Obama’s Health Care Summit: Your Questions Answered


During President Obama’s health care summit last week, we got analysis and commentary throughout the day from a panel of experts:

Thomas Mann, senior fellow in governance studies at the Brookings Institution.

Ron Pollack, executive director of Families USA, a health care advocacy organization that supports universal health care.

Robert Laszewski, health policy consultant and blogger, and former insurance executive.

We also got their final thoughts on the summit, but we also wanted to hear from you. We picked some of your questions and comments, and asked the trio to respond. Here are your questions and their replies:

Jerry Weinstein asks: Clearly Obama showed mastery in the health care summit’s format, but did it facilitate any compromise or merely pave the way for reconciliation?

Thomas Mann: As I said before the summit began, the probability of any Republicans engaging in a serious effort to amend the Senate bill in return for their support of the final package was near zero. That message came through loud and clear: “We need to throw out the Democratic bills and start from scratch.” That is a euphemism for killing comprehensive health reform. Democrats will proceed with their plan: the House will try to pass the Senate bill (which already garnered 60 votes for cloture) and separately the House and Senate will use the reconciliation process to make a limited number of amendments to that Senate bill. It’s new twist to the reconciliation process but fits easily within its precedents and historical use.

Ron Pollack: The summit actually helped to accomplish both purposes — enabling some compromise and paving the way for reconciliation. President Obama and the Democratic congressional leaders felt that some of the Republicans who attended the Summit offered a number of good ideas. In the coming days, I believe we will see that President Obama, House Speaker Nancy Pelosi, and Senate Majority Leader Harry Reid will incorporate some of those ideas in their final legislative package. They will do so not because they are naive in believing that this will result in securing Republican votes but because they want the final legislative package to be as effective as possible. Since it is highly unlikely that Republicans will break ranks and change their persistent opposition to meaningful reform, the summit will also have provided greater impetus for congressional Democrats to bring meaningful health care reform across the finish line using reconciliation as part of that effort: Once they agree on the final package, the House will adopt the Senate bill and a separate reconciliation bill will be used to adopt the changes in the Senate bill so that it reflects the best features of the House and Senate bills (as well as the additional ideas offered at the summit).

It is likely that Republican leaders will continue to demonize the use of reconciliation. That rhetoric won’t stick both because the public cares more about the content of the health reform legislation than the process for passing it, and because Republicans have used the reconciliation process far more frequently than Democrats. Of the 19 bills enacted into law through reconciliation, 14 were signed by Republican presidents (including seven by President Reagan and five by President George W. Bush). Three other bills initiated by the Republican leadership were passed by Congress through the reconciliation process and were vetoed by President Clinton (including then-Speaker Newt Gingrich’s attempt to adopt key elements of the “Contract with America,” which included massive cuts in Medicare and Medicaid, and which ultimately led to a temporary shutting down of the government). Additionally, an examination of the voting record of current Republican congressional leaders (as contained in a report on familiesusa.org shows that the very persons now complaining about the use of reconciliation consistently promoted and voted for reconciliation in past years.

Robert Laszewski: I don’t think it did either. The Republicans walked out of the meeting as defiant as ever.

A USA Today/Gallup survey released Feb. 25 found Americans polled 49-42 against Democrats going ahead by themselves without any GOP support. Opposition was even stronger to the idea of Senate Democrats using the special budget reconciliation rules, with 52 percent opposed and 39 percent in favor.

I saw the summit as a political draw. Did the president win on substance? For his supporters and perhaps many in the middle he may have. But he did not score any knock-out blows and all the Republicans had to do was get a draw. I don’t think he changed any minds, and more importantly, moved the polls enough to give very uneasy and vulnerable Democratic House members the political cover they need to take the leap on his health care bill.

John asks: It seems that President Obama agrees with Senator McCain on removing state-specific provisions for exceptions in Medicare advantage, and potentially other state-specific markups in the bill. What do you think the odds are that these markups are removed from the bill? Sen. Tom Coburn brought up the “secret patient” provision that is not in the bill now that also seemed to meet with some acceptance. How likely is this to be added?

Thomas Mann: It’s possible they will add a few items for PR purposes but the issue of state-specific provisions is more complicated than the Nebraska and Florida examples suggest. There are complicated formulas for reimbursements under Medicare and Medicaid, and oftentimes law is written to deal with perfectly reasonable special circumstances.

Ron Pollack: I believe that the state-specific special provisions in the Senate bill are likely to be removed in the final legislative package. President Obama has already made clear that he will eliminate the special provision inserted in the Senate bill applicable to Nebraska that was included at the behest of Sen. Ben Nelson. I’m not yet sure about whether Senator Coburn’s “secret patient” provision will be included in the legislation, but I believe there is a good chance that the Department of Justice and the Department of Health and Human Services will use such a technique as part of its growing efforts to ferret out fraud and abuse.

Robert Laszewski: The Nebraska deal is already gone and there is pressure to take out the Louisiana deal for Medicaid. But I think the special Medicare Advantage deal for states like Florida will stay. Without them they will have lots of irate senior voters in those states, which of course makes voters mad everywhere else.

Fred asks: What is happening to the 21 percent reduction in the Medicare reimbursement fee schedule to physicians effective March 1? Is this part of the planned “Medicare savings” to pay for covering the uninsured under the proposed health care reform plan? My doctor mentioned to me that if Congress does not reverse this significant pay cut he will have to seriously consider not accepting any new Medicare patients in the future. What is the point of having good insurance coverage on paper if most of the reputable physicians in your community refuse to accept it?

Thomas Mann: Some years ago Congress adopted a change in Medicare that had consequences for physician reimbursement they didn’t intend. But they have never managed to deal with it on a permanent basis, instead periodically adopting time-limited fixes. The Democrats decided they would deal with this problem outside of their health reform package, mainly because it lowered the cost of reform by doing so. They made a deal with the physicians to stop the scheduled decline and they are likely to do so but in a way that doesn’t make their task of passing health reform harder.

Ron Pollack: The president and Congress will complete work on the so-called “doc fix” this year. The “doc fix” may not be a formal part of the health insurance reform bill, but it will be dealt with. The current assumption is that there will be a temporary “doc fix” to ensure that the looming deadline doesn’t result in physician payment reductions, but a more permanent fix will occur fairly soon — either as part of one of the jobs bills or in a separate legislative vehicle. Everyone understands that the original legislation adopted years ago that created this problem was a mistake, and this will no doubt be corrected. Medicare patients will not lose access to physicians due to this correctable problem.

Robert Laszewski: The Democratic bill does not even mention the pending 21 percent cut — or any of the future cuts that add about another 5 points in cuts every year. The Congress is trying to find another bill to use as a means of postponing it. It was supposed to be part of the jobs bill but was carved out at the last minute. One of the real frustrations I have with the Democratic health care bills has been that Democrats claim this $300 billion problem is not a health care reform issue and should be dealt with separately. Every time they deal with it they just add the cost to the deficit so expect this to be a huge expansion in deficit spending when they finally do take care of it.

Elizabeth Alexander asks: There are huge geographic disparities in Medicare spending. What are the barriers to say, putting the Medicare population of Miami or McAllen, Texas, “on a budget” so that, for a given region, only “x” number of dollars would be available to spend? Is anyone making proposals that could lead us to that approach?

Thomas Mann: The cost disparities have attracted a lot of attention in recent years, with researchers trying to isolate the forces and practices that produce these differences. Some is due to the age and wellness of the patient population, some to local prices of health services more generally. The health reform bill includes studies and experiments with different reimbursement schemes to try to bring higher-cost areas more in line with average costs. The goal is to reimburse not for medical services but for treatment as a whole. A simple global budget has fiscal appeal but could lead to undesired and potentially harmful rationing. That’s why so much emphasis is being placed on changing medical delivery and reimbursement practices in the public and private sectors.

Ron Pollack: The precise way of fixing the geographic disparities problem will not incorporate specific budgets per region. However, several other improvements are being made and will continue to be made to ameliorate this problem. First, the Administration is intent on paying hospitals in a way that provides incentives for quality of care, not quantity of care; further experimentation with payment innovations to promote such better incentives are embodied in the health insurance reform bills adopted in the Senate and House. Second, the administration and Congress — as part of the American Recovery and Reinvestment Act passed last year — have already invested significantly in promoting so-called “comparative effectiveness research” designed to better understand what clinical approaches are most effective in dealing with different ailments. Although the results of these research efforts will not result in dictates about how to treat patient illnesses (since these decisions will continue to be left in the hands of physicians and their patients), they will be disseminated widely so that wasteful clinical procedures — which don’t help a patient or might possibly harm the patient — are minimized. And third, the Administration is intent on promoting coordinated care so that health care is provided as effectively and efficiently as possible.

Robert Laszewski: The barriers are hospitals, doctors, drug companies, nursing homes, patients….

The Democratic health care bills, and Republicans are really no better here, don’t face up to the real problem: runaway costs. These are entitlement expansion bills not health care reform bills.

John from Brooklyn asks: In the new plan, is there a financial incentive for the 30 million Americans who are uninsured to buy insurance? There will be an individual mandate, but unless prices are lower, won’t most still decline? Now those without employer plans have no tax incentive. Will that change? Will the rest of us subsidize their plans … seeking to expand the base, which will reduce overall costs?

Thomas Mann: The plan includes subsidies based on income for those who do not qualify for for Medicaid as well as insurance exchanges designed to lower the price of policies for those shopping as individuals. There are also backup plans if the private market doesn’t produce affordable policies.

Ron Pollack: A key element of the Senate and House bills is to provide premium (tax credit) subsidies so that insurance premiums are more affordable for middle-class and moderate-income families. This is critically important for numerous reasons. First, it is illusory to establish an individual mandate to purchase health coverage if people cannot afford to pay the premiums. That is why the Senate and House bills invest heavily in such subsidies — and, indeed, they are the most significant cost item in the reform bills. Second, while the overwhelming majority of policymakers believe that insurance companies’ pre-existing condition exclusions should be prohibited, it is impractical to do so unless we make it affordable and require individuals to purchase health coverage. If we fail to link improved coverage affordability and expansion with a prohibition on pre-existing condition exclusions, the older and sicker portion of the population will enroll in coverage and the younger and healthier part of the population will drop such coverage — thereby leading to a skyrocketing premium cost spiral.

Doing this will provide significant relief to people and businesses that purchase health coverage today. This is because premiums for health coverage contain a “hidden health tax” that substantially increases the premiums to underwrite the uncompensated health care costs of the uninsured. A report by Families USA, based on data developed by the well-respected actuarial firm Milliman, Inc., found that the average premium for family health coverage contained an average “hidden health tax” of $1,017 in 2008 — a figure which is no doubt higher today. Hence, the extended health coverage to more than 30 million uninsured people, as envisioned in the Senate and House bills, will provide premium relief for America’s families as well as businesses that currently offer coverage for their workers.

Robert Laszewski: There is actually a disincentive for most of the uninsured to sign-up for insurance. True, they get subsidies to have insurance but for many in the middle-class these subsidies will still make it expensive for them. A family making $65,000 a year will still have to pay about $6,200 a year in premiums out of their own pockets for a plan with a $2,500 deductible. What is often not reported is that there is a provision in the Senate and White House bill that exempts people from paying the fine for not having insurance if the insurance costs them at least 8 percent of their incomes. So, most in the middle class will be exempted from paying any fines. It would take a six figure income for most families to, under the 8 percent rule, have to buy it. So, many, particularly the healthy, will wait until they need it and that will be a problem for the overall insurance pool. That means the costs in the pool will be higher than they would have otherwise been.