Here are some of my favorite changes that will immediately be in place thanks to the new health care reform (Kevin Drum has a
more comprehensive list). Starting this year:
- Small businesses that choose to offer coverage will begin to receive tax credits of up to 35% of premiums to help make employee coverage more affordable.
- Children with pre-existing conditions can no longer be denied health insurance coverage.
- Insurance companies will be banned from dropping people from coverage when they get sick, and they will be banned from implementing lifetime caps on coverage. Annual limits on coverage will be banned for certain plans.
- Adults who are uninsured because of pre-existing conditions will have access to affordable insurance through a temporarily subsidized high-risk pool (this is to help until the exchanges and subsidies get up and running, I think).
- The bill increases funding for community health centers, so they can treat nearly double the number of patients over the next five years.
- The bill creates a new, independent appeals process that ensures consumers in new private plans have access to an effective process to appeal decisions made by their insurer.
- New private plans will be required to provide free preventive care: no co-payments and no deductibles for preventive services. And beginning January 1, 2011, Medicare will do the same.
- The bill starts to close the Medicare Part D 'donut hole' by providing a $250 rebate to Medicare beneficiaries who hit the gap in prescription drug coverage. And beginning in 2011, the bill institutes a 50% discount on prescription drugs in the 'donut hole.'
5 comments:
I'm struggling to get excited about any of this. Sorry to be so skeptical, maybe you can help me with a few of my concerns.
1) How are we going to pay for this? Some of the proposed methods seem like they won't hold up. It seems to me that there are underestimations when it comes to cost and overestimations when it comes to savings. It seems like these things always cost more than we think, and always get more complicated than we anticipate.
2) Where is the tort reform? It wouldn't have been that complicated to humor us and put a smidgen of tort reform in the bill.
3) It seems there is a huge loop hole in the effort to get everyone on health insurance and thus lowering the cost. The fine for not getting covered is far less than what health insurance can cost. And now insurance companies cannot deny coverage to anyone. So what is to stop someone from paying the fine, then when they get sick, getting covered? Who cares? Well a part of this plan was to lower costs by bringing more healthy people into the pool of the insured. This is an example of what might be an overestimation of savings. This combined with all of the very expensive new regulations on health insurance companies and I'm guessing premiums will do nothing but increase over the next few years.
4) He has raised taxes on people making over $200k, and I'm skeptical that the middle class will never feel burdened by this new legislation. Obama vehemently promised not to raise taxes on anyone making over $250k, but I'm doubtful that future presidents will be able to fund this legislation without spreading the love to the middle class. So he directly and indirectly broke his promise, one made over and over again.
I've got some more, but I'm trying not to break the record for longest comment ever (which I hold the record for by the way).
Kyle
Hi Kyle,
Thanks for the comment. Glad I'm not the only one interested in health care policy around here. Can't say I'm surprised that you are not excited.
(1) Obviously, I know next to nothing about health care accounting, but the geeks at the Congressional Budget Office do. The CBO traditionally gives very cautious estimates when it comes to health care savings. That is, they traditionally underestimate savings and overestimate costs. This gives me reason to believe that the savings will materialize as projected. Of course, nobody knows for sure, but the cost control measures are real and have been applauded by many economists. "I'm sort of a known skeptic on this stuff," said MIT's Jon Gruber of the Senate Bill, "but I can't think of a thing to try that they didn't try. They really make the best effort anyone has ever made. Everything is in here....I can't think of anything I'd do that they are not doing in the bill."
http://www.commonwealthfund.org/Content/News/In-The-Media/2009/Aug/Congressional-Budget-Office-Has-Underestimated-Savings-and-Overestimated-Costs.aspx
http://www.theatlantic.com/politics/archive/2009/11/a-milestone-in-the-health-care-journey/30619/
(2) Obama offered a compromise on this, but it was rejected by Republicans who would accept no concessions for their votes. With pressure coming from the trial lawyers, Democrats couldn't do this without bipartisan cover, which Republicans refused to give. At the same time, capping malpractice awards has been shown to do very little to control costs. The CBO says, "In short, the evidence available to date does not make a strong case that restricting malpractice liability would have a significant effect, either positive or negative, on economic efficiency."
http://www.cbo.gov/doc.cfm?index=4968&type=0
(3) Well, this hasn't been how it has turned out in Massachusetts, which has a very similar plan. The ACA penalty will be $674. Massachusetts penalty is $537. But very few people opt out in Massachusetts. As one economist puts it: "Since there is little evidence of substantial gaming in Massachusetts, based on an analysis of penalty size alone there would seem to be little cause for concern over gaming under ACA, particularly for higher income individuals."
http://theincidentaleconomist.com/individual-mandate-penalties-are-not-too-low/
(4) Over $200,000? What are you thinking of?
I have no doubt that we will be tweeking this bill for a long time, but we should applaud it for the steps it does take in controlling costs and extending coverage.
Thanks for the response Bryan. I guess time will tell on costs and savings.
As for tort reform, it's a shame that politics has to be so political. :) It is hard to swallow though that it is the Republican's fault there is no tort reform in a bill owned entirely by Democrats. Pressure from trial lawyers or not it is disappointing. And it seems almost impossible to me that tort reform wouldn't save patients at least some money.
The new taxes for people making over $200k:
This one starts in 2011
"The Medicare payroll tax will increase from 1.45 percent to 2.35 percent for individuals earning more than $200,000 and married filing jointly above $250,000."
And this one in 2013
"The hospital insurance tax will increase 0.9 percentage points for those earning more than $200,000 ($250,000 for married filing jointly), and it includes net investment income."
Both from:
http://www.cnn.com/2010/POLITICS/03/23/health.care.timeline/index.html?iref=allsearch
One more thing. According to the polls (on how popular this bill was), this seemed like somewhat of a suicide mission for the Democrats. What is in store for the Dems in November?
Kyle
Hi Kyle,
Yes, we'll see. As Yoda says, cloudy is the future. Perhaps we should bet a root beer and you can come back to Columbus in ten years to buy me one (or vice versa, depending of budget outlays).
On taxes: Obama's actual promise was: "I can make a firm pledge. Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes." Notice he says families, not individuals. (He did raise cigarette taxes, though, so I guess that might count against his promise.)
On tort reform: Personally, I do wish they would have put it in, if only to stop the whining. Plus, every little saving helps. But let's not pretend it makes a significant difference; it doesn't. Texas, for example, aggressively caps malpractice awards, but they have some of highest health care costs in the nation.
On the Democrats future, I guess I'll say three things. First, according to my experience and polling I've seen from the Kaiser Foundation, very few people actually know what is in the bill. Most of the actual provisions are quite popular, and most of the unpopular ones (death panels, abortion coverage, government takeover of 1/5 of the economy, etc.) don't exist. The ability of the Democrats to blow a winning political issue, though, should never be underestimated. Second, sometimes it is important to do the right thing, even if it is unpopular and costs you seats in the short term (when the Republicans did unpopular things during the Bush years, it was celebrated as a matter of principle). Third, the economy will determine the midterms. If unemployment does not decrease, Democrats will we devastated, and this will have nothing to do with health care.
So, a root beer then? If the bill increases the deficit, I'll buy you one. If not, you buy me one. Collectible in March 2020.
A root beer it is! I await the year 2020 with anticipation, for I at least know that no matter what happens I will be drinking a root beer.
Kyle
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