Saturday, March 20, 2010

WTF is this Health Care Reform, anyways?

On the eve of the historic House vote on health care reform, we reflect back on the substance of the bill, as well as the problems, as much of this has been lost in the heated debate. The bill as it stands now does many things:

  • prohibiting health insurers from refusing coverage based on patients' medical histories[5][6]
  • prohibiting health insurers from charging different rates based on patients' medical histories or gender[5][6]
  • repeal of insurance companies' exemption from anti-trust laws[6][7]
  • establishing minimum standards for qualified health benefit plans[5]
  • requiring most employers to provide coverage for their workers or pay a surtax on the worker's wages up to 8%[5][8]
  • restrictions on abortion coverage in any insurance plans for which federal funds are used[6][8]
  • an expansion of Medicaid to include more low-income Americans by increasing Medicaid eligibility limits to 150% of the Federal Poverty Level and by covering adults without dependents as long as either or any segment doesn't fall under the narrow exceptions outlined by various clauses throughout the proposal.[9][10]
  • a subsidy to low- and middle-income Americans to help buy insurance[8]
  • a central health insurance exchange where the public can compare policies and rates[8]
  • requiring most Americans to carry or obtain qualifying health insurance coverage or possibly face a surtax for non-compliance.[5][12]
  • a 5.4% surtax on individuals whose adjusted gross income exceeds $500,000 ($1 million for married couples filing joint returns)[5]
  • a 2.5% excise tax on medical devices[5]

Basically it will establish minimum standards for "qualified health benefit plans," which we will all be required to buy, or our employer will be required to buy for us, on new "exchanges" which are mechanisms will theoretically allow people to more easily compare and shop for insurance plans. It also expands Medicaid, and provides subsidies for other low income people to buy insurance on exchanges. To pay for this bill, there are several new taxes and non-compliance penalties, as well as scheduled cuts to Medicare.

There are parts of the bill I agree with, but many more that I am completely opposed to. I have several critiques of this bill, but I will limit myself to my top four.

1. We can't afford it. First of all, the largest expenses don't begin until 2014, so this "$1 trillion over the next decade" price tag is misleading. A more honest price tag would start in 2014, and would be substantially higher, estimated at $2.5 trillion. And that's assuming we DO cut Medicare, which Congress is supposed to have done already on several occasions, but has not.

Also, the tax on "Cadillac" insurance plans does not kick in until 2018, and there is a strong possibility that Congress will avoid this unpopular measure when the time comes.

2. It will hurt small business. Businesses with 50 employees or more will be required to cover all of their employees or face stiff penalties. This will put many people out of work as businesses will be unable to afford the assuredly more expensive health insurance, and those who keep their jobs will likely face stagnant or reduced wages in order to pay for health care.

3. It encourages the employer-based insurance system. This system separates citizens from making health care decisions, and is a large part of why our system today is so terrible. Most people with health insurance do not pick their own plans, but rather take what is offered to them at work. The problem here is two-fold: first, since employees don't pick their insurer, employers are likely to pick the cheapest/easiest plan they can, not necessarily the best plan. Since employers may not face the consequences of picking a crappy plan, the money savings can outweigh any potential downsides of choosing a bad provider. Problem two: when you lose your job, you lose your insurance. I do not know how portability is addressed in this bill, so they may have fixed it, but I couldn't find it.

4. It is unconstitutional. Requiring every American to purchase insurance is plainly unconstitutional. Nowhere in the constitution is the federal government given this power, or anything like it. It's job is to regulate commerce, not require it. Idaho and Virginia's Attorneys General will sue over this issue if the health bill passes.

This bill has been watered down so much that little, in the end, will change. Health costs will continue to rise faster than the economy, and there will still be 20 million uninsured in America. I know we can do better.

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