A Healthcare Reform Factsheet

So many of my friends seem not to know exactly what’s in this bill (these bills, really). I offer this abbreviated list of facts and figures from the HCR bills that passed the House last night, compiled by somebody who’s been glued to the Huffington Post, Drudge, 538, the New York Times  and Wall Street Journal for the last six months:

Insurance Reform:

For many, the most important part of the bill, and where most of the consensus was. As of implementation, insurers can no longer do any of the following:

  • Place caps on your benefits, annually or over the life of the policy
  • Drop your insurance plan because you got sick (which insurance companies did … a lot)
  • Deny you coverage for conditions that pre-date your policy

At the same time, insurance providers MUST do the following:

  • Allow parents to keep their children on their family plan until the kids turn 26
  • Cover preventative procedures (screening tests and the like)
  • Cover the cost of meeting with your doctor to discuss end of life decisions (the origin of the "Death Panel" myth)


Insurance Exchanges:

The bill creates state-run insurance exchanges, which essentially allow individuals in the insurance market to unionize; just like big employers, the exchange will take bids from providers, and only the best bids will get offered to those who used to have to fend for themselves. I’ve shopped for insurance on the individual market. It’s a miserable place. This plan has states step in to screen off the worst plans from the market so people don’t get bilked.

This is where you would have found that "public option" government-run insurance plan that everybody was hollering about, but nothing resembling a public option made it into the final bill.

Mandates:

Everybody must now have a bare minimum of health insurance or pay a fine. Likewise, every business with more than 50 employees must provide their employees with the same bare minimum insurance or pay a fine. Note that you can pay the fine (in the form of a tax) without any further repercussions; it’s not like it’s now a federal crime not to have health insurance.

The federal criteria for what constitutes the "bare minimum" is what most of the hullabaloo about "government approved healthcare" comes from (I think, I’ve never 100% understood the argument).

The mandates are there to maximize the risk-distributing effects of insurance – if everybody has insurance (including 20-somethings who are convinced that they’re invincible), the insurers will have more money with which to pay out benefits on sick peoples’ policies, thus allowing insurers to keep premiums (at least marginally, hopefully) lower for everybody else.

Subsidies, Medicaid Expansion:

At the same time that everybody is required to buy insurance, the Feds will give hefty tax subsidies to the middle class to help cover the cost, while simultaneously expanding Medicaid further up the income ladder (Medicaid and Medicare, of course, meet the "bare minimum" criteria). Everybody making up to 85k a year gets a subsidy to buy the insurance that they have to buy, and the subsidies get really hefty once you get down into the 30k-50k range. Small businesses will likewise get hefty subsidies to help pay for employee healthcare.

The subsidies are where the abortion howling comes in. The bill expressly says that none of the subsidies can be used to pay for abortion coverage; all buyers of a company’s policy will share the cost of reproductive health expenses for women covered by the company, including a separate check for abortion coverage. The argument, however, is that, because money is fungible, there’s no difference between the subsidy and the extra check. I’ll leave it there.

Revenue Raising:

New Taxes – Yes, there are hefty new taxes in this bill. The most talked-about tax is on "Cadillac" healthcare plans, generally worth more than 10k/year. Unions HATE this idea, because they generally negotiate for super-premium health plans in lieu of pay raises. My mom, a teacher, in the Teacher’s Union, will see her taxes go up. This tax won’t kick in until later (the fact that the tax is delayed was somehow considered a "gift" to the unions, which this tax most certainly isn’t). There are also some new income and capital gains taxes on the super-rich.

Medicare – HCR strips about half a trillion of waste from Medicare and spends that money on the rest of the bill. The Congressional Budget Office found that benefits to seniors would be almost entirely unaffected. Quite the contrary, one of the main features of the bill is to further extend President Bush’s Medicare prescription benefit. And, at the same time the cuts provide money to pay for the rest of the bill, they extend Medicare’s solvency for another decade.

Fines – Presumably, some people will opt to pay the fine rather than buy the mandatory insurance. That money will also go to pay for the subsidies.

Senate Nonsense:

Back-room special deals like the "Cornhusker Kickback" and "Gator-Aid" were in the Senate bill, have now been passed by the House, and will be the law of the land once the President signs the bill. However, the second bill the House passed last night mitigates most, if not all, of this nonsense. In some cases (i.e. the "Louisiana Purchase"), what had been sweetheart deals for one state will be extended to all states. In other cases, the deal will be stripped out altogether. These are minor points, and the fix bill does nothing to fundamentally alter anything else in the main bill.

The Senate still needs to pass this fix bill, which it plans to do with budget reconciliation, which is why the 52 votes the Dems say they now have will be enough, notwithstanding Republicans’ desire to filibuster. Conventional wisdom is that the fix bill will pass the Senate this week, and so much of this will be moot.

Federal Budget Impact:

In all, the official CBO number found that, over the next ten years, the bill will CUT the deficit by about 150 billion dollars. Over the next twenty years, the bill will cut about 1.3 TRILLION dollars from the deficit.

There’s been some howling about a "doc fix" (a bump to Medicare and Medicaid reimbursement rates) that hasn’t been paid for. True, the doc fix hasn’t been paid for, but it also hasn’t been passed … so, I’m not sure what the beef is here. If it isn’t in the bill, it doesn’t mean that the bill hasn’t been paid for.

Impact on the Uninsured:

In all, and again according to CBO, somewhere on the order of 32 million people will have insurance once the bill is fully phased in who did not have it before, bringing the total number of insured Americans to 95%, up from about 84% today. Those 5% still left out will include some people who opt to pay the fine instead of buy insurance, and some other folks who will fall through the cracks (including illegal aliens, who will not be allowed to participate in the exchanges).