SAN FRANCISCO — The rheumy-eyed fellow at the end of the brunch table at the Tivoli inn on Christmas morning sounded more and more like a noisy Forrest Gump. Whatever or whoever was the passing topic from the week's news, it would turn out that his life in some odd way had touched it or him or her.
When the discussion turned to the U.S. Senate's historic passage of a health-reform bill the previous morning, everyone but he concurred that it was a healthy turn of events. No, he corrected us, all aging parents visiting spawn in the bay area, the Democratic health bill was a giant failure of leadership. It merely trifles with a broken system.
The one real chance for a true universal insurance system, he said, passed when the country did not take up Richard Nixon's offer of an insurance plan that would have covered everyone and stopped the cost spiral. He had worked on the Nixon plan and its failure was one of the great disappointments of his life, he averred.
Helpfully, I chimed in that the Nixon health plan, consciously or not, was the template for the bills emerging from the Senate and House of Representatives now, some 35 years later. No, he snapped, they bear absolutely no resemblance to the plan produced for Nixon.
Sen. Edward M. Kennedy scuttled the Nixon plan because his own health-insurance bill was going nowhere, the fellow continued, and though he was pretty liberal himself he had never forgiven the senator. He exhibited so much feeling and just enough knowledge of the events — Kennedy did help kill the Nixon initiative, alongside the insurance companies, the medical establishment and the business community — that I was inclined to believe that he had indeed been present at the birthing. Maybe his formative role in Woody Allen's career was not imaginary either.
But he might have given Nixon, and, yes, his real or imaginary self, more credit for the solution that seems now likely to emerge as law. Both the Senate and House bills, especially the Senate's, are close imitations of Nixon's plan in their broad outlines. (Actually, there were two Nixon plans, in 1971 and a second one in 1974 when he tried to change the subject from Watergate to avoid impeachment.) The first one mandated the purchase of a minimum-benefit policy for all workers through their employers, a system of government subsidies for employers, an insurance exchange (pool was the word then) for small employers, expanded Medicaid or an alternative for the unemployed and others not eligible for employer coverage, and some restrictions on medical underwriting. It would be financed by payroll taxes and general revenues. That is pretty much the Harry Reid plan the Senate approved Christmas Eve.
Kennedy insisted in 1971 on a single-payer system, Medicare for all, which the United Auto Workers and the AFL-CIO said was the only way to treat American workers fairly. But in 1974 he and our own Rep. Wilbur D. Mills of Kensett agreed to work with Nixon and his health and human services secretary, Caspar Weinberger (later Ronald Reagan's defense secretary), on universal employment-based insurance. They never reached full agreement. Kennedy and Mills wanted a compulsory plan, Nixon thought by then that it should be mostly voluntary, but they agreed that employers should pay three-fourths of the premiums and workers a fourth. Mills began hearings in April 1974 on the Nixon plan and the Mills-Kennedy plan. National health insurance seemed a certainty by the year's end.
Four months later, Nixon resigned ahead of impeachment. Two months after that, the U. S. park police stopped the car of a drunk Mills on the Tidal Basin causeway and the stripper Annabella Battistella jumped out of the car and into the Tidal Basin, ending Mills' sway in the Capitol. The Democrats decided to wait for the certain Democratic president in 1977, who turned out not to be keen on the idea. Kennedy ran against him in 1980 and lost.
Kennedy in a few years would regret that he had not seized the chance and reached an agreement around the Nixon plan. Even by 1974 he had given up on the ideal of a single-payer system because the insurance industry was already too powerful and the medical establishment even after Medicare's fantastic popularity was still resistant.
So we are about to get the Nixon-Cap Weinberger plan (let's credit my friend at the Tivoli with a dubious assist) with one further perfection that seems to have been anticipated by at least some of the big players in 1974: the end of the insurance industry's role as medical underwriters — evaluating the risks of people of different ages and health conditions and fixing premiums accordingly or else denying coverage. That essentially is an insurer's only differential role. Otherwise, its function is supplemental to the government's. It pays the bills and takes a profit.
The current bills embroider on the Nixon plan by telling insurance companies they cannot cut people off for getting sick or having pre-existing ailments and they can't charge people different premiums for their health conditions — the one aspect of the plan that nearly all the Republicans embrace, too. Insurance companies will be able to set different premiums based only on age, region of the country and whether people smoke.
The Senate bill goes another step further and restricts their profits by requiring them to spend at least 85 cents of every premium dollar on large-employer plans, and 80 cents of every dollar on small-business and individual policy plans, for actual medical benefits. With that 15 or 20 cents they would have to administer the program and squeeze a profit. That would make them like regulated utilities, which actually produce something, power or water, but still make good money.
Nixon and Mills would have done it if they had thought of it.
TFS MONEY 1074 Finance House, London road, LEIGH-ON-SEA, SS9 3NA Email: email@example.com TFS money is…