WASHINGTON — Sixty years is how long Democrats say they’ve been pushing for legislation that provides health care access for all Americans. They’ll have to wait another three if President Barack Obama gets a bill to sign this year.
Under the Democratic bills, federal tax credits to help make health insurance affordable for millions of low- and middle-income households won’t start flowing until 2013. But Medicare cuts and a sizable chunk of the tax increases to pay for the overhaul kick in immediately.
The eat-your-vegetables-first approach is giving heartburn to some Democrats. Three years is a long time to wait for dessert, and opponents could capitalize on misgivings about the complex legislation to undo what would be a signature achievement for Obama.
“The real danger is that health reform could be vulnerable to what we see with the stimulus package,” said Democratic health policy consultant Peter Harbage, referring to criticism that Obama’s $787 billion economic plan hasn’t stemmed rising unemployment. “There needs to be more focus on what can you do quickly so that real people will start seeing change sooner, rather than later.”
Obama administration officials and Democratic lawmakers say the reason for the three-year wait is the time it’s going to take to set up insurance marketplaces, write consumer protection rules and reconfigure the bureaucracy to carry out the legislation. It took President George W. Bush’s administration two years to phase in the Medicare prescription benefit, a more modest undertaking.
There’s another reason, less talked about: to make the costs of the plan seem more manageable under congressional budgeting rules.
Lawmakers use a 10-year accounting window to assess new programs. Starting the Medicare cuts and some of the taxes in the early years — and pushing the bulk of new spending into the latter years — helps keep the cost of the health care overhaul within Obama’s $900 billion limit. Bush used the same kind of maneuver to push the Medicare benefit through Congress.
Senate Finance Committee Chairman Max Baucus, D-Mont., addressed rollout concerns in a recent news release captioned: “What You Get Right Away.”
Among the major short-term improvements in his bill would be a benefit for people on Medicare, who already have insurance coverage. Starting in 2010, those who fall into the Medicare prescription plan’s coverage gap would get a 50 percent discount off the price of brand-name drugs.
In 2011 and 2012, certain small employers with fewer than 25 workers could get a tax credit for up to 35 percent of what they contribute toward the cost of employee coverage. That could encourage some companies that don’t offer coverage to do so, but it’s more likely to shore up those who already do.
To answer Obama’s call for an immediate end to insurance company discrimination against the sick, Baucus would set aside $5 billion from 2010-2013 to help states provide affordable coverage to people denied because of a medical condition. The money would be apportioned to high-risk insurance pools that many states have set up.
The House Democratic bill tries to provide some immediate relief. For example, insurance companies could not cancel coverage just because a policyholder develops an intractable disease such as cancer.
Yet all of that has failed to make much of an impression on the Congressional Budget Office, which estimates that under the Senate Finance Committee bill, the number of uninsured will stay stuck around 50 million from 2010 through 2012, until federal tax credits start flowing the following year.
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