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Obama needs to find his backbone on healthcare reform

After backing off from a 'public option' and settling on extending coverage to 30 million of the nearly 50 million uninsured, he's apparently content to let each state set policy and price standards.

January 09, 2012|David Lazarus

It's wrong to call the president of the United States a weenie. So I'll just say instead that perhaps President Obama could show a little more spine when it comes to healthcare reform.

Sure, he flexed his muscles last week with the recess appointments of new consumer and labor regulators. But on the healthcare front, Obama has backed off from a "public option" for people who don't receive coverage from their employer.

He's settled for extending health insurance to an additional 30 million people when in fact the number of uninsured is closer to 50 million.

And now the president has apparently decided to avoid a bruising fight over how much coverage insurance companies should provide, and at what price, when so-called online exchanges open for business in 2014.

Rather than have the federal government guarantee that certain standards for policies and pricing are met nationwide — ensuring that all Americans receive equitable coverage no matter where they live — the White House says it's content to let each state call its own shots.

"Our approach will protect consumers and give states the flexibility to design coverage options that meet their unique needs," said Kathleen Sebelius, the secretary of Health and Human Services.

It might do that.

But it might also create regulatory confusion as healthcare standards potentially differ in all 50 states. It might give businesses more clout in lobbying to offer as little insurance to employees as possible. And it might squander the savings that could come through consistent coverage and pricing on a nationwide basis.

"You can be a Jeffersonian and say that states would have a better perspective on what people need in a benefits package," said Mark Pauly, a professor of healthcare management at the University of Pennsylvania.

At the same time, he observed, "the federal government may have more countervailing power against special interests than the states."

So it comes down to the same ideological divide that's characterized the healthcare debate from the start: whether the federal government is in the best position to make sure everyone's covered, or whether this is best left to local authorities and the marketplace.

To me, that question has already been answered. The failure of local authorities and the marketplace to provide affordable and accessible health coverage is clearly demonstrated by the tens of millions of people who lack health insurance in the richest, most powerful nation in the world.

And for those who do have coverage, chances are they're paying more for medical treatment than people in other developed countries.

The United States spends about twice per person for healthcare than the likes of Germany, France and Britain, according to the Organization for Economic Cooperation and Development. Yet our life spans are shorter and our infant mortality rate higher.

For all the talk among conservatives about the U.S. healthcare system's being second to none, those are some pretty eye-opening data points.

Ours is one of the few developed countries without a healthcare system that guarantees coverage for everyone. A Medicare-for-all system would address this, but Obama decided not to take us down that road.

He went instead with prohibiting private insurers from turning people away, regardless of their medical condition. To prevent people from waiting until they get sick before buying insurance, Obama introduced a requirement that most people have coverage.

That requirement is now under attack by Republican state attorneys general. The Supreme Court is scheduled to hear arguments in March on whether Congress can impose such a mandate.

Apparently as a sop to live-free-or-die tea party types, Obama has now punted as well on the exchanges intended to provide a level playing field for people seeking insurance. Rather than creating a national framework for coverage and pricing, he's content to hand that authority to the states.

You'd think the insurance industry would be the first to cry foul. The industry routinely laments state-by-state regulations that it says make policies more complex and expensive.

Yet Karen Ignagni, president of America's Health Insurance Plans, an industry group, said insurers believe the exchanges require "comprehensiveness, affordability and state flexibility."

Does that mean the industry supports the administration's move? A spokesman for the insurance group said only that Ignagni's statement "speaks for itself."

Perhaps insurers look forward to the prospect of tailoring policies so they can offer as little coverage as possible for as much money as they can get away with — a prospect made more feasible by dealing with cash-strapped, industry-friendlier state officials.

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