July 28, 2009

There is a lot of confusion, fear and misinformation right now about health reform. There also is good, positive debate about the best ways to end our chronic health system problems – and enough real progress to keep moving forward.

Consumers Union believes Congress must continue making progress, and keep its promise to fix health care so Americans will no longer be at the mercy – physically or financially – of a broken system. The debate about health reform isn’t new, nor has it been rushed this time around.

The Senate began holding hearings last fall and has consistently worked on legislation ever since, with the Senate Health committee passing a bill in mid-July. The House has been developing proposals and holding hearings since early this year, and two of three committees already have approved a reform bill.

While we still look forward to seeing the Senate Finance Committee’s proposed solution to the health care crisis, we support the House reform bill as it moves to the floor because of the ways it will improve our lives:

BETTER ACCESS

It helps those who now have coverage through their jobs:
If you have insurance through your job, you can keep it. Nothing in the House bill would require you to change that.

But the bill will give you more security when it comes to your employer-sponsored insurance. Right now, your employer is not required to offer you insurance, can drop your health coverage at any time, or dramatically increase how much is taken out of your check to pay for it. The bill will encourage most companies to keep providing insurance by making them pay a fee, or penalty, for not providing you coverage. And in five years, all companies offering coverage to their employees will have to offer a minimum level of benefits – so you won’t just be forced to have shoddy coverage or nothing.

It helps those who don’t have insurance through their jobs, or who don’t like their employer’s coverage:
The bill ensures you will always be able to get a policy, and shopping for insurance will be easier and likely less expensive. It will increase financial protections for consumers. It will prohibit insurance companies from denying you coverage because you are older or you have a pre-existing condition, as they do now. It would stop companies from charging you more due to your gender or health status. It would stop the industry practice of capping your benefits each year, or over your lifetime (many people with expensive illnesses like cancer often hit their treatment payment limit, and are forced to pay huge amounts for their care.) And it would limit your out-of-pocket costs each year, so you’ll know exactly the most you will have to pay that year.

To help you find a policy, the bill creates a health insurance “exchange” where all those offering insurance must compete against each other, and follow the same rules. This exchange will mean an end to hidden charges and confusing pricing – everything will be transparent, such as what is covered, and what it will cost you.

Today, when you shop for health insurance, you might find a very low-priced policy, but that rate can also shoot up year after year. Premiums are expected to stop skyrocketing under the legislation because private insurance companies would have a new competitor in the exchange – a public plan option (see below) – that will help hold everyone to a higher standard of service and price.

It helps those who can’t afford insurance:
For the very low income – those making less than 133 percent of the federal poverty level ($14,400 for an individual or $24,400 for a family of three) – Medicaid will be expanded, and the rates paid to doctors and providers for their care will be increased with new federal funding to ensure that doctors will serve you.

For the millions of hardworking Americans who don’t get insurance from their employer, and make too much to qualify for Medicaid but make too little to buy health insurance and still pay their mortgage, there will be “affordability credits” based on income. These credits will buy down the price of insurance policies offered in the exchange. The help is reduced as your income rises, and is completely phased out at 400 percent of the federal poverty level ($43,000 for an individual or $73,240 for a family of three). This help will now put insurance coverage within reach for those who want to buy it, but simply can’t afford it.

It helps small-business owners:
Small-business owners are struggling to buy affordable coverage for themselves and their employees. The bill would give them new options and help many small businesses pay for coverage.

Both owners and employees of very small businesses could buy insurance through the exchange, where they will have multiple choices of plans. Small employers will get tax credits to help pay for health care if they qualify based on their size and payroll. Small businesses with payrolls of less than $250,000 a year are exempt from the penalty that larger businesses face if they choose not to offer coverage.

It helps those on Medicare:
The bill would give a 50 percent discount on brand name drugs for those seniors who hit the ‘donut hole’ in Medicare Part D drug coverage; currently they pay 100 percent of the costs. Eventually the donut hole would be phased out, reducing seniors’ out-of-pocket costs for medication. For those seniors who buy Medicare Advantage Plans – private insurance policies offered as an alternative to the “original” Medicare – there will be new consumer protections.

MORE AFFORDABLE

It introduces sorely needed competition in the insurance marketplace:
Right now, our insurance “choices” are controlled essentially by a handful of giant insurance companies. And many of us live in states where one or two insurers provide the bulk of the coverage. That means little real competition to bring down prices or give us better service.

The House bill introduces a new insurance choice -- a public plan option, which is basically insurance coverage administered by the government. This choice would be available in the exchange beginning in 2013. The plan would play by the same rules as private insurance. The public plan option is anticipated to bring down the cost of coverage because it won’t have traditional overhead markups like private insurance companies – profit margin, advertising, marketing, etc – and it is expected to pressure private companies to lower their prices. No one will be required to buy the public plan option.

It starts the hard work of reducing health care costs:
If we do nothing to reform health care, our costs are expected to double in just 10 years. To reduce costs we must get better value – and care – for the money we pay hospitals, doctors, drug companies and device makers for their services. New ways of paying for care will encourage this (see quality below). In addition, the House bill will require insurers be clear about what is covered and what things cost, finally giving consumers information to compare plans and make better choices when spending their money.

Reform will begin to emphasize prevention, and make health care more coordinated and efficient to end our wasteful and duplicative spending. The basic benefit package will include preventive services to stop disease in its early stages when it can be treated more successfully and at a lower cost.

Our health care system is the only major industry that isn’t computerized, where paper files still dominate. We need to implement electronic medical records, give doctors unbiased treatment information at their finger tips, and improve coordination among the many doctors that may treat a very sick person. All of these steps, and more, will get a handle on spiraling health costs.

BETTER CARE

It will improve the quality of our health care:
You no longer will face skimpy insurance plans that deny preventive care, screenings or certain services that are essential for your good health. An independent Advisory Committee of doctors, chaired by the Surgeon General, will develop a benefit package that will serve as the floor of coverage (you can always purchase more coverage if you desire) offered in the exchange. The basic package will include preventive services with no cost-sharing from you, and include mental health services, oral health and vision for children, and a cap on your out-of-pocket costs each year.

Health care will put a premium on getting and keeping you healthy. Today, insurers pay a fee for every test, pill, consultation, and procedure — which means that the more care given, the more providers get paid. And studies show that those who get more care don't necessarily do better, and often do worse, as a result. The bill includes projects to test the effectiveness of patient-centered reform, where doctors, hospitals, and labs would earn a combined flat fee for managing an episode of illness, providing an incentive to get you back to health.

Reform will stop paying for care that hurts you. For example, hospitals get paid by your insurance company or Medicare if they make you sicker – say, you get an infection from the hospital while you’re there, or they leave a sponge in during surgery. Reform would stop using our tax dollars to pay for these mistakes, encouraging them to do a better job of cleaning up their act and caring for you.

Finally, the House proposal will help fund more scientific research and studies to determine what medicines and procedures are most effective. Right now, most doctors rely on drug company sales reps for information, and most of us are bombarded with drug company TV ads that push the latest – but not necessarily most effective – drug. This research will be made widely available to doctors and patients, and will help improve the care we get, but not dictate it.

The bill shares responsibility broadly:
Insurance is based on spreading the risk of big health expenses among the largest group possible – both healthy and sick. So to make reform effective, everyone will have to have health insurance. Once all the reforms are in place, every one will be required to have insurance. That means the cost of care for the uninsured will no longer be embedded in the premiums we pay. Those who choose not to get insurance will pay a penalty based on their income.

Employers will be encouraged to keep offering coverage to employees – but will have to offer a minimum standard of benefits (they can offer more) and a minimum contribution toward the employee’s coverage. If they drop coverage, they’ll have to pay a fee, or penalty, based on a percentage of their payroll, which will help offset the cost of their employees buying coverage in the exchange.

Reform to stop the budget-breaking upward spiral of health costs will require sacrifice from everyone who benefits from health care – insurance companies, drug companies, hospitals, doctors, businesses, seniors, patients. Much of the reforms are expected to be paid for by making both Medicare and Medicaid more efficient and providing incentives for better care. New programs also would eliminate fraud, waste and abuse, and others would achieve savings by coordinating care through information technology and reducing the need for duplicative tests.

It will take many years to squeeze out the wasteful practices in our current system, so additional funding is needed so that reform does not increase our federal deficit. To help close the gap, the House bill currently calls for a small tax on the wealthiest 1 percent of Americans who have benefited the most since the late 1990s, when taxes began being cut on the wealthy.

Learn more about the House health reform bill – a summary of the legislation and the bill itself. Also, check out this link to see what it means for your state and hometown
district.

Read a summary of the Senate HELP committee reform bill, as well as the bill itself.

For more information, contact Melissa Trevino, activist development specialist.