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How the Obama Administration Could Begin Health Care Reform

HealthDay News -- President-elect Barack Obama is likely to begin taking steps to improve access to health care when he takes office in 2009. But federal budget constraints are likely to rein in the administration's efforts.

"There's not a lot of money in Washington, D.C. to do an ambitious government-financed health reform, but that doesn't mean that an ambitious health reform won't happen," said Joel White, executive director of the Coalition for Affordable Health Coverage.

One way Obama could advance his agenda without incurring significant federal costs is by mandating that every child have health insurance coverage, White said. The 44th president could also establish an insurance exchange, or "connector," as the state of Massachusetts has done, to help people find health insurance coverage.

Even the centerpiece of Obama's health reform plan -- a "pay-or-play" employer mandate - could be achieved without adding to the nation's economic troubles, he added.

"You could make all of that budget neutral by making the payroll tax great enough to cover the subsidies for the workers who don't get their insurance through an employer," he reasoned.

Still, achieving long-term health system reform means some upfront federal investment in things like health information technology "will need to be on the table," noted Karen Davenport, director of health policy for the Center for American Progress Action Fund.

Obama's approach to health reform builds on existing public and private coverage by encouraging employers to continue providing health insurance and expanding eligibility for Medicaid and the State Children's Health Insurance Program (SCHIP).

SCHIP comes up for reauthorization in March 2009, making it a potential vehicle for expanding coverage to children and some Medicaid-eligible adults, White said.

In addition, Obama's plan largely replaces the individual market for health insurance by creating a National Health Insurance Exchange. People who lack private coverage or don't qualify for other public programs would receive federal subsidies to buy coverage similar to plans available through the Federal Employee Health Benefits Program.

In an analysis of the presidential candidates' health reform plans published last month, The Commonwealth Fund concluded that Obama's plan has greater potential to move the health care system towards "high performance" than Sen. John McCain's. While falling short of the goal of universal coverage, Obama's plan is likely to "provide more people with affordable health insurance that covers essential services," it said.

The new President and Congress will also need to address the Medicare physician payment system.

"Physician payment reform will no doubt be an issue in 2009, but a permanent fix could be a challenge because of the costs involved," said Tricia Neuman, a vice president and director of the Medicare Policy Project at the Henry J. Kaiser Family Foundation.

At issue is the "sustainable growth rate" (SGR) factor, which stands to clip physician reimbursement by 21 percent in 2010. Eliminating the SGR entirely would cost nearly $300 billion over 10 years, according to the Congressional Budget Office.

The question is whether the administration commits to putting those dollars on the table or does it "keep kicking the can down the road?" White said. "That decision, I don't think, is made yet."

November 6, 2008
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The 2008 election and health care reform

There is one word in my mind that best describes the 2008 election: extraordinary.

And I say this from a purely non-partisan standpoint. Whether one voted for Senator Obama or Senator McCain, it is undeniable that the outcome of this election is extraordinary.

That the voters elected the first African American to the Presidency of the United States is in itself an extraordinary occurrence. I will leave it to others more eloquent than me to describe what this means for the country.

Instead, I will focus on the extraordinary re-alignment of political power in Washington created by the election, and what it may mean for health care.

President-elect Barack Obama is the first Democrat to get more than 50 percent of the vote since Jimmy Carter. He scored the biggest Electoral College victory since Bill Clinton in 1996. He won in parts of the country--the South, the Midwest, and the Mountain states--that in the past two presidential elections were out of reach for Democratic candidates. He is the first Senator to be elected President since John F. Kennedy.

He has the political fortune of being able to work with a Congress where both chambers are controlled by his own political party. When all the votes are counted, it looks like the Democrats will gain another 20 or so seats in the House of Representatives, and another five to seven seats in the Senate, leaving them just a few votes short of the 60 votes needed to overcome Senate filibusters. President Bill Clinton had similar congressional majorities in his first two years, but came to office with the decided disadvantage of having won only a plurality (43 percent) of the total votes cast in the election.

Few Presidents have had as great an opportunity to shape the nation's politics, priorities, and policies at a time when the country is facing so many crises, domestic and abroad.

One of the priorities will be health care reform. Health care reform is the holy grail of the Democrats. From Harry Truman to Bill Clinton, Democratic presidents have sought to achieve universal coverage, only to find the politics and policies too difficult.

Will an Obama administration be any different? Some observers speculate that an Obama administration will back away from health care reform, because it costs too much, the deficit is too high, and there are too many competing priorities.

I disagree: President Obama and the congressional leadership will not allow the best chance in a generation to achieve lasting health care reform to pass them by.

I expect the new President and the leadership of Congress to make a push early in 2009 for comprehensive reforms to expand coverage--starting with reauthorization and expansion of the State Children's Health Insurance Program (SCHIP), which expires on March 31--and then moving beyond that to try to enact income-based subsidies and insurance market reforms to close gaps in employer-based coverage. They will also take on Medicare physician payment reform. [See related story on ACP Member's election to Congress]

Will they succeed? That depends largely on whether President-elect Obama and his Congressional allies have learned the lessons from the last time the country had a serious debate over health care reform.

- Bob Doherty

Click here to read The ACP Advocate Blog by Bob Doherty

November 6, 2008