Analysis: Paring back health care not so easy

WASHINGTON - Trimming back the 2,000-page, trillion-dollar Democratic health care bills to the parts that average folks understand and like may not be as simple as it sounds.

A complete ban on insurance companies denying coverage to people with medical problems would be out of the question. Forget about guaranteed health insurance for all Americans - it costs too much. Still, Congress might be able to craft legislation that takes some rough edges off today's coverage problems and makes progress in controlling costs.

That's if Democrats and Republicans can call a truce.

Republicans, who for months have been urging "commonsense" alternatives to the Democrats' sweeping overhaul plan, may still be unwilling to help pass anything that lets President Barack Obama claim an election-year victory. They'll have 41 votes in the Senate to block it once Massachusetts' Scott Brown is seated.

Yet the nation's health care system is unlikely to heal itself. The number of uninsured will rise above 50 million unless government steps in, while ballooning costs could leave the baby boom generation with a bare-bones Medicare.

"The problems that exist in our health care system are real problems," said Sen. Jeff Bingaman, D-N.M., a moderate who has worked to find compromise with Republicans. "It would be unfortunate if we were to just set aside significant health care reforms."

Obama has suggested shifting the focus to popular proposals like banning denial of coverage to those with medical problems. That particular fix is unlikely because it would encourage people to put off getting insurance until they're sick, driving up premiums for everybody else.

"In health care, everything fits together," said Sen. Jay Rockefeller, D-W.Va. "It's very hard to say we can cut this out and do that." Banning pre-existing condition denials would have to go hand-in-hand with coverage for all.

Still, some limitations on health insurance companies are feasible, said Mark McClellan, who served as Medicare director for President George W. Bush.

"There is a starting point," McClellan said. "There is a way to do something meaningful without going to requirements for coverage and trillion-dollar subsidies."

On McClellan's short list would be a ban on denial of coverage to children with medical problems, forbidding insurers from canceling the policies of people who get sick, and limiting in some way what the companies may spend on overhead and profits instead of direct medical care.

Other possible insurance fixes include eliminating lifetime dollar limits on coverage and allowing children to stay on their parents' coverage into their late 20s.

Such changes could be combined with federal funding for high-risk insurance pools to provide affordable coverage for people in poor health shut out of the private market. Obama supports risk pools, as does Sen. John McCain, the 2008 GOP presidential candidate.

Another bipartisan idea is tax credits to help small businesses get and keep coverage. A modest expansion of Medicaid to help low-income working people isn't out of the question. Both ideas are already in the legislation.

Notably, individual components of the Democratic megabills are far more popular than the whole, according to a poll released Friday by the nonpartisan Kaiser Family Foundation. Seventy-three percent of Americans support small business tax credits, and 62 percent back a Medicaid expansion. Allowing dependent children to stay on their parents' coverage until age 25 got 60 percent support.

Such steps could help many who now lack coverage, but that would leave holes in the safety net.

On cost-control, incremental improvements also are possible.

There is broad agreement that the way Medicare currently pays hospitals and doctors rewards high-volume, low-quality care. Shifting Medicare payments to make providers more accountable for whether the patient ultimately gets better could have a positive impact throughout the health care system. The Democratic bills would launch a series of experiments aimed at getting good quality care at lower cost, and those could be incorporated into a scaled-back bill.

Alternatives to medical malpractice litigation also could yield savings. The Congressional Budget Office, reversing a previous analysis, says curbs on jury awards in malpractice cases could save the government $54 billion over 10 years by reducing defensive medicine.

It's too early to tell whether Democrats will embrace the smaller-is-better route, much less get it through Congress in the current political climate.

"The well has been poisoned," said Robert Laszewski, a health industry consultant. "The Republican base is not going to let any Republican senator take Democrats off the meat hook they are on now."

Still, for Democrats, there is a hopeful precedent. After the Clinton-era health overhaul imploded in 1994, Democratic and Republican lawmakers coalesced around the idea of a new health insurance program for the children of low-income working parents. That program, still thriving, now covers about 6 million kids.