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The Year of Health Care Reform?

Image has not been found. URL: /wp-content/uploads/2008/09/healthcare-drawing.jpgIllustration by: Matt Mahurin

Earlier this month, during the fiery debate over how to preserve payments to Medicare doctors, scores of Republicans did the unthinkable: Bucking the White House, the insurance industry and even party ideology, they joined the thin Democratic majority to scale back funding for private plans operating under the federal health-care program.

To health-policy observers, the move was a stunner. Congressional conservatives have long sought to curtail government’s role in delivering health care by shifting more responsibility to the private sector. The GOP defections, which allowed Democrats their first major health policy-win in a decade, caused many commentators to suggest that Democrats’ plans for broader health reform might find unexpected legs in 2009.


Illustration by: Matt Mahurin

“If the Democrats can win victories like this now,” New York Times columnist Paul Krugman wrote on July 11, “they should be able to put a definitive end to the privatization of Medicare next year, when they’re virtually certain to have a larger congressional majority and will probably hold the White House.”

A host of health policy-experts, however, have another message: Not so fast. Trimming some Medicare payments for the sake of preserving the program, they argue, is far easier to accomplish than the sweeping expansions of federal coverage that many Democrats have proposed.

“Medicare naturally makes for strange bedfellows,” Jacob Hacker, a political science professor a the University of California-Berkeley and the author of “The Great Risk Shift: The New Economic Insecurity and the Decline of the American Dream,” wrote in an email. “Both conservatives and liberals have an interest in keeping the program’s costs in line. The divisions are much deeper when it comes to expanding the role of government in health care — and the political fight will be that much fiercer.”

Others noted that the Democrats owe much to the looming elections for their Medicare victory. Faced with an enormous lobbying campaign from seniors and physician groups, they note, many Republicans voted largely to preserve their seats. This should not be mistaken for a change of heart on privatization, these experts say; rather, the Republicans’ support was simply a political calculation. With that in mind, the experts predict, the same partisan battle will likely resurface next year — making the Democrats’ major health-reform successes highly uncertain.

At issue is the five-year old Medicare Advantage program, which delivers Medicare services through private insurance companies. In recent years, it has become a leading symbol of the ideological differences between each party’s approach to health care. Republicans and other supporters argue that the private companies provide choice, treatments and efficiencies that Medicare cannot, while most Democrats and patient advocates say that removing the middle man would save Medicare much-needed resources.

The Congressional Budget Office has found that MA plans cost taxpayers roughly 12 percent more per beneficiary than traditional Medicare. For one particularly popular type of MA plan, called private fee for service, the divide is closer to 18 percent.

The Democratic proposal to stave off a scheduled 11 percent cut to Medicare physicians was expected to fail because it lopped $14 billion from the MA program over the next five years, mostly from private fee for service. But in a surprise vote, the House last month passed the bill 355 to 59, with 129 Republicans supporting the measure. Shortly afterward, the Senate — with help from an ailing Sen. Edward M. Kennedy (D-Mass.) — approved the bill 69 to 30. Eighteen Republicans lent their support.

Making good on earlier vows, President George W. Bush vetoed the bill over the MA cuts. But both chambers easily overrode the veto, with even more Republicans breaking with the White House than had done so originally. Some advocates say the vote is indication that the Democrats can take major strides toward universal coverage next year.

“We think it’s more than possible,” said Richard Kirsch, national campaign manager of Health Care for America Now, a liberal advocacy group. “We think it’s likely.”

There are others, however, who say passing MA cuts is no precursor of things to come. Robert Blendon, professor of health policy at Harvard University, said the credit should go to the lobbying efforts that successfully portrayed the opposition as anti-elderly. Faced with that, he said, many Republicans had little choice but to support the bill.

“Tactically, their position seemed politically indefensible in an election year,” Blendon said. “The way the debate was framed made it very difficult to remain on that train, but I don’t think the Republican leadership is giving up on their vision of what the Medicare program should look like.”

Alexander Vachon, a Washington-based health-policy analyst, agreed, calling the Medicare vote an election year anomaly. “R[epublican]s were running from [the] Medicare bill like Indiana Jones with a big rock bearing down on him,” Vachon wrote in an email. “Jones didn’t care what rock was made of, just wanted to get out of the way. Ditto Rs.”

What reforms are possible next year could hinge on the November election results. Democrats are expected to pick up seats in both chambers, but the question remains whether they’ll gather the margins to have their way legislatively. Right now, it looks like they could pick up roughly six Senate seats — not enough to break a Republican filibuster.

Meanwhile, Sen. Barack Obama (Ill.), the likely Democratic presidential nominee, has floated a sweeping health reform plan that aims to cover the nation’s 47 million uninsured, computerize all medical records and eliminate unnecessary treatments. Obama claims the plan would save the average family of four $2,500 per year in premium costs.

But even if Obama does take the White House, Senate Republicans can kill proposals by rallying just 40 members in support of a filibuster.

That leaves next year’s health reform questions largely unanswered. Some experts say that Democrats can use this year’s victory to their advantage in 2009.

“Democrats should take away from the Medicare fight two big lessons,” Hacker said. “They need to stick to their guns on the important principles, and they need to pressure moderate Republicans to break with the more conservative members of their party.”

Advocates remain hopeful that this year’s Medicare battle will embolden Democrats in similar fights to come.

“You couldn’t characterize it in any way as a push against [privatization],” Paul Precht, director of policy for the Medicare Rights Center, said of the Republicans voting against MA. “But it does show that [Democrats] can play hardball and win, and that’s an important lesson to take into the larger health-care debate.”

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