It is crunch time for health care. Lawmakers who are trying to fundamentally remake one-sixth of the U.S. economy say this might be the most complicated legislation they have undertaken.
Here are some basics that everyone can grasp -- and probably ought to, because the health bill, if it passes, will affect almost everyone.
Janet is right. This legislation will affect everyone, yet 9/10 Americans do not understand the basics of healthcare policy.
To her credit, Ms. Adamy provides a nice summary of the healthcare reform taking place in Washington, D.C. that every American NEEDS to understand.
For your convenience, I have provided the following Key Quotes for each of the 10 questions/answers:
1. What is the problem with health care, anyway? Is it as bad as they say?
Key Quote: "...some 46 million people don't have health coverage. To be sure, that oft-cited number ... is somewhat misleading because it includes illegal immigrants, healthy young adults who don't think they need insurance and poor people who are eligible for Medicaid."
2. Can Democrats and Republicans agree on anything?
Key Quote: "It amounts to a twin mandate -- one on insurers to sell policies, and another on Americans to buy them."
3. Where are the main points of disagreement?
Key Quote: "Congress ... remains divided over whether to make employers (except really small ones) provide insurance."
4. What would a public plan look like?
Key Quote: "... most people probably wouldn't even be eligible for the public plan."
5. Why is the total price of the overhaul so expensive, especially considering that it is designed to bring down costs?
Key Quote: "The cost mostly comes from giving people subsidies to buy insurance, and from expanding Medicaid"
6. What are the most likely ways to pay for the overhaul?
Key Quote: "The wealthy are a natural target."
7. Which industries are most likely to lose, and which to gain, from any overhaul?
Key Quote:"Perhaps no industry stands to gain more from the changes than health insurers, who would get tens of millions of new customers because Americans would be required by law to carry health insurance. The big losers would be retailers, restaurants and other businesses with low-income workers who provide little or no health insurance, since they would be forced to start paying for it."
8. I already have insurance through my job - what happens to me?
Key Quote: "Longer term, a lot could change. For instance, your employer could drop coverage, preferring to pay the penalty for doing so and deflecting employees to Uncle Sam's plan."
9. Politicians have tried for decades to push universal health insurance. Why did they always fail before? Why would this time be any different?
Key Quote: "What is different now is that major health and other interest groups are on board with the idea."
10. What happens if the effort once again fails?
Key Quote: "... it would probably be several years before lawmakers tried again."
Last week, President Obama hosted a town hall discussion about the future of health care in America. I'm going to go over what we can take away from his comments.
First of all, he was incredibly vague about almost everything. That's to be expected since he's a politician and has to be...political. Here are the few things that he actually answered directly:
1. Reform will be passed in 2009
This is a great point for Obama to get across. He explained that this is a complicated issue and it would be easy to spend years on research and negotiations, but that any action is better than inaction. Also, while he didn't say it explicitly, but I thought he was implying that his administration will plan on tweaking whatever reform is passed as we learn what works and what doesn't.
2. The private insurance market will still exist
Lots of people are concerned that the federal government might completely take over insurance. Obama made it clear that he doesn't want to do that, but that he does want some sort of federal plan that private carriers will have to compete with (to keep them honest). He pointed out that 1/6 of the US economy is related to healthcare and even if he wanted to offer universal healthcare, upending such a large section of the economy is simply impossible.
3. For the most part, individuals will foot the bill
Right now we have Medicare to help seniors and Medicaid to help people with low incomes. The plan will still need to cover these people along with anyone with pre-existing conditions. However, the new plan needs to be "deficit neutral" which means that anyone that can afford their own healthcare will most likely still have to pay.
This also includes hints from Obama that he doesn't like the idea of employer-sponsored health care. This is one of the topics that he was vague about but it sounds like he supports individual policies instead of group (YAY!) which probably means that either individuals will get the tax benefits that employers do now, or employers will lose some of their current tax benefits. This is speculation on my part, but that's the only way I can make sense of what he said.
While we're on the topic, let's go over some of the things that Obama mentioned, but wasn't very specific about:
Quick Hits:
2/3 of the cost of reform will come from re-allocating money that is already being spent on healthcare. 1/3 will come from new revenue (like capping itemized deductions for people making over $250,000/year).
The government won't sell all insurance, but they may offer a portal (called the "Health Insurance Exchange") where Americans shop for plans provided by private carriers.
There will be huge savings from wellness and medical I.T. initiatives, but it's impossible to calculate that right now so they're leaving those savings out of the projections.
The Mayo Clinic offers world class health care for significantly less than most hospitals. The government is looking into how they can learn from Mayo's model.
Americans can help this process by informing themselves. There's a lot of propaganda being thrown around and people are reacting with fear which hurts everyone.
What do I think?
Feel free to form your own opinions about what the President had to say, but here's how I took it.
As is always the case, Obama said nearly all the right things. The question so far has been if his administration is actually prepared to follow through with their promises. The White House has received a lot of criticism about the lack of the "change" we were promised, and it looks like health care may be the very first major issue where we get to see if Obama can truly execute.
He said a few things that were just completely wrong. For example, he mentioned that individuals buying personal policies don't have as much leverage with the insurance companies as members of groups. This is about as wrong as you can get. People with group insurance are stuck with whatever their employer offers them. Individuals can use the power of the free market to force insurance companies to compete for their business. Luckily, most of Obama's mistakes weren't particularly damaging to his overall point.
The best thing he said is that we need to move toward individual policies. We at Zane Benefits have serious moral objections to group insurance (which we'll post about soon) and it's great to hear that the current administration agrees. It was also great because this was McCain's stance which Obama disagreed with during their campaigns. You might criticize Obama for flip-flopping, but at least he seems to have ended up in the right place.
Unfortunately, it doesn't sound like the legislative branch is on board with individual policies quite yet. There may be some intense debate and if Obama's promise for reform this year holds true, we need to start making progress right away.
Stay tuned for some posts summarizing how other political figures are proposing we reform our health care system.
I just saw this post from Alan Katz discussing how President Obama is trying to use budget reconciliation to make it easier to enact health care reform. This would basically mean that the Senate could pass legislation with fewer votes than would normally be required so that changes to the existing system would face less resistance.
I'm not one to analyze the politics involved in this situation (I'll let Paul handle that) but there are some takeaways for those of us in thehealthcare business, or anyone interested in how this reform plays out.
Obviously no one knows exactly what will happen, but if the reconciliation protection is passed, it's probably safe to assume a few things:
Major health insurance companies are too large to be put out of business overnight. The changes can't be so sudden and dramatic that they would disrupt the business practices of major insurers.
Other aspects of health insurance will be subject to major changes. Tons of new opportunities will appear out of nowhere.
Once again, I'm not claiming to know what will happen. I'm just giving some vague predictions. That said, rapid change means that some of the systems we currently have in place will need to be adjusted. Someone will make a lot of money off these adjustments.
While we can't predict exact what will be different for the healthcareindustry, something will be different. If you currently sell or use traditional insurance products, your bread and butter isn't going to be swiped out from under you right away, but the writing may be on the wall.
As a young adult with an entrepreneurial spirit, I think this is great news. Anyone that is waiting for anew opportunity to arrive might not need to wait any longer. Something will change and large companies are notoriously slow to adapt.
Everyone working in healthcare should start building some flexibility into their business. You can't specifically prepare for the future (since you don't know what will happen) but you can create infrastructure that will support the change that will be required in the coming months and years. The first companies to market with some new ideas will be at a huge advantage.
To me, this also means that we should all consider what we depend on to keep our careers afloat. If you depend too heavily on selling one type of insurance or providing one type of service, consider what would happen if new legislation makes your one product obsolete. Diversification has always made sense, but maybe now is the time to actually reflect that with your actions.
Clarifying Health is a blog about health insurance, health benefits, and everything else related to how Americans pay for medical expenses.
If you have any tips or suggestions for this blog, send an email to blog@ZaneBenefits.com and let us know. We always appreciate feedback
We also run a company called Zane Benefits where we're doing everything we can to help America out of the current healthcare mess.
If you want to learn more about how Zane Benefits helps companies with their benefits, or you're interested in working with us, visit the Zane Benefits website.
