Health care reform for dummies

Americans are struggling to decipher the current state of health care reform. Understanding the ins and outs of over 1,600 pages of proposed law is daunting...

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With the bombardment of speeches, commentaries and rowdy town forums, many Americans are struggling to decipher the current state of health care reform. Understanding the ins and outs of over 1,600 pages of proposed law is daunting. Unfortunately, there is no politician or any crystal ball that can predict either plan’s success at this stage.

To date, two bills have been proposed – the 1,017-page House bill (H.R. 3200) and the 615-page Senate Health Committee bill. A third bipartisan bill is said to be in the works from the Senate Finance Committee. Until September, when Congress reconvenes, we will continue to wait and debate on the limited information we do have.

Here is a summary of those bills, commonly-raised concerns and the debate as it now stands.

1) Problem: The Uninsured
Millions are uninsured and falling ill without insurance can be financially catastrophic. Many of these are working people, or recently unemployed, who can’t afford to buy insurance plans. Others are self-employed or small business owners who also can’t afford insurance. Some are between the ages of 55 (retirement age) and 65 (Medicare-eligible age), and thus have no coverage. In 2008, the Kaiser Commission reported that 41 million were uninsured, while another 35.8 million people had no insurance during part of the year.

Proposed Solution: “Health care for all.” Both bills have outlined strategies to include all Americans in some form of a health insurance plan – whether Medicaid, Medicare, the private or the public/community option.

2) Problem: Pre-existing conditions
People with any history of medical problems (“pre-existing conditions”) can be denied coverage by certain insurance plans because their condition makes them too high-risk.

Proposed Solution: Ban the pre-existing condition clause for all health insurance companies, including those in the private option. The hope is that as more young and healthy Americans have insurance and pay their premiums, that money will offset the costs of taking care of the sicker Americans.

3) Problem: The under insured
Some people with health insurance have plans that don’t cover all basic health care needs (the “under-insured”).

Proposed Solution: All health insurance plans will cover hospitalizations, outpatient hospital and clinic care, physician fees, equipment, prescription drugs, rehabilitation, maternity care, child care, preventive care, mental health, and marriage and family therapy. The addition of coverage for mental health and counseling is an added benefit not often covered currently.

4) Problem: Payout limits
Once people with health insurance reach their annual dollar limit, they are left to pay for any additional care out-of-pocket.

Proposed Solution: No lifetime or annual limits on what insurance companies will cover.

5) Problem: Out-of-pocket expenses
Out-of-pocket expenses for the “under-insured” are high and bankrupts families.

Proposed Solution: Annual out-of-pocket expenses would be no more than $5,000 for an individual and $10,000 for a family – including co-payments and all additional medical costs. All preventive care would be excluded from charging co-payments.

6) Problem: Not enough preventative medicine
Insurance coverage and reimbursements tend to not favor preventive care.

Proposed Solution: Reimbursements will change for doctors to focus on patient outcomes, health disparities, and avoiding hospital admissions. The focus will shift to preventive care and keeping Americans healthier in order to avoid aggressive and costly medical treatment down the line.

7) Problem: Small business challenges
Small businesses are often financially unable to provide medical coverage for its employees.

Proposed Solution: The smallest employers will have the option to enroll employees into the subsidized health insurance options. Employees will also have the option to enroll themselves.

Concerns about the proposed bills

People will lose their current insurance. According to the bills, no American will be forced to give up a plan he or she currently has. Those health insurance companies will be grandfathered in and ultimately have to abide by the standards of the other plans.

There will be one government-run plan. There are several options on the table – keep your own plan, current Medicaid and Medicare, a private option which includes three tiers, and a public or community-based option. Each differs in the amount of out-of-pocket expenses. However, even the most basic plan will cover essential health care services. Some plans will be available through an insurance “exchange” – the mechanism that handles the administration and enrollment. States may also be given the option to run their own health care “exchange.”

We will have no choices. Again, there are several options of plans. The only automatic enrollments are those who qualify for Medicaid – an economically vulnerable population that otherwise may not have access to plans requiring a premium anyway. Rates will be decided by a committee that takes public opinion into account. All Americans will, however, have to enroll in some form of health insurance, or risk the 2.5 percent penalty tax.

The reform won’t be fair for all. There is a proposed appeals process, utilizing an impartial, independent committee to review those claims. An ombudsman will take grievances from individuals. The entire health care “exchange” is said to be transparent to the public, including the process and the companies involved. Whistleblowers within these companies are protected from firing if they report a company’s infractions. Lastly, plans will be prevented from discriminating based on salary, gender, or past medical insurance claims.

People will have to go before death panels. The section of the House bill (page 425) that former Gov. Sarah Palin referred in her “death panels” comment states that physicians will be reimbursed for taking the time to discuss end-of-life wishes. These discussions are not mandatory. However, such discussions are essential to prevent families and physicians from performing aggressive, and sometimes painful, measures to keep someone alive when it is against their wishes. It’s better to talk about this while the person is awake and of sound mind than to wait until the person is too ill and the family is left to guess.

We’ll lose our privacy. Some have expressed concern that employees of the government will have access to Americans’ financial and personal records. They already do – the IRS is one example. All patients currently enrolled in government-run health insurance – the military, Medicaid and Medicare, have also made this type of information available to the government. Our personal data will be protected under HIPAA just as it is now with our government and private plans.

Healthcare will be rationed. The bills describe a committee that will decide which services will be covered by the insurance plans. It is similar to the process of private insurance companies now. There are covered services, and services not covered. Setting standards is a necessary part of the process and does not necessarily imply subpar benefits. The speculation is that rationing will have to take place in order to stay within budget. However, nothing in the bills infers that.

The public option may not be an option. The public option is proposed in order to compete with private insurers and keep costs down. Both sides agree there needs to be competition. However, the Senate is not in full support of a public option, and instead plans to propose the idea of nonprofit health cooperatives, where the members own and govern the insurance company. Democrats in the House support a public plan in theory, but how it will look is still being debated. Republicans in the house are almost universally opposed.

As individuals, we can’t afford these reforms. As individuals, premiums will vary based on age, with the highest rates set no more than double the lowest. Affordability credits will be made available based on income to help people afford premiums.

As a country, we can’t afford these reforms. Government funds already pay the bills left behind by the uninsured – $56 billion in 2008. In addition, both the House and the Senate expect to tighten excess spending on Medicare and Medicaid and allocate those funds to covering the uninsured. The penalty taxes charged to businesses that opt-out of providing health insurance for their employees will also go into the fund toward health care – anywhere from 2 to 8 percent of payroll each year. There is also discussion about taxing insurers with the most expensive health plans.

We’re going too fast. Even if the House bill is passed this fall, it is estimated that changes would not be seen until 2013 and the full effects not until 2018.