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Key health issues competing with tax cut

Seniors' drug coverage, insurance, patients'rights facing Congress

Sunday, February 11, 2001

By Rachel Smolkin, Post-Gazette National Bureau

WASHINGTON -- Democrats and Republicans are preparing to tackle three big health-care issues in a closely divided political environment where momentum for a sizable tax cut -- rather than for ambitious health-care reform -- is gaining strength.

Top health care priorities for Congress

Patients' Bill of Rights:

Efforts to guard patients against abuses by private health insurers failed in the past, but lawmakers and President Bush are optimistic about success this year.
A bipartisan bill would allow patients to sue private insurers in state and federal court for large damages.
Bush wants to allow lawsuits only in federal court, where damages tend to be smaller. He wants to limit damages and shield businesses that offer employees health coverage from lawsuits.

Prescription Drugs:

This was a campaign issue for many lawmakers but is contentious and expensive.
Democrats generally want to help seniors buy expensive prescription drugs by adding an immediate benefit to Medicare.
Republicans generally want to address prescription drug coverage as part of a broader Medicare overhaul that would open the program to the private sector.
During the campaign, Bush proposed letting seniors choose among a variety of plans that offer a drug benefit.

Health Insurance:

Expanding health-care coverage to some uninsured Americans could be the sleeper issue.
Interest groups that have battled each other in the past agree it makes sense to expand some government programs and add some new tax credits that target low-income working Americans.
Even incremental health-insurance expansion could fall victim to a lack of money as Congress focuses on other priorities, including Bush's $1.6 trillion tax cut.


President Bush and scores of lawmakers from both parties pledged during their campaigns to guard patients against abuses by private health insurers, to offer senior citizens help in buying expensive prescription drugs and to expand health coverage to millions of uninsured Americans.

But to become law, health-care proposals must compete for money with Bush's $1.6 trillion tax cut plan, survive attacks by a bevy of interest groups and triumph over partisan gridlock.

"There is essentially a one-year window of opportunity to get together on some of these issues," said Drew Altman, president of the Kaiser Family Foundation, a nonpartisan health policy research group. "There is the question of the clock ticking" toward midterm elections that generally stymie legislative activity, as members of Congress position themselves to look better on the issues than their rivals in the other party.

Here are two scenarios:

In the first, Bush succeeds in cultivating a new, bipartisan tone in Washington. Congress reaches deals on aiding seniors with the soaring costs of prescription drugs, offering an incremental expansion in health coverage and providing patients with some protection against abuses by managed-care providers.

The result: Congress enters the 2002 midterm elections touting progress on health issues that many of them campaigned on in 2000.

In the second, Congress deadlocks on sweeping Medicare reform, which Bush promised during the campaign, and runs out of time on the smaller proposals that might have generated bipartisan support.

The result: Congress enters the midterm elections with no notable accomplishments on politically appealing health issues. Each party blames the other for obstructing progress.

A postelection survey by the Kaiser Family Foundation indicates that any action on health issues will be viewed favorably, but the public has not focused on any single topic.

Thirty-five percent said they would most like to see a bill passed that deals with Medicare reform, one that provides prescription-drug coverage for seniors and makes Medicare more financially sound. Thirty percent put expanding health insurance as a top priority, with 16 percent choosing patients' rights in managed-care plans, and 14 percent opting for helping families with the cost of caring for the elderly or disabled family members.

Good chance for patient rights

Lawmakers and interest groups on all sides of the debate predict Congress has a good chance of reaching accord on a "patients' bill of rights" this year. The politically popular issue carries the advantage of requiring little federal money.

Congressional efforts to reach an agreement on patient protections stalled last year amid opposition by Senate Republican leaders, such as Don Nickles, R-Okla.

This year, "the Republican president is saying that he supports a strong patients' bill of rights," said Ron Pollack, executive director of Families USA, a consumer group in Washington. "It makes it more difficult for a Republican leader to take that position when the new president is saying he wants it."

Pollack also said failure to champion patient protections contributed to election losses by several GOP incumbents, including Spencer Abraham of Michigan, John Ashcroft of Missouri and Slade Gorton of Washington.

The stumbling block will be the right to sue. A bipartisan group in the Senate, led by John McCain, R-Ariz., and Edward Kennedy, D-Mass., wants to allow patients to sue managed-care providers in state courts for medical issues and in federal courts for administrative issues. Their bill would cap "civil assessments," similar to punitive damages, in federal courts at $5 million. Damages in state courts would be limited only by state caps.

Insurance and business groups already have dubbed the McCain-Kennedy bill a boon for trial lawyers, contending that it will spur an onslaught of lawsuits and inflate health-care costs.

Bush countered with his own "statement of principles" on patients' rights that would attempt to curb lawsuits and damages. He wants patients with grievances to go through an independent review panel and then be able to sue in federal court, where damages generally are more limited than in state courts. Bush also wants to shield employers from "unnecessary and frivolous lawsuits" and believes damages should be subject to "reasonable" caps.

Tax cut vs. health insurance?

Expanding medical coverage to at least some of the nearly 43 million Americans who lack health insurance may be the sleeper issue of the 107th Congress. Broadening health insurance has garnered scant attention during the first few weeks of the Bush administration. But during the campaign, Bush proposed spending $132 billion over 10 years to expand health coverage, primarily through new tax credits.

Opposing interest groups have signaled a willingness to compromise. In November, two rival groups that had clashed during the 1994 debate over universal health coverage released a joint plan to extend health insurance. The proposal by Families USA and the Health Insurance Association of America would offer new tax credits and expand some programs. It would target low-income workers.

The obstacle in this area is the clash between money and political priorities.

"This is one of the questions that goes back to the Bush tax cut," said Mark Mellman, a Democratic pollster in Washington. "Which is more important? A tax cut to the wealthy or providing health insurance to the uninsured?"

Republicans would rephrase the issue, emphasizing that just about everybody would pay less under Bush's tax plan, but they would acknowledge the trade-off involved.

Rough road for drug coverage

The third major health area, prescription-drug coverage for seniors, is politically appealing but highly contentious. It would require a significant federal investment, and Democrats and Republicans have very different viewpoints on how prescription-drug relief should be provided.

Democrats generally want to add an immediate benefit to Medicare that would help seniors pay for prescription drugs. They prefer to tackle Medicare reform after that benefit is in place.

Republicans generally want to address prescription-drug coverage as part of a broader Medicare overhaul that would incorporate the private sector.

During the campaign, Bush offered a $158 billion drug proposal over 10 years as part of a Medicare restructuring. His plan would let seniors choose among a variety of health plans that offer a drug benefit.

"I think initially they are going to try to do this as a restructuring of Medicare," Pollack said. "They are likely to get bogged down, and if they do, then there's a question of whether an incremental effort [on prescription drugs] will be undertaken and what it is."

But there are optimists even on the prickly issue of prescription-drug coverage.

Sen. Arlen Specter, R-Pa., said prescription-drug coverage "most logically" fits into a broader Medicare reform. But he predicted that "prescription drugs will be done, even if we don't do a Medicare overhaul."

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