Dem-GOP Split on Health Care Goes Beyond Public Option

Senate's No. 2 Republican opposes Obama's health insurance reform proposals.

August 18, 2009, 7:25 PM

Aug. 19, 2009— -- If you were to listen to most coverage of the health-care debate, you would be excused for thinking that the public option is the only significant difference between the parties.

It's not.

Republicans and Democrats are at loggerheads on a far broader set of issues.

The distance between the parties' leaders on health care was made clear on Tuesday when the No. 2 Republican in the Senate held a conference call with reporters.

Asked by ABC News about a package of insurance market reforms that have been endorsed not only by President Obama but also by the insurance industry, Sen. Jon Kyl came out against all three proposals.

In particular, the Arizona Republican signaled that he opposes requiring insurance companies nationwide to provide coverage without regard to pre-existing conditions; requiring them to charge everyone the same rate regardless of health status; and requiring all Americans to carry health insurance.

"One of the concerns I have about the approach of the Democrats ... is an assumption that there has to be a national mandate on all insurers to do various things," Kyl told ABC News when asked for his position the three issues.

"Those are techniques that states can, and some have, used in the past with fairly disastrous consequences," he said.

Although the public option has dominated coverage of the health-care debate, Kyl's comments underscored that the rift between GOP leaders and Democrats runs much deeper.

"The more you look into [the views of congressional Republicans], the more you are going to find significant opposition up and down the board to most ideas on the table when it comes to comprehensive health-care reform," Jim Manley, the senior communications adviser to Senate Majority Leader Harry Reid, D-Nev., told ABC News. "Republicans are betting that the president will fail."

Kyl said he opposed guaranteed issue -- requiring insurers to provide coverage without regard to pre-existing conditions -- and community rating -- requiring them to charge the same rate regardless of health status -- because of concerns about cost.

"There's no question that it does raise costs," Kyl said. "And the objective here is to reduce costs."

Obama Supports Mandating Individuals to Have Health Insurance

Two years ago, the insurance industry commissioned a study of states that have pursued guaranteed issue and community rating.

The study, which was conducted by Milliman, Inc., found that these policies "have the potential to cause individuals to wait until they have health problems to buy insurance. This could cause premiums to increase for all policyholders, increasing the likelihood that lower-risk individuals leave the market, which could lead to further rate increases. If this continues, the pool or market could essentially collapse or shrink to include only the high risk population."

The insurance industry has since concluded, however, that these problems can be overcome by requiring all Americans to purchase insurance.

"If we can get everyone in the health-care system, we can do guaranteed issue, which means no denials on the basis of preexisting condition, and no rating by health status or gender," said Robert Zirkelbach, a spokesman for America's Health Insurance Plans (A.H.I.P.), the insurance industry's trade group.

Obama originally opposed requiring all adults to purchase health insurance. In fact, his opposition to an individual mandate was a flashpoint in his fight for the Democratic nomination against then-Sen. Hillary Clinton, D-N.Y.

Since becoming president, however, Obama has changed his stance and he now supports an individual mandate, viewing it as essential to winning the insurance industry's support for guaranteed issue and community rating.

"So it's important when people ask me, why don't you do the insurance reform stuff and not expand coverage for more people, my answer is I can't do the insurance reform stuff by itself," Obama said Friday during a town-hall meeting in Montana.

"The only way that we can change some of the insurance practices that are hurting people now is to make sure that everybody's covered and everybody's got a stake in it," he said. "Then the insurance company are able and willing to make some of the changes."

GOP 'Not Relevant' to Health-Care Debate, Liberal Blogger Says

A liberal blogger spearheading efforts to raise money for progressives who see the public option as an essential element of health-care reform, reacted to Kyl's comments on Tuesday by saying that it reconfirms her view that Democrats should be reluctant to make concessions to Republicans since most of them are likely to oppose whatever bill emerges from Congress.

"Democrats don't need Republicans to pass health care," Jane Hamsher, the founder and publisher of the liberal FireDogLake blog, told ABC News. "The issue is going to be: 'How am I going to get health care?' Republicans are not relevant to this debate -- except if the Democrats decide to make them relevant."

ABC News' Elizabeth Gorman contributed to this report.

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