Seniors and Children First: The Future of Health Care Policy Begins with Medicare and SCHIP

| Fri Jan. 30, 2009 2:53 PM EST

When it comes to health care policy, the old and the young serve as the canaries in the coal mine, testing the political air for the rest of the population. If the new government isn't able to muster the guts--and the Congressional majorities--to improve access to health care for these vulnerable segments of the population, there isn't much hope for anyone else. On the other hand, if long-overdue changes to Medicare and the State Childrens Health Insurance Program (SCHIP) move forward swiftly, it could be a good omen for health care reform in general.

Some early signs give cause for cautious optimism: The new Congress has acted quickly on SCHIP, which gives states federal funds to help cover uninsured children who belong to relatively low-income families that nonetheless earn too much to qualify for Medicaid. Some 80 percent of Americans support legislation to expand funding and eligibility for SCHIP. In the past, such legislation has been twice passed by a bipartisan majority in Congress--and twice vetoed by George W. Bush.

Yesterday, the Senate succeeded in passing a bill increasing annual SCHIP funding by $32.8 billion, and expanding the program to cover 11 million children, rather than the current 7 million. The expansion will be paid for largely by a rise in the cigarette tax. The Senate earlier rejected two harsh amendments introduced by Republicans: one that would force some of the less impoverished families to contribute to plans costs "to stop the people moving from private plans … to a government-sponsored plan"; and one that would have limited states' ability to enroll documented immigrant children in the program. The Washington Post described the Senate debate as "rancorous"--but in the end, nine Republicans joined Democrats in voting for the bill.

Similar legislation had already passed in the House on January 14, and a final conference bill could be signed by President Obama as early as next week. Perhaps the most promising news is that the new SCHIP legislation is considerably better--more generous and more inclusive--than the two previous versions vetoed by Bush. A number of Republicans objected to this fact, accusing Democrats of double-crossing them on their earlier deals (as if that weren't what happened after every shift in party power).

SCHIP legislation has always enjoyed some bipartisan support. The same is not true of reforms to the Medicare Part D prescription drug benefit–-Bush's signature piece of health care legislation, which is in effect a massive handout of taxpayer dollars to the insurance industry and Big Pharma. So what happens with Part D is perhaps a more useful predictor of things to come.

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On Wednesday, House Democrats introduced a bill that would scale back some of the biggest rip-offs in Medicare Part D. One provision of the bill allows the Department of Health and Human Services to negotiate drug prices directly with pharmaceutical companies, instead of leaving it to Part D's 50-odd private insurance plans. This could knock down drug prices by 25 or 30 percent. The Bush-era law that created Part D expressly forbid such negotation, even though it has long been done in purchasing drugs for Medicaid and Veterans Administration. Bills to negotiate Medicare drug prices have been floated before, but failed to muster filibuster-proof majorities in the Senate.

The new House legislation would also create a government-run prescription drug plan to compete with the private insurance plans. This could force private insurers to improve drug coverage and bring down premiums and copays. Better still, it could drive their market share down toward oblivion--though they are not likely to give up such a prodigious cash cow without a fight. Real reform, of course, would entail and kicking private insurers out of the mix altogether, and running Part D like original Medicare, as well as further measures to bring the drug companies to heel.

And to place this all in perspective: Even after SCHIP expansion, there will still be an estimated 5 million children without health insurance. Meanwhile, the Medicare Rights Center has released a list of ten other actions that need to be taken to ensure "basic consumer protections under Medicare private health and drug plans." Then, of course, there are still the millions of uninsured, underinsured, and underserved Americans between 18 and 65 to be dealt with.

Some leading Democrats are promising to major progress on a broad health care reform bill in the Obama administration's first year. At a conference hosted by the advocacy group Families USA, House Energy and Commerce Committee Chairman Henry Waxman (D-CA) said on Thursday: "We need to get this job accomplished this year and get the bill to the president." According to The Hill, Senators Ted Kennedy (D-MA) and Max Baucus (D-MT), who chair key committees, have been drafting basic health care reform legislation for months. But House Majority Whip James Clyburn (D-S.C.) was less optimistic. Speaking on C-SPAN on Sunday, he invoked the ubiquitous spectre of the Clintons' failed effort at health care reform. "I would much rather see it done...incrementally, than to go out and just bite something you can't chew. We've been down that road. I still remember 1994."

SCHIP and Medicare are clearly the first steps in this "incremental" journey toward health care reform--but its ultimate desitnation is still unclear. These two programs--which for all their shortcomings, are still the closest thing we have to single payer health care--could become the models for wider reform, as well as its precursors. What remains to be seen, however, is whether the Democrats will content themselves with saving a few trees, while leaving the rest of the forest to burn.

This post also appears on James Ridgeway's blog, Unsilent Generation.