Congressional Panels Discuss Options for Health Care Overhaul Amid Economic Downturn

Members of the House Ways and Means Health Subcommittee and the Senate Finance Committee on Tuesday at separate hearings discussed aspects of overhauling the U.S. health care system amid broader economic troubles and "the massive revenue drain likely to result from an expected congressional bailout of the nation's stricken financial system," CQ HealthBeat reports.

House
The Health Subcommittee hearing focused on the possibility of offering tax breaks for individuals purchasing private coverage equivalent to tax subsidies offered for employer-sponsored insurance, as well issues in the private insurance market. Rep. Dave Camp (R-Mich.), the panel's ranking member, said, "By equalizing the tax treatment, we can give millions of Americans in the individual market the ability to purchase quality health insurance." He noted that "in order to make this work, we must study the shortcomings of the private health insurance market."

Roger Feldman of the University of Minnesota said the tax subsidy for employer-sponsored coverage "is seriously flawed" because it "distorts the choices of where people work; it encourages them to purchase insurance policies that are too generous, thereby subsidizing the purchase of too much medical care." Feldman added that eliminating the tax subsidy for businesses purchasing health care for their employees would address rising costs by forcing people to pay more out-of-pocket for health care.

Blue Shield of California CEO Bruce Bodaken agreed that the private insurance market is flawed and said that the only option to address the individual and small group markets is to require that everyone have coverage and provide financial assistance for people to purchase coverage.

Mila Kofman, the insurance superintendent for Maine, cautioned against pushing people into the individual insurance market because the individual insurance market because in most states is "inaccessible, unaffordable and inadequate." Commonwealth Fund President Karen Davis said that "setting national rules for the operation of individual health insurance markets" or creating a national insurance exchange would be beneficial.

Senate
Finance Committee members discussed options for expanding coverage to more uninsured U.S. residents. Sen. Jay Rockefeller (D-W.Va.) said incrementally decreasing the number of uninsured residents would create a momentum for a larger overhaul by proving to the public that Congress can make an impact in this area. He suggested starting with legislation to reauthorize SCHIP.

Rockefeller added that although neither Republican presidential nominee Sen. John McCain (Ariz.) or Democratic presidential nominee Sen. Barack Obama (Ill.) have backed away from proposals to significantly overhaul the nation's health care system, "there's no way that's going to happen, financially or otherwise" in 2009.

Sen. Ken Salazar (D-Colo.) said the committee might spend a considerable amount of time considering changes to the health care system but the "ominous cloud" of a $700 billion government package to aid Wall Street firms "may end up creating huge challenges for us as we try to deal with health care reform." When asked about the impact of the Wall Street bailout, Senate Finance Committee Chair Max Baucus (D-Mont.) said, "We're going to have to look and see. I don't know. It's a good question to ask today." Witnesses also discussed how health care overhaul is working at the state level.

Overhaul Talks Will Continue
According to CQ HealthBeat, discussions regarding overhauling the U.S. health care system will not cease despite the chances of reform waning amidst the current economic downturn. In a press conference on Tuesday, Obama said that, even with financial aid to Wall Street, the U.S. health care system needs reform. "We're going to have to make sure we deal with these issues," he said, adding that there are concerns "we have to move on in order to strengthen the underlying economy" (Adams/Reichard, CQ HealthBeat, 9/23).