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An interview with Kaiser's Drew Altman

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Drew Altman is chief executive of the Kaiser Family Foundation, the largest and most respected health-care foundation in the country. He also writes the "Pulling It Together" column. So he seemed like a good guy to ask about the bill. A transcript of our conversation follows.

Tell me, in the simplest possible terms, what this bill does.

To boil it down, it does four things, and I’m putting them in order of importance and power. First, the coverage expansions and subsidies. Second, the insurance market reform. Third, cost containment. And fourth, there's a prevention component. And if you wanted to go a bit more concrete, what it does is cover about 32 million people, reforms insurance and makes a start on cost containment, while, according to CBO, decreasing the deficit and saving a trillion dollars.

There are some things it doesn’t do. It doesn’t cover everyone. It comes reasonably close. It helps an awful lot of people pay their bills, but it doesn’t fundamentally alter the cost curve. Instead, it makes a start on altering that cost curve. It throws most of the best ideas on the table, but we don’t know which will work and which won’t. It doesn’t change how most Americans get their health care now. That was, of course, by design: The lesson of the Clinton effort was that the third rail of health-care reform was people’s current arrangements. And while some of the bill starts soon, some of it doesn’t start for several years. If you go to 15,000 feet, I guess I would say it is centrist legislation leaning a little bit left.

When you talk about the Clinton plan, past efforts at health-care reform were really health-care reform. You pass the bill and you wake up to a different system. But not this one. This is sort of a health-care expansion with components that encourage gradual reform. Is that a fair way to put it?

That's a fair way to put it. It is in fact insurance reform more than it is health delivery reform. And while health reform people are often dismissive of insurance reform, I’m not. This debate has traction because of average Americans who have problems paying their bill and problems with insurers and this is directly responsive to that. The bill got into trouble in June and July and August when the message began to stray from the focus on affordability and people’s problems with the health-care system and began to focus on the concerns of experts. Experts and average people look at this very differently.

What happens now that it's passed?

Moving forward, this is a giant improvement over the status quo. It will do more to help people than any domestic legislation in 40 years. But how it will actually work out will be as much a function of how the American people react to the law as what’s written into the law today. The lessons from every other nation is that health-care reform doesn’t stop when you pass the legislation, it is always evolving.

What concerns you about the legislation?

I think you have to worry about an expectations gap. Premiums will continue to go up. There are some questions when we get to subsidies whether everyone who gets a subsidy will feel the policies are affordable. The other side of it is that for most Americans, little will change. But premiums will continue to go up. So there might be an expectations problem.

The other thing is that the debate about subsidies has been about premiums. But you also have to look at total out-of-pocket costs. There are two things people really understand in insurance: Their premium and their deductibles. And some of these deductibles could be pretty large. So most people will find there is nothing to fear and little will change, but affordability will continue to be a challenge.

Finally, the midterm elections are the next great focus for health reform and so the effort to inform the American people about what the law does will be critical. We’ve discovered in our polling that while the law itself plays to mixed reviews in the public debate, most of the key components are quite popular. The question is whether the American people find out about them. Only 15 percent of people know that CBO said the legislation will reduce the deficit. If you ask people how they’d feel if they knew that, more than 50 percent say they’d become much more likely to support it.

By Ezra Klein  |  March 22, 2010; 4:59 PM ET
Categories:  Interviews  
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Next: Ron Pollack explains how the bill might cover even more than 95% of the country

Comments

"15 percent of people know that CBO said the legislation will reduce the deficit. If you ask people how they’d feel if they knew that, more than 50 percent say they’d become much more likely to support it."

Of those 15 percent who know what the CBO said, how many are highly skeptical that any new government entitlement will reduce the deficit? Because I know what the CBO said, but I don't think there's a chance of heck that HCR will actually reduce the deficit. Not when the rubber meets the road.

Also, I sent an email, but I want to mention National Review's Stephen Spruiel tackles your "How Health Care Reform Reduces the Deficit" article. Defend your honor!

http://corner.nationalreview.com/post/?q=NDBmMDE5ZWNhNzE2YjRhNGQ2MjNhYmIyYjVhYmVkZGY=

Posted by: Kevin_Willis | March 22, 2010 5:05 PM | Report abuse

thank you Ezra.

"it doesn't fundamentally alter the cost curve"

agreed that the expectation gap is huge. This will be a major issue for Dems (especially if the high risk pools aren't up and running well at their onset).

not only that but what is the premium and benefits components in the high risk pools. If you take people who have no cost right now (and no coverage) and suddenly tell them they can have healthcare but it will cost them an unaffordable amount then what good does that do them?

Posted by: visionbrkr | March 22, 2010 5:08 PM | Report abuse

@vb: they can have healthcare but it will cost them an unaffordable amount then what good does that do them

Another argument for single payer, universal health care? Everybody is automatically in. Costs can be controlled because the single payer can bargain effectively with providers.

Posted by: srw3 | March 22, 2010 5:36 PM | Report abuse

srw3,

Yes, the monopsony power of a single payer system can reduce costs somewhat. But the primary vehicle of cost reduction is rationing. And of course you have to ration because demand is nearly unlimited when things are free.

I prefer a working price system.

Steve

Posted by: FatTriplet3 | March 22, 2010 5:56 PM | Report abuse

This is what's crazy about our politics. 15% know what the CBO score says, and me and Kevin_Willis can argue until we're blue in the face about whether reality will approximate that score, but the other 85% are like CBWhat?

Posted by: CatfishHunter | March 22, 2010 6:06 PM | Report abuse

Ezra,

Former CBO director on the real cost of Obamacare in the March 20th NYT: The Real Arithmetic of Health Care Reform. His estimate is that the legislation will "raise, not lower, federal deficits, by $562 billion." Some of the gimmicks in the CBO scoring:

* Front load revenue and back-load spending
* Costs left out of $114 B in annual discretionary spending
* Revenue from the LTC insurance program and Social Security although both programs create future liabilities for payment of benefits.
* Higher withholding of corporate taxes. This money will have to be refunded.
* Deficit reduction of student loan federalization calculated into the scoring
* The likelihood that Congress will override scheduled Medicare cuts.

His summary: "The bottom line is that Congress would spend a lot more; steal funds from education, Social Security and long-term care to cover the gap; and promise that future Congresses will make up for it by taxing more and spending less."

Cost reduction in this is just smoke and mirrors.

Steve

Posted by: FatTriplet3 | March 22, 2010 6:10 PM | Report abuse

Ezra: Thank you for 1 smart, non-demagoguing, occasionally funny post after another.

You're my new favorite WP blogger. Keep up the good, hard work.

Posted by: paul65 | March 22, 2010 6:19 PM | Report abuse

What percent believes the legislation mandates that every man woman and child has insurance?

What percent knows that 85% of American's with Insurance will see thier rates raise?

What if they said - the CBO and multiple other economists say this bill will have a net job loss?

Posted by: Holla26 | March 22, 2010 6:33 PM | Report abuse

@ FatTriplet3 : The problems with a rationing by prices system are:

1 it assumes that everybody has disposable income to spend on health care, which is not the case.
2 in the competition for scarce health care resources, people with the most money get the care and those without don't. This is not an acceptable result.
I am sure there are more, but I am at work.

Price system for cars is fine. Rich people can drive up the cost of BMWs all they want. middle class folks can get by with a toyota or GM econobox. And currently there are more cars than buyers so buyers are relatively happy. Health care is the opposite in a price rationing system. Many consumers chasing scarce resources. This will lead to health care inflation and many middle class people being priced out of the market. It would also continue the trend of physicians specializing in diseases of the rich, because in a market based model, actors try to maximize their profits without regard to how they get them. Lots of plastic surgeons and dermatologists, very few internists, pediatricians, and GPs. I don't like a strictly price system for something as essential as health care.

And single payer is not free. there would be costs to users, perhaps collected as taxes or premiums or some combination of these along with copays. And most people don't like to go to the doctor so I am not as worried about egregious overuse of the system.

I am also a big proponent of nurse practitioners as the first (and often the only necessary) treatment option. 80% of cases can probably be resolved by seeing a nurse without needing to see a doctor. This alone could be a big cost saver.

Posted by: srw3 | March 22, 2010 6:39 PM | Report abuse

I'm shocked anyone is concerned about insufficient subsidies. The subsidies are quite generous. Healthcare under the subsidy schedule will be affordable - yes, premiums won't be free, and people still won't enjoy paying for it, but it will be affordable.

Posted by: justin84 | March 22, 2010 6:42 PM | Report abuse

@steve:Cost reduction in this is just smoke and mirrors.

Well that does remain to be seen. Medicare D cost estimates were higher than the actual program costs, for example. And at least, there are some proposals to pay for the plan, not just a mindless addition to the deficit like the shrub did. Will congress make tough choices? I don't know, but at least they will be on record voting for or against paying for the program.

Posted by: srw3 | March 22, 2010 6:44 PM | Report abuse

There ain't no such thing as rationing by price. Rationing is by definition a planned distribution of a good or service, usually fixed and equitable. The market isn't a thing or a collective that can act - it is simply the result of individuals interacting. Market allocation is metaphorically like rationing, but it isn't centrally directed - there is nothing there to direct rationing.

If the market rations, then requiring ERs to provide emergency care is effectively slavery (forced, uncompensated work). It's not exactly slavery (I think it only applies to hospitals that accept Medicare patients, for example), just as market prices aren't exactly rationing.

Not that I'm against helping the poor through taxes (theft? j/k), but equating a market system of prices with rationing is incorrect.

http://www.britannica.com/EBchecked/topic/492077/rationing

http://www.answers.com/topic/rationing

http://medical-dictionary.thefreedictionary.com/health+care+rationing

Posted by: justin84 | March 22, 2010 7:03 PM | Report abuse

Couple comments:

"centrist legislation leaning a little to the left"--The left to me is that the goverenment nationalizing all insurance companies and some vital suppliers and gradually implements a universal health care system based on progressive taxes. The center to me is pushing Medicaid eligiblility to 200%FPL and dropping Medicare eligibity to age 50 or 55. Let insurers insure healthy people, which is what they do best.

"It will do more to help people than any domestic legislation in 40 years."--This is more a statement of how little the federal government has done for lower income people. But long term it is robbing Peter to pay Paul. The taxes will all fall disproportionately on the middle class, rather than being truly progressive. The cost control issue is not addressed by this plan, except by the excise tax which is a cruel right-wing way to do it.

Posted by: bmull | March 22, 2010 8:57 PM | Report abuse

bmull,

don't the taxes on instruments of healthcare (insurers, medical devices) fall just as badly on the middle class?

The excise tax is designed (when done properly) to affect all equally. If union members are dumb enough to negotiate for benefits post reform and not wages then that's their fault.

Posted by: visionbrkr | March 22, 2010 10:15 PM | Report abuse

Living in this instant gratification in politics conservatives should not worry because its all about framing the issues from now until Nov. Dems cant wait until September for those benefits to be felt, while the Reps will preach how bad it is and point to the increases in premiums. Right on Ezra on this interview exactly what I was thinking was going to happened will take place if the republicans can think strategically and capitalize!!.

Posted by: SD619 | March 23, 2010 12:13 AM | Report abuse

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