This week, The Economist zoomed in on
an issue that the press has overlooked of late: the details of where
the money will come from to pay for health reform. The House document released yesterday
calls for an “individual mandate”—a requirement that everyone must
carry health insurance. If you don’t get it from your employer or if
you don’t qualify for Medicaid, you will be required to buy a policy in
the dreaded individual insurance market, where prices are high and
insurer scrutiny of your health problems is intense.
The mandate is sure to be controversial, and interest groups are already poised to fight it. “We know the mandate can be beat,” wrote
Carmen Balber on the blog of Consumer Watchdog, a vocal consumer group
that helped defeat an individual mandate in California a few years ago.
“We were able to beat it because the numbers behind a mandate just
don’t add up. You just can’t force people to buy something they can’t
afford.”
Indeed you can’t, and therein lies the problem. Without government
subsidies—and generous ones, at that—it’s unlikely that uninsured
people will rush out to buy health insurance. They may even find, as thousands do in Massachusetts, that it’s cheaper to take the tax penalty. Some 85 percent of the uninsured simply can’t afford health insurance.
And that circles back to The Economist, which clearly laid
out the cost challenges facing Congress and the President. The magazine
noted that Obama’s budget proposal specified $634 billion in cuts to
pay for the subsidies, roughly half of what’s needed to cover all
uninsured people over the next decade. While that fact has already been
reported, The Economist tied it to the President’s ill-fated
suggestions for raising some of the money. Obama wanted to limit
charitable deductions for wealthy Americans, but Congress didn’t like
the idea. He suggested cutting agricultural subsidies for richer
farmers, but that idea didn’t fly in the farm states. He wanted to
raise $210 billion from companies with foreign operations by limiting
the tax deferral on income earned overseas, but senators fear that
could cause an exodus of American companies to foreign shores.
Here’s another underreported fact: the Congressional budget resolution does not call for a $634 billion set-aside. It simply proposes
a flexible reserve fund, with no dollar amount attached. It will be up
to the various committees dealing with health reform to decide how much
should be spent in this budget cycle. The administration is in sync
with this approach.
If the money is not there—and it may not be—a further question is
raised: Who will be excluded from coverage if there are not enough
subsidies to go around?
A few weeks ago I put that question to Charles Kahn, a long-time
Washington insider who now heads the Federation of American Hospitals,
the trade group representing for-profit hospitals. His answers are
useful for journalists who want to move beyond covering the process of
the debate and on to the substance of it. “If you don’t have enough
money to have universal coverage, I don’t see how the individual
mandate works,” Kahn said. “You can’t get blood out of a turnip. It may
be that the individual mandate does not fit.” Then he mentioned a
comprehensive, standard package of benefits that reform proponents hope
will be part of the mix. There’s been little press coverage of that.
Said Kahn:
Right now, looking at what I know, I don’t see money being
there for what people think of as an individual coverage with a
comprehensive benefit package. Is it better to have more people have
something, or fewer people have more benefits, the kind your
congressman gets?
Sounds like a lot of trade-offs in the works. They beg for press inquiry. The public needs to know what’s in store for them.
