Kreidler offers his take on debate over health-care reform

As debate continues over the health-care reform effort currently consuming Congress, we check in with Insurance Commissioner Mike Kreidler.

Re-elected last year to his third term as the state's insurance watchdog, Kreidler was a member of the House of Representatives in 1993 during the unsuccessful push for health care reform. He says he believes this Congress will succeed where those before it failed and that the plan will ultimately garner some Republican support.

Kreidler, a Democrat formerly employed as an optometrist with the Group Health Cooperative, said insurance should be portable for workers -- meaning you shouldn't lose coverage if you quit your job or get laid off -- and accessible to all Americans. The system as it stands, Kreidler said, is a holdover from the World War II era that's now constraining economic growth while draining Americans' pocketbooks.

This is something that you'd be following pretty closely. What's standing out to you right now as far as the great debate that's going on?

"I'm very hopeful about the level of progress they're making on health-care reform this time, and I say that because I was there in the middle of the storm when they last made this a major endeavor in 1993. I see such major improvements as to the progress they've made to this point and to the scope for the kind of reform. I'm feeling very positive about what is transpiring at this point."

What should people be paying attention to? A lot of this is detail that is probably fairly new to most of us. What should people be watching for in all of this?

"There are kind of four things that I look at. No. 1 is that it's universal. We've got to make sure that everybody is covered. This accounts for a lot of cost shifting in the health system that we have today. We need to make sure that everybody is covered.

"The second is that it needs to be portable, meaning that it's not tied to your job. If you're laid off, if you're in between jobs, you still have insurance coverage. It isn't tied to your employer. You keep coverage.

"It's also important that individuals have choice, that they wind up being able to choose the doctor that they want to have as their doctor in much the same way that we have that kind of choice today. …

"Fourth, it needs to be one that is built on the current system that we're familiar with. We need to have that kind of choice, and that kind of framework for health insurance reform. That's important principally because no one from the standpoint of developed nations have moved into health insurance reform without building on the system that people were familiar with or were using currently. They all built on the system that they had in place, and we have a market today. We need to have that.

"I think that, as part of building that framework, having the choice of a public plan makes a lot of sense. It affords people a lot of the options and comfort that they're looking for, as long as that public plan is one that plays by the same rules as the private insurance market."

I want to get back to a point you made earlier, but why is it important to have that public plan, that public option? What does that do for you and me and everybody else who has health insurance?

"No. 1, I believe it affords us an opportunity for us to help lead the market toward providing health care that is much more efficient and effectively delivered. The market will wind up adjusting to that public plan as part of the marketplace. …

"Again, it's a person's choice whether they go into a public plan, and that public plan, in my opinion, needs to adhere to the same rules as the private market."

And that would be to ensure a level playing field then?

"Absolutely. You want to make sure that this isn't one where you're trying to supersede the private market. You're offering choice to people. If they're more comfortable with having a public plan, that would be one of their choices. And having a public plan in place would drive the market toward a more efficient delivery of health care. "

I'd like to ask you about portability. Forgive me if I'm wrong, but that sounds like that would be a significant departure from what most working people enjoy now. What would portability mean? How does that work?

"There are several parts to portability right now. One is that, if you're in the individual or small-group market, going through these exchanges or gateways that would be created at the national, regional or state level. That would afford the individuals an opportunity to make their purchases that way. … It would mean that, once you purchased it there, you could effectively take it with you whether you were employed with that employer or not.

"The second part would be that the plans that the individual would get through their employer would have the opportunity to continue that insurance so that there would be portability with that particular insurance. We have that right now with COBRA for large employers, but it's pretty expensive. Part of what's being discussed here is that you wind up with a significant amount of financial assistance to people to make sure that they keep their health insurance premiums affordable.

"It would mean that you could keep that health insurance. You wouldn't be tied to that employer any longer. You'd have viable choices available to you from the standpoint of whether you stay with that employer, whether you look for another job, whether you retire early, or you were laid off in this economic environment. Whatever your situation was, you would still be able to maintain your health insurance and make sure it's affordable to you."

So it would be like COBRA, but cheaper? Is that essentially what you're saying?

"If it's a large employer, you're right. It would be like COBRA but with financial assistance that isn't available today. So you'd make it much more affordable to individuals who are financially challenged. For smaller employers, the small group market for example, … it would be a direct contract between you and the insurance company. It wouldn't even be listing the employer, even if the employer was assisting you with the premium."

In your view, what would the impact of that kind of change be?

"It's huge. You wind up making sure that individuals aren't left in that gap from one employer to another. You're not tied to your job because you or a family member are dependent on having that health insurance. You're not locked in. If you're laid off, if you switch jobs, whatever it might be, you're going to wind up making sure you have that health insurance and that coverage will be available to you.

"That's something that you don't have today. Today, you lose your job and your chances of finding something that's affordable and meets your needs are very, very small if you're trying to get it as an individual.

"A part of this, of course, is tied to insurance reform itself. You can't judge someone on their medical history. Pre-existing conditions no longer will have an impact, meaning that just because your spouse may have diabetes and you're laid off, reform would mean that you'd be able to retain that health insurance. Right now, you'd find it extremely expensive if you go into that high-risk pool. You could pay up to 150 percent of what that product would cost in a comparable market. It would be very, very expensive. It precludes the vast majority of individuals from even being able to find insurance in that situation when they've left that employer's plan."

What do you make of the criticism that this kind of activity is going to drive either government debt or higher taxes?

"You know, I think it's one of those situations where people will always come up with "What if" scenarios. What if this happens? What if that happens? I can tell you what will happen if we do nothing.

"What will happen if we do nothing is that we're going to drive $33 trillion over the next 10 years in medical expenditures which this country can no longer afford nor can it remain economically competitive with other developed nations. They offer health coverage at half the amount that we are spending nationally but get phenomenally better results. In fact, the outcomes for the American health care system rank us with Third World countries, while we outspend other countries by two-to-one or more. "

This may be a bit of an odd question, but why do you think it is that we are where we are in the United States and so many of the countries that we see as our peers are at such a different place in terms of health care?

"I think it's an anomaly in the United States that we've ended up in this particular position. I mean, we've been talking about health-care reform in this country for over 100 years, and its never happened.

"Part of what tipped us over the edge is what happened in World War II. When they had wage and price controls in effect, the only way that benefits could be increased for individuals was to provide employer-based health insurance. When they wound up doing that, it built in this employer-based system in the United States, and it's proved incredibly difficult ever since that point to make changes. But the rising cost of health care, rising at three times the rate of inflation in recent years, has meant that we're increasing dramatically the number of people who are uninsured, but even more so the number of people who are underinsured. They're insured, but they lack the financial resources to meet their own medical needs in a medical crisis. Those numbers are getting worse as the cost of health care continues to rise.

"We spend so much money on it in this country -- one-sixth of the U.S. economy, and, in a few more years, one-fifth of the U.S. economy -- toward health care. We've spending vastly more on a per-capita basis than our economic competitors in the developed world, and we're getting terrible outcomes as a result. There's no question that there's plenty of money in the system. We just have to get smarter than what we've been if we're going to raise the quality of health care and, at the same time, reign in the costs of inefficient and duplicative, administratively burdensome system we have in place today."

Do you think Congress will be successful this time around?

"Yes, I do. I believe that Congress will be successful.

"I was right in the middle of the storm in 1993. As a member of Congress, I was on the Energy and Commerce Committee, and I was on the health subcommittee of Energy and Commerce that was then chaired by Congressman Henry Waxman, who is very much at the center of the health insurance reform debate right now.

"We didn't get the bill from the Clintons until October of '93. Look where we're at right now. We're still in July, and they're making huge progress. The bills have moved out of committees. I'm very optimistic that they're going to have legislation on the president's desk before Congress adjourns for Christmas. "

Why do you think they're looking toward success now when so many times this effort has failed?

"I think there are a couple of factors. No. 1 is that you're seeing the nature of the problem being redefined as an economic problem much more so than a human or moral issue. I think we're starting to realize that the large employers who had historically been resistant to a national health insurance program now are stepping up and viewing it very differently. They're stepping up and saying that we need to view this as an economic challenge.

"Large employers are not immune to these rising costs. Take a look the automakers. One of the problems that they faced was the rising costs of health insurance, and, as a result of that, they were severely challenged competitively.

"When you see the head of the Service Employees International Union and the CEO of Wal-Mart signing a joint letter that goes to the president urging that we need health insurance reform and that it needs to be universal, that's a different dynamic than we've seen in the past. You also have the American Medical Association which back during the creation of Medicare and Medicaid was staunchly apposed to those programs is now on board supporting the president for health insurance reform.

"The other factor is how astutely President Obama has preceded with health insurance reform. Rather than presenting a bill to Congress and doing it late, as it was done in 1993, which essentially pushing it into an election year, he started right out of the blocks with an outline of principles that were essential for his endorsement and allowed Congress to write the bill. It's meant that we're much further along. The commitment on the part of the Democratic majorities in Congress right now than what were looking at in 1993, in no small part because of the timing issue. I think that the drum roll is so high right now that they're going to wind up proceeding on health care reform.

"The exact details of what it's going to look like are still up in the air. … There are still ongoing discussions, such as the public plan or the employer mandate and things of that nature. At the same time, the outline of what's going to happen is there.

"When you have this much momentum and this much progress, the Congress is committed at this point that they are going to be successful. There's going to be a bill, though the exact details remain undecided. Once they've gone this far, they realize that the political downsides if they were to fail would be very, very high.

"They've progressed so much farther. They're committed. It's just a matter now of working out some of these details. In the end, I believe we're going to have a bill, and I believe we're going to have a bipartisan bill."

Why do you think that? I'm somewhat surprised to hear you say that.

"I don't think you can get through the United States Senate without having some bipartisan support. That's not true in the House, but it's true in the Senate. … That doesn't mean that you're going to have a significant number of Republicans that are going to be supporting it in the Senate, but you will pick up several Republican senators that will be supportive of this change.

"If you go back and look historically, even in the battle for the creation of Medicare, there were a significant number of Republicans that supported that. It was clearly the Democratic majority that was driving that bill, but a significant number of Republicans supported the creation of the Medicare program. The same was true for Social Security back in the '30s. Even though it was part of FDR's program and the Democrats were in the lead, a significant number of Republicans joined.

"The difference now of course is that you have a much more stridently partisan Congress, largely driven by voter redistricting that have made much more solidly Republican or Democratic districts. But I sense right now that there are still those in the United States Senate who are going to look at this issue and say, 'This is an issue for America. This is an issue for our economic competitiveness.' "

Mike, can you paint me a bit of a picture. I'm a working person. I have insurance through my employer. Maybe I don't love it, maybe I do. How does my situation change if the reforms you're talking about were to come into effect?

"The vast majority of the people who have health insurance today like the insurance that they have. So it would be a real mistake to say that these individuals, who make up the vast majority of the voters in this country, are looking at their health insurance and saying, 'I don't like what I have right now.' They generally like it, but I can tell you there's a much higher degree of uncertainty on whether you're going to have that health insurance tomorrow.

"Employers, in order to try to control the amount of spending that they have to do to maintain their employer-based health insurance, are continuing to ask employees to contribute more and more to that cost. The co-pays and the deductibles continue to rise rather dramatically. It is the No. 1 source of labor-management disputes, and it has been for years. It usually comes at the expense of having any increases in their compensation in the face of inflationary increases.

"It's been much more difficult to maintain their direct compensation because of the effort has been focused on health care. That means for the average person out there with an employer-based health care program, this is a way to stabilize those costs in a way that hasn't been happening for decades. So tomorrow, they won't find they're all of a sudden left without health insurance or that participating in their employer's health insurance has become unaffordable to them.

"If they leave their job or are laid off, they can now be assured that they have health insurance coverage for themselves and their families. For that average person out there who may like their health insurance program, that's the greatest comfort they'll have with health insurance reform.

"There isn't a person out there who doesn't recognize that this situation is not sustainable, that we are at major jeopardy right of seeing loses of what we enjoy today. (With reform) they get predictability that they don't have today.

"It keeps their choice in the matter. They get to choose their doctor the same way they do it today. There's no change in that. That's built in because we're building on the private system that we're familiar with, so they have that comfort of knowing that what they're familiar with and comfortable with in the vast majority of cases is going to continue with a great deal more certainty that it will be there when they need it tomorrow."

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