Defining government's role in healthcare

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NEWS ANALYSIS

Defining government's role in healthcare

A recent stalemate exposes the central issue of how far the government

should go in helping families. December 14, 2007

By Alonso-Zaldivar, Los Angeles Times Staff Writer

WASHINGTON -- When the year began, the expectation was that the new

Democratic-led Congress and President Bush would make some headway on

the problem many voters placed at the top of the nation's domestic

agenda -- healthcare for the uninsured and rising medical costs that

are squeezing the middle class.

Instead, lawmakers fell back into the old pattern of harsh partisan

rhetoric and stalemate. Congress and the president could not even

agree on expanding a popular health insurance program for children

that was up for renewal.

The failure to act underscores how hard the healthcare problem is to

deal with, and it puts the issue squarely in the laps of the

presidential candidates in both parties.

The debate over expanding the children's program uncovered the main

fault line in the discussion of broader reforms: how far government

should go to help middle-class families struggling to afford

healthcare. It also reaffirmed a key political lesson: Major changes

can't get accomplished in a divided government without support from

all the key players.

" A lot of people will say, 'If Congress couldn't pass legislation with

respect to children, how could we possibly go on to a broader effort

to fix healthcare?' " said Sen. Ron Wyden (D-Ore.). " But I am a

contrarian on this issue. I am still confident there is the capacity

to deal with healthcare on a broader basis, and both sides can secure

what they want most: Democrats making sure everybody gets covered --

because that's how you rein in costs -- and Republicans being able to

say, 'Look, the government is not running healthcare.' "

Though many Americans may not realize it, government is already the

dominant player in healthcare, with federal and state expenditures

accounting for 47% of the projected $2.3 trillion the nation will

spend this year. Indeed, many private insurers follow the lead of the

biggest government program, Medicare, in setting coverage policies.

Even if nothing changes, government will pick up more than half the

nation's healthcare tab by 2017. Universal coverage proposals from the

leading Democratic presidential candidates would advance that tipping

point to 2011, according to a recent analysis by the consulting firm

Pricewaterhouses.

Leading Republican healthcare experts acknowledge the trend toward a

greater role for government -- indeed, Bush himself accelerated it

when he signed the Medicare prescription drug benefit. But some of the

GOP experts say the goal now should be to find a balance that

preserves private insurance for most Americans workers and their families.

" If we are going to get to broad-based reform, it's not going to be

the model of government paying for most of it, " said health economist

Mark McClellan, who served as Bush's Medicare administrator. " Rather,

it's coverage that would provide help from the government but expect

real contributions from individuals, with partial subsidies at higher

income levels. "

In the deadlock over the State Children's Health Insurance Program --

known in California as Healthy Families -- the administration wanted

to focus on children in families making about $41,000 for a family of

four, or about twice the federal poverty level. Congressional

Democrats and some Republicans wanted to allow states to cover kids in

families making up to $62,000, or three times the national poverty level.

Raising tobacco taxes to pay for the expansion had widespread support

in Congress, although Bush was opposed to it. In its present form, the

program covers some 6 million children whose parents earn too much to

qualify for Medicaid, but too little to afford private coverage.

Back in the summer, some senior Republicans said they thought a deal

was within reach.

Sens. Orrin Hatch of Utah and E. Grassley of Iowa had helped

write the Senate version of the bill, a political compromise that won

a veto-proof majority in that chamber. Hatch suggested the dispute

could be resolved as such things are routinely handled: by splitting

the difference. And Grassley calculated that enough House Republicans

could be persuaded to support the Senate version to overcome the

president's opposition.

But the politics of the debate became too polarized, with Bush

suggesting that one relatively small program for children could put

the nation on a slippery slope toward government-run healthcare, and a

parade of Democrats lining up to condemn the president as heartless.

Some Republicans blamed House Democratic leaders, who, unlike their

Senate counterparts, decided to write a bill without consulting their

GOP colleagues. Later, despite last-minute overtures, House Democrats

were unable to secure enough Republican backing to override Bush's veto.

" I think it was an unfortunate lesson for the new leadership, that

when you play politics with an important issue it might fall apart in

the end, " said Rep. Bono (R-Palm Springs), who broke ranks with

her party to vote for the legislation Bush vetoed.

But other observers -- noting the strong support for the children's

program among Senate Republicans -- said the real political problem

was division within the GOP.

They suggested the healthcare deadlock parallels the impasse earlier

in the year over immigration reform.

" The debacle is not a partisan war between Democrats and Republicans

over how to cover children, it's a civil war within the Republican

Party over the role of government and health policy in general, " said

economist Len Nichols, director of the healthcare program at the New

America Foundation.

" The right of the GOP carried the day because it had just enough votes

in the House to sustain a veto. It may reflect the majority position

among Republican primary voters, but it's hard to believe it's a

majority position among the American people. "

This week, unable to override a second Bush veto, Democrats pulled

back, announcing they would go for a temporary extension of the program.

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