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5 Health Reform Proposals Obama Should Offer In The State Of The Union Address

By Igor Volsky on January 24, 2011 at 12:10 pm

"5 Health Reform Proposals Obama Should Offer In The State Of The Union Address"

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Early reports indicate that while President Obama will defend the health care law in tomorrow’s State of the Union Address, he will also reach out to Republicans to suggest that he is open to revisiting, improving, or even tweaking certain parts of the legislation. As HHS Secretary Kathleen Sebelius told The Hill on Friday, “I hope that we can work together around some areas where the bill can be improved, or we certainly make it better, but recognize that this is the new platform,” she said.

Over the weekend I asked various health care experts — including Len Nichols, Director of the Center for Health Policy Research and Ethics at George Mason University, John Holahan, Director of the Health Policy Research Center at The Urban Institute, and Harold Pollack of the University of Chicago — to identify what those areas are. What follows is a synthesis of their suggestions: five ways Obama can work with Republicans to improve the health law:

1. Propose serious national malpractice reform:

Len Nichols suggested that Obama and Boehner “should jointly appoint a commission with the power to make recommendations — if 2/3 of them can agree — that will become law in every state unless 2/3 of each state legislature (both houses, save in Nebraska) votes no (if they do vote no, that means they like their current deal better than new one. Couple of states might do this, legitimately).”

John Holahan also argued that malpractice reform may be an area ripe for bipartisan compromise. As a senator, Obama co-sponsored Sorry Works legislation that would have given physicians who disclosed their errors “certain protections from liability within the context of the program, in order to promote a safe environment for disclosure.”

2. Embrace “across state lines”:

Len Nichols saw some validity in the GOP’s suggestion that insurers should be allowed to sell across state lines but cautioned that if Obama were to pursue this policy, “we do it on PPACA’s base of a common framework — a reasonable national floor — for insurance market reforms.” “Without a common regulatory framework, as Republicans normally propose this, selling insurance ‘across state lines’ is less about competition that helps consumers than it is about allowing insurers to pick their regulator so they can cherry pick the healthy and drive those who can’t switch domiciles — the non-profit Blues, local HMOs — into adverse selection/death spiral hell.” “Emphasize your desire to make insurance markets work for CONSUMERS, including small business owners, rather than for insurers as does the status quo,” Nichols suggested. “Again, this would show you’re willing to listen to Republicans and compromise, but they’ve got to be realistic about the way insurance markets actually work for real people.”

3. Offer states greater flexibility:

Harold Pollack argued that finding ways to “free more resources for fiscally-challenged state governments would be quite valuable. Extending Medicaid subsidies embodied in the stimulus would provide essential help to state governments, while reducing the potential for further punishing layoffs during a deep recession.”

John Holahan said that states have reason to complain about the law’s requirement to maintain Medicaid eligibility for all populations and hinted that Obama could offer states some leeway in limiting the program to optional populations.

Len Nichols suggested that Obama should embrace the spirit of Wyden-Brown: “if you can come up with a way to cover as many, (roughly) as comprehensively, by all means let’ talk, say we’ll entertain your proposal before enforcing PPACA entirely from DC.” “The truth is the scale of Medicaid enrollment increases — especially in southern, red states — is huge, and many politicians are leery of adding so many to a program that already is the number one budget problem in most states. If they’d rather put more in the exchange, with perhaps lower benefit packages than we would all like (and progressives dream of) but which those low income non-pregnant adults have no hope of getting now, why fight that if that will help PPACA get over the hump of broader acceptance and embrace? Along those lines, at a minimum offer to phase in Medicaid expansion if individual states prefer. Forty-eight to fifty states will, I bet you,” Nichols said.

4. Do more to control health spending:

“The biggest traction the Republicans gained with independents in the 2010 elections has to do with budget/fiscal/debt worries,” Len Nichols argued. “We can argue about CBO scoring vs. Holtz-Eakin exaggerations until we’re blue in face, but the key thing now is to show you hear the fears and you are taking steps to mollify them. So, embrace a budget ‘failsafe’ trigger, that would slow down coverage expansions or scale back future generosity of premium/cost-sharing subsides if Medicare/delivery system reforms fail to generate savings CBO scored. CBO was so conservative you’ve got more leeway than you think, your CMS/HHS team can make mid-course corrections in delivery and payment reform to work better over time as well, but mainly what this does is protect the future fiscal balance from an ‘unfunded’ liability which is what independents fear PPACA is,” Nichols said.

5. Decrease burden on businesses:

Harold Pollack suggested that Obama should ask Republicans to pass legislation addressing the 1099 reporting requirement provision, while noting that the party filibustered previous efforts “so that they could run on this as a campaign issue.

John Holahan argued that the penalty for employers who don’t provide coverage but have one full-time employee receiving insurance through the exchanges may be too harsh, and that it may make sense to reduce the fine. Under the law, employers with more than 50 employees would have to pay a fee of $2,000 per full-time employee, excluding the first 30 employees from the assessment. Employers with more than 50 employees that offer coverage but have at least one full-time employee receiving a premium tax credit, will pay the lesser of $3,000 for each employee receiving a premium credit or $2,000 for each full-time employee.

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