Drew Altman, President and CEO of the Henry J. Kaiser Family Foundation
The Washington Post
November 2, 2009
MS. ROMANO: In your view, what must a bill have in order to be a step forward in health care reform.
MR. ALTMAN: Well, you know, we’re having this debate because the American people, average working Americans, became really worried about and are having real problems just paying their health care bills, and that’s having a real impact also on their family budgets and their ability to pay for other things, pay their rent and mortgage or put a kid through college.
We’ve forgotten a little bit that that’s where this came from. That’s why health got traction again as a political issue.
So the main thing I actually want to see–us health care people tend to talk about this in terms of health care goals, access to care and the quality of care. The first thing I look for is, is this legislation actually responsible–responsive in a meaningful way to the meat-and-potatoes pocketbook problems that average Americans are having, paying for their health care which brought us this debate in the first place. That’s number one for me.
MS. ROMANO: With President Obama trying to cap the cost of these plans at $900 billion over ten years, does that make the discussion about subsidies very important?
MR. ALTMAN: It is a really important discussion, and one of the things that’s happened is, as so much of the debate lately has focused on this hot-button issue [of] the public option. Flying under the radar screen and not getting as much attention are these bread-and-butter consumer issues about will the policies be affordable for people who now have to buy health insurance coverage, are the subsidies high enough, is the coverage that people are going to get going to be adequate.
And I think, as we get to two bills and then one bill that the country can really focus on and that people in the media can really focus on, that issue of the affordability of the coverage will rise to the surface and will become a really big issue.
MR. ALTMAN: I think the public option issue has diverted attention from lots of other issues, and I think this issue of affordability will emerge as a big issue. And there’s a tradeoff as they design this legislation between keeping the overall sticker shock, the price tag of the legislation down and the generosity of the subsidies they can give to people and the comprehensiveness of the coverage that people get, how high–how big those deductibles will be that average middle-class families are going to be asked to pay.
And that’s a very big issue. It’s going to be a big issue not just for the people who are in these exchanges, who get these policies, but for the American people generally who look at this and say is this a fair deal, is this a good deal for people who now have to have health insurance coverage.
I think this is the sleeper issue still. This affordability issue.
And it’s hard to understand. They’re focused on the public option. They haven’t gotten to it yet. So this issue of affordability, I think, is a sleeper issue because it’s complicated, hard to understand how coverage works, what an actuarial value is, how the subsidies work at different income levels, and because they’re focused on the public option. Everyone is so focused on the public option right now, but I think as they get to one bill that everyone can put under a microscope, then this issue of the subsidies and the coverage will really rise to the surface, and we’ll have a much bigger debate about that.
And that’s the consumer issue. It’s the real meat-and-potatoes consumer issue in this legislation.
MS. Romano: Is there a way to hold private insurers accountable on costs other than a government option?
MR. ALTMAN: Well, you know, there are comprehensive reforms of the insurance industry in the legislation, but the one thing they didn’t do in this legislation which was proposed in the Clinton health reform plan, which as we all know failed, they did not propose this time around caps on the increases in insurance premiums. They didn’t say, “Your premiums can only go up two times inflation in the general economy.” That–those–that kind of price controls or regulation, they just didn’t think that would work this time, or they didn’t think it would fly. Anyway, it’s not in the legislation this time.
So, no, there aren’t–I mean, one of the characteristics of the legislation this time is there are not strong controls over the increases that can occur in premiums in the future.
MS. ROMANO: Health care costs are a huge burden on American businesses. Are there enough incentives in these different legislations to help the businessmen pay for this, pay for it for employees, or are we fast approaching a point where businesses will be no longer offering health insurance to employees?
MR. ALTMAN: Well, it’s a big problem in this. The reason we’ve seen a sort of slow drip-drip-drip of coverage out of the employment-based health care system is simply that business can’t pay the cost any longer.
I did a projection the other day that showed that if current trends continue, in 20 years the average cost of a family premium could be 30,000 bucks a year. So we’re not on a good trajectory.
MS. ROMANO: Wow!
MS. ROMANO: Do you see a time when the U.S. will ever drift towards a single-payer system?
MR. ALTMAN: You know, I don’t know for sure, but I certainly think it will be a long time, and I know the single-payer people, you know, don’t like to hear that because they believe so strongly in that approach, but we’re at a point in time now when the approach is favored by the two wings, an all-market approach–people get a voucher, and they shop for themselves–and a single-payer approach are not in the cards.
And so what we’re really looking at, if you view it through that lens, is we’re looking at some form of a centrist deal that brings together elements that the right likes and that the left likes and builds on the existing system. It’s a little bit messy, but that’s all that can fly right now in our political system.
MS. ROMANO: Is the U.S. obligated to provide every citizen with health insurance–health care–let me ask that again. Is the United States obligated to provide health care to all of its citizens?
MR. ALTMAN: The way I would answer that question is to say that it is certainly something that we should do. And I don’t know anybody–you know, right, left, or center–who doesn’t believe that at some level. The debate is about how we get there, and, unfortunately, that debate about how we get there has been a really bitter and difficult debate in our country. And the tough part of it is, if you scratch beneath the surface and look at the difficult part of it, it is fundamentally about redistributing wealth in our country; that, ultimately, it means, as some of us who have more, have to pay, you know, a little bit more, so that others who have less can have health care. You can slice it and dice it a million ways with this kind of tax or that kind of mandate, but, at the end of the day, that’s what’s involved, and we don’t do that too easily in our country, too happily, or too willingly.
By Don McCanne, MD
Drew Altman is a very intelligent and very well informed advocate of a health care system that works well for all of us. His only handicap is that, as President and CEO of the Henry J. Kaiser Family Foundation, he must maintain his reputation as a highly credible but impartial voice on health care reform. That requires diligently negotiating his way through the minefield of Washington politics.
Setting ideology and politics aside, Altman makes it clear that wealth redistribution is absolutely essential if everyone is going to have the health care that they need. By far the simplest, most efficient, and most equitable method of doing that would be to enact a single payer system. But this is where ideology and politics enter.
How do you meld the ideology of single payer with the ideology of consumers shopping in a market of private health plans? After all, there’s that redistribution problem. The solution currently being advanced is to perpetuate the market of private health plans while superimposing government policies to achieve redistribution of wealth, without which it would be impossible to finance care for everyone.
The combination of private health plans and government policies requires a complex, difficult balancing act. Some of the variables that must be brought into balance include the package of benefits to be covered by the plans, the premiums to be charged for the plans, annual premium increases not limited by regulation, actuarial values of the plans, eligibility for the insurance exchanges, the value of the vouchers used to purchase the plans, the eligibility for the vouchers as related to income or as to wealth as some suggest, the size of the deductibles, copayments and coinsurance, financial support for out-of-pocket expenses, caps on yearly or life-time spending, payment for non-covered or out-of-network products and services, the variable contribution rates for employers, caps on federal and state budgets that limit the level of government funding, extensive corrections in the Medicare program, eligibility for and financing of taxpayer-financed Medicaid programs, financing the complex administrative services for a program in constant flux because of ever-changing eligibility status and contribution levels, balancing income taxes, payroll taxes, possibly VAT taxes, payroll deductions, taxes on health care products, taxes on insurance plans… (continue with your own additions to this list).
Once you have the full list, just try changing any variable and see what happens to the rest of the variables. What will be the most shocking is to observe what happens to middle-income Americans. They will be clobbered by health care costs!
The primary reason for these complex adjustments is that health care is now so expensive that redistribution is essential if everyone is to have the care they need. The private insurance market by itself is totally incapable engineering redistribution. Drew Altman says that this would be “a little bit messy,” and that, at the end of the day, we won’t do it “too easily, too happily, or too willingly.” But that’s as far as Drew Altman’s job description will allow him to go.
We are not so constrained. Soon we will have “one bill that the country can really focus on and that people in the media can really focus on; that issue of the affordability of the coverage will rise to the surface.”
We can take Drew Altman’s astute observations on “the meat-and-potatoes pocketbook problems that average Americans are having in paying for their health care,” and we can run with it. We know how to fix it, even if he can’t publicly endorse our model of an improved Medicare for all. When we succeed, Drew Altman certainly will be at least a little bit smug. Let’s go!