Posts Tagged ‘George H.W. Bush’

Healthcare Fight Could Be Settled by Stealing an Idea From Medicare

Tuesday, January 18th, 2011

The Obama administration may have a card up its sleeve in its battle against states’ attempts to have the new healthcare reform law declared unconstitutional.  Even if the Supreme Court ultimately rules that the federal government cannot require that individuals purchase healthcare insurance, the administration could borrow a strategy that Medicare has used for decades that encourages consumers to participate in new insurance groups.  Medicare coverage for physician visits is voluntary and is paid for by a separate premium.  Even so, 90 percent of Medicare recipients sign up for the plan because opting out when they become eligible carries a lifelong penalty that only increases the longer they resist.

The healthcare reform law could incorporate a similar penalty instead of the current mandate.  Such a move would persuade reluctant but healthy people to enroll in a healthcare plan.  The primary benefit is that this keeps premiums affordable because the law makes it impossible for insurers to refuse to treat sick people.  “It wouldn’t be a nirvana solution,” said Chris Jennings, a health policy consultant who advised President Bill Clinton and Hillary Clinton during their 1990s push for healthcare reform.  According to Jennings, the current law covers more people at lower cost, although “it would be irresponsible not to try an alternative” if the courts overturn the legislation.

Gail Wilensky, who ran Medicare for President George H. W. Bush, described the ploy as “mandate lite”.  A modification of what is done with seniors on Medicare would be a much more powerful tool.  You don’t have to buy insurance.  But if you don’t, the first time you come in, we’re going to add a penalty that you’ll have to pay for the next four or five years.”

The case is likely to be tied up for years in more than 20 lower federal and state courts before it potentially reaches the Supreme Court.  In the meantime, provisions of the law will be phased in.  President Obama is firm in his belief that the law will be proven constitutional and that the possible fallback plan will not be necessary.