Include the tab for expanding Medicaid, and the proposal for health care reform that the Senate Health, Education, Labor, and Pensions (HELP) Committee approved last week will probably cost $1.6 trillion, report the Urban Institute’s Linda J. Blumberg and John J. Holahan in a brief titled: “Beyond the $1.6 trillion sticker shock.”

This “is clearly a considerable sum,” acknowledge the researchers, who were funded by the Robert Wood Johnson Foundation. They note that when the Congressional Budget Office (CBO) announced that it guessed the Senate Committee’s health plan could cost that much, “the estimate caused the committee to stop its deliberations,” and set a new goal: “a plan that would cost closer to $1.0 trillion.”

But perhaps Finance Committee Chairman Senator Max Baucus didn’t need to panic. As Blumberg and Holahan point out: “The $1.6 trillion is a 10-year number,” measuring how much reform is expected to cost the nation between 2010 and 2019. Meanwhile, over that same span the Congressional Budget Office (CBO) projects that total GDP will “equal $187 trillion.” 

Thus, they observe, “the estimated gross costs of health reform are less than 1 percent of the GDP over ten years.”

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Recently, I’ve become a member of a Washington Post health care panel that answers a weekly questions  about health care reform. This week’s query, “Should We Tax the Rich to Cover the Uninsured? refers to the House proposal, released earlier this week, which would tax the wealthy to help finance reform.“

Below, my answer, plus some additional thoughts:

Sometimes a picture is worth a million words. This graph, from the Center on Budget and Policy Priorities   tells you why it makes sense to tax the very rich to fund reform.

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Do Americans view health care as a communal resource that should benefit everyone or do they view it mainly from the standpoint of “what’s in it for me”? Do they view themselves as citizens, working together for a “greater good,” or as patients and consumers of health care; worried about retaining access to all that medicine has to offer?

The answer, according to a recent article by David Nather in Congressional Quarterly, is that most Americans are aware that “[w]hat’s good for the health care system as a whole often looks very different when it’s their own health at stake, or the health of someone in their family.”

Because the public is worried about sacrifices they may have to make to further the “public good,” Nather writes that Obama’s biggest challenge in maintaining support for health care reform will be to make sure that “Americans don’t think they will personally lose out in an overhaul of the way medical services are delivered—through higher costs to themselves, lower quality of care or simply inability to get the care they’re convinced they need.”

Nather says that in his speeches at town hall meetings and talks around the country, Obama is focusing too much on discussions about the financial aspects of health reform and on the benefits for all that will result from slowing spending on health care:

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Today, the the Senate Health, Education, Labor, and Pensions (HELP) Committee passed its reform bill on a party-line vote, thirteen to ten. Yesterday, the three House committees writing healthcare legislation released the final text of their bill. Left behind in the dust, the Senate Finance Committee remains bogged down as Committee Chairman Senator Max Baucus vainly struggles to engineer a “bi-partisan bill.” (And yes, I mean “vainly” in both sense of the word.) 

I suspect Senator Baucus is about to discover that he is not as important as he thought he was. As I have been suggesting in recent weeks, in the end he will not be the ultimate architect of health care reform. That job belongs to President Barack Obama.

What’s most interesting about the two pieces of legislation put forward by HELP and House Democrats this week is what they tell us about President Obama’s priorities.

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When the White House announced that President Obama had named Dr. Francis Collins to head the NIH, many applauded the choice. “But praise for Dr. Collins was not universal or entirely enthusiastic,” declared The New York Times.  “Dr. Georges C. Benjamin, executive director of the American Public Health Association, called Dr. Collins’s selection a ‘reasonable choice.’ Others privately expressed unease.”

In what seemed a strained effort to find a second side to the story, the Times zeroed in on the

“two basic objections to Dr. Collins. The first is his very public embrace of religion.” While in medical school, Collins converted to Christianity.  “Religion and genetic research have long had a fraught relationship, and some in the field complain about what they see as Dr. Collins’s evangelism,” the Times commented. But in fact, Collins religious belief did not stand in his way when leading the Human Genome Project. And no one has pointed to a single instance when religion has in any way interfered with Collins work as scientist. Was the Times suggesting the the only suitable candidate to head the NIH would be an agnostic? This seems to me just as discriminatory as the bias against agnostics so common in other corners of the mainstream media.

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Here we go again. Do you remember that fine spring morning when President Obama stood in front of the graduation crowd at Notre Dame and spoke of finding “common ground” between foes and supporters of reproductive choice. Abortion politics have reared up again, this time threatening to derail health reform legislation as we eke ever closer to the finish line.

In a move clearly meant to scorch that newly fertile “common ground,” nineteen House Democrats recently sent a letter to House Speaker Nancy Pelosi warning that they would vote against any health care reform plan that included abortion as a covered procedure—either through a mandate or even through a recommendation for coverage.

Here’s an excerpt from the letter which can be found in full here:

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Some observers have suggested that if we tax the gold-plated insurance that some employers offer to their employees, insurance that encourages over-utilization of health care would begin to disappear. To avoid the tax, employees would settle for more basic, less expensive plans. Others propose giving consumers a larger menu of plans to choose from, so that they have an opportunity to pick more modest plans that don’t cover so many unnecessary treatments.

Both ideas suffer from two problems. First, they assume that less expensive insurance plans cover effective care—and eschew unnecessary care. Second, they’re  proposing a crude across-the-board solution to a complicated problem. As I have said in the past, the waste and “fat” in our health care system is not hanging out around the edges of the steak. It is marbled through the meat. Eliminating it means using a scalpel to discourage use of specific tests, treatments and products that provide no benefit for patients who fit a particular profile. Simply taking a whack at expensive insurance plans does not do the trick.

Granted, the idea of taxing pricey employer-based health insurance has a certain appeal. Today health benefits are not taxed as income. Since more affluent Americans are most likely to enjoy the most valuable benefits, this seems to be a “regressive tax break”—one that favors the rich.

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I’m now part of a Washington Post panel responding to a health-care reform question each week. Click here to find the panel.

This week’s question:  “Is the Individual Mandate Necessary?”

You’ll find my reply here.

Let me add that while I think we need an individual mandate, I am concerned that the House version of health care reform lets insurers charge older customers twice as much as younger customers. At this point, the Senate Finance Committee also allows insurers to discriminate by age. This could make it very hard for 50-somethings who don’t qualify for subsidies to afford a family plan. Under the House bill, a couple with joint income of $75,000, before taxes, would not receive a subsidy. And if they are self-employed, and receive no help from an employer, the premiums that they would be expected to pay could easily run as high as $13,000 a year. After taxes, if they live in a high-tax state, they might take home $65,000 a year—or less. This means that health care premiums would eat 20 percent of their income—or more.

I don’t think it makes sense to suggest that a young couple, earning $150,000, jointly, shouldn’t pool their resources with a 50-something couple earning $75,000.  Don’t younger Americans want to help pay for the health insurance that their parents need? These days, as more 50-somethings become unemployed, it’s not that unusual for college-educated 20-somethings and 30-somethings living in two-income households to earn  significantly more than their middle-class parents.

Both Social Security and Medicare ask all Americans to pay the same percentage of their paychecks into the system, regardless of  age. When they grow older, younger taxpayers will benefit from a system that expects all of us to pull together.  Universal health care should follow the same model: everyone in, no one out of the pool.

Today’s headlines tell us that last night the nation’s hospitals agreed to contribute $155 billion over 10 years toward the cost of insuring the 47 million Americans without health coverage.  According to the Washington Post  “the agreement that three hospital associations reached with White House officials and leaders of the Senate Finance Committee is the latest in a series of side deals that aim to reduce the cost of revamping the nation's health-care system and to neutralize influential industries that have historically opposed such reforms."

We’re told that “about $40 billion would be saved by slowly reducing what hospitals get to care for the uninsured . . . . The reductions would probably not begin for several years, after a significant number of people have enrolled in the new insurance programs.

“For their part, hospital officials have an understanding that, if the final legislation includes a new government-sponsored insurance program, it will not pay at Medicare or Medicaid reimbursement rates, which the industry has long argued do not cover the cost of services.”

What Does This Mean?

I have a few questions. First, how can anyone promise that a public sector plan “will not pay at Medicare or Medicaid reimbursement rates” when we don’t know what Medicare and Medicaid reimbursement rates will be in 2010 or 2011? 

We do know that there are plans to change the structure of reimbursements—bundling payments to doctors and hospitals, refusing to pay for preventable readmissions, paying bonuses to hospitals and doctors that approach benchmarks for efficiency set by hospitals like the Mayo Clinic.  Medicare has been experimenting with bundling payments to the doctors and hospital involved in a single episode of care for quite a while. All of this is part of a larger plan to begin to pay for quality, not quantity of care. Presumably, a public sector plan will follow suit.

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There’s powerful storytelling going on over at Obama’s grassroots website, Organizing for America,  and clearly the goal is to use gripping narrative to get Americans to stop thinking about health care reform and start feeling the need for change. The newest addition to this site is called “Health Care Stories for America” and it includes a neat, interactive map of the U.S. that is constantly updating with new stories of health care woe from real people across the country. Site visitors can click on a megaphone at the bottom of a story they like to help promote its status and increase the anecdote’s chance of being pegged on the interactive map.

Here is an excerpt from a highly rated story from “Barbara” in Wocester, MA who was faced with $65,000 in medical bills when her insurer denied coverage after her son was in a serious bicycle accident:

“It's the phone call in the middle of the night that no parent ever wants to receive. Your son, a student at George Washington University, has been taken by ambulance to the emergency room. The doctor on the other end of the line explains, as you desperately wake-up into the nightmare, that in a bicycle accident your child has landed on his jaw, has broken almost all the bones in his face and has lost many teeth. He's lucky; there was no spinal damage, no brain injury, no eye involvement, and he's alive. But even after 5 hours of surgery, and 8 titanium plates installed into his face, you are told that reconstruction and recovery will take a year. Somehow your son gets through the long hospitalization, and the trauma. But there is no preparation for the next phone call: all further medical treatment is being denied by your insurance company.”

The Obama campaign plans to use stories from this site as the President conducts his “listening tour” around America to garner local support for his health plan and other issues that include energy policy and his Supreme Court nominee. Tomorrow alone, there are public meetings scheduled for several cities in New Hampshire, South Carolina and North Carolina. They will continue throughout the month of July as Congress remains in recess.

The use of anecdotes to influence health policy is not new; both sides used the technique during the 1993 battle over Clinton’s health plan. (The main difference being that conservative opponents used a fictitious couple—Harry and Louise—to act out a fictitious dilemma to make their point.)

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