Does Harry Reid Really Plan to Include a Public Option... and Just What Would the Option Be?

Check out the FreeStater blog for my take on Senate Majority Leader Harry Reid's latest expression of support for a "public option."

Richard Nixon: Health Reform Visionary

In 1974, President Richard Nixon addressed Congress on the issue of health care. Said Nixon “Without adequate health care, no one can make full use of his or her talents and opportunities. It is thus just as important that economic, racial and social barriers not stand in the way of good health care as it is to eliminate those barriers to a good education and a good job.”

Nixon went on to explain that the rising cost of health care placed too many American families in danger of being wiped out by a catastrophic illness. Our health insurance system was flawed according to Nixon because too many Americans were uninsured and unable to obtain insurance due to low pay, unemployment or pre-existing conditions and still millions more who had coverage lacked “balanced, comprehensive and fully protective” coverage.

To address the problems, Nixon proposed the Comprehensive Health Insurance Program (CHIP). Nixon pledged that CHIP would allow every American to obtain comprehensive insurance, that no American would pay more than he or she could afford, and patients will be free to choose their doctors. According to Nixon, CHIP would build on America’s existing private insurance market, promote effective use of health care resources, and use public funds only when necessary – all without requiring new taxes.

CHIP contained three key elements: Employee Health Insurance, Medicare, and Assisted Health Insurance.

• Employee Health Insurance – Employers would be required to provide health insurance to their employees, these benefits would need to meet minimum benefit requirements set by the federal government, and employers would be required to cover 75% of the cost of the insurance premium. There would also be a limit placed on annual out of pocket expenses.
•  Medicare – CHIP would reform Medicare to add coverage for outpatient prescription drugs and it would place an annual limit out-of-pocket expenses. Medicare would also be required to meet the same minimum benefit requirements established for employers.
•  Assisted Health Insurance – CHIP would have replaced the Medicaid program with a new federal/state program to provide health insurance to everyone not covered by Employee Health Insurance or Medicare. This program would also be available to those with pre-existing conditions who were unable to obtain care from private insurers. Premiums and out-of-pocket expenses would vary depending upon income with low income persons paying nothing. The program would have the same minimum benefit package as Employer Health Insurance.

Nixon argued that CHIP would require no new taxes and would save families money. To better control ever rising health care costs CHIP would rely on Health Maintenance Organizations that would end the days of fee-for-service medicine that incentivize the overuse of service and instead rely on prepaid arrangements with physicians and other providers. CHIP also would create Professional Standard Review Organizations (PRSOs), staffed by physician, an empowered to review best practices and find ways to reduce needless hospitalization.

Every person participating in CHIP would receive a Health-card. Modeled after a credit card, it would offer proof of insurance and provide information on blood type and any medical conditions or drug allergies that may be important to know in an emergency.

The Watergate scandal that ended the Nixon presidency also ended CHIP. Congress had no interest in considering comprehensive reform proposed by a President likely to be impeached.

But good ideas never die. Look to the legislation currently being considered in the House of Representatives or being debated in the Senate Finance Committee and you cannot help but see Nixon’s CHIP. Legislation in the House and Senate rely on employer mandates and establish minimum benefit requirements, the House legislation is likely to include a so called “public option” which is exactly what Assisted Health Insurance under CHIP was, both the House and Senate are proposing to create review bodies to promote efficient and effective resource use, both are likely to prohibit insurers from denying coverage based on pre-existing conditions, and both will rely almost exclusively on the existing private insurance industry to provide coverage.

There are some differences – Nixon wanted CHIP to be voluntary for individuals, no one was required to purchase insurance, but the House and Senate will likely include individual mandates. Neither the House nor the Senate will establish annual caps on out-of-pocket expenses for Medicare beneficiaries and prescription drug coverage was added in 2003 (30 years after CHIP proposed adding it). The House and Senate will also maintain the Medicaid program and in fact expand it. And HMOs have long since fallen out of favor – quite unfairly.

But these differences do nothing to diminish the fact that we are today engaged in a great debate over whether to at long last enact health reform first introduced by President Nixon in 1974. It’s not the first time, or even the second time, that we have considered CHIP – President Clinton’s Health Security Act, introduced in 1993, was essentially Nixon’s CHIP, right down to the health card and reliance on HMOs. Clinton dropped the public option and added an individual mandate, but otherwise it was very much CHIP.

So here we are in 2009 considering a reform first proposed in 1974… at what point does a proposal become too old to be deemed dangerous or radical? Nixon’s Comprehensive Health Insurance Program was a good idea in 1974 and it is a good idea today. We may never see single payer in the US, but we could move closer to the German model via the reforms currently on the table.

Hyper-Partisanship and the Weakening of Democracy

Charlie Cook at National Journal offers some great reasons for redistricting reform. From Cook: "When I first came to Washington in September 1972, Congress abounded with conservative and moderate Democrats, as well as liberal and moderate Republicans. These lawmakers provided the ballast that prevented their parties from going to extremes. They kept the Democrats from driving into the ditch on the left and steered Republicans away from the one on the right."

The lost center in American politics is poisoning our system and weakening our democracy. It turns legislating into a winner take all war rather than the exercise in compromise that our framers intended. When our representatives engage in this brand of politics it discourages moderate voters and emboldens partisan voters - the result being an even more partisan Congress. As Congress becomes so hyper partisan normal rules of procedures are ignored and bypassed. Sarah Binder and Michael Mann at Brookings have a great review of the 110 Congress and show that the use of restrictive rules of debate and amendment in the House, bypassing the normal committee process in the House and Senate, and simply ignoring the Conference process have become the norm. The practices were begun by the Republicans in 1995 and have only gotten worse.

These abuses of process reduce the minority party to a non-entity with little recourse but to serve as an obstructive force. The result is a zero sum game politics where each legislative battle is treated like an all out war. These legislative battles then influence the politics of the voting public. Republican and Democratic voters each view the other as a threat, one that cannot be tolerated, can never be accepted as legitimate. Anger and hate naturally follow. Ends justify the means politics ensue as each side views its policies as superior and noble.

The threat by the Democrats to use reconciliation to pass health care reform is just one more example of our poisoned politics. I have taken serious flak for my support of Max Baucus and his efforts to forge compromise health reform. To be sure, the Baucus plan is flawed and would not bring the fundamental reform we need. So why do I support it? Because Baucus has demonstrated a clear respect for the process of legislating. He has sought compromise and he is seeking a bill that can pass without bypassing the normal procedures of legislating. Baucus represents a Congress of a bygone age... and the best hope of bringing that Congress back. In the process, he may just save our politics. In the end, that is far more important than any one single piece of legislation.