In the second of a series of sponsored conversations about the future of the employer-based health insurance system, Sens. Gordon Smith (R-OR) and Blanche Lincoln (D-AR) offered their perspectives on how the employer system can continue to provide coverage for American workers and their families, if appropriate bi-partisan policy actions are taken soon. Both senators are authors of legislation designed to encourage more small firms to offer insurance to their employees. Len Nichols, director of the Health Policy Program at the New America Foundation, and Henry Aaron, senior fellow at the Brookings Institution, moderated the discussion, which was followed by audience questions and answers.

Sen. Smith began the dialogue by acknowledging what many are afraid to mention: In the United States we ration care now -- by income, limiting benefits, or queues. He then discussed shortcomings of both the political left and right, manifested by some Canadians turning to private insurance despite their state-sponsored national health insurance, and the fact that health savings accounts are not helpful to low-income or very sick Americans.

Smith’s main point was that it takes 60 votes to accomplish health reform, due to the Senate's use of the filibuster, and that therefore bipartisanship is vital. To this end, he has worked hard on a number of health care initiatives, including S.3701, the Catastrophic Health Coverage Promotion Act, which he introduced with Sen. Ron Wyden (D-OR). While not a major overhaul of the current system, it represents a first bipartisan step, and therefore an important place to start.

Sen. Lincoln continued in the same spirit by remembering the ease of acquiring health insurance when she arrived on Capitol Hill as a staffer some years ago. Pooling, as she discussed, allows for the sharing of responsibility between the healthy and the sick, so that when a small number of sick individuals need treatment money is available, provided by the healthy as insurance against their own malady. Under the employer-based health system that exists in the United States, pooling occurs by employer—which allows large employers to pool risk by hundreds, thousands, or even millions of employees, but naturally leads to difficulty among small businesses. In her case, the federal government’s size allowed her affordable insurance.

Lincoln’s bill -- S.2510, the Small Employers Health Benefits Program (SEHBP) Act -- would enable small businesses to pool together and purchase health coverage through the federal government’s Office of Personnel Management. Circumventing a common criticism of the employer-based system, the SEHBP plan allows for portability of benefits when an individual changes jobs between two employers participating in the program. The small business sector would then be allowed access to the same type of coverage as members of Congress.

Other comments included Nichols’ introduction in which he mentioned the 18,000 person Hewitt survey released a few days prior, which found that 80 percent of respondents worried about affording health care, and that half of all respondents who have a high-deductible health plan intend to abandon it in favor of more comprehensive coverage. Aaron brought up the issue of rising health care cost, which both senators agreed was a major problem that must be addressed in the near term. Lincoln mentioned her work with Rep. Nancy Johnson (R-CT) on the coordinated care provisions of the MMA as possibly pointing the way for the health system as a whole.

The video of this event is available at right, while an MP3 audio recording can be downloaded below.