The virtue of this proposal (scheduled for Senate debate this week) is its modesty. There’s nothing wrong with constructive tinkering. We’ve had enough of grand reforms, which promise much and deliver little. They will never create our ideal health-care system: one that provides all the care people want without huge costs or intrusive controls, from either government or business. That system is impossible; too many of its goals collide.
Consider recent experience. Since 1992, health spending has slowed sharply. The uninsured population has stabilized. In 1994 it was 15.2 percent of Americans, down slightly from 1993’s 15.3 percent. Good news? Well, yes. But our collective applause meter has barely registered. Instead, complaints have shifted to managed care – the main mechanism for cost control. Critics say that it squeezes spending by denying needed care; champions counter that it emphasizes preventive care. Maybe it does both.
The real point is that there’s a constant tension among our many goals (higher insurance coverage, lower costs and unlimited patient and doctor choice). Kassebaum-Kennedy conforms to this moral ambiguity. It doesn’t promise to be everything to everybody. In the main it would accomplish two things.
First, it would enhance insurance ““portability.’’ Workers could change jobs more easily, because insurers offering group policies (including managed-care organizations) couldn’t impose sweeping restrictions for pre-existing health conditions – say, heart disease. Under Kassebaum-Kennedy, restrictions couldn’t last more than a year. Also, people would receive credit for being in a group policy. Someone covered more than a year at an existing job would instantly qualify for coverage at a new job. The idea is to end “job lock”: staying put for fear of insurance loss.
Second, Kassebaum-Kennedy would provide a safety net for people (and their dependents) who lost employer-paid group coverage altogether. These people would now have a right to buy an individual policy. That would create a fallback for anyone who gets fired or wants to leave a job.
These are good ideas, but how many people would benefit? Probably fewer than you think.
No one really knows the extent of job lock. By one survey, 30 percent of Americans say they’ve stayed at a job to keep their insurance. But Kassebaum-Kennedy wouldn’t eliminate the main causes of inertia: the possibility that a new employer doesn’t offer any insurance or, alternatively, that coverage is much less generous. Moreover, the 30 percent figure is probably wildly exaggerated. A study by economist Douglas Holtz-Eakin of Syracuse University found little evidence that insurance fears have reduced job mobility.
He could be right. Job hopping is most common among younger workers who are healthier and less worried about insurance. Middle-aged and older workers, more concerned about their health and insurance, don’t switch as much. Some states have also limited pre-existing-condition requirements, and some group insurers don’t have them. The Congressional Budget Office estimates that the new curbs on pre-existing conditions would expand insurance coverage for about 400,000 people annually. That’s important for them, but they’re less than 0.4 percent of those with private insurance.
Nor would Kassebaum-Kennedy extend individual insurance to most of the uninsured. Only people who had first lost group policies would have a right to buy. This would exclude most of the 40 million uninsured Americans, who haven’t had employer-paid coverage. Cost is another obstacle. Those who qualify would have to pay for their insurance; annual premiums could easily total between $3,000 and $6,000 for a family. The CBO thinks only about 150,000 people a year would buy coverage; the Health Insurance Association of America, a trade group, puts the figure at 1.6 million. Either way, it’s a tiny fraction of the uninsured.
The hoopla attending Kassebaum-Kennedy reflects politics: both President Clinton and Republicans yearn to ““do something’’ on health care. Their claims for this reform will inevitably be overblown. In truth, no one knows how it would work, because many details – including the rates insurers could charge – would be left to states. The CBO assumes that states would permit insurers to charge above-average rates for new policyholders with higher health costs. By contrast, the insurance companies fear that premiums would be held down and that the extra costs will be shifted to the 5 to 8 percent of Americans who now buy individual insurance through higher premiums on them.
Somebody has to pay. It’s impossible to avoid messy conflicts. Health care engages an unending series of awkward ethical, economic and political choices. Universal coverage? Sure. But then, what treatments and therapies are covered? Who pays? How are costs controlled? As Clinton learned in 1994, there’s no consensus on any of these questions. And anything less than universal coverage leaves ample cause for complaint.
What this means is that ““health reform’’ is a permanent condition, because it confounds any seamless solution. In this sense, the restrained ambition of Kassebaum-Kennedy is a worthy model for the future. It would do some good without risking much harm. Both the president and Republican leaders subscribe to the basic approach; but a House-passed version of Kassebaum-Kennedy contains some provisions the White House opposes. It would be a pity if Clinton and Congress can’t resolve these differences. This legislation isn’t exciting, but then again, good government often isn’t.
