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Health Care: What to Expect from the Obama Presidency and the Next Congress by David C

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Health Care: What to Expect from the Obama Presidency and the Next Congress by David C Advisory Health Care Health Care December 5, 2008 Health Care: What to Expect from the Obama Presidency and the Next Congress by David C. Main, Edgar D. Bueno and Melissa Starry During the presidential campaign, President-elect Obama spoke frequently of the problems plaguing the U.S. health care system. Now that he has been elected, to be joined by a largely Democratic Congress, what can be expected? A review of Obama’s campaign positions as well as several recent develop- ments, including the designation of former Senate Majority Leader Tom Daschle as Secretary of DHHS and the release of a 90-page comprehensive health care plan by Senator Max Baucus (D-MT), provides considerable insight as to the direction in which Obama and the Congress will steer the nation’s health care system in the coming years. Obama’s Campaign Position One of the major issues Obama continuously stressed in the campaign was that 47 million Americans lack health care insurance. Throughout the campaign, Obama argued that everyone should be entitled to qual- ity, affordable, and portable health care coverage, and that no American should be denied insurance due to illness or a preexisting condition. Though stopping short of universal health care, the platform on which Obama campaigned calls for a national program that would cover every American, regardless of health status. This national program would be administered by a new government agency, the “National Health Insurance Exchange,” which would also be responsible for regulating the insurance industry. In addition, employers would be required to “pay or play.” That is, employers would be required either to provide coverage for all employees or con- tribute into the public program. Small businesses would receive a refundable tax credit of up to 50 percent on premiums paid by small businesses on behalf of their employees. Individuals and families who do not qualify for Medicaid or the State Children’s Health Insurance Program (“SCHIP”) but still need financial assistance would receive an income-based federal subsidy to buy into the new public plan or purchase a private health care plan. Though all children would be required to have coverage, Obama’s plan does not contain an across-the-board mandate for coverage of all adults. Pillsbury Winthrop Shaw Pittman LLP www.pillsburylaw.com | 1 Advisory Health Care Additionally, Obama’s platform emphasizes quality improvement through preventive health care, electronic medical records and chronic disease management. His plan is to provide a $50 billion investment in health information technology, and he supports the implementation of programs to encourage team care that will improve coordination and integration for patients with chronic conditions. Tom Daschle’s Role The selection of Tom Daschle as DHHS Secretary has received largely positive reviews for several rea- sons: his well-regarded role as Senate Majority Leader; his years on the Senate Finance Committee (which has jurisdiction over Medicare and Medicaid); his history and experience with both successful and unsuccessful legislative efforts in the health care arena, including the last attempt at reform in 1994; his ability to bridge gaps between the parties (as evidenced by his recent involvement in the formation of the Bipartisan Policy Center); as well as his focus on the American health care crisis, as highlighted in his Feb- ruary 2008 book. Daschle was also a close advisor to Obama throughout his Presidential campaign. Since his defeat in a hard-fought Senate campaign in 2004, Daschle has been serving as a board member of the Mayo Clinic as well as an adviser to health care clients at a DC lobbying firm. In February of this year, he published a book entitled Critical: What We Can Do About the Health-Care Crisis, which outlines the problems of our current health care system and the steps he deems necessary to repair it. Daschle proposes the creation of a Federal Health Board, an independent government-chartered body, that “would be a foundation from which we could address” all three fundamental problems in health care: “skyrocketing costs, lack of access, and disparity in quality of care.”1 This Board (the “Fed Health”) would operate in a fashion similar to the Federal Reserve Board. The Fed Health would be largely insulated from political pressure, yet would still be accountable to elected officials. “[T]he Fed Health would ensure harmonization across public programs of health-care protocols, benefits, and transparency. Ultimately, the Fed Health would offer a public framework within which a private health-care system could operate more effectively and efficiently.”2 One of its major goals would be to set up basic coverage guidelines to limit payments for wasteful or unnecessary care. In a review of Daschle’s book, which is perhaps quite telling, the President-elect himself states that Daschle “brings fresh thinking to this problem, and his Federal Reserve for Health concept holds great promise for bridging this intellectual chasm and, at long last, giving the nation the healthcare it deserves.” Daschle urges a merging of employer-based plans, Medicare and Medicaid, with the current Federal Health Benefits Program, which covers federal employees. The intent would be to lower costs in a way that would more efficiently provide universal coverage, as “the lack of a comprehensive coverage system drains the economy, burdens our businesses, and limits providers’ ability to deliver efficient, high-quality care to patients.”3 The appointment of Tom Daschle indicates that Obama sees health care reform as a major priority. Daschle’s legislative skills, the respect he has garnered throughout his career, his ability to work in a bipartisan fashion, and his expertise on the subject of health care are evidence that Obama would not J 1 See Tom Daschle, Progressive Solutions to America’s Health-Care Crisis, March 3, 2008, Huffington Post, available online at: http://www.huffingtonpost.com/sen-tom-daschle/progressive-solutions-to-_b_89590.html 2 Id. 3 See Tom Daschle, Paying More but Getting Less: Myths and the Global Case for U.S. Health Reform, Center for American Progress (November 2005). Pillsbury Winthrop Shaw Pittman LLP www.pillsburylaw.com | 2 Advisory Health Care likely select him as DHHS Secretary (nor would Daschle likely accept) if he were not serious about spend- ing large amounts of his current political capital on this initiative. Max Baucus’s Health Reform Proposals Even before Obama has taken office, Senate Finance Committee Chairman Max Baucus released a 90-page white paper on November 12, 2008 outlining his proposal to overhaul the nation’s health care system. Though not intended as a legislative proposal, the “Call to Action” provides policy options for Con- gress to consider in 2009, with an underlying objective of achieving universal health care, reducing health care costs, and improving quality.4 Senator Baucus makes it very clear that he believes health care reform cannot wait any longer. One of the reasons for this is the financial condition of Medicare and Medicaid, which his committee oversees. There are several key ideas in Baucus’ proposal: (1) eliminate exclusions for preexisting conditions; (2) promote patient responsibility; (3) strengthen the employer-based system; (4) guarantee access to affordable coverage for individuals and small businesses; (5) strengthen Medicare, Medicaid, and SCHIP; (6) focus on prevention and wellness; and (7) address disparities in health care among racial and ethnic minorities.5 The plan also contains a mandate that individuals obtain coverage if affordable cover- age is available. Particularly striking are the many similarities between the plan on which Obama campaigned and Senator Baucus’ proposal.6 One example is that the Baucus plan would also ensure access to affordable health insurance by creating a nationwide insurance pool, called the “Health Insurance Exchange.” However, the Baucus plan differs from Obama’s in that it requires that individuals of all ages have health insurance if it is available.7 According to his proposal, a mandate makes sense for three reasons: (1) it will help end cost shifting; (2) it will ensure that the insurance market functions effectively; and (3) it is essential to effective prevention and wellness efforts and managing chronic illness.8 Of course, mandates are highly controver- sial and potentially unpopular. Obama may have omitted mandates for coverage of all adults in his cam- paign position for purely this reason: a plan containing such a mandate may be much more difficult to get through Congress. As further evidence that major reform is on the horizon, on November 19, 2008, Senator Edward Kennedy (D-MA) and Senator Baucus attended a meeting, including several other key Senate leaders, to discuss plans for “meaningful health care reform” within the next year. Baucus stated, “We all agreed that there has not been a better time in modern American health care” for major reform and “we have to move very quickly to seize the opportunity and build momentum because it’s difficult to anticipate what else is going 9 to come up next year that will involve the Congress.” J 4 See Max Baucus, A Call to Action: Health Reform 2009, p. iv. (November 12, 2008). 5 Id. at 13-14. 6 In fact, it would not be surprising if President-elect Obama saw, and possibly approved of, this proposal prior to its formal publish date. 7 Id. at 15 (“Once affordable, high-quality, and meaningful health insurance options are available to all Americans, it will be each individual’s responsibility to have coverage”). 8 See id. (noting that “insurance works because policyholders pay into their plans when healthy, and have their medical bills paid when they are sick…if a significant portion of Americans does not purchase coverage until sick, then premiums for all enrollees will increase to cover insurer outlays, and the problem of unaffordable coverage will persist”).
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