one of the biggest issues for health reform going forward is the question of affordability. Over at the New York Times Prescriptions blog, David Herszenhorn weighs-in:

Democrats proposing an overhaul of the American health care system have gotten themselves locked in a box around the question of affordability.

This is not the question of whether the proposed health care legislation is affordable for taxpayers and the federal government -- an issue that seemed to be answered when the Congressional Budget Office said the Senate Finance Committee's bill would eventually help reduce federal budget deficits.

The affordability question vexing Democrats is whether those with moderate income will be able to afford health insurance, even with the subsidies the legislation would provide and all sorts of new rules aimed at controlling costs.

Herszenhorn suggests that so-called curve bending provisions of the legislation -- the stuff that will lower rates of health care inflation and reduce overall costs -- will take too long, while raising the subsidies would cost too much. He thinks one option available to Democrats is to lower the affordability threshold for the individual mandate so that more individuals and families would be exempted from a requirement to purchase insurance. (Currently, individuals and families would be exempt if the cheapest option available, with subsidies, cost more than 10 percent of their income.)

While Herszenhorn's piece is certainly to attune to the political challenges of health reform, we think his take on the policy options available is a bit too glum.

First, on the issue of bending the cost curve, it's not as if we're starting from scratch. As we've documented frequently, there are plenty of examples of what works in American health care -- models of high-quality low-cost care whose lessons can be applied throughout the country. And as The Atlantic's Derek Thomspon notes in his rebuttal of Robert Samuelson's latest column, there are many provisions in reform legislation that will help speed up this process of delivery system reform:

There's comparative effectiveness research. There's the billions Obama's spent on electronic records in the stimulus bill. There are pilot programs and an "innovation center" fund to test ways to move away from costly fee-for-service. There's MedPAC, the independent advisory counsel that will try to make difficult decisions Medicare delivery and payments...

The health care industry can move quickly when it believes a change is coming -- see for example, the rise of managed care companies in the 1990s or the change in physician practice as response to Medicare's prospective payment system. The challenge for lawmakers then, is to make that commitment to change credible. That means ending fee-for-service medicine and realigning incentives to promote more integrated and coordinated care, and a host of other measures boldly outlined by the Health CEOs for Health Reform.

As for the issue of subsidies, mandates, and affordability, we'll quote or boss, Len Nichols, who's fond of saying, "God and the Devil are in the details." The Kaiser Family Foundation has an excellent tool which calculates the different subsidies offered by various health reform bills in the House and Senate. For example a family of four with a 40 year old policy holder and income at 300 percent of the Federal Poverty Level ($66,150) could expect to receive the following subsidies under different proposals:

• $6,769 -- Senate HELP
• $3,481 -- House Ways and Means/Education and Labor
• $2,820 -- House Energy and Commerce
• $1,497 -- Senate Finance

There are many ways to structure subsidies and define affordability, and as the above variation illustrates, there is plenty of room for compromise as reform legislation moves through Congress. When the Senate Finance Committee resumes its mark up tomorrow, the media will focus on all the drama and debate surrounding the public health insurance option, but the real questions on our minds will continue to be about affordability.

Already, changes made to the Chairman's Mark have lowered out-of-pocket limits as well as the percent of income a family receiving subsidies could spend on insurance. Democrats will continue to look for ways to finance additional subsidies and provide alternative ways to give individuals more low cost choices to help make health care affordable and available to all Americans. For example, Senator Maria Cantwell has proposed that individuals with incomes below 200 FPL be offerd a basic health plan modeled on a program in her home state of Washington.