Healing Healthcare: The Politics Of Reform

Health care reform has evolved into a major item on the national agenda as the concerns of Main Street and Corporate America force their way into the political consciousness of lawmakers in Washington as well as candidates on the Presidential campaign trail.

"This is a 'bread and butter', pocket-book issue," says National Coalition on Health Care (NCHC) Senior V.P. Joel Miller. "Politicians simply can not ignore it."

Some in Congress have made the growing anxieties of their constituents a top priority. For instance, the office of Sen. Ron Wyden's (D-Oregon) like many of his peers, regularly receives letters from residents in his state, who are ineligible for the coverage they need or bankrupt as a result of expensive medical treatments. It is no coincidence thatWyden's proposal for healthcare reform, the 2007 Wyden-Bennett Healthy Americans Act, reflects feedback from town hall meetings in Oregon.

"We've been focused on demographic issues like social security and not enough on health care," Congressional Budget Office (CBO) Director Peter Orzsag, who says healthcare is the "key to our fiscal future. Everything else is a footnote."

The U.S. spends more on healthcare than any other industrialized nation, whether it is a private- or public-based system, yet some 47 million Americans are without coverage.

Since 2000 health insurance premiums have increased four to five times faster than salaries and the rate of inflation, according to the NCHC. If costs continue to climb at their current rate, federal spending on Medicare and Medicaid alone will rise from 4.5 % of GDP to 20% by 2050, according to estimate released by the CBO.

Employers, who have voluntarily provided the bulk of the nation's healthcare for the past half-century have been skeptical about large government participation, but runaway costs have prompted business leaders to reconsider that position.

General Mills Chairman and CEO Stephen Sanger is representative of those pushing for reform. He recently told CNBC that any system that "leaves that many people out isn't sustainable long term."

"Rising health care costs are diminishing innovation and competition by forcing employers to choose between investing in technology and providing benefits," says Miller.

Legislation On The Rise

The Wyden-Bennett Healthy Americans Act -- which also has a House version spearheaded by Reps. Brian Baird (D-WA) and Jo Ann Emerson (R-MO) - is one of the many proposals working its away around Capital Hill. The question for most in Congress is not whether but when legislation will become law.

Though any viable reform plan must lower costs and increase coverage, most initiatives fall into two broad categories -- government or market-based.

New insurance pools -- state and/or federal -- and the expansion of public programs characterize government-based models.

Federally mandated health insurance programs and single-payer systems - which are typically funded by taxes and administered under government supervision -also fall under this category.

Market-based models, what's known as consumer-oriented healthcare is based on individual responsibility for health care costs by means of Health Savings Accounts and high deductible plans.

"Expansion is off to a slow start," says Miller. "They are more popular among healthier and wealthier individuals. People in good condition are not worried about costs. If someone has a chronic condition they are going to blow right past these deductions and we're really not going to do anything to tamper insurance costs."

Other proposals are narrower in scope. The renewal and expansion of SCHIP, the State Children's Health Insurance Program, would increase federal funding for low-income children from the current $5 billion a year. A vote is scheduled in the fall.

The Healthy Americans Act may be the only legislation covering comprehensive health care reform and is the first bipartisan one of its kind in 13 years. The bill, which Wyden created with Sen. Bob Bennett (R-Utah), provides universal health care and removes the burden from the employers while encouraging people to seek preventative care.

Debate On The Campaign Trail

Far from Washington, healthcare is already a major issue on the presidential campaign trail, even though the general election is still 16 months away.

"Health care will be the transcendent domestic issue in the upcoming election" says Miller.

Democrats have taken the lead and healthcare reform is a prominent part of most candidates stump speech. It is also highly visible on their campaign websites.

Both Sen. Barack Obama (D-Illinois) and John Edwards, the 2004 VP candidate and a former senator, have integrated universal health care into campaign platforms.

Obama is emphasizing lower costs as a way to facilitate increased coverage. Edwards, on the other hand, wants to aggressively expand coverage, largely by government mandate.

The current frontrunner, Sen. Hillary Clinton (D-New York), whose 1993 healthcare reform initiative while First Lady failed miserably, is making the expansion of coverage for children and universal health care a central theme to her presidential bid.

All of the candidates have articulated their health care platform on their websites. Edwards "will provide universal health care for every man," Clinton says "America is ready for universal health care" and Obama 's plan "will save a typical American family up to $2,500 every year."

Republican candidates have not been nearly as upfront or vocal about the issue. Neither former New York City Mayor Rudolph Giuliani nor Sen. John McCain (R-Arizona) has any official health care platforms on their campaign websites.

(Since the original publication of this article on July 28, Giuliani unveiled a major healthcare proposal, centered around individually-purchased health insurance policies and without any coverage mandate)

Former Massachusetts governor Mitt Romney's does, referring to "extending health insurance to all Americans, not through a government program or new taxes, but through market reforms".

All of the major GOP candidates have made enough public statements reflecting their ideas and positions on health care, which largely resemble those of the Bush Administration, whose "ownership society" theme involves individuals taking direct control of their health care expenses.

Given healthcare's status as a hot button, populist issue, observers say all of the presidential candidates will develop clearly defined platforms on the issue health as campaign ages.

"It's really hard to see healthcare as anything less than a top three campaign issue and it may even compete with Iraq for number one," suggests Austan Golsbee, a professor of economics at the University of Chicago School of Business, who is also a campaign adviser to Sen. Obama.

(All of the major campaign organizations were asked to comment for this story, but all but Sen. Obama's failed to return phone calls or declined comment.)

A major campaign issue, yes, but probably not a law. The irony may be that while the presidential campaign draws attention to the healthcare issue and helps define its potential solutions, the political process will delay the legislative one. Even if consensus and bipartisan agreement emerge, any healthcare reform law will have to wait for the input and the signature of the next president.