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The corridors of power on Capitol Hill have long been the front lines in the war over healthcare policy. But recently many of the most combative groups have been joining hands with their most implacable political opponents in common cause.

In just the last few months, health insurers and patient advocacy groups have banded together to outline reform proposals that they can all agree on. And union chief Andy Stern has joined with the head of the Business Roundtable and the head of the AARP to give their joint nod to reform as well.

"It's pretty historic, just getting the three of us to sit down together," noted Stern, head of the SEIU (Service Employees International Union).

What's behind the sudden show of unity?

Blame it on the crisis of rising healthcare costs and the political albatross of 47 million Americans whose lack of health insurance coverage has become a daily drain on the healthcare system. After a 2006 election saga that rarely pushed beyond a few well-worn talking points that divide Republicans and Democrats, healthcare insurance reform has suddenly become one of Washington's hottest causes.

"In one month, we've seen Washington go from a point where this was not on their radar screen to being almost in shock at how quickly demand for change is rolling out," said Stern. "If that's happened in a month, imagine what will happen when more CEOs and business groups demand change, when more odd-bedfellows are working together and not just having press conferences together."

"AARP knows that we must act and we must act now," asserted Bill Novelli, president of the AARP. "If we don't, the next generation will be the first in American history to be less well off than their parents."

It's been a dozen years since the last big debate over a national healthcare coverage pact was prompted by President Bill Clinton's failed proposals, the reformers note. Now new proposals are popping up at the state level from Massachusetts to California. Pennsylvania's governor just announced a health plan to work toward universal coverage and other states are working on their proposals as well. Oregon Sen. Ron Wyden, meanwhile, has outlined in detail a national program to shift health insurance out of the employer base that covers most working Americans to a new system the relies on federally sanctioned health plans which cater directly to individuals. And presidential candidates like Barack Obama are making universal coverage a major theme of their campaigns.

The big change this time around from the failed effort of the Clinton administration, he adds, is that the business community is lining up with everybody else to demand that lawmakers step in. Back in the 1990s, managed care organizations stepped in to rein in prices. Now, MCOs are passing on higher costs, although at a more moderate pace. And business leaders have good reason to go looking for some allies with clout. The Business Roundtable's annual survey of big employers has pointed to healthcare as the leading cost pressure for businesses in each of the last four years.

"High healthcare costs threaten the long-term prosperity of America's consumers, the economy and businesses," said John J. Castellani, president of the Business Roundtable.

In politics, of course, timing is everything. This year, Congress will have to deal with a bill to reauthorize the State Children's Health Insurance Program, prompting proposals to expand SCHIP coverage with new federal dollars as a first step toward universal coverage. The Bush administration, though, is proposing to trim federal subsidies for kids while counting insurance benefits as taxable income and extending a new set of deductions to cover most of the cost.

In the Bush plan, a tax deduction of $15,000 per family or $7,500 for an individual is designed to offset the cost of most insurance policies and make it much more affordable for individuals to go out on the open market for coverage. But a number of workers with the richest benefits, including some rank and file union workers, would find an added cost for their coverage.

Leading Democrats were quick to label the president's measure — which even supporters said would only cut the number of uninsured by 3 million to 5 million — as "dead on arrival." And some lawmakers are pointing to competing plans being floated by some of the presidential candidates who are now hitting the road for the '08 election.

Whether or not lawmakers can grapple with healthcare reform before the 2008 election or wait to deal with it in earnest in 2009, though, every indicator points to continued pressure to reform the system. In late February, federal numbers crunchers estimated that healthcare costs will climb to $4.1 trillion by 2016, and federal tax dollars will provide half of that money. By that point, healthcare will account for 20 percent of all economic activity in the United States — twice what it was in 1985.


May 2007

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