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A Bipartisan Plan on Health Care? Try Two

By Ruth Marcus
Wednesday, July 29, 2009

If only Democrats and Republicans could get together and produce a health-care bill that would expand coverage and control costs.

But wait -- there is such a proposal. In fact, there are two.

The first, which would, in a more perfect world, be my preference, is the measure devised by the odd couple of the Senate, Democrat Ron Wyden of Oregon and Republican Robert Bennett of Utah. This bill not only has the merit of being demonstrably bipartisan but has been scored by the Congressional Budget Office as fully paid for.

The problem is that the Wyden-Bennett plan would essentially blow up the existing, although rickety, system of employer-sponsored insurance, which is both the substantive attraction and the political drawback.

Under Wyden-Bennett, states would set up purchasing pools through which individuals would obtain insurance. Employers could still offer theirs, but that would probably dwindle over time. Individuals would be required to get coverage, with subsidies to those with lower incomes; Medicaid would be eliminated in favor of full subsidies for the poorest Americans. The subsidies would be financed by ending the current tax-free treatment of employer-provided health insurance, a move that would have the added benefit of constraining costs.

These would be huge changes, which may be why, despite its sponsors' indefatigable efforts, the proposal hasn't gotten traction.

There is, however, a more politically sustainable, deficit-neutral alternative, crafted by three former Senate majority leaders -- Democrat Tom Daschle, President Obama's erstwhile choice as health-care czar, and Republicans Bob Dole and Howard Baker. Staffing the work for the Bipartisan Policy Center were Chris Jennings, a veteran of the Clinton health reform efforts, and Mark McClellan, who ran the Medicare and Medicaid programs under George W. Bush.

If Wyden-Bennett is the equivalent of a tear-down of the health-care system, the Bipartisan Policy Center proposal is more of an extensive renovation.

And -- have I mentioned this? -- a bipartisan one.

It was released last month, to praise from the leadership of the Senate Finance Committee, Montana Democrat Max Baucus and Iowa Republican Chuck Grassley, but more muted murmurings from the White House.

It's time to take another look. To switch from a real estate metaphor to a romantic one, the Bipartisan Policy Center proposal is like the nice guy you weren't thrilled about dating. He started to look a lot better after you tried some of the alternatives.

The group finessed one hot-button issue, whether there should be a public plan to compete with private insurers, by giving states the option of establishing their own public plans and providing for the option of a federal plan if state-level efforts don't work.

It further ticked off Democratic allies -- especially labor unions -- by proposing to limit the amount of health insurance that employers can provide tax-free; cleverly, the cap would be linked to the value of the federal insurance plan, and the sting would be reduced by exempting retirees and those covered by existing labor agreements.

Republicans, for their part, would have to swallow not only a mandate that individuals purchase insurance but also a requirement that employers offer coverage or pay a certain percentage of their payroll (maximum 3 percent, compared with 8 percent in the House bill). The proposal would also subsidize premiums for families earning up to 400 percent of the federal poverty level -- $88,000 for a family of four.

You may dispute the entire premise of this column -- that bipartisanship is essential to this enterprise -- and argue that Democrats, with firm control of both houses, should get everything they want.

My answer is that it's not so firm. The current standoff with Blue Dog Democrats suggests the need for some compromise, and the 60-vote Senate Democratic majority is far from monolithic. In the longer term, Democrats-only health reform is a perilous enterprise; the risk of being blamed exceeds the chances for political reward.

Right now, scrambling to live up to the president's promises of health reform that will be fully paid for and bend the long-term cost curve, negotiators are trying all sorts of back-door routes to responsibility, such as imposing an excise tax on insurers and hoping that the effects trickle down to deter the purchase of Cadillac coverage.

Tom Daschle showed that the front door is open. Bob Dole and Howard Baker showed that they could walk through it. Won't President Obama take another look -- and join them?

marcusr@washpost.com

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