Thursday, March 15, 2007

The Bush administration this week soundly rejected a set of proposals for health care reform from the Citizen’s Health Care Working Group.

The group, made up of 14 health care experts from across the country, was convened by Congress to examine ways to reform the system. Their recommendations included a call for universal health care that would provide a predetermined core set of benefits by 2012.

But the administration balked at the group’s recommendations because they are based on mandates and government intervention rather than consumer choices.

Specifically, the working group advocates a single-benefit package, defined by a federally appointed committee, be made available for all Americans. But that was rejected by the administration.

“A nationally determined set of core benefits would place important decision-making about a person’s health care in the control of federal appointees, rather than allowing the consumer to choose the benefits that best meet their needs,” said Health and Human Services Secretary Michael O. Leavitt.

Instead, the administration will focus on its plan to expand access to basic, affordable health care through market-based approaches such as reforming the tax code to provide a standard tax deduction for individuals purchasing private health insurance and start taxing employer-sponsored health plans.

By taxing employer-sponsored plans, the administration would level the playing field between those who get untaxed health coverage from their employers and those who must buy it in the private sector.

But the tax proposals would only cover from 3 million to 5 million people, while 47 million are currently uninsured. And the tax-deduction savings only amount to about $1,500 per family at the most, which is not a lot of extra cash to spend on pricey medical services.

While the administration seems dead set on not adding to the nation’s staggering $2 trillion annual health care bill, John Sheils of the Lewin Group, a national health care consulting firm based in Virginia, says the administration’s tax reform plan would actually cost $154 billion over 10 years.

That’s much more than the administration’s estimates, which suggest overall neutrality. And health care experts think universal coverage would cost $70 million to $100 billion a year, making a budget-neutral approach seem less likely to succeed.

While the administration tries to persuade lawmakers to enact its tax reforms and incremental health care reform, Congress is laying the groundwork for a possible overhaul to the system in the coming years. The Senate Finance Committee on Wednesday began a series of five hearings titled “Moving Toward Universal Coverage.”

Committee Chairman Max Baucus, Montana Democrat, said, “I believe health care should be a right, and I believe America is big enough and rich enough to guarantee that right.”

Meanwhile, speculation making its way through the health care circles of Washington is that the next head of the Centers for Medicare and Medicaid Services (CMS) is likely to be Kerry Weems, a budget director in the Health and Human Services Department.

Mr. Weems will reportedly replace Mark McClellan as the next administrator at the agency as acting CMS Director Leslie Norwalk will announce her departure soon, numerous health care sources said.

“Kerry is a longtime manager who can be relied upon to continue the many activities CMS has under way — continuity will be the theme,” said Joe Antos, a budget specialist at the American Enterprise Institute.

“The last year and half of an administration is not a time when you see new initiatives.”

The possibility of Ms. Norwalk’s departure would leave CMS without an experienced health care resource with valuable knowledge of the Medicare Modernization Act of 2003, a law that implemented much more than the new prescription drug benefit.

Mr. Antos pointed out that Abby Block, longtime health insurance policy wonk and current director of CMS’s Center for Beneficiary Choices, may retire in the near future.

“This is a critical time for Medicare,” he said. “The likely departures of key personnel over the next two years will certainly mean the program will change — even without legislation from [Capitol] Hill.”

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