Why Does the House Push Off Full Reform Until 2013?

It is the single most frequently asked question I get about the new House bill, HR 3200:  why doesn’t it make its major push to expand coverage until 2013?  The top two bullet points on the House bill’s summary call for the creation of a Health Insurance Exchange and a public health insurance option.  Yet according to a document obtained by The Treatment’s Jon Cohn, those elements won’t be open for business until Year Four.  What’s going on here?  And what can we expect to get right off the bat to make the health care we currently have better for the insured and uninsured alike?

My own guess is that we’re looking at two real problems of U.S. health care at work – one policy based, the other political.

The policy reason for delaying before opening up a Health Exchange where the uninsured and small businesses alike could purchase standardized, transparent and comprehensive plans – and where all businesses would be able to purchase plans by 2015 – reflects the state of our workforce, and the experience of Massachusetts.  Giving everyone coverage does not guarantee there are adequate physicians, health care providers and facilities.  In fact, we know there’s not -- shortages, particularly in primary care, are noticeable even today.  Massachusetts, for all of its physician density, had rather lengthy wait times for a doctor’s appointment even before it pushed its reform.  But once hundreds of thousands of people suddenly had coverage and began calling around, it could no longer be ignored.

The same is true of the U.S. as a whole – particularly if the legislation pushes primary care and prevention as much as the House bill, we’re going to hit a real snag waiting for enough primary care providers to tend to the 37 million+ who suddenly have coverage.  Looking at the accomplishments scheduled for 2010-2012, they focus disproportionately on provider development:  eliminating the SGR fix in Medicare;  increasing primary care reimbursement for Medicare and Medicaid; more funding for the National Health Service Corps for primary care; and jump-starting the programs designed to increase our supply of doctors and nurses are all Year One (2010) priorities.  Even the items unrelated to workforce development all have to do with delivery system reform.  Community health centers get their investment right away, since they’re going to be important in the delivery of care in rural and out-of-hospital settings.  Administrative simplification by regulation and Health IT start up right away.  Programs to ramp up preventative care start right away.  In fact, the delivery system reforms are the only piece of the puzzle that would all get accomplished in year one! Given the years that it takes to develop primary care doctors and even nurse practitioners, that still won’t be enough time.  But any head start is a necessary one to prevent a dysfunctional disconnect between supply and demand.

And let’s be real about the political reality – these are also the immediate reforms that will most likely be noticed and appreciated by those who are quite happy with their insurance coverage, but would like to see their health care improve and become cheaper.  Seen in this light, instituting regulations against rescissions in Year One also make sense.  Year Two regulations requiring all insurers to spend a minimum at least a fixed percentage on medical care makes sense.  And, unfortunately, so does pushing off the regulations against discrimination against pre-existing conditions and out-of-control individual rating until Year Four.  The number of people affected by the last category of regulations is much smaller than those who will notice and appreciate the first two.

Of course, there’s one other political consideration that may be at work – and it has nothing to do with the improving the delivery system.  Many have speculated that the timeline is back-loaded to keep the major costs and the CBO score down – no subsidies for insurance until Year 4 means the budget projection is only for 6 years of subsidies, not 10.  That doesn’t entirely make sense to me just because most of what does get accomplished in the intervening years will itself be very expensive.

I have another theory.  From the minute I heard the 2013 timeframe, I immediately remembered possibly the most memorable question from the Democratic presidential debates of 2007 – when the late, great Tim Russert asked all the candidates if they would commit to having all troops out of Iraq by 2013.  The year is the same.  Of course, it’s the year after the next Presidential election, and one in which a successful re-election campaign could also lift Democratic majorities in Congress.

We won’t know how likely that is until 2011-2012.  But this is a Congress that lived through the messy, years-long implementation of Medicare Part D, widely derided as a fiasco.  They don’t want to be running for re-election in 2010 while setting up a large bureaucracy like the Health Exchange, particularly if the hopes of reformers proves more accurate than the CBO estimate and people make a beeline for the public health insurance plan.  And as we learned last time, the presidential race really starts the year before, which would be 2011.  If you think I’m being too cynical, look at the proposed accomplishments for 2012.  It basically translates to “we’ll tinker with Medicare a little bit, but not so anyone would notice.”  It’s also the only year where only one stinkin' accomplishment will be attempted.

Of course, the robust nature of the Exchange, its regulations against private insurance within and without, the competition for the public plan, the employer mandate, the individual mandate, small business credits, etc. will cause an explosion of change in 2013.  In 2015, any business can buy from the Exchange.  In 2018, all employer-based insurance will have to be as good as what’s offered in the Exchange, and we’ll finally truly have a national standard for health care benefits where your level of coverage won’t have anything to do with whether your insurance is public or private, from your boss or from your Uncle Sam.  This is still the most robust bill that has a chance to pass Congress this year.

But it’s ironic that for the first three years, the benefits will disproportionately go to those who already have coverage.  It’s especially ironic that so many of these folks are the same people who look at something like the public plan and ask, “What’s in it for me?”

(Photo credit:  AlaskaTeacher on Flickr.)