Inside Story: Current Affairs and Culture

HEALTHCARE REFORM is back on the agenda in Washington this week and in a big way. Since things came to an unexpected and screeching halt after the Massachusetts election, which cost the Democrats their super-majority in the Senate, the daily news on spiralling health costs has helped to drive the recognition that reform is imperative. To give one example: WellPoint’s Anthem Blue Cross in California, one of the largest health insurers in the state, announced early this month that it was about to hike health insurance premiums by as much as 39 per cent for individuals. A recent survey by the Center for American Progress shows double-digit hikes in insurance premiums implemented or pending in at least ten other states.

Meanwhile, the five biggest health insurance companies in the United States have collectively reported a record profit for 2009, even as they covered fewer customers. The economic crisis is making it increasingly difficult for middle-class families to keep up their health insurance payments. Chairman Henry Waxman of the House Energy and Commerce Committee is set to hold hearings on this issue on 24 February.

For America’s hospitals, the cost of doing nothing in Washington is translating into tens of billions of dollars each year in medical bills that go unpaid by patients with little or no insurance. Nationwide, the cost to hospitals of unpaid care, which includes charity care as well as money that could not be collected from patients, was around US$36 billion in 2008, and it is expected to spiral higher unless there is some relief for uncompensated care.

On Monday the White House released President Obama’s healthcare proposal, ahead of the planned White House health summit on 25 February. The White House says the proposal bridges the differences between the House and Senate bills, and by my assessment that’s a fair description; it is clearly designed to allay liberals in the House while not going too far in a way that would alienate Senate moderates. The proposal is silent on a public health insurance option. It would take the Senate language on abortion. Not surprisingly, there are stronger anti-fraud provisions and it would allow the federal government to review insurance rate hikes.

The White House release also includes a factsheet that outlines the extent to which Republican ideas have been included in the president’s proposal. The plan aims to make the president’s proposal the starting point for renewed discussions, and he is trying to force Republicans to come to the table with their own proposal and to acknowledge the degree to which their ideas have been incorporated in the Democratic bills.

The Republican response has been typical, and does not augur well for real progress on Thursday. Within minutes of the White House posting their proposal, the House Republican leader John Boehner issued a statement saying: “The president has crippled the credibility of this week’s summit by proposing the same massive government takeover of healthcare based on a partisan bill the American people have already rejected. This new Democrats-only backroom deal doubles down on the same failed approach that will drive up premiums, destroy jobs, raise taxes, and slash Medicare benefits.” He went on: “This week’s summit clearly has all the makings of a Democratic infomercial for continuing on a partisan course that relies on more backroom deals and parliamentary tricks to circumvent the will of the American people and jam through a massive government takeover of healthcare.”

Republican leaders in the House and Senate have said they cannot accept the Democratic bills that were passed last year, and they want to start over. Their aim is to shape narrower legislation that cuts costs for small businesses, allows insurance sales across state borders, uses federal dollars to set up special insurance pools for people with medical problems and places limits on medical malpractice judgements. The measures they propose won’t come close to providing health coverage to the millions of uninsured Americans, won’t reign in health costs or health insurance premiums and, ironically, will unravel the current employer-based healthcare system.

Obama’s summit is a gamble to save his embattled healthcare overhaul by the power of persuasion – persuasion that the Democrats’ healthcare plan is reasonable, that much of its complexity reflects the nature of the healthcare system and its financing, and that lockstep Republican opposition is unreasonable and could spoil a historic opportunity to solve a problem that concerns all Americans. •

Lesley Russell is the Menzies Foundation Fellow at the Menzies Centre for Health Policy, University of Sydney / Australian National University and a Research Associate at the US Studies Centre at the University of Sydney. She is currently a Visiting Fellow at the Center for American Progress in Washington DC.