More Bruises for Health Care

Hopes for broad reforms of the American health- care system in the near future have been dimmed by the lack of consensus in the U.S. Bipartisan Commission on Comprehensive Health Care, the so-called Pepper Commission. It is a setback that could have painful consequences for the 37 million Americans without health insurance and the thousands of older Americans impoverished each year by the cost of long-term nursing-home care.

Collapse of the effort at the national level coincided with a setback for a California plan drafted by the staff of Gov. George Deukmejian that would have mandated employer-provided health insurance. The governor disassociated himself from the plan when a state task force couldn’t agree on any one approach to accomplish the insurance program.

The reason for both setbacks is simple--lack of money. President Bush reaffirmed his opposition to any new taxes in connection with the federal effort. Republican lawmakers on the commission apparently agreed and opposed the final report. The Democrats, while supporting a new insurance plan, offered no details on how it might be funded. In the state plan, the burden of expanded care was to be placed largely on employers, with additional funding coming from shifting existing revenues and programs, a task made difficult by the lack of agreement on how to keep costs down.

But at least both the federal and state studies have advanced along the debate over how to solve the worsening health-insurance crisis. The federal study underscored the realities of cost--$66 billion in additional federal taxes to achieve basic reforms. The state study won important concessions from the health-insurance industry while establishing some sensible standards for basic health care. Furthermore, at both levels there was broad agreement on the problems: the risk for all in denying access to health care to so many, and the devastating cost of institutional nursing care, now running at $25,000 or more a year. That prohibitive cost places thousands of persons with disabling illnesses, not just seniors, at risk of financial ruin.

Rep. Bill Gradison (R-Ohio) was one of the national commission members who voted against the Pepper Commission report that proposed a new federally backed long-term care program and health insurance for all Americans. Gradison emphasized an often neglected fact: Medicare and Medicaid fail to do what they were intended to do-- provide adequate health care for the poor, the disabled and the elderly.

Gradison’s own remedy would be reallocation of existing resources, including a cap on tax credits for health insurance, with the savings directed to fund new programs. Tinkering with existing public programs, or placing a vastly increased burden on employers, are attractive proposals at a time when there is widespread resistance to additional taxes.

Unfortunately, however, such proposals perpetuate a myth that there may be a cheap and tax-free solution. As the Pepper Commission report made clear, there is no inexpensive solution.

To keep matters in perspective, one needs to measure the cost of reform, whatever that may be, against the fact that Americans are currently spending about $1.5 billion a day--yes, each day--on health care in a system largely without cost containment and weakened by unnecessary procedures. Compared with the status quo, the cost of reform will most likely turn out to be a bargain.