Health reform advances

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A wide-ranging overhaul of the nation's health-care system squeaked through the House of Representatives Saturday, but only after Speaker Nancy Pelosi, to mollify conservative Democrats, agreed to tighter restrictions on coverage for abortions.

While more liberal Democrats balked, they nevertheless supported the bill, which is touted to extend coverage to 36 million people who lack insurance. It requires most individuals to have coverage and most big companies to offer it to workers. Subsidies would aid people with lower incomes and smaller businesses. The bill also includes a government-run insurance plan although only a small slice of the nation would have access to it.

Although the House bill is more comprehensive -- covering 96 percent of the population -- than what Senate committees have endorsed, it is also more expensive ($1.1 trillion over 10 years) and lacks key provisions to rein in ever rising health-care costs.

The House bill is paid for through savings in Medicare, fees and taxes on the richest, but, to assuage labor unions, it retains the income tax exclusion on expensive health-insurance plans. Absent that subsidy, according to health economists, companies would have an incentive to buy cheaper, better-run insurance plans, which over time would drive down health-care costs.

The Senate bills, which include the "Cadillac tax" on insurance polices, also would create a commission to set Medicare payment rates based on economics -- what care works best -- rather than politics. House Democrats rejected that approach as an intrusion on their turf. Both measures "bend the curve" of medical costs and should be included in the final bill.

The Senate, which is only now moving to take up the issue, has many contentious issues to negotiate to forge a majority, but with substantive health-care reform so close to fruition, it has a major incentive to reach the goal.