Black Enterprise: In his recent speech, the president said that healthcare reform is a moral imperative. Having made that assertion, what areas of healthcare legislation are open to negotiation and what’s nonnegotiable?
Kathleen Sebelius: I think the details of a lot of the legislation are probably negotiable. But the principles around which the legislation will be written are nonnegotiable. I think the president believes strongly that we need to aim for available, affordable insurance for all Americans. So a fraction of the population being insured won’t really cut it as far as he’s concerned. Costs need to come down so we need to have a program which really focuses on higher quality, lower cost, and right now that’s available in some places but not every place. I think changing the rules, once and for all, so insurance companies no longer get to pick and choose who gets coverage and who doesn’t or drop people when they get sick or refuse to reinsure someone who has a pre-existing condition; that is non-negotiable. And I think at the end of the day the notion that we won’t add to the deficit and that the program needs to be paid for is nonnegotiable.
The president said healthcare reform would cost $900 billion over 10 years. There have been some estimates from others that it will cost more than $1 trillion. How do you pay for this program? How do you create efficiencies in the system? How do you get more money from the insurance companies?
Well, about $600 billion has been identified by the president actually in the budget this year that he put forward in sort of a reserve fund that is money we’re currently spending in the system. So two-thirds of that $900 billion is money that’s spent right now and paying for things that don’t really add to the health or well-being of Americans. Cut out [federal] subsidies for private insurers who want to compete with Medicare and currently are being paid more money than the fee for service but aren’t delivering more benefits. Lowering the overall cost of prescription drugs for Medicare beneficiaries to the tune of about $100 billion is part of this. Competitive bidding for durable medical equipment and some of the prescription prices will lower costs. And then the president is open to having a tax on the insurance companies who sell Cadillac plans, plans worth more than $25,000 or $30,000 which again discourages those plans and brings in some revenue.
The administration wants to create a competitive exchange, and one aspect of that proposal is a public health plan. If it would serve as a powerful tool to lower insurers’ rates then why would that be an optional aspect of the plan?
I’m not sure it’s optional in terms of having some competitors to private insurers or some target that they have to meet in terms of keeping costs down. The president has said pretty much from the beginning that the goal is choice for consumers. He believes strongly that competition holds down costs so there needs to be some kind of competitive strategy in this new marketplace. As for a public option, there’s some members of Congress who think you can do the same thing with a not-for-profit co-op. You have others who are suggesting a trigger so if insurance companies don’t have affordable plans you kick in a public option. But I think there will be definitely a mechanism for lower costs, competition and choice.
Public option, co-op, trigger. Which do you favor?
Well I think the public option is the best idea that I’ve seen to get to those principles. But when the Senate Finance Committee comes out with its specific draft and they have a co-op that’s robust and can provide that kind of competitive option, it may work just as well. But I don’t rely on the private insurance companies to just, on their own, lower costs for Americans.
***
Further Reading
— Obama Outlines Healthcare Goals Before Congress
— How Healthcare Reform Affects You
— Finding Compromise in a Tough Healthcare Reform Debate
Resources
— Senate Finance Committee Proposal
***
In part two, Black Enterprise and Health and Human Services Secretary Kathleen Sebelius discuss how reform would affect small business and healthcare disparities in African American communities.