The Battles Ahead

Health care is being teed up for early action next year, with veterans of the Clinton reform effort convinced their delay in getting legislation to Congress 16 years ago was what killed their plan. Act fast and get it passed, is the new motto.

But that may be more of a challenge than it appears right now. People are policy, and the Senate is shaping up to be the power center for action. But there are a lot of competing agendas, egos, and priorities:


  • Sen. Ted Kennedy returned to Washington this week, holding meetings with colleagues and staff as he takes a leading role in advancing his career-long agenda of enacting universal health coverage. I would not be surprised to see the Kennedy health reform bill get the prestigious designation of Senate Bill #1.


  • Sen. Baucus, chairman of the Senate Finance Committee, released an 89-page overview of his health reform plan last week, stating, "It is the duty of the next Congress to reform America's health care system."


    • His plan has many features similar to the one offered by President-elect Obama, but he takes government involvement even further: He would impose a federal mandate that everyone have insurance, not just children, and he would allow people aged 55 to 64 to buy in to Medicare, for example.


    • Other Baucus features similar to the Obama plan: Mandating that employers provide insurance or pay a new tax; a major expansion of existing government health care programs; and creating a new national Exchange for health insurance where insurers would be required to sell policies to all applicants and charge younger, healthier people higher premiums to reduce costs for older, sicker people. (It will be interesting to see how this goes over with Mr. Obama's young supporters.)


  • But there are other power centers as well: Sens. Ron Wyden of Oregon and Bob Bennett of Utah have been working for several years to build support for their bi-partisan bill. And the leading Republican on the Finance Committee, Sen. Chuck Grassley, has his own ideas, as does the leading Republican on the Health, Education, Labor, and Pensions Committee, Sen. Mike Enzi, that Sen. Kennedy chairs.


  • …Not to mention Sen. Hillary Clinton who will certainly want to play a major role if she doesn't become Secretary of State.

It's no wonder that Mr. Obama selected former Senate Leader Tom Daschle as his new Secretary of Health and Human Services. He will need to use all of his leadership skills as referee.

There is more drama on the House side, with Los Angeles Rep. Henry Waxman ousting long-time Energy and Commerce Committee Chairman John Dingell in a power coup. (Whoever thought we would now think of Rep. Dingell as a conservative? Everything is relative.)

And Rep. Pete Stark, the influential chairman of the House Ways and Means Health Subcommittee, will surely want to play a major role in shaping health reform legislation. These power dynamics also will be interesting to watch.

Then there is the issue of money. Incoming White House Chief of Staff Rahm Emanuel said this week that universal coverage will be an early, top priority of the Obama administration.

But where is the money going to come from to pay for these massive reform agendas, which were developed before the meltdown of Wall Street, the $700 billion rescue package, and a projected $1 trillion deficit?

The Obama plan is estimated to cost an additional $100 to $160 billion in the first year alone, yet the president-elect made fiscal responsibility a big part of his campaign platform. If the White House is going to extend the plan to mean universal coverage, the bill will be even more expensive.

Mr. Obama also will be facing the huge flood of red ink in Medicare, with the program starting to run out of money in 2017, about the time a second Obama term would end.

It's impossible to make predictions in the current topsy-turvy political and economic climate, but these power political power centers, fiscal realities, and the urgency of other issues, including Detroit's looming bankruptcy and an unstable geo-political climate, make these dreams of sweeping health reform a major challenge.

Mr. Obama will likely use the pending expiration on March 31 of the State Children’s Health Insurance Program (which will be renamed) as a vehicle to expand health coverage to all children and possibly even enact his mandate for children’s coverage. That probably means funneling more money to the states through Medicaid since they must pay part of the costs.

After SCHIP, Congress will take the lead on major health reform legislation from there.

We need to remember that 82% of the American people are happy with their own health care and only a minority is willing to pay higher taxes to get to universal coverage. Also, the employer mandate is a new tax, and it is going to be especially difficult to impose during the economic crisis. And can we really tell people who have lost their jobs that now, in addition to everything else, they are going to be forced to buy health insurance?

It will be up to us to let you know all of the details and what it means for you.

Health Policy Matters will continue to follow all of these developments. And thanks to so very many of you for taking the time to fill out our survey last week. We get your message that you like the newsletter the way it is: 70% of you said you don't want us to change the distribution to three times a week.

And your comments were so encouraging! One example: "I look forward to the newsletters. Grace Marie's commentary is insightful and prophetic. The summaries of the articles give me a glimpse so I can determine the urgency level for my reading them. Keep up the good work."

But you also gave us a lot of great suggestions about how we can make the newsletter more useful to you. We will do our best to follow up on every one of them. Thanks so much to all of you. You can view the survey results online at



And Happy Thanksgiving from all of us at the Galen Institute. We are thankful to have you as friends and to be working with you. We live in a wonderful country where we still have the freedom to speak our minds, and we will continue to be active in the policy conversation to protect our freedom in the challenging times ahead.

Grace-Marie Turner

Recent News Articles and Studies

Open Enrollment Here for Medicare Patients
Improving the Individual Health Insurance Market
Simple Answers, Not Easy Solutions
Healthcare Policy in an Obama Administration: Delivering on the Promise of Universal Coverage
What Do We Really Know About the Uninsured?
The Physicians' Perspective: Medical Practice in 2008
Cost and Benefits of Individual and Family Health Insurance Plans
Findings From the 2008 EBRI Consumer Engagement in Health Care Survey


Open Enrollment Here for Medicare Patients
Grace-Marie Turner, Galen Institute
South Florida
Sun-Sentinel, 11/18/08

Seniors enrolled in Medicare's prescription drug program should take advantage of the open enrollment period, which runs from November 15 through the end of the year, to compare their current coverage with other offerings. Medicare's prescription drug program is structured so that insurance companies must compete for customers, which results in more choices and lets seniors search for the best value. In 2003, lawmakers estimated seniors would pay an average monthly premium for prescription drug coverage in 2009 of more than $44. According to government officials, their average monthly premium next year for the standard plan will be just $28. But some drug plans are raising their prices and changing the specific drugs available, so every senior who is enrolled should be sure to seize this once-a-year opportunity to review their coverage. Web-savvy seniors can do this through Medicare's Web site at and seniors without access can always call 1-800-Medicare.

Improving the Individual Health Insurance Market
Grace-Marie Turner, Galen Institute
National Journal Expert Blogs: Health Care, 11/17/08

People purchasing health insurance in the individual market face double-jeopardy: Unless they are eligible for the self-employment tax deduction, they must pay for coverage with after-tax dollars, and they also face the full plethora of state insurance mandates and regulations, writes Turner. Despite these encumbrances, the individual market functions much better than conventional wisdom assumes. Wharton University Professor Mark Pauly and Bradley Herring of Emory University have looked not just at hypotheticals, but at actual people shopping for and purchasing insurance in the individual market. They find there is more pooling of risk in the individual market than commonly believed: “Analysis of new data…shows that actual premiums paid for individual insurance are much less than proportional to risk, and risk levels have a small effect on obtaining coverage.” Further, University of Minnesota economist Steve Parente and colleagues showed that opening up competition among the states for health insurance would mean an additional 12 million people could get health insurance without any new spending by the federal government (an important consideration in the current fiscal climate).


Simple Answers, Not Easy Solutions
Thomas P. Miller, American Enterprise Institute
Health Affairs, November/December 2008

Miller reviews Healthcare Guaranteed: A Simple, Secure Solution for America, by bioethicist and breast oncologist Ezekiel J. Emanuel. The underlying theory of health cost containment in Healthcare Guaranteed appears to be that we first need to load everyone into the same leaky boat of basic coverage and then hope that someone later figures out how to row it back to the shoreline of fiscal balance with acceptable health care quality, writes Miller. Unfortunately, a number of too-facile budget calculations, economic assumptions, and factoid citations in this book don't stand up to closer scrutiny. In this latest plan to save America from its health care crisis, Emanuel provides a number of nuanced findings and provocative thoughts, but the remaining whole adds up to less than the sum of its parts, concludes Miller.

Healthcare Policy in an Obama Administration: Delivering on the Promise of Universal Coverage
PricewaterhouseCoopers' Health Research Institute, 11/08

PricewaterhouseCoopers' Health Research Institute presents a comprehensive look at how President-elect Obama's health plan compares to reform in Massachusetts. Key findings:


  • Based on the results in Massachusetts, PwC estimates Obama's plan would provide coverage for two-thirds of the nation's uninsured at a cost to the government of $75 billion a year.
  • Of the 30 million Americans who would be newly insured under Obama's proposals, nearly 40% would obtain coverage through their employers, which would mean a reversal in the current decline of employer-based coverage.
  • Not all of those who will receive subsidized coverage under the new plan would have been previously uninsured. PwC estimates that about 4.5 million people would trade their current private coverage for insurance with higher government subsidies.
  • Over one-third of the cost of Obama's plan could come from existing funding for the uninsured; much of that funding now goes to hospitals. The rest will have to be raised through repealing tax cuts, raising taxes, or limitations on other spending.

What Do We Really Know About the Uninsured?
William Snyder, Heartland Institute
The Wall Street Journal, 11/21/08

The notion that there are 46 million Americans who can't get the health care they need for lack of money or public assistance is a myth, writes Snyder. Most of the proposals under discussion today involve a significant expansion of government programs, a legal requirement for everyone to carry insurance, or a combination of the two. But if millions of people have found ways to access and pay for satisfactory health care without involving an insurance company, is forcing them to buy traditional insurance an effective solution? Perhaps we should look for ways to encourage the millions of people who are currently eligible for existing government programs to enroll before we expand programs to include people that may not need assistance.

The Physicians' Perspective: Medical Practice in 2008
The Physicians' Foundation, 11/18/08

Nearly half of all the nation’s primary care physicians say that over the next three years they plan to stop practicing or reduce the number of patients they see, according to this survey from The Physicians’ Foundation. The survey finds widespread frustration among primary care physicians nationwide, due largely to increased time dealing with non-clinical paperwork, difficulty receiving reimbursement and burdensome government regulations. An overwhelming majority – 94% — said the time they devote to non-clinical paperwork in the last three years has increased, and 63% said that the same paperwork has caused them to spend less time per patient.


Cost and Benefits of Individual and Family Health Insurance Plans
eHealthInsurance, 11/08

A study by the nation's premier online broker of health insurance offers a detailed look at consumer purchasing of health insurance plans from the individual and family health insurance markets. Key findings:


  • In 2007, the average monthly premium for individual policies was $158, for family policies, $366.
  • Half of all individual policy holders paid less than $130 per month for monthly premiums and more than half of all family policy holders paid less than $300 per month for monthly premiums.
  • Average monthly premiums for individual plans across the U.S. ranged from $83 in North Dakota to $388 in New York — a monthly disparity of $305, or $3,660 per year.
  • Of individual plans, 12.1%, and of family plans, 17.6%, were compatible with health savings accounts.
  • Almost 100% of individual and family plan policy holders had lab, x-ray, and emergency room coverage and a vast majority had prescription and chiropractic coverage.



Findings From the 2008 EBRI Consumer Engagement in Health Care Survey
Employee Benefit Research Institute, 11/08

Enrollment in consumer-directed or high-deductible health plans eligible for a tax-preferred savings account increased to 9.8 million adults this year, up from 7.5 million adults in 2007, according to this EBRI survey. The fourth annual survey also finds that those in consumer-directed and high-deductible plans exhibited more cost-conscious behavior in their health care decisions than individuals with traditional health insurance. The 2006 survey found that individuals in consumer-directed and high-deductible plans were less likely than those in traditional plans to be satisfied with the quality of care they received. But between 2006 and 2007, the gap in satisfaction between those in traditional plans and those with consumer-directed plans disappeared because satisfaction increased significantly among those with consumer-directed plans and remained unchanged in 2008.

Matthew Hisrich of the Flint Hills Center for Public Policy and Roy Ramthun, former Treasury official, senior health policy advisor at the White House, and now president of HSA Consulting, have written a brief that discusses the tax, savings, and health spending advantages of health savings accounts.

Upcoming Events

Medicare Advantage: Where Is It Now, And Where Is It Going?
Health Affairs Briefing
Monday, November 24, 2008, 9:45 a.m. – Noon
Washington, DC

Health Care Reform in Light of the 2008 Election: Free Market Solutions vs. Government Regulation
Northeast Ohio Health Underwriters Association Event
Tuesday, December 2, 2008, 8:00 a.m. – 11:30 a.m.
Westlake, OH
Grace-Marie Turner will discuss free market solutions to health care reform.

After the Election: What Happens Next?
Women in Health Policy Forum
Tuesday, December 2, 2008, 9:00 a.m.
Washington, DC
For more information, please contact

Religious Practice and Health: What the Research Says
The Heritage Foundation Conference
Wednesday, December 3, 2008, 8:30 a.m. – 6:00 p.m.
Washington, DC

CPAHU's Winter Program
Central Pennsylvania Association of Health Underwriters Event
Thursday, December 4, 2008, 7:00 a.m. – 1:00 p.m.
Camp Hill, PA
Grace-Marie Turner will discuss free market solutions to health care reform.


Health Policy Matters is a weekly newsletter containing summaries of timely and informative studies and articles on free-market health reform. It features a commentary by Grace-Marie Turner on the major developments and issues of the week as well as summaries of writings by participants in the Health Policy Consensus Group and other articles of interest from the health policy world, plus announcements of coming events. Health Policy Matters is published by the Galen Institute, a not-for-profit public policy organization specializing in information and education on health policy. For more information about the newsletter and our organization, please visit our website at

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The views expressed in this newsletter are the opinions of the authors and do not necessarily reflect the views of the Galen Institute or its directors.