Health-Care Reform Is In The Air, But…

Despite all the big talk and odd alliances, expect only small steps for now

After 15 years of intermittent warfare over health care on Capitol Hill, détente has been declared. "The sun and moon may be coming together," says Federation of American Hospitals President Charles N. Kahn III, architect of the "Harry and Louise" commercials that helped doom Bill and Hillary Clinton's efforts at health-care reform. Now, says Kahn: "There's more hopefulness."

The manifestations of this brave new world are everywhere: strange partnerships between the Service Employees International Union, the Business Roundtable, and the AARP. Bipartisan coalitions on Capitol Hill. More than a dozen proposals to remedy the agreed-upon ills.

Yet for all the big talk, few expect big changes. For starters, Democrats, business groups, and their allies do not believe their vision of near-universal health coverage would be acceptable to the Administration. President Bush's plan for a health-care tax deduction, unveiled in his Jan. 23 State of the Union address, seems likely to sink as a result of Democratic opposition. But that doesn't mean there won't be smaller developments that could help to slow the mounting liabilities for companies struggling to cover workers' medical costs. So where is progress most likely?

One bipartisan bill expected to gain traction would improve information technology in the health-care industry. Pushed by Presidential hopeful Senator Hillary Clinton (D-N.Y.), Senate Health Committee Chairman Edward M. Kennedy (D-Mass.), and senior committee member Mike Enzi (R-Wyo.), the bill is designed to save $130 million by reducing paperwork, duplication, and medical errors. It would set standards for the exchange of electronic health-care information by doctors and hospitals. And it would give grants to medical consortiums to create regional data networks.

Another popular measure from Enzi and Senator Ben Nelson (D-Neb.) would allow small businesses to join in insurance-purchasing pools in order to lower premiums.

The most likely area for bipartisan success is health coverage for uninsured children. The federal child health program known as "SCHIP" (State Children's Health Insurance Program) is up for renewal this year. Business groups and activists are pushing a provision that would sign up poor kids for schip when they are enrolled in other needs-tested programs such as reduced-price school lunches. Its estimated cost: $45 billion over five years. Congress is also likely to encourage states to continue their experiments with health coverage by giving them grants to pursue innovative approaches.

One measure not likely to pass: the President's plan for a $7,500 tax deduction for individuals and $15,000 for families with health insurance. Workers with insurance plans worth more than $15,000 per year would have to pay income tax on the difference. Democrats say the plan targets generous union health packages and would prompt companies to drop employee coverage. A key lawmaker, Representative Pete Stark (D-Calif.), accuses Bush of trying "to destroy the employer-based health-care system."

The business-labor coalition knows other partisan eruptions are coming, but vows to keep their eyes on the ultimate prize. Ronald F. Pollack, executive director of Families USA, a liberal advocacy group, says: "This is not a one-night stand."

By Richard S. Dunham

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