Health care debate should face central issues

Sen. Max Baucus of Montana has introduced a health care bill designed to gain enough support to pass the senate, but no Republicans and not all Democrats have signed on as yet.

The main thing missing that President Obama might like is a government option for heath insurance; the bill does include nonprofit insurance cooperatives in every state, something the Congressional Budget Office said "seems unlikely to establish a significant market presence in many areas of the country."

The bill is the lowest cost of the five major health care bills moving through Congress, at $774 billion over 10 years, compared to $1 trillion or more for the other plans. It would still leave 25 million people uninsured, about a third of them illegal immigrants, compared to about 46 million now uninsured.

Other points of the Baucus plan:

* It requires most of us to have insurance, and offers limited subsidies to help low- and middle-income people buy insurance, but some Democrats think health insurance would still be unaffordable.

* It would impose a new excise tax on gold-plated insurance policies costing more than $8,000 for individuals and $21,000 for families.

* It would not require employers to offer coverage, but those with 50 or more workers would have to reimburse the government for some or all of the cost of subsidies provided to employees who buy insurance on their own.

* It would significantly expand Medicaid, and substantially reduce Medicare payments to hospitals, managed care plans and other health care providers.

Nebraska Gov. Dave Heineman has already chimed in on that latter point, calling it an unfunded mandate burdening the states and forcing cuts in aid to education. Plus, any cut in Medicare payments to hospitals could only hurt health care in rural Nebraska.

What shouldn't be lost in the debate, however, is the central point that any plan should address: Health care costs have been climbing too quickly.

According to a background brief by the Kaiser Family Foundation, Americans paid $2.2 trillion for health care in 2007, more than three times the $714 billion we spent in 1990 and eight times the $253 billion we spent in 1980.

The current amount figures to $7,421 per resident and 16.2 percent of the nation's Gross Domestic Product. Although the rate of growth, 6.1 percent, was slower than recent years, it still outpaced inflation and growth in national income. That $7,421 per resident and 16.2 percent of GDP is higher than most industrialized countries

What is driving health costs? The report cited:

* Expensive new drugs and technologies, for which companies must recoup costs and which consumers may demand, whether or not they are cost-effective.

* Longer life spans and more chronic illnesses.

* The number of aging baby boomers who will soon be eligible for Medicare, although this idea is under dispute.

* Administrative costs, which it is estimated account for at least 7 percent of health care expenditures

Whatever we do about health care, let's hope partisan wrangling doesn't prevent us from addressing the central issues.

The Kaiser Family Foundation report is available online.