Experts look at saving the health care bill

One health care expert is proposing a plan that combines passing one of the most popular elements of the original health care bill while eliminating one of the most unpopular elements. But some wonder how that would add up.

President Obama is expected to talk about health care reform in his State of the Union address Wednesday night. The overhaul has been stalled since Senate Democrats lost their filibuster-proof majority last week.

One idea that's been proposed is to pass a pared-down version of the original legislation.

One of the most popular health care reform ideas is restricting insurance companies from charging higher premiums or dropping policy-holders with pre-existing medical conditions. It's an issue that Ken Thorpe, who heads Emory University's Department of Health Policy and Management, says should be included in an alternative version of health care legislation.

"We're at a crossroads -- we either fully retreat and abandon the effort like we did in 1994 ... or alternatively you can put together a very substantial package."

Thorpe is disappointed that the current overhaul bill is at a standstill, but said Congress shouldn't give up now.

"We're at a crossroads -- we either fully retreat and abandon the effort like we did in 1994, and I think that would be a shame, or alternatively you can put together a very substantial package," Thorpe said.

Thorpe's plan would include the pre-existing condition language and require employers to offer health insurance. But his plan would eliminate a key piece of the original bill -- the requirement that everyone obtain health insurance or face penalties.

That mandate has been controversial and some members of Congress even called it unconstitutional and threatened to block it with a lawsuit.

Keeping the pre-existing condition regulations but eliminating the individual mandate isn't as simple as just changing the text in the bill.

Insurance companies were willing to take on policy-holders with medical problems if they could count on an injection of healthier customers to balance out the risk. They would've gotten that through the mandate because most of those without insurance who would have been forced to buy it are young, healthy and at low risk of getting seriously ill.

Julie Brunner of the Minnesota Council of Health Plans said she doesn't know all the details of Thorpe's plan. But she said she understands the logic of the original legislation on pre-existing conditions.

"It's actually something in the federal legislation as the health plans in Minnesota watched it go forward, we supported it because it was counter-balanced by that individual mandate," Brunner said. "You have to have both sick and healthy people paying for the cost of health care."

Thorpe agrees, but said that can be done without a mandate. He contends that even if the uninsured aren't required to buy insurance, many will do so anyway and that will add more healthy customers to the risk pool. Thorpe said insurance companies would still have to cover people who may be more likely to get sick, but taxpayers would cover the cost of the added risk through government subsidies of premiums.

"Think about it this way, suppose it costs $10,000 for a 64-year-old and $2000 for a 20-year-old. The plans would get $10,000 more for one person and $2000 for the other person," he said. "But what those two people pay would be virtually identical."

University of Minnesota health economist Jean Abraham said the plan could work but could also be expensive for the government. She said 20 percent of the population incurs about 80 percent of the nation's medical costs.

"So the subsidies are going to be large," Abraham said. "It might be for a fairly small number of people, but those subsidies would need to be pretty large to keep premiums affordable for the typical household."

Thorpe said his reform ideas would lower health care costs, and lower the cost of the plans Congress has been debating. He said his proposal would cover about 20 million currently uninsured people by the year 2018.

Thorpe said he still supports the original legislation but in the absence of that, he said his plan is a good alternative.