The Senate's merged health bill isn't perfect, but it'll do

Friday, November 20, 2009

THE HEALTH-REFORM legislation unveiled Wednesday night deserves to be considered on the Senate floor. This is the only real question facing wavering senators who have concerns about particular provisions or about the overall reach and cost of the measure. The right answer is to allow the proposal to go forward. If senators are unhappy with the final result, on the Senate floor or after a House-Senate conference, they can vote no. But there is no justification for refusing to proceed to floor consideration. The issue of health reform -- both extending coverage to the uninsured and controlling health-care costs -- is too important to abandon at this stage.

On its merits, the merged bill -- combining the output of the Senate's Finance and Health, Education, Labor and Pensions committees -- is a mixed bag. Neither the self-congratulatory back-patting of Democrats about fantasy savings nor the sky-is-falling government-takeover rhetoric of Republicans is warranted. Last month, we termed the Senate Finance measure "the best version of health-care reform that Congress has mustered so far" but warned that "from here on most of the pressures in Congress will push the legislation in a less responsible direction." That has turned out to be the case, although not -- at least not yet -- outrageously so.

Thus, the excise tax on high-cost health-care plans has been tweaked to kick in at policies worth more than $23,000 a year for a family of four, up from $21,000 in the Finance Committee's version. That will bring in $149 billion over 10 years, compared with $201 billion. But the higher ceiling is still indexed to grow at the rate of inflation plus 1 percentage point, and the Congressional Budget Office still estimates that the resulting revenue would grow by 10 to 15 percent annually in the following decade. This suggests that there remains a sustainable financing mechanism for the measure and that a key cost-containment provision remains intact.

This bill does not do enough to reform how health care is delivered and paid for. It also contains some of the fiscal dangers and fictions of its brethren. For example, it creates a Medicare commission to control costs but severely circumscribes its power; it could not modify "eligibility or benefits," the CBO notes, and would focus on payment rates for "providers other than hospitals, physicians, hospices, and suppliers of durable medical equipment." Who's left? The plan is officially deficit-neutral, but only because it pretends that Medicare payments to physicians will fall precipitously after the first year, which everyone knows will not happen. It assumes that Congress will allow payments to other Medicare providers to grow far more slowly than they have until now. As the CBO tactfully put it, "These longer-term calculations assume that the provisions are enacted and remain unchanged throughout the next two decades, which is often not the case for major legislation."

These are legitimate worries. But the potential benefits of the bill are also significant. It would raise the share of legal U.S. residents with health insurance from 83 to 94 percent by 2019. Losing coverage would become less of a worry for many Americans who are insured. Insurance company practices would be reformed for the better. Senators should allow a debate over the risks and benefits of the bill, and use the debate to improve the legislation further.

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