Health Care: A Bolt of Civic Hope

In an anti-political time the politics of remedy is still possible. Two congressmen, one liberal, one conservative, both versed in the relevant complexities, agree on the bones of a plan to insure the 44 million Americans without health insurance

"Jim's not going to get what he wants [that is, a single-payer system] anytime soon," McCrery said. "I or some right-wing person is not going to get an unfettered market, which is the individuals fending for themselves. So if we want to solve the problem, we've got to come up with something that's kind of a combination. I think that's possible along the tax-subsidy lines. If we don't do anything, if we just keep going like we're going, eventually I think we'll end up with single-payer. We'll end up with the government controlling just about everything in health care."

This was an argument that McCrery had made to me earlier: that the tendency today to put a patch here and a quick fix there, typified by the push for an HMO patients' "bill of rights," leads inexorably toward heavy-handed federal solutions. "That might take forty years or fifty years," he continued, "but we're going that way now. So I'm willing to accept a lot more government intervention in the market than I normally would to create a system that will have some vestige of the market left in it."

We turned to the key components of a potential health deal, starting with benefits. If a tax subsidy were used, "there would be the element of different levels of health care for different people," McCrery said. "Somebody who is wealthier is probably going to buy a policy that would be richer in benefits than the basic benefit package that I would pay one hundred percent for from the government. That would enable the market to continue to be more innovative than under a single-payer system."

It's the classic conservative argument: beneficial innovations always begin as luxuries for the wealthy. Think of automobiles, telephones, airplanes: first came the breakthroughs funded by the rich and benefiting the rich, and later came dissemination to the masses. This pattern of capitalism, as Milton Friedman argues, has produced higher living standards for more people than any rival form of social organization.

McDermott seemed unconvinced. "But if you and I both need to have doctor visits and all this stuff, right up to the level of a bone-marrow transplant at a hundred and twenty thousand dollars a crack," he asked, "why wouldn't you guarantee that to everybody in the United States? What would you leave above the line that you would say that people who are wealthier can get for themselves?"

"The catastrophic examples are not the kinds of things I'm talking about," McCrery replied. "I'm talking about variances in bells and whistles in insurance policies -- if you want a private room, if you want extra [nursing] help in the room, all those things that people could purchase if they wanted to. The basic plan that would be provided by the government to low-income folks would not have all those."

McDermott wasn't satisfied. "One of the big difficulties will be us agreeing on a basic package."

"But having said that," McCrery added, "I don't think it's impossible."

"No, it's not impossible," McDermott agreed.

McCrery, like Bill Bradley earlier this year, suggested the federal-employee health plan as a model. It doesn't define benefits down to every test and procedure, but it assures general areas of coverage, such as major medical expenses and surgical fees. This way there's no stifling of the extraordinary innovation that is now sweeping health-care delivery, whose future shape can't be foreseen. Go too far in defining things rigidly, the Republicans argue, and you end up with inanities like Medicare, which unaccountably still fails to cover prescription drugs, thirty-five years after the program's inception.

"Ultimately," McDermott said, "there has to be a come-to-Jesus meeting someplace where that package is defined: This is health insurance for the country. This is what we're gonna give everybody."

I asked McDermott why defining a detailed benefit package is crucial to liberals when there's no government-defined package in the employer-based system under which most Americans now get their coverage. What's more, as Bill Thomas argues, any honest observer has to concede that a move to what Democrats deride as "two-tier" care would be a vast improvement over the five- or six-tier care we have today, which runs from princely to truly pauperish. And as Richard Armey told me, there are precedents for leaving the actual benefit undefined: with food stamps, Uncle Sam provides the wherewithal but doesn't tell poor folks what to eat; the mortgage-interest deduction helps millions without any need for the government to tell people what kind of house to buy. Why not simply make the health subsidy generous enough and let people pick among competing offerings?

McDermott responded that it's hardly an advertisement for the system of different employers' plans we have today, under which one person may be covered for, say, certain cancer treatments, while another cancer patient is exposed to financial ruin. In any major reform such inconsistencies should be rationalized in favor of some common notion of what every citizen ought to have. It will also be a fight, McDermott believes, to make any tax subsidy substantial enough to buy a decent package, because many Republicans essentially want a cheap tax-style voucher that they can ratchet down over time to limit costs.

Yet both men think that differences here can be bridged. The occupant of the Oval Office, McCrery said impishly, needs to "lock us in a room with his people and say, 'Okay, let's come up with a [benefit] plan that Jim McDermott, Jim McCrery, and President Bush can support.'" McDermott moaned at the very thought. But later he agreed. "If you locked the door and said we don't get any lunch until we come up with a benefit package," he said, "we would have one and be out of here."

"It Would Fundamentally Alter the Insurance Business"

I ASKED the congressmen to turn to another central issue: if individuals are subsidized to buy coverage from private plans, how do we protect people who have predictably high medical costs from sky-high insurance premiums that leave them shouldering the full burden of their own care? Everyone agrees that access to reasonably priced insurance for these unlucky souls should be a priority. How to go about achieving it is another matter. Chip Kahn, the head of the powerful Health Insurance Association of America, the industry's lobbying group, told me that insurers want a separate "high-risk" insurance pool, funded by broad-based taxation, to handle these people (as happens now in some states). Liberals say that such funds invariably mean lousy care, and prove that greedy insurers want only healthy customers who don't actually need insurance. Pete Stark is sharp in his response. "Let's cut the crap," a longtime aide told me he has said, and just redline. "You tell me, Chip Kahn, which healthy folks you want to make money off of, and which sick folks you want the government to take, and we'll cut out all the make-believe."

McDermott was warming to a similar rant when McCrery interrupted him. "I wouldn't have a high-risk pool," he said. "I'd just do community rating."

"Community rating" means that everyone pays the same premium, regardless of age, sex, or medical history. This is, of course, the liberal dream. Rates for decent policies in the individual market can easily top $10,000 a year for people with a history of health problems. Community rating, though controversial in theory, is actually widespread today. Employees of large companies enjoy it on a de facto basis, as health risks are spread among thousands of workers. It is the chief virtue of today's otherwise anomalous employer-based system, in which the United States, alone among advanced nations, looks to employers to manage most health coverage.

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