Comprehensive health reform will not happen in the near future. There is no money. There are lots of other priorities – financial stability, huge and growing deficits, energy, wars in two countries, nuclear proliferation and tax policy. There’s just no money, and not much bandwidth. Yet the Democrats will be highly motivated to do something meaningful, pressured by campaign promises and voter demands.
There may well be a solution that enables the Democrats to deliver on their commitment without breaking the bank, while laying the groundwork for more comprehensive reform if and when that’s feasible.
Access can certainly be addressed without additional funds, with support from both parties, and while it will almost certainly incite much wailing and gnashing of teeth within the health insurance industry, they’ll get over it. It would certainly help the several hundred thousand folks who are at risk of losing their employer coverage as the country slides into recession, not to mention those currently unable to obtain meaningful, comprehensive coverage at an affordable price due to a pre-existing condition.
A modest proposal
Congress could pass and the President could sign legislation prohibiting medical underwriting in the individual market, requiring insurers to cover pre-existing conditions, mandating community rating, and establishing a basic benefits plan. There are (at least) three mechanisms available to meet these objectives.
1. The legislation could require states to work with the National Association of Insurance Commissioners to develop model language that would meet these standards. (NAIC does this for lots of insurance types and policies today)
2. The Federal law could set forth minimum standards, while allowing states to require carriers in their jurisdiction to meet higher standards.
3. A new Federal regulatory body could be set up to ensure all insurance carriers comply with the standards set forth in the legislation.
To guard against ‘cheaters’ – the folks who wait till they get sick before signing up for coverage, the law should include a provision allowing insurers to increase rates for those that do not sign up within a time certain after they become ‘eligible’ for coverage. The increase would be pegged to the length of time the individual delayed obtaining coverage (similar to the way Part D works today).
Some will contend that this will drive up premiums for the young and healthy. No argument from me. That’s the way health insurance should work: some subsidize others, with the understanding that when that ‘some’ (or when their kids break bones or they get hurt) someone else will help them out. I don’t know if the increase will be so drastic that it will drive all the young healthies to drop their coverage; my gut says there will be some disenrollment, but it will be modest. I do know that after a period of moaning and groaning, insurers would find themselves competing not on the basis of how well they select risks and decline coverage, but on cost and benefits.
Now wouldn’t that be something?
Politically, it would be pretty tough for any elected representative to come out against the proposal. Who wants to be pilloried for preventing someone from getting coverage just because they lost their job or their employer stopped offering health insurance? Answer – only the most committed of libertarians.
(bad health wonk joke – what’s a libertarian? Someone with a chronic medical condition who hasn’t tried to get insurance in the individual market)
Access would be improved, those who actually need insurance could get coverage (albeit at a price) and everyone would be financially motivated to get coverage.
No, it isn’t perfect. But it is doable.

Most pollsters have Obama well ahead nationally and in the swing states, with Gallup reporting he has almost reached a double-digit lead.. And after last night’s debate, which Obama ‘won‘ handily more independents look to be behind his campaign (although if you watched the alternate-universe-dwelling wingnuts on Fox, you might not get that impression).
It is looking very good for Obama, and very bad for the Mav (the bettors have it Obama with a 73% chance of winning).
So, the Senator from Illinois wins. What does that mean for health care?
We’ve established that his big reform plan is not going to happen. And I couldn’t really take Obama at his word when he said last night that health reform would be his second priority after energy. Energy’s big, but health care is bigger.
Here’s what I’d expect we’ll see in 2009-2010 from Congress and the new President.
Expect the new political year to begin with incremental fixes to specific programs – The biggie will likely be Medicare physician compensation. With docs scheduled to see their reimbursement drop by around 20% in 2009, the caterwauling will be heard loud and clear inside the Beltway. Don’t look for a major policy change, but rather something to satisfy the physician community and build a little equity for the future. Where will the money come from?
Do not be surprised if CMS is expressly ordered to negotiate prices with big pharma in the near future. The Part D program is a budget buster, big pharma has few political allies (despite big contributions) and reducing the cost of drugs will save CMS budget dollars that can be spent on physicians.
SCHIP may be next out of the blocks. The expansion of coverage for kids is a central piece of Obama’s platform on health reform, and with a Democratic Congress the chances of meaningful expansion of this program are pretty good. And it won’t just be Democrats voting ‘aye’. After the back and forth battles, marked by confusion and consternation from Republicans who felt Pres. Bush threw them under the bus by vetoing a bi-partisan bill to extend SCHIP earlier this year, enough Republicans are likely to cross the aisle to support funding of a somewhat-expanded program.
Also on the table will be reduced funding for Medicare Advantage, a program that has long struck Democrats as a giveaway to big healthplans. Foolishly. the insurance industry worked hard, and effectively, to block reductions in MA this year. As Bob Laszewski notes, with Congress and the White House changing hands, the bill they stopped this year will look great compared to what they’ll get next. Expect MA subsidies to be slashed, in what could, and should, be seen as a shot across the bow of the insurance industry.
The FDA will also be under the microscope. Despite passage of the Food and Drug Administration Amendments Act of 2007, ostensibly fully funding the FDA and giving it the staff needed to do its job, the FDA continues to stumble. With a Democrat running the Administration, expect increasing oversight, much more post-approval monitoring, and much less tolerance for patent-extending gamesmanship.
What does this mean for you?
Obama is a very smart guy who knows enough to not try to do everything at once. Incremental steps mean progress towards reform – and are easier to accomplish, build consensus. momentum and working partnerships.

An article in this morning’s Politico.com asks if health care will reappear as a key issue in the election. If it doesn’t it’s because Obama has missed perhaps his best chance to hit Mc Aon where he’s most vulnerable.
Careful – and not-so-careful – readers of the candidates’ platforms will note that McCain’s has two flaws guaranteed to scare most independent voters; the elimination of employer-based health insurance and requirement that families seek coverage through the individual market. This last may well be more of a factor than the policy wonks and economists think, for the simple reason that families are used to getting their insurance issues handled by their employer. Whether it’s a problem with a claim, need for a new insurance card, issue with a precert requirement, or change in coverage status most Americans have turned to their employer for help.
I sold group benefits for several years, a job that meant I spent a good bit of time talking with HR staff about their employees’ questions and issues. The HR staff acted as an advocate for the insured, and the size of the employer’s business relationship with my employer ensured there issues got addressed quickly. And with minimal shouting from the insured.
Insurance is complicated and complex, hard to navigate for even those of us with secret decoder rings. Normal folks don’t want any part of dealing with their health insurer, and in today’s market they don’t have to.
All that would change if a McCain plan passes. Of course it won’t, but that’s not the point. The point is what his plan reveals about McCain. Here’s betting Obama brings these issues to the fore tonight.

There is no chance McCain-style health reform will happen.
None.
The hammer blows of crushing budget deficits and the complete failure of a deregulated financial system have ended the free-market, individual insurance movement’s chance of becoming reality. The death of the McCain model was inevitable, but the economic and political realities have saved us from the burden of tearing it apart through public discussion.
As hard as it is to believe, the plan, which would have covered fewer Americans, would have cost much more than rival plans that actually insured more of us. The Joint Committee on Taxation estimated the plan would cost $3.6 trillion over ten years (a mere $205 billion in 2009). (for the details click here) Cost-prohibitive to start, the plan is now so obviously unaffordable that McCain himself couldn’t rationalize its cost.
The McCain health reform plan’s other fatal flaw was its reliance on a deregulated individual insurance market. As Daniel Libit noted on Politico.com today, “In a 2003 interview with CNN, John McCain avowed, “I am a deregulator. I believe in deregulation.” Herein lay the fundamental problem with McCain’s proposal – its reliance on the free market to operate counter to its interests. Somehow the Senator believed that the ‘free market’ would figure out a way to cover people with heart disease, asthma, cancer, hypertension, and skin cancer (that would be McCain) at a price they could actually afford to pay.
Expect to see a lot less trumpeting of the wonders of the free market; even the folks at Cato have been quiet these days; perhaps they are stocking up on food and water as they prepare to hunker down and try to survive their own version of nuclear winter.
At least we didn’t have to describe in detail how McCain’s plan was awfully similar to Bush’s last feeble attempt at health reform, one that a GOP Congress couldn’t bring itself to consider.
If there is a silver lining to the credit market disaster, one of its threads is the demise of McCain’s ill-conceived and deeply flawed attempt at health policy.

I didn’t know whether to laugh or cry, or (more likely) become violently ill after reading this.
Here’s an excerpt from Katie Couric’s interview of Gov. Sarah Palin.
COURIC: Why isn’t it better, Governor Palin, to spend $700 billion helping middle-class families who are struggling with health care, housing, gas and groceries; allow them to spend more and put more money into the economy instead of helping these big financial institutions that played a role in creating this mess?
PALIN: That’s why I say I, like every American I’m speaking with, were ill about this position that we have been put in where it is the taxpayers looking to bail out. But ultimately, what the bailout does is help those who are concerned about the health-care reform that is needed to help shore up our economy [emphasis added], helping the–it’s got to be all about job creation, too, shoring up our economy and putting it back on the right track. So health-care reform and reducing taxes and reining in spending has got to accompany tax reductions and tax relief for Americans. And trade, we’ve got to see trade as opportunity, not as a competitive, scary thing. But one in five jobs being created in the trade sector today, we’ve got to look at that as more opportunity. All those things under the umbrella of job creation. This bailout is a part of that.
I kid you not.