Spiraling costs and continued lack of access to quality health care have
resulted in broad agreement among congressional leaders that action is needed
to overhaul the delivery of health care in the United States. Critical fault
lines have begun to emerge, however, suggesting where that effort could
Although no specific plans for health care reform have been introduced by
either President-elect Barack Obama or leading members of Congress, several
proposals have been offered as guideposts for the debate. Included in these
general plans are some items that have drawn criticism from Republicans and
some health care advocates.
Among the most controversial proposals is a plan to include a new
government-backed insurance program that would compete directly with existing
private insurance plans.
A report that outlines such a public plan is being touted by some
Democratic lawmakers as essential to controlling health care costs and
improving the quality of care. That plan, as outlined in a report by the
Institute for America's Future and the University of California Berkeley
School of Law's Center on Health, Economic and Family Security, would create a
public health insurance plan like Medicare to compete with private health
plans and could produce $1 trillion in national savings over 10 years by
driving down costs, improving efficiencies, and fostering innovation.
Overall health care savings, according to Hacker, would come from private
plans cutting costs to compete with a public plan that has lower per-enrollee
spending. The basis for the argument includes previous research he cited that
found Medicare spending per enrollee between 1997 and 2006 grew 4.6 percent a
year, while the average private insurance spending per person grew 7.3 percent
"If the private plans are really as efficient and effective as they
say they are then they shouldn't be worried about competing with a public
plan," said Jacob Hacker, a University of California at Berkeley
professor and author of the report, during a December 2008 telephone press
Such an approach has been supported by Obama and Tom Daschle, his nominee
to be secretary of Health and Human Services, and some leading Democratic
That proposal appears a lot less benign to critics, including insurers, who
are concerned that federal regulators will create rules to favor a public plan
over any private option. The long-term consequences of such an unbalanced
competition could be a flight from private plans to a cheaper public-insurance
option resulting in a de facto single-payer system, according to critics.
Chuck Clapton, health policy director for Republicans on the Senate Health,
Education, Labor and Pensions (HELP) Committee, said existing public plans
like Medicaid impose price controls and shift costs to purchasers, which shows
that true market-based competition is not possible with such public plans.
"Inherently it's an uneven playing field," Clapton said, during
a December 2008 policy briefing in Washington,D.C.
Critics of the public health insurance plan cite an October 2008 analysis
of Obama's health care approach by the Lewin Group, a national health care
research firm. That analysis concluded that the Obama plan would increase the
number of people with public insurance by 48.3 million, while private
insurance coverage would decline by 21.6 million people as employers and
individuals shift to a national plan that they expect will have cheaper
John McDonough, a health policy advisor to Sen. Edward Kennedy (D-Mass.)
said the public-insurance proposal is important because it provides some"
cost accountability" and provides a potential way for
policymakers to hold down the overall and ongoing cost of a national health
"There may be other ways to try to achieve those ends effectively,
but it is important that, as we have this conversation, that the
accountability in terms of costs, is very much a part of it," McDonough
said, during the December health care forum sponsored by the Alliance for
The government-backed insurance option has been linked to the contentious
issues of physician reimbursement and some clinician shortages in existing
public-insurance plans. Supporters of a new public-insurance program maintain
that a government insurer could help bolster physician reimbursements because
it would be in competition with the reimbursements provided by private
"If there was a shortage of physicians in the [new] plan then we
would have to up the pay," said Rep. Pete Stark (D-Calif.), in a
December 2008 press conference. "That's called competition." Stark
is chair of the House Ways and Means Health Subcommittee.
Another area of contention has emerged around the role of health
information technology (HIT) within the health care reform effort. Democratic
congressional leaders have called for an expansion of and public funding for
HIT as part of any major health reform effort.
Clapton, the Republican health advisor, warned, however, that the
unresolved patient privacy concerns that kept previous HIT legislation from
passing still need to be addressed.
The contentious issues that have arisen, and future obstacles that will
emerge, should not be allowed to derail health reform as happened during
President Bill Clinton's first term, agree the effort's supporters, as well as
some of it critics.
"Stabilizing our health care system is a critical component of
putting our economy back on track," said Jocelyn Moore, health policy
advisor to Sen. Jay Rockefeller (D-W.Va.), a member of the HELP Committee."
It is why we cannot afford to let the window on reform close even a
Many Republicans agree that federal health spending growth is
unsustainable, including projections that Medicaid and Medicare spending will
double by 2018. States also have called for reform as they grapple with their
share of spiraling Medicaid costs that require frequent tax increases or cuts
in essential services.
The dissolution of Clinton's 1993 to 1994 health reform effort has led
congressional leaders to strive to make health reform a bipartisan effort. To
achieve that goal they have organized a series of roundtable discussions since
last spring among both major parties and "stakeholder groups,"
McDonough said supporters of the previous reform effort failed because they
focused on various "micro details" of health reform proposals and
neglected to summon the nation's political will to achieve "health
reform for everybody."
"We think fundamentally that what the American people want is to see
a bipartisan solution that reflects the concerns of both sides of the
aisle," he said.
That bipartisan solution may not come early in the new Congress, according
to supporters and critics, due to competing priorities that are likely to
include a major economic stimulus package, reform or overhaul of parts of the
financial system, and the need to pass government spending bills that Congress
put off finishing last year.
The public-insurer plan by Berkeley and the Institute for America's
Future is posted at<www.law.berkeley.edu/files/Hacker_final_to_post.pdf>.▪