Chicks-n-Scratching

Sunday night, at around 10:45 Eastern time, the House passed the Health Care Overhaul bill.  It had some changes and amendments that make it a bit different from the Senate version passed last fall, so the Senate will still need to do their thing on those sections, but the underlying legislation is a done deal.  But what does it MEAN?

We’ve heard a lot of talk about costs to taxpayers, costs to consumers, benefits to individuals, concern for small businesses. Unfortunately, it’s hard for the average Joe (or Jane) to make any sense of such a huge, conflicting mass of information. The politics definitely get in the way of understanding in this case.

So, I thought I’d take a moment to give you some of the basics. Some good, some not so good, aspects of the health care reform legislation. I’ll tell you up front I think our health care system is broken, badly broken.  I’m not at all sure this legislation will “fix” or even “improve” health care overall. But since I’m not in the business of prognostication, I don’t expect to know if it will “fix” things. I’m willing to give it a chance.

So, here’s some basic info on what health care reform means for actual people.

What’s in the bill?

1. An individual mandate: all individuals must have insurance by 2014 or pay a $695 annual fine. This is like the mandatory car insurance thing – if you don’t have insurance, you pay the uninsured motorist fee, at least here in VA. Same deal. There are exceptions for the extremely poor.

2. Expands Medicaid for US citizens and legal immigrants; illegal immigrants are not eligible for Medicaid.

3. Closes the Medicare prescription plan “donut hole” by 2020.  If you aren’t familiar with this, the Medicare prescription plan covers costs of prescriptions up to a point, then cuts off until an out-of-pocket limit is reached, when the coverage kicks in again. The gap between the first limit and the out-of-pocket limit is referred to as the donut hole.

4. Requires that employers with more than 50 employees offer insurance to employees or face a fine of up to $2000 per employee per year. The fine is designed to offset government subsidies which will help employees pay for coverage.

5. Individuals and families making up to 400% of the US poverty level are eligible for graduated subsidies to help pay for insurance coverage. The current poverty line for a family of 4 is around $22,500. This means that subsidies would be available for families making up through around $90,000.

6. New health care “exchanges” are designed to create bigger risk pools and create competition for insurance policies.  The idea is that these exchanges will allow individuals more choice and will encourage competitive pricing by the insurers.

7. Starting in 2014, insurers will no longer be able to deny anyone based on preexisting conditions. Within 6 months of enactment, insurance companies will no longer be able to deny coverage to children based on preexisting conditions.

8. Parents will be able to carry their children on their insurance policies until age 26, provided those children do not have access to plans through their employer.

What’s NOT in the bill?

1. Government-run health care (aside from the changes to Medicare/Medicaid, which are existing programs). This plan does not put in place anything resembling the national health care plans of Europe, Canada, Costa Rica, or other similar plans.

2. Funding for abortion. The bill segregates tax payer money from private insurance. Subsidies from the US government cannot be used to pay for premiums that fund abortions.* No insurance plan will be required to provide abortion coverage.

3. Increased access for illegal immigrants.  Illegal immigrants will not be allowed to buy insurance on the exchanges, even if they use entirely their own money.  The exchanges are closed to illegal immigrants.

4. Universal prescription drug coverage. Nope. Not in there.

5. Reductions in premiums for existing insured. The vast majority of people who currently have insurance will not see a reduction in premiums. What you, theoretically, should see, is a reduction in increases.

*There is a separate Executive Order which allows for use of those funds to pay for abortion in the case of rape, incest, or for the health of the mother. This is the source of a significant firestorm. Pro-choice groups dislike it because it puts limits on abortion, Pro-life groups dislike it because it doesn’t ban all use of taxpayer funds for abortion. The order itself reflects existing law, so this is not anything new in the debate.

I hope that helps you get some of the idea about what is and is not in this bill.  In terms of cost, the estimated cost is around $940 billion over ten years, which is, theoretically, supposed to be paid for from three main sources. First, right now Medicaid/Medicare tax excludes unearned income. Starting in 2012 for families making more than $250,000/yr that will no longer be the case. Second, a tanning tax. No, I’m not making that up. There will be a 10% excise tax on tanning services. Third, an excise tax starting in 2018 on “Cadillac” plans – that is, plans that exceed $27,500 in cost each year for a family (this doesn’t include vision or dental benefits).

So that’s the basics. If you want more info, here are a few reference links: NPR’s Consumer’s Guide to HCR; The Examiner’s summary; MSNBC coverage; Wall Street Journal coverage; the CBS News breakdown; and the West Wing Report blog summary.  I’d have included a Fox link for contents of the bill, but I couldn’t find one. I found any number of articles on the political repercussions for the Dems having now passed it, but nothing on the actual contents of the bill.  If anyone finds a link for that, let me know and I’ll include it.

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