Let's start with what I'm not going to do here. I'm not going to tell you to support the health care reform bills; I'm also not going to tell you to oppose them. What I am going to do is ask you to focus.
Here's what the bills do:COVERAGE AND PREMIUM REFORM
- Medicaid eligibility will be expanded. Medicaid covers a broad range of stuff and does a good job for low-income people, who are more likely than people with higher incomes to be in fair health or worse.
- Subsidies for premiums. Those above 150% of the poverty line (the Medicaid limit) but below 400% of the poverty line would get help to purchase health insurance in the exchange.
- Caps on out of pocket spending. This is also on a sliding scale up to 400% of the poverty line.
- Individual mandate. You buy insurance or pay a penalty, which is a percent of income. Individuals can get hardship exemptions.
- Employer mandate. Employers have to offer coverage meeting certain standards or pay a fine that's a percentage of their payroll. Most small employers are exempt.
- No more extra payments to Medicare Advantage. We're overpaying by 14% or $1100 per person over the age of 65. No more.
- We can let Medicare negotiate drug prices with the pharmaceutical industry (although the administration does not want this).
- Reimbursement reforms. They're going to try and implement accountable care organizations and pay for quality not quantity.
- Insurers can't deny coverage for pre-existing conditions.
- Premiums would have a narrow range. The most a company could charge for one person compared to another based on age or tobacco use could be only a certain amount more.
- There would be maximum lifetime out-of-pocket costs and no maximum lifetime benefit.
- There will be a minimum package of benefits that will be considered mandatory.
- These rules apply to all new policies and eventually all employer-sponsored policies as well.
- The exchanges. These are for individuals and small businesses in every state. Theoretically, the exchanges help people to make better choices about insurance and find a good plan. By year three, they could also apply to businesses with up to 100 workers that wish to use it. Eventually, everyone might get there.
- The House bill sets a 5.4% surtax on couples making more than $1,000,000 a year and individuals making more than $500,000 a year. Brings in more money than you'd think. The Senate bill uses an excise tax of 40% on premium dollars above $23,000 for families and $8,500 for individuals. If you have a high-risk job, are over 55, or live in a high-cost state, the threshold may be higher.
Now here's the tricky part. Notice what I didn't talk about: The Public Option.
However it started, it's now a shell of its former self. At best it's opt-out or triggered. You can only get it if you're in the insurance exchange. It's not pegged to Medicare rates, so would need to negotiate for savings. Maybe a few million people might wind up using it. It probably won't get the cost savings many think it will. And it's entirely possible the premiums might be higher than private insurance. The CBO agrees with me.
It's just not that important. It's really not. Maybe there was a time it was, but no longer. Now it's a withered appendage. No more people will be insured with a public option than without it. Nor will the quality of care differ. It may decrease the total cost of the bill by a few percent, but that's it. It's not a path to single payer. It's not a secret government takeover of care. And I say that not caring whether you hope or fear if either of those things is true.
If you like most everything else in reform, is it really worth losing it if you don't get a public option? If you like most everything else in reform, is it worth forgoing it all if there is one? I don't understand the rhetoric.
There are people who I respect who legitimately oppose these bills, both from the left and from the right. Personally, I don't think the bills do enough to change the health care system or provide robust ways to get a handle on costs. I also think it's insane that anything less than 100% is considered universal coverage. But this isn't about me. And it shouldn't be about the public option.
So forget about it. It's time to decide if you want health care reform as I describe it here. Yes or no. If you do, then stop fighting over the public option (or Medicare buy in or whatever) and pass it. If you don't, propose an alternative solution. We've got other things to do. And a lot of them will still involve improving the health care system.
Read more about health care policy and get your questions answered at Rational Arguments.