Health Reform Plans Range From Single Payer to Market Based

Four leading options for health care reform are under discussion by the Obama administration and leaders in Congress, although many advocates said the final plan that is expected to emerge from months of negotiation may include components of each approach.

A version of the plan advocated by President Obama may garner the greatest public support, but some health reform advocates worry about its bottom line since it also offers the least ability to control the rapid rise in health care costs.

Among the four options that have drawn the most attention in Congress are a single-payer plan (HR 676), an approach that increases the competitive market for health insurance, and two plans that would expand the current mixed public and private insurance system.

Many reform proponents maintain that a single-payer system supported by taxes and providing universal access is among the most straightforward.“ This is probably the only approach that's actually going to get us to having no uninsured left,” said Jack Ebeler, an independent consultant on federal health policy, during a Washington, D.C., roundtable discussion in March.

This approach offers the largest reductions in administrative costs, based on estimates that Medicare spends up to 3 percent on administration, while private insurers average about 14 percent to 15 percent.

However, it is also the least likely to succeed, according to some health policy experts, because it may require large increases in taxes and greatly increase government control of health care.

A major drawback for physicians is that this approach is likely to result in lower payments for care. Based on Medicare Payment Advisory Commission (Med-Pac) data, private-system reimbursements are about 20 percent greater than those in public systems.

Another option not likely to succeed, according to Ebeler, is the one advocated by the Republican minority in Congress, which involves tax reform, individual markets, and cross-state purchasing.

“The theory is that increased competition might result in a competitive market for health insurance,” Ebeler said, thus driving down the cost of buying it.

Many Congressional leaders, however, oppose this approach because it could discriminate against sicker people by allowing companies to either charge them higher premiums or deny them coverage.

Also, this approach could relegate many chronically ill people—prominent among them people with co-occurring serious mental illness—to expensive or under-funded high-risk pools for coverage.

More widely known is the proposal outlined by Obama during the election campaign, which is similar to an approach advocated by Sen. Max Baucus (D-Mont.) (Psychiatric News, December 19, 2008). Their approaches build on the current system, which is likely to appeal to many in the public who are wary of drastic change.

“It's very easy for the public to get scared away from the concept of coverage if they think their own coverage is vulnerable,” said Diane Rowland, executive director of the Kaiser Commission on Medicaid and the Uninsured.

The Obama and Baucus approaches use a national insurance exchange, which would allow people to comparison shop for policies nationwide.

The more-detailed Baucus plan would create a mandate for all Americans to have insurance—as was done in Massachusetts—and create a government-run insurance option while allowing the private insurance system and employer-provided insurance to continue.

His plan would bar exclusion of people from insurance coverage based on preexisting conditions and allow those aged 55 and older to “buy in” to Medicare. Medicare is restricted to people aged 65 and older.

But this approach also has its detractors. A highly contentious aspect of it is the inclusion of a federal health insurance option that would compete with plans sold by private insurers. Republicans consider this a“ nonstarter.”

Another potential complication of building on the system in which employers provide insurance for a substantial number of Americans is the lack of subsidies for workers who earn relatively low wages, whose employers do not offer insurance, and who cannot afford to buy individual insurance.

Brad Herring, Ph.D., an economist at the Bloomberg School of Public Health at Johns Hopkins University, said that such an approach will struggle politically because many Democrats prefer a single-payer system, while conservative Democrats also may oppose the federal insurance option because of their concern that it could undercut private insurers and eventually lead to a government-run system.

Another leading option is the only one that has so far gained broad bipartisan support.

The Healthy Americans Act (S 391), sponsored by Sen. Ron Wyden (D-Ore.), also would build on the existing mix of public and private insurance systems through the use of state-based “exchanges” in which buyers could comparison shop for plans. The key difference from the plans advocated by Obama and Baucus is the continued state-specific limitation of insurance plans, which the insurance industry has advocated. Wyden recently updated this legislation to allow workers insured through their employers to retain their health insurance.

The Wyden legislation has 13 cosponsors, including six Republicans. This bipartisan option has drawn some fire from liberal legislators because it would move the “vulnerable” Medicaid population into private insurance plans. “That could be problematic for many advocates,” Ebeler said.

Although this legislation is seen by some as the best bipartisan compromise possible, it generally remains congressional leaders' second preferred plan, or even a third plan behind retaining the status quo.

“That may not bode so well for us all,” Ebeler said about the continuing preference for no action if a favored option fails.

Regardless of which option eventually becomes the focus of legislative action, the final plan is likely to include some version with rigorous cost-control approaches and perhaps the use of allied health professionals to expand into physicians' traditional scope of practice.

Rep. Parker Griffith (D-Ala.) signaled this possibility, noting that any system that provides broad-based health care access will immediately confront the challenge of an insufficient number of physicians to meet the need, especially in rural and some urban areas. “So the question is who are [patients] going to see, and are we willing to step outside the box and say that nurse practitioners, clinical pharmacists, nutritionists, in conjunction with physicians, must deliver primary care?” Griffith said.

Herring, of Johns Hopkins, said an eventual national health plan may address the physician shortage through expanded subsidies for physicians who practice in underserved areas and increased tuition support for students going into medical fields in which there are shortages.

The text of health care reform bills can be accessed at<http://thomas.loc.gov> by searching on bill numbers, S 391 and HR 676. ▪