Momentum Builds for U.S. Role in Paying Highest Health Costs | NYT | 10.23.04
Senator John Kerry is pushing the concept, and so are some Senate Republicans. That is why lawmakers and lobbyists say that regardless of who wins the presidential election, Congress will soon take up the idea of fighting high health insurance costs by shielding employers from the most expensive medical cases.
In seeking to rein in the costs of the runaway insurance premiums paid by employers and their workers - nearly $520 billion this year and rising - politicians of both parties and some business groups are pushing an idea known as reinsurance. Such an approach might take its place alongside existing federal reinsurance programs, like the ones for floods and other natural disasters, or for the damages that might result from acts of terrorism.
Although Mr. Kerry’s proposal calls for a much larger government role than a plan recently floated by the Senate Republican leader, Bill Frist, the goals are similar: to reduce the financial burden on employers when their workers’ medical bills rise above a certain threshold. …
Dr. Frist has referred to it as a “national publicly chartered, privately run ‘Healthy Mae.’” …
“This would help insurers more broadly share risk, reduce administrative costs and create a vibrant secondary market for health insurance, just as we have done for home mortgages,” Dr. Frist said. …
Jeff Lemieux, an economist and health policy analyst for the insurance industry, said the Kerry and Frist proposals had similar goals. “In essence,” he said, “Frist’s Healthy Mae proposal is a public-private version of Senator Kerry’s direct-subsidy idea. But Healthy Mae would probably be less expensive than Kerry’s direct subsidy proposal, and it would be less likely to lead toward government regulation of health benefits.”
Megan E. Hauck, deputy policy director of Mr. Bush’s re-election campaign, said that if the government shared the cost of the most expensive cases, it would inevitably scrutinize and try to regulate the care it is paying for.
“If the federal government helps pay for costs above a certain threshold, it will look at every claim above that level,” Ms. Hauck said. She predicted that the government would then demand answers to many questions: “What counts toward the threshold? How did you meet the threshold? Why does your surgery cost more in one area of the country than in another?”
Some form of reinsurance makes very good sense, and because of the bipartisan support it will survive 11/2. A state version of a national “Healthy Mae,” see New York’s Healthy NY.