After a series of compromises and crass side deals, the Senate Democratic caucus stuck together early Monday to keep health care reform on track for a vote by Christmas Eve. The Senate compromise is far from perfect, but on balance it is substantially better than the unsustainable status quo. The basic principles — making health care more available and affordable without adding to the federal deficit — are intact, and the details can be improved upon before Congress' final vote in January.
The bill would add 31 million people to the rolls of the insured while protecting already insured Americans from losing coverage for getting sick. Either the public option insurance plan or an expansion of Medicare would have made the Senate proposal more attractive, but their loss is not as fatal as some liberals claim. Senate Majority Leader Harry Reid was dealing with difficult political realities and did not have the votes for either. Rather than criticize its shortcomings, liberal Democrats and labor unions should focus on the legislation's positives and mitigate its negatives.
Two key elements of the bill make it worth advancing. Private insurance coverage would be transformed in ways that would give Americans peace of mind that their insurance will be there when they need it. And although it does not go far enough in reducing medical costs, the bill would slow the cost increases and offers opportunities to experiment with bending the medical cost curve.
While all Americans and legal residents would be required to have health insurance, private insurers no longer would be allowed to deny coverage due to a pre-existing condition, charge customers more based on health status, gender or occupation, or set lifetime maximum benefits. Families with incomes up to 400 percent of the poverty level, about $88,200 for a family of four, would receive federal subsidies to purchase private insurance on new state exchanges.
Any legislation that doesn't fundamentally alter the fee-for-service model isn't going to entirely remove the incentive for doctors to order more tests and procedures. But the Senate bill offers a number of experimental steps to control costs. It sets up a commission on Medicare to recommend to Congress specific ways to prevent medical costs from rising above set goals. The recommendations would go into effect automatically if Congress didn't come up with its own plan that matched the savings.
The bill also promotes more coordinated patient medical care, which saves money and offers better health outcomes. It encourages the use of more technology in record-keeping, and it creates experiments within Medicaid and Medicare to explore cost savings models. The Senate bill also would impose a 40 percent excise tax on "Cadillac" employer-sponsored group health insurance policies. Labor unions are complaining about the burden on their members' generous policies, but economists agree that this targeted tax will give health insurers incentives to control medical spending.
The Senate bill is being blasted by Republicans on the right and liberal Democrats and labor unions on the left. There are provisions that need refinement, and there are special deals to win votes that would be indefensible on their own. But the fundamentals remain sound, and remember how much work it took to advance the health care debate this far. To start over now would be to give up for decades. The Senate should approve its health care reform legislation this week, and there will be time for a final evaluation before a historic vote in 2010.