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If health overhaul fails, look for spiraling premiums, more uninsured, skimpier Medicare
Ricardo Alonso-Zaldivar, Associated Press Writer

What could be worse for Americans than health care overhaul? No health care overhaul.

It's anybody's guess whether President Barack Obama's health remake will survive in Congress.

But there's no doubting the consequences if lawmakers fail to address the problems of costs, coverage and quality: surging insurance premiums, more working families without coverage, bigger out-of-pocket bills, a prescription coverage gap for seniors that grows wider and deeper, and government programs that pay when people get sick but do little to keep them healthy.

"They complained, 'If you pass this bill, prices will go up,'" said Sen. Maria Cantwell of Washington state, who helped shape the Senate Democrats' bill. "Well, you don't pass it, and prices will still go up."

For economist Douglas Holtz-Eakin, a top adviser to 2008 Republican presidential nominee John McCain, "no one has the luxury of saying we're not going to worry about this." While he's no fan of the Democrats' approach, he said Republicans "are going to have to deliver something at some point. The question is whether they do it with this president leading or wait for a Republican president."

Health care spending in the U.S. hit $2.5 trillion last year, growing faster as a share of the economy than at any time in a half century, yet with results that compare poorly with other advanced countries spending less and offering universal coverage. Government programs — mainly Medicare for the elderly and Medicaid for the poor — will soon cover more than half the nation's health care tab, a staggering burden for federal and state budgets.

For those with private insurance, the recently announced double-digit premium increases for people purchasing their own coverage with Anthem in California could be a harbinger. Medical costs are rising in a weak economy, causing healthy people to drop coverage and raising costs for those left behind, with no limit in sight.

"We will see real changes in the way health care is delivered, regardless," Holtz-Eakin said. "The question is whether they are coordinated and done proactively or whether they are done on the ground by providers, insurance companies and employers, reacting to their costs and their risk pools."

A look at how some major groups would fare if the health care overhaul collapses and present trends continue unchecked:

Older people
Both Democratic bills would begin experiments aimed at providing quality care at lower cost for Medicare recipients, particularly those with chronic conditions such as heart failure and diabetes. Copayments for preventive care would be eliminated. The House bill gradually would close a gap in prescription drug coverage for seniors, now growing wider and deeper because of inflation. Those improvements would be lost.

On the plus side, private insurance plans in the Medicare Advantage program, serving about one-fourth of seniors, would be spared cuts proposed by Democrats. Still, insurers and other service providers won't get a free pass. With Congress looking to cut the federal deficit, Medicare will be on the chopping block again.

"The irony is that major interest groups — hospitals and drug makers — had agreed to take reductions this time," said John Rother, top political strategist for AARP, an advocacy group for seniors, which supports the Democratic bills.

Workers
The divide between those who have health insurance and those who don't will get deeper. Many more will find themselves with inadequate coverage that leaves them with hefty bills if they get seriously ill.

"More employers will drop coverage. More consumers will get increased copayments and deductibles," said Oregon Democratic Sen. Ron Wyden, a moderate who has not given up hope of a deal with Republicans. "I believe that would be so corrosive for the country that we would not let it be the outcome."

By 2019, the number of uninsured Americans would rise to 54 million, most of them low-income workers paying federal and state taxes to support health care programs for older people and the poor. The Democratic bills would expand Medicaid to pick up more people near the poverty line, while providing subsidies for many middle-class households to buy private coverage.

People with health problems
Insurers would be able to continue denying coverage to people with medical problems, or charge them higher premiums. People who get sick could face cancellation of their coverage in certain circumstances.

People in their 50s and 60s, when many medical conditions emerge, would face premiums up to six times or seven times higher than what those in their 20s pay.

Conversely, 20-year-olds would continue to enjoy access to low-cost health insurance. The Democratic bills would have forced them to subsidize premiums for older generations. Still, young people would not escape unscathed. The Democratic bills would have allowed children to stay on their parent's coverage until their mid-twenties, a particularly valuable benefit for those with health problems.

Employers
Big employers were hoping that the Medicare experiments would provide a template for their own efforts to try to control costs and maintain quality. Small employers were leery of the Democratic bills, although some would have received subsidies to help them provide coverage.

If nothing gets done, large employers will be the front line in efforts to rein in health care spending. They will keep passing on costs to employees through higher premiums and copayments. But they're also expected to take a more aggressive approach to get workers to shape up by quitting smoking, losing weight and making other lifestyle changes. Employers won't just be insurance sponsors any longer; they could start acting more like the health police.

Small companies are likely to keep dropping coverage, as are employers with lots of low-wage workers.

"The fact that we had a mandate from voters to do something, and that a major effort to respond led to such a deep partisan divide and gridlock is not positive," said AARP's Rother. "The gridlock that's developed on health care is a very serious and negative omen for our ability to tackle Social Security and deficits."

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