koyunbabaNew House Health Bill - The Pros and Cons
October 29th 2009 19:12
The U.S. House today revealed their version of the much anticipated health care reform bill (herein referenced as "the bill" or "AHCAA"). Many hot-button issues are addressed in the proposed bill and, while the bill is not perfect (indeed I wish it was a single payer bill - but I digress), it would allow coverage for nearly all Americans and it is certainly a step forward in comparison to the "system" we currently "enjoy." Below is an explanation of the pros and cons of the bill.
Pro: Health Insurance Exchange
According to the bill, a new Health Insurance Exchange will be established which will include plans from private insurers, co-ops, and the new public option (more on that later). Additionally, any plan offered in the exchange would provide preventative care with no co-pays and cap out-of-pocket costs.
Con: Who can use the Exchange
Unfortunately, the Exchange will not be available to all U.S. citizens. In order to qualify for any plan offered in the Exchange, citizens must NOT have insurance through their employer already. Therefore, the Exchange will be limited to uninsured consumers. This seems to be a gift to the insurance companies, since they will not lose customers they already have. They may not gain new ones, but they will still control the employer market.
Pro: Public Option
Offered in the exchange will be a government-run public option. This option would be offered alongside private plans in the exchange. Consumers would be able to compare all plans on the exchange, private or public. The public option and all plans offered in the Exchange would not be allowed to deny coverage for pre-existing conditions - a VERY important step.
Con: Who can use the Public Option
As with the Exchange, the public option would only be available to those that qualify for the Exchange. In my mind, this is not really a public option, since it would not be available to everyone.
Pro: Employer Provisions
The AHCAA includes language that would allow employers to continue providing private coverage, however, those that do not will be charged a fee in the amount of 8% of payroll. It's not a mandate, but it's pretty close.
Con: Individual Mandate
Nearly all individuals will be required to have insurance of one form or another. If an individual does not purchase coverage, they will be subject to a penalty equal to 2.5% of income, "subject to a hardship exemption."
Pro: Affordability Credits
I really like this part. To soften the blow of the individual mandate, consumers will receive subsidies from the Federal Government based on a sliding scale to help pay for any plan in the exchange. The credits would be available to low and middle-income citizens.
Pro: Closing the Donut Hole
This may be my favorite provision of the proposed legislation. To give a little background as to why, I'll tell you a brief story. I used to work for a company that fielded customer service calls for a major health insurance company that administered Medicare Advantage plans for seniors. According to the Medicare Act of 1996 Part D, once a member of the plan reached a certain amount of "total drug expenditure" (that is, the total cost of a drug including the co-pay and the amount the insurer pays) the insurance company stops paying for the drugs. This year, the number was $2700. Once this gap is reached, the member on the plan is required to pay 100% of the drug cost until they hit "catastrophic coverage," at which point the insurance plan starts paying again. Catastrophic coverage this year began at $4350. Therefore, seniors who have expensive medications had to pay $1650 out of pocket (not including the co-pays for the first $2700) during the gap - a.k.a. the "Donut Hole." I received a call from one senior who had just entered the Donut Hole and informed me that she had $20 in her bank account. Rather than paying for her drugs, she said, she would go out and buy a bottle of hard liquor and get drunk. Our society cannot afford to force our seniors to choose between drugs and any other expenses. Closing the Donut Hole will be a huge benefit to our seniors.
Pro: How it's Paid For
Part of the money for the AHCAA will come from a "surcharge" (a nice word for additional tax) placed on the top .3% of households. Thus couples that make over $1 million a year in adjusted gross income would be charged. Also, Medicare and Medicaid would be more streamlined (without cutting benefits to eligible persons)
So those are some of the pros and cons as I see them. I would say this is a good first step in health care in America, and hopefully it will be a catalyst for further changes in the future.
Disclaimer: Unless otherwise indicated, all facts and figures are sourced directly from the U.S. House Committee on Education and Labor's summary page located here.
You can read the entire 1990 page bill here.
Pro: Health Insurance Exchange
According to the bill, a new Health Insurance Exchange will be established which will include plans from private insurers, co-ops, and the new public option (more on that later). Additionally, any plan offered in the exchange would provide preventative care with no co-pays and cap out-of-pocket costs.
Con: Who can use the Exchange
Unfortunately, the Exchange will not be available to all U.S. citizens. In order to qualify for any plan offered in the Exchange, citizens must NOT have insurance through their employer already. Therefore, the Exchange will be limited to uninsured consumers. This seems to be a gift to the insurance companies, since they will not lose customers they already have. They may not gain new ones, but they will still control the employer market.
Pro: Public Option
Offered in the exchange will be a government-run public option. This option would be offered alongside private plans in the exchange. Consumers would be able to compare all plans on the exchange, private or public. The public option and all plans offered in the Exchange would not be allowed to deny coverage for pre-existing conditions - a VERY important step.
Con: Who can use the Public Option
As with the Exchange, the public option would only be available to those that qualify for the Exchange. In my mind, this is not really a public option, since it would not be available to everyone.
Pro: Employer Provisions
The AHCAA includes language that would allow employers to continue providing private coverage, however, those that do not will be charged a fee in the amount of 8% of payroll. It's not a mandate, but it's pretty close.
Con: Individual Mandate
Nearly all individuals will be required to have insurance of one form or another. If an individual does not purchase coverage, they will be subject to a penalty equal to 2.5% of income, "subject to a hardship exemption."
Pro: Affordability Credits
I really like this part. To soften the blow of the individual mandate, consumers will receive subsidies from the Federal Government based on a sliding scale to help pay for any plan in the exchange. The credits would be available to low and middle-income citizens.
Pro: Closing the Donut Hole
This may be my favorite provision of the proposed legislation. To give a little background as to why, I'll tell you a brief story. I used to work for a company that fielded customer service calls for a major health insurance company that administered Medicare Advantage plans for seniors. According to the Medicare Act of 1996 Part D, once a member of the plan reached a certain amount of "total drug expenditure" (that is, the total cost of a drug including the co-pay and the amount the insurer pays) the insurance company stops paying for the drugs. This year, the number was $2700. Once this gap is reached, the member on the plan is required to pay 100% of the drug cost until they hit "catastrophic coverage," at which point the insurance plan starts paying again. Catastrophic coverage this year began at $4350. Therefore, seniors who have expensive medications had to pay $1650 out of pocket (not including the co-pays for the first $2700) during the gap - a.k.a. the "Donut Hole." I received a call from one senior who had just entered the Donut Hole and informed me that she had $20 in her bank account. Rather than paying for her drugs, she said, she would go out and buy a bottle of hard liquor and get drunk. Our society cannot afford to force our seniors to choose between drugs and any other expenses. Closing the Donut Hole will be a huge benefit to our seniors.
Pro: How it's Paid For
Part of the money for the AHCAA will come from a "surcharge" (a nice word for additional tax) placed on the top .3% of households. Thus couples that make over $1 million a year in adjusted gross income would be charged. Also, Medicare and Medicaid would be more streamlined (without cutting benefits to eligible persons)
So those are some of the pros and cons as I see them. I would say this is a good first step in health care in America, and hopefully it will be a catalyst for further changes in the future.
Disclaimer: Unless otherwise indicated, all facts and figures are sourced directly from the U.S. House Committee on Education and Labor's summary page located here.
You can read the entire 1990 page bill here.
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