Progress on how to fix health care, but rifts remain

WASHINGTON — Fault lines are emerging in the upcoming battle over health-care overhaul.

Recent movement on Capitol Hill and by major health-care players suggests consensus is growing for action this year, but rifts remain over how to pay for expanded coverage and whether a new government-sponsored program should be offered to people who have trouble buying private insurance.

A coalition of hospitals, insurers, employers, physicians, drugmakers and consumers released a report Friday endorsing a set of policy changes that could cut in half the number of uninsured Americans.

Most notably, the group — the Health Reform Dialogue — calls for creating an "individual mandate" that would require every American to have some type of health coverage. Anyone who cannot afford insurance would be eligible for subsidies or expanded government programs, such as Medicaid.

"We should seek to ensure coverage for all," the group concluded after six months of private negotiations.

The results are noteworthy because it is the first time such a varied mix of special interests — "strange bedfellows," in the words of one participant — have coalesced around significant changes to the U.S. health system.

The signers include the American Medical Association, the National Federation of Independent Business, two hospital groups, AARP and the liberal consumer advocacy group Families USA.

"We're narrowing the range of disagreement," said Karen Davis, president of the Commonwealth Fund, a nonprofit private health-care foundation that was not involved in the effort. It is striking, she said, that the Health Reform Dialogue and influential lawmakers have all but ruled out the prospect of a European-style single-payer system, opting instead to build on the existing employer-based insurance arrangements.

Equally striking, however, were the fundamental questions left unaddressed by the group of health-care heavyweights.

"A day late and a dollar short," said one participant who spoke on the condition of anonymity.

The coalition's report is silent on whether employers have a responsibility to contribute to the cost of care, and it does not address the idea of creating a government-sponsored insurance program that would be available for anyone having difficulty buying coverage.

Two unions — the American Federation of State, County and Municipal Employees and the Service Employees International Union — declined to sign the document, in part because of their support for a "public plan option," something President Obama endorsed during his campaign.

House Speaker Nancy Pelosi, D-Calif., has advocated including the public option in a bill, while Senate Finance Committee Chairman Max Baucus, D-Mont., has said it should be "on the table" for consideration.

The idea is anathema to the insurance industry, however, which fears a government-sponsored program with the ability to set prices would have an unfair advantage and severely undercut the private market.

"A government-controlled plan available to every American will push 160 million Americans now in private plans into a one-size-fits-all bureaucratic plan," said Nick Simpson, spokesman for Rep. Roy Blunt, R-Mo.