Analyst: Plan won't contain health costs

WASHINGTON - Democrats' health-care bills won't meet President Obama's goal of slowing the ruinous rise of medical costs, Congress' budget umpire warned yesterday, giving weight to critics who say the legislation could break the bank.

The assessment from Congressional Budget Office Director Douglas Elmendorf came as House Democrats pushed to pass a partisan bill through committees, while in the Senate a small group of lawmakers continued to seek a deal that could win support from both political parties.

From the beginning, Obama has insisted that any overhaul must "bend the curve" of rapidly rising costs that threaten to swamp the budgets of government, businesses, and families.

Asked by Senate Budget Committee Chairman Kent Conrad (D., N.D.) whether the legislation would bend the cost curve, the budget director responded that - as things stand now - "the curve is being raised."

Explained Elmendorf: "In the legislation that has been reported, we do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount. And on the contrary, the legislation significantly expands the federal responsibility for health-care costs."

Even if the legislation doesn't add to the federal deficit over the next years, Elmendorf said that costs over the long run would keep rising at an unsustainable pace.

Part of the reason is that Obama and most Democrats have refused to accept a tax on high-cost health-insurance plans as part of the overhaul. There's wide agreement among economists that such a tax would give businesses and individuals an incentive to become thriftier consumers of health care. Senate Finance Committee Chairman Max Baucus (D., Mont.) said yesterday that Obama's position isn't helping matters.

White House officials played down the significance of the budget director's assessment, calling it premature. "At the end of the day, we'll have significant cost controls," presidential adviser David Axelrod said.

Senate Republican leader Mitch McConnell of Kentucky said the budget director's warning should be "a wake-up call."

For the fourth straight day, Obama used a public forum - a political rally for Gov. Corzine - to argue for a health-care overhaul, saying, "It affects the stability of our entire economy."

Despite the flashing yellow light from the budget office, Congress pushed ahead.

On the heels of the Senate health committee's approval Wednesday of a plan to provide coverage to the uninsured, three House committees shifted into action on their version of the legislation. The Democratic bills also call for the creation of a government-sponsored insurance plan to compete with private coverage, although they differ on the details.

Lawmakers yesterday amended the health-care bill to allow workers who lose their jobs to hang on to their employer-provided care until they get new coverage.

The measure agreed to by voice vote in the House Education and Labor Committee affects the program known as COBRA. It allows workers to keep their company's health-insurance plan for 18 months after they leave their job, if they pay the premiums.

Under the provision, workers would still have to keep paying the cost, but the insurance would not cut off until they became eligible for a new coverage plan.

The House committee also passed an amendment to speed up access to health insurance for people with preexisting medical conditions. The bill as written would have stopped insurance companies from denying coverage because of such conditions, starting in 2013. The panel agreed yesterday to move up the date for group plans to six months after the bill takes effect.

Obama was doing all he could to encourage Congress to act. He met yesterday morning with two potential Senate swing votes, Ben Nelson (D., Neb.) and Olympia J. Snowe (R., Maine).

Harry and Louise are coming back to television screens across the country to talk about overhauling health care. This time, they've switched sides.

TV ads featuring the fictional couple played a big role in derailing President Bill Clinton's effort to revamp the medical system in the 1990s. Back then, actors Louise Caire Clark and Harry Johnson played a middle-class couple worrying about the proposed changes.

Now, they will appear in a $4 million TV campaign supporting a reshaping of health care, sponsored by Families USA, which champions affordable health care for families, and the Pharmaceutical Research and Manufacturers of America.

The ads begin airing this weekend and will run for at least three weeks on national cable and network news shows.

In 1993 and 1994, the Harry and Louise ad campaign cost an estimated $14 million to $20 million. Fourteen spots were produced, compared with one this time.

In an interview, Clark, 59, and Johnson, 66, said they were Democrats who supported both Clinton and President Obama.

- Associated Press

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