Senators Closer To Health Package

Senate negotiators are inching toward bipartisan agreement on a health-care plan that seeks middle ground on some of the thorniest issues facing Congress, offering the fragile outlines of a legislative consensus even as the political battle over reform intensifies outside Washington.

The emerging Finance Committee bill would shave about $100 billion off the projected trillion-dollar cost of the legislation over the next decade and eventually provide coverage to 94 percent of Americans, according to participants in the talks. It would expand Medicaid, crack down on insurers, abandon the government insurance option that President Obama is seeking and, for the first time, tax health-care benefits under the most generous plans. Backers say the bill would also offer the only concrete plan before Congress for reining in the skyrocketing cost of federal health programs over the long term.


Three Democrats and three Republicans from the Senate Finance Committee will brief Obama on Thursday about the progress of their sometimes arduous talks, which are now set to extend through the August recess. The negotiators are holding the details close as they continue to debate key issues, and it could be a challenge for them to meet the Sept. 15 deadline set by the committee's chairman, Max Baucus (D-Mont.), for a deal.

Even if the partnership does not result in legislation, Democratic leaders are already contemplating ways to preserve much of what it produces as they look to unite their party and pick up Republican votes when the health-care debate moves to the Senate floor in the fall. The Finance Committee coalition is seeking compromise on some of the most complex issues facing Congress, including how to compel employers to continue providing insurance to their workers; how to more fairly distribute government subsidies for coverage; and who and how many should be allowed to remain uninsured.

Lawmakers said insurance companies are likely to pass the cost of such a tax to policyholders, raising the price of those plans. That would create a strong incentive for employers to stop offering them, thus driving down overall health-care costs. With employers paying less for insurance, tax analysts predict, they would pay workers more in wages, increasing income tax collections by as much as $180 billion over the next decade.

The Finance Committee proposal is also likely to contain a number of much smaller tax provisions, including a $2,000 cap on flexible savings accounts -- which are currently unlimited -- and a plan to improve tax compliance by requiring businesses to tell the Internal Revenue Service when they pay corporations for services.

"We've got options on the table that will pay for this fully," said Sen. Kent Conrad (D-N.D.), one of the negotiators. "It's a matter of choosing which pieces and how much of each piece is selected."

The excise tax is one of five provisions designed to slow the soaring trajectory of federal health spending, which is on track to bankrupt the country by the middle of the century absent significant reform, according to the Congressional Budget Office. Spurred by the CBO director's startling assertion last month that measures drafted by other committees would not bend the "cost curve," negotiators on the finance panel are also studying a plan to fine insurance companies that do not pay providers electronically, a plan to reduce payments to providers to force them to increase efficiency and a plan to study the comparative effectiveness of various medical treatments.

Finance Committee negotiators also want to set a target for savings through those reforms. If the target is not met, they would create a panel, called the Medicare Preservation Commission, that would recommend ways to obtain additional savings.

Baucus said preliminary estimates from the CBO, the nonpartisan arbiter of the cost of legislation, show that an early version of the plan would not only pay for itself but would begin to reduce projected budget deficits by 2019.

Health care debate: How many actually uninsured?

By ERICA WERNER (AP)

WASHINGTON — It's a central goal of the president's plan: Extending health care coverage to the millions of Americans who lack it. Question is, just how many million are uninsured?

The answer could make a huge difference in the billions of dollars it will cost to remake the national system.

Barack Obama frequently cites last year's Census Bureau number of 46 million people with no health insurance. But some experts argue that figure is off by tens of millions — in one direction or the other.

The recession's continuing toll on jobs, a tendency to undercount people on Medicaid and other factors make it hard to come up with an exact number. And the most widely accepted range — 40 million to 50 million — includes some 10 million non-citizens, a detail that's generally overlooked when Obama and others talk about "uninsured Americans."

The lack of certainty about such big numbers is one more question mark for Obama and members of Congress as they try to craft a plan that would cover most of the uninsured. Obama says his goal is to cover 97 percent to 98 percent of Americans, a target that would be reached by plans taking shape in the Senate — if you don't count illegal immigrants. A bill crafted by House Democrats comes in closer to 94 percent.

All the plans would exclude illegal immigrants, who account for as much as 17 percent of the uninsured, according to the Pew Hispanic Center.

"I want to cover everybody," Obama said at a news conference last month. "Now, the truth is that unless you have a what's called a single-payer system in which everybody is automatically covered, then you're probably not going to reach every single individual."

Some people don't want health insurance or just don't bother to get it, but most people who don't have it can't afford it, Obama said.

"So I think that the basic idea should be that in this country, if you want health care, you should be able to get affordable health care," he said.

New Census Bureau figures expected next month could scramble the equation, adding billions in costs if the numbers come in higher than expected, or reducing costs if the numbers are lower.

There could be serious implications "if we all of a sudden found that instead of 45 million uninsured there are 35 million," said Michael O'Grady, a senior fellow at the University of Chicago's health policy and evaluation department and a former assistant secretary at the Department of Health and Human Services.

A lower figure could cut two ways: making Congress' job cheaper, but also making the country's health care woes seem less pressing.

Even if there are fewer uninsured than now estimated, health experts emphasize that it's still a lot of people, and being uninsured has consequences. The Institute of Medicine has found that uninsured people are more likely to succumb to illness and suffer premature death.

Still, some overhaul foes are accusing the media of overreporting the number of uninsured in order to frighten the public and "bolster calls for universal government-run insurance coverage," as a report by the conservative media watchdog Media Research Center's Business and Media Institute put it.

The 46 million number (actually 45.7 million) cited by Obama and others comes from the Census Bureau's annual Current Population Survey for 2007. It's the consensus figure, but some researchers believe the CPS overstates the number of uninsured people, partly by undercounting how many people are on Medicaid, the federal-state program for the poor.

Another government survey, the Medical Expenditure Panel Survey done by the Department of Health and Human Services, says that about 40 million people were uninsured for all of 2007, and about 70 million were uninsured for part of the year.

All those numbers are out-of-date. Taking into account the effects of the recession, with widespread job losses cutting into employer-provided health care — more than 5 million jobs have been lost since last August — researchers at the Urban Institute and elsewhere estimate that the present-day number of uninsured is closer to 50 million. That's the number used by the Congressional Budget Office.

The Census Bureau is releasing its Current Population Survey for 2008 on Sept. 10. Then, later in September, for the first time, it's releasing health coverage information collected by the American Community Survey, which has a much larger sample size than the CPS. Some researchers are expecting that number to be more precise.

Immigrants may lose state health insurance

Thousands of legal immigrants — including hundreds on the Cape — could be cut from state health insurance rolls, making a dent in the commonwealth's vaunted health reform program.

Up to 30,000 immigrants who've held a green card for less than five years were sent letters July 1 saying their coverage under the Commonwealth Care program might be eliminated as of the end of the month. State officials and health care advocates say the ongoing fiscal crisis means the state doesn't have enough money to cover all its programs.

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Health bill could cut costs to businesses Commonwealth Care is a government-subsidized health insurance plan that pays for medical and dental care. Participants pay premiums based on a sliding-scale fee, with the poorest paying no fee.

"They're going to lose their health insurance. They didn't see it coming," said Camila De Oliveira of the Community Action Committee of the Cape and Islands. The organization has enrolled thousands of legal immigrants in the state's new insurance programs that came about as a result of the health reform act of 2006.

Receiving Commonwealth Care benefits allowed many immigrants to go to the doctor for the first time in years, and quite a few found they needed treatment for conditions such as diabetes and cancer, De Oliveira said. "Now their treatment is going to be stopped."

She estimated there are at least 2,000 legal immigrants on the Cape who will be affected, including people from Brazil, Haiti and Jamaica.

Most individuals dropped from Commonwealth Care would be shifted to something called the Health Safety Net and would end up getting their care from already busy community health centers or emergency rooms, said Brian Rosman, research director of an organization called Health Care For All.

"It's definitely a step backward from the progress we've been making," he said.

The closest pharmacy serving Health Safety Net customers is in New Bedford, De Oliveira said.

State legislators have said they need to cut the $130 million in Commonwealth Care benefits for this group of "aliens with special status" because of the budget crisis, Rosman said. The federal government provides no reimbursement for these recent, legal — but non-citizen — residents. Gov. Patrick has come up with a compromise plan of restoring $70 million in benefits that "would at least keep them in the kind of primary care that would keep them healthy," Rosman said.

The compromise is in the state Legislature's hands now, said Richard Powers of the Commonwealth Connector, a quasi-state agency that helps enroll people in insurance plans under health care reform. He said if the compromise funding is approved for September, there will be a gap of at least a month when the immigrants don't have any type of Commonwealth Care coverage and probably will have to be covered by something like the Health Safety Net, which replaces what was formerly known as the free care pool.

"We don't know if it's even going to be approved at all," Powers said. He said Commonwealth Care clients are entitled to 30 days' final notice before their coverage can be pulled.

Samantha Dallaire, aide for state Sen. Therese Murray, said the Senate can't act on the compromise funding until the House takes it up. All revenue bills start in the House, she said. "If they vote it down, it's dead."

How Not to Fix Health Care

FOR THOSE WHO seek health reform that is effective, bipartisan and fiscally sound, the past few days have been unsettling.

First, Senate Majority Leader Harry M. Reid (D-Nev.) told Senate Finance Committee Chairman Max Baucus (D-Mont.) that his panel's plan to limit the tax-free treatment of employer-provided health insurance would not pass muster; too many Democrats would object. The ability of employers to offer unlimited health insurance to workers tax-free drives up health costs by promoting over-consumption; it benefits the well-off at the expense of lower-paid workers who are less apt to have insurance and, if they do, receive less value from the tax-free treatment of benefits. President Obama made a mistake during the campaign when he attacked John McCain for proposing to get rid of the exclusion. He is making an even bigger mistake by letting campaign positions be the enemy of good public policy.

Second, Democrats continued their insistence on a public option -- a government-run insurance plan to compete with private insurers -- as essential to effective health reform. Mr. Obama issued what amounted to a public rebuke of his chief of staff, Rahm Emanuel, for the apparently heretical act of suggesting openness to an alternative: having a "trigger" mechanism under which a public plan would be established if the private insurance market fails to provide enough competition. The president, from Moscow, restated his support for a public plan, though, thankfully, he continued to avoid drawing a line in the sand. As we have said before, it would be tragic if this issue were to drag down health reform or make it impossible to secure Republican votes. Restructuring the health-care system is risky enough that Democrats would be wise not to try to accomplish it entirely on their own.

Third, a new gimmick has been designed to pretend that health reform is fully paid for. The Senate Committee on Health, Education, Labor and Pensions adopted a measure, endorsed by the Obama administration, to have the government provide long-term care insurance in which workers would be automatically enrolled unless they opt out. Premiums would flow into the system beginning in 2011, but benefits would not begin to be paid out until five years later; consequently, over the 10-year budget window through which the Congressional Budget Office assesses legislation, the program would bring in $58 billion, according to CBO estimates. Thankfully, the committee also agreed to an amendment, offered by Sen. Judd Gregg (R-N.H.), to require that premiums be set at an actuarially sound level -- not so low that the program would end up further draining the federal treasury. Still, the money that flows in during the 10-year budget window will flow back out again. These are not "savings" that can be honestly counted on the balance sheet of reform.

Many With Insurance Still Bankrupted by Health Crises

Health insurance is supposed to offer protection — both medically and financially. But as it turns out, an estimated three-quarters of people who are pushed into personal bankruptcy by medical problems actually had insurance when they got sick or were injured.

And so, even as Washington tries to cover the tens of millions of Americans without medical insurance, many health policy experts say simply giving everyone an insurance card will not be enough to fix what is wrong with the system.

Too many other people already have coverage so meager that a medical crisis means financial calamity.

One of them is Lawrence Yurdin, a 64-year-old computer security specialist. Although the brochure on his Aetna policy seemed to indicate it covered up to $150,000 a year in hospital care, the fine print excluded nearly all of the treatment he received at an Austin, Tex., hospital.

He and his wife, Claire, filed for bankruptcy last December, as his unpaid medical bills approached $200,000.

In the House and Senate, lawmakers are grappling with the details of legislation that would set minimum standards for insurance coverage and place caps on out-of-pocket expenses. And fear of the high price tag could prompt lawmakers to settle for less than comprehensive coverage for some Americans.

But patient advocates argue it is crucial for the final legislation to guarantee a base level of coverage, if people like Mr. Yurdin are to be protected from financial ruin. They also call for a new layer of federal rules to correct the current state-by-state regulatory patchwork that allows some insurance companies to sell relatively worthless policies.

“Underinsurance is the great hidden risk of the American health care system,” said Elizabeth Warren, a Harvard law professor who has analyzed medical bankruptcies. “People do not realize they are one diagnosis away from financial collapse.”