Now that you have seen some of the possible reforms that should be taken to bring about true change in health care and foreseen the likely benefits derived there from, and seen the powers that are at work in Washington, it is good to give a quick examination to the President's plan and what it actually proposes. The following is the exact text of the President’s plan taken from the White House website (footnote 1) as posted on September 9th. I have taken each point and given a brief opinion for the benefit of the reader in italics.
While you read along, see if you can see what lobbyist each point appeases or makes a compromise with.
Here is the President's Plan:
If You Have Health Insurance
More Stability and Security
· Ends discrimination against people with pre-existing conditions. Over the last three years, 12 million people were denied coverage directly or indirectly through high premiums due to a pre-existing condition. Under the President’s plan, it will be against the law for insurance companies to deny coverage for health reasons or risks.
Translation: Everyone is going to have to pay a lot more for their health care. Rather than make a blanket regulation that all plans must have this waived, products need to be developed based on cost and underwriting, as well as plans where there are no pre-existing conditions, to ensure that each American can receive the kind of health care that best fits their needs.
· Limits premium discrimination based on gender and age. The President’s plan will end insurers’ practice of charging different premiums or denying coverage based on gender, and will limit premium variation based on age.
Translation: Although I agree that premiums should not change based on gender, I disagree that premiums should not be adjusted based on age. The affect of this is that it would push up prices for every other insured individual. Although there should be products in the marketplace that offer this type of coverage, it should not be the only product. This kind of mandate severely limits the marketplace's ability to provide individual coverage for the low income and unemployed as the prices would be unbearable.
· Prevents insurance companies from dropping coverage when people are sick and need it most. The President’s plan prohibits insurance companies from rescinding coverage that has already been purchased except in cases of fraud. In most states, insurance companies can cancel a policy if any medical condition was not listed on the application – even one not related to a current illness or one the patient didn’t even know about. A recent Congressional investigation found that over five years, three large insurance companies cancelled coverage for 20,000 people, saving them from paying $300 million in medical claims - $300 million that became either an obligation for the patient’s family or bad debt for doctors and hospitals.
Translation: This is a very good change that should be implemented.
· Caps out-of pocket expenses so people don’t go broke when they get sick. The President’s plan will cap out-of-pocket expenses and will prohibit insurance companies from imposing annual or lifetime caps on benefit payments. A middle-class family purchasing health insurance directly from the individual insurance market today could spend up to 50 percent of household income on health care costs because there is no limit on out-of-pocket expenses.
Translation: This provision places an ever larger cost on the insured and does nothing to lower costs. This kind of provision will actually increase costs across the board. Insurance is meant to minimize risk. A person should be able to purchase a plan based on the amount of risk they are willing and able to assume. Some product innovations that carry the spirit of this provision could be plans that state that out-of-pocket maximums will not exceed a percentage of a person's annual income. However, mandating that there will be no lifetime maximums and set out-of-pocket maximums for all insurance products will reduce choice in the marketplace and increase costs for all Americans.
· Eliminates extra charges for preventive care like mammograms, flu shots and diabetes tests to improve health and save money. The President’s plan ensures that all Americans have access to free preventive services under their health insurance plans. Too many Americans forgo needed preventive care, in part because of the cost of check-ups and screenings that can identify health problems early when they can be most effectively treated. For example, 24 percent of women age 40 and over have not received a mammogram in the past two years, and 38 percent of adults age 50 and over have never had a colon cancer screening.
Translation: It is important to remember that nothing is free – especially not in health care. It must be paid for – either in a low co-pay or in an increased monthly premium. It has to be paid for. With that said, I do believe that there should be some basic standards to qualified health plans – preventative care being one of them.
· Protects Medicare for seniors. The President’s plan will extend new protections for Medicare beneficiaries that improve quality, coordinate care and reduce beneficiary and program costs. These protections will extend the life of the Medicare Trust Fund to pay for care for future generations.
Translation: The true reason the government is heading to a financial mess is because of Medicare and the likely costs the taxpayer must assume. Although it is impossible to truly forecast what those unfunded liabilities are, it is safe to assume that it will be expensive. One should no more wish to extend Medicare than they should wish for a beating. Medicare must be secured for those who have it and other options must be given to those who would otherwise qualify for it. This, and the other free market reforms, is the best course for solving our looming financial crisis and for providing care to our seniors.
· Eliminates the "donut-hole" gap in coverage for prescription drugs. The President’s plan begins immediately to close the Medicare "donut hole" - a current gap in its drug benefit - by providing a 50 percent discount on brand-name prescription drugs for seniors who fall into it. In 2007, over 8 million seniors hit this coverage gap in the standard Medicare drug benefit. By 2019, the President’s plan will completely close the "donut hole". The average out-of-pocket spending for such beneficiaries who lack another source of insurance is $4,080.
Translation: Because the People of the United States are insuring the elderly we should provide them with the care they deserve. However, with America's aging population, Medicare in all its parts is an unsustainable program that does nothing for the free market. It may provide a service to the elderly, but certainly not the best one nor the one they deserve. No amount of government improvements in this program will ever change that. The people and their creative forces through the marketplace is the best and surest way to provide quality, value and Justice in health care. This is also an obvious win for the pharmaceutical companies.
If You Don't Have Insurance
Quality, Affordable Choices for All Americans
· Creates a new insurance marketplace – the Exchange – that allows people without insurance and small businesses to compare plans and buy insurance at competitive prices. The President’s plan allows Americans who have health insurance and like it to keep it. But for those who lose their jobs, change jobs or move, new high quality, affordable options will be available in the exchange. Beginning in 2013, the Exchange will give Americans without access to affordable insurance on the job, and small businesses one-stop shopping for insurance where they can easily compare options based on price, benefits, and quality.
Translation: The health insurance exchange is an excellent idea that must be included in reform. However, the President’s version of the exchange excludes everyone that has or is eligible for group or government insurance. It protects insurance companies, does nothing to improve competition and solidifies the employer and government sponsored health plans. It keeps the status quo for those with insurance.
· Provides new tax credits to help people buy insurance. The President’s plan will provide new tax credits on a sliding scale to individuals and families that will limit how much of their income can be spent on premiums. There will also be greater protection for cost-sharing for out-of-pocket expenses.
Translation: Rather than encourage health insurance which furthers the monopoly of the insurance industry over health care, the government should ensure equal tax treatment for all health care costs – be it insurance, co-ops, health shares or out-of-pocket expenses.
· Provides small businesses tax credits and affordable options for covering employees. The President’s plan will also provide small businesses with tax credits to offset costs of providing coverage for their workers. Small businesses who for too long have faced higher prices than larger businesses, will now be eligible to enter the exchange so that they have lower costs and more choices for covering their workers.
Translation: Rather than deepen the hold of employer sponsored health plans, the President and Congress should seek to open up the health care marketplace and end the complete hegemony of employer sponsored health plans over American health care.
· Offers a public health insurance option to provide the uninsured and those who can’t find affordable coverage with a real choice. The President believes this option will promote competition, hold insurance companies accountable and assure affordable choices. It is completely voluntary. The President believes the public option must operate like any private insurance company – it must be self-sufficient and rely on the premiums it collects.
Translation: Reasons enough have already been given that demonstrate this proposal to be unjust, costly, destructive to the marketplace, inefficient and unsustainable. Rather than seek to reduce the marketplace, the president should seek to build the marketplace.
· Immediately offers new, low-cost coverage through a national "high risk" pool to protect people with preexisting conditions from financial ruin until the new Exchange is created. For those Americans who cannot get insurance coverage today because of a pre-existing condition, the President’s plan will immediately make available coverage without a mark-up due to their health condition. This policy will offer protection against financial ruin until a wider array of choices become available in the new exchange in 2013.
Translation: The high risk pool is an excellent recommendation and should be included in the health care reform plan. However, this should not be part of a National Health Plan and should be state specific.
For All Americans
Reins In the Cost of Health Care for Our Families, Our Businesses, and Our Government
· Won’t add a dime to the deficit and is paid for upfront. The President’s plan will not add one dime to the deficit today or in the future and is paid for in a fiscally responsible way. It begins the process of reforming the health care system so that we can further curb health care cost growth over the long term, and invests in quality improvements, consumer protections, prevention, and premium assistance. The plan fully pays for this investment through health system savings and new revenue including a fee on insurance companies that sell very expensive plans.
Translation: I agree with the principle whole heartedly. Today's generation should be responsible for today's expenses. However, setting a fee on “very expensive plans” ultimately means setting a new tax on plans that employ elderly and unhealthy individuals. Plan design is only one factor in health care costs. The largest factor is the utilization of the plan. The more people use it the more it will cost them. Accordingly, the most expensive plans are the ones that are the most used. And presumably they are the most used because of the unhealthy or older workforce. Furthermore, the real translation is: your taxes are guaranteed to go up. If it’s not going to add to the deficit it is because it will be paid for which means that the taxes will have to be increased. I have already shown that based on the House version of the bill, the wealthy alone will not be able to pay for this legislation – despite what they may say. The numbers don’t add up.
· Requires additional cuts if savings are not realized. Under the plan, if the savings promised at the time of enactment don’t materialize, the President will be required to put forth additional savings to ensure that the plan does not add to the deficit.
Translation: Although this language is nebulous, it is impossible to disagree with the concept. However, what will be cut? Will the government actually cut spending on health care? Will it be politically feasible to begin cutting a certain kind of cancer drug, therapy or technique because it costs too much? It is unlikely. The concept is noble. Putting it into practice however will be very difficult. The government has only increased spending over time. History shows that cutting spending won’t happen.
· Implements a number of delivery system reforms that begin to rein in health care costs and align incentives for hospitals, physicians, and others to improve quality. The President’s plan includes proposals that will improve the way care is delivered to emphasize quality over quantity, including: incentives for hospitals to prevent avoidable readmissions, pilots for new "bundled" payments in Medicare, and support for new models of delivering care through medical homes and accountable care organizations that focus on a coordinated approach to care and outcomes.
Translation: Quality over quantity is a concept that must be included in the reform.
· Creates an independent commission of doctors and medical experts to identify waste, fraud and abuse in the health care system. The President’s plan will create an independent Commission, made up of doctors and medical experts, to make recommendations to Congress each year on how to promote greater efficiency and higher quality in Medicare. The Commission will not be authorized to propose or implement Medicare changes that ration care or affect benefits, eligibility or beneficiary access to care. It will ensure that your tax dollars go directly to caring for seniors.
Translation: Any measure that can improve the value of the service and lower the cost is one that seems to need no defense.
· Orders immediate medical malpractice reform projects that could help doctors focus on putting their patients first, not on practicing defensive medicine. The President’s plan instructs the Secretary of Health and Human Services to move forward on awarding medical malpractice demonstration grants to states funded by the Agency for Healthcare Research and Quality as soon as possible.
Translation: Although medical malpractice is a factor in the rising health care costs, it is small. This is a complicated problem and one that is included because the Republicans have been calling for this kind of reform for years. It is tangential to true health care reform.
· Requires large employers to cover their employees and individuals who can afford it to buy insurance so everyone shares in the responsibility of reform. Under the President’s plan, large businesses – those with more than 50 workers – will be required to offer their workers coverage or pay a fee to help cover the cost of making coverage affordable in the exchange. This will ensure that workers in firms not offering coverage will have affordable coverage options for themselves and their families. Individuals who can afford it will have a responsibility to purchase coverage – but there will be a "hardship exemption" for those who cannot.
Translation: Again, if the President wants to reduce health care costs and ensure that all Americans have coverage, he must move away from this kind of model. This goes in the exact opposite direction than the end we desire: quality health care for each American. The president’s direction keeps the monopoly of the insurance industry and maintains the dominion of the employer sponsored health plan. Furthermore, fining Americans for not purchasing insurance should never be considered a crime worthy of a fine.
_________________
Now that you know the forces at work, it is easier to see who is really benefiting from this plan. If you go bullet by bullet you will be able to see which lobbyist was at work. Take those same tools and look at the HELP or Baucus bills. It is most revealing.
In sum, the president's plan contains many important provisions that should be included in the final reform bill. However, it is important to realize that it does nothing to fundamentally improve the American health care system. Even the health care exchange in this system would be a lost reform because, with the exception of the public health care plan, it would offer exactly what we have which is exactly the problem we are dealing with. The government plan would only worsen the situation. If anything, the majority of the President’s proposals would weaken the already dying marketplace that does exist and increase costs and taxes for all Americans.
_____________________________________
Footnotes
1. http://www.whitehouse.gov/issues/health_care/plan/
While you read along, see if you can see what lobbyist each point appeases or makes a compromise with.
Here is the President's Plan:
If You Have Health Insurance
More Stability and Security
· Ends discrimination against people with pre-existing conditions. Over the last three years, 12 million people were denied coverage directly or indirectly through high premiums due to a pre-existing condition. Under the President’s plan, it will be against the law for insurance companies to deny coverage for health reasons or risks.
Translation: Everyone is going to have to pay a lot more for their health care. Rather than make a blanket regulation that all plans must have this waived, products need to be developed based on cost and underwriting, as well as plans where there are no pre-existing conditions, to ensure that each American can receive the kind of health care that best fits their needs.
· Limits premium discrimination based on gender and age. The President’s plan will end insurers’ practice of charging different premiums or denying coverage based on gender, and will limit premium variation based on age.
Translation: Although I agree that premiums should not change based on gender, I disagree that premiums should not be adjusted based on age. The affect of this is that it would push up prices for every other insured individual. Although there should be products in the marketplace that offer this type of coverage, it should not be the only product. This kind of mandate severely limits the marketplace's ability to provide individual coverage for the low income and unemployed as the prices would be unbearable.
· Prevents insurance companies from dropping coverage when people are sick and need it most. The President’s plan prohibits insurance companies from rescinding coverage that has already been purchased except in cases of fraud. In most states, insurance companies can cancel a policy if any medical condition was not listed on the application – even one not related to a current illness or one the patient didn’t even know about. A recent Congressional investigation found that over five years, three large insurance companies cancelled coverage for 20,000 people, saving them from paying $300 million in medical claims - $300 million that became either an obligation for the patient’s family or bad debt for doctors and hospitals.
Translation: This is a very good change that should be implemented.
· Caps out-of pocket expenses so people don’t go broke when they get sick. The President’s plan will cap out-of-pocket expenses and will prohibit insurance companies from imposing annual or lifetime caps on benefit payments. A middle-class family purchasing health insurance directly from the individual insurance market today could spend up to 50 percent of household income on health care costs because there is no limit on out-of-pocket expenses.
Translation: This provision places an ever larger cost on the insured and does nothing to lower costs. This kind of provision will actually increase costs across the board. Insurance is meant to minimize risk. A person should be able to purchase a plan based on the amount of risk they are willing and able to assume. Some product innovations that carry the spirit of this provision could be plans that state that out-of-pocket maximums will not exceed a percentage of a person's annual income. However, mandating that there will be no lifetime maximums and set out-of-pocket maximums for all insurance products will reduce choice in the marketplace and increase costs for all Americans.
· Eliminates extra charges for preventive care like mammograms, flu shots and diabetes tests to improve health and save money. The President’s plan ensures that all Americans have access to free preventive services under their health insurance plans. Too many Americans forgo needed preventive care, in part because of the cost of check-ups and screenings that can identify health problems early when they can be most effectively treated. For example, 24 percent of women age 40 and over have not received a mammogram in the past two years, and 38 percent of adults age 50 and over have never had a colon cancer screening.
Translation: It is important to remember that nothing is free – especially not in health care. It must be paid for – either in a low co-pay or in an increased monthly premium. It has to be paid for. With that said, I do believe that there should be some basic standards to qualified health plans – preventative care being one of them.
· Protects Medicare for seniors. The President’s plan will extend new protections for Medicare beneficiaries that improve quality, coordinate care and reduce beneficiary and program costs. These protections will extend the life of the Medicare Trust Fund to pay for care for future generations.
Translation: The true reason the government is heading to a financial mess is because of Medicare and the likely costs the taxpayer must assume. Although it is impossible to truly forecast what those unfunded liabilities are, it is safe to assume that it will be expensive. One should no more wish to extend Medicare than they should wish for a beating. Medicare must be secured for those who have it and other options must be given to those who would otherwise qualify for it. This, and the other free market reforms, is the best course for solving our looming financial crisis and for providing care to our seniors.
· Eliminates the "donut-hole" gap in coverage for prescription drugs. The President’s plan begins immediately to close the Medicare "donut hole" - a current gap in its drug benefit - by providing a 50 percent discount on brand-name prescription drugs for seniors who fall into it. In 2007, over 8 million seniors hit this coverage gap in the standard Medicare drug benefit. By 2019, the President’s plan will completely close the "donut hole". The average out-of-pocket spending for such beneficiaries who lack another source of insurance is $4,080.
Translation: Because the People of the United States are insuring the elderly we should provide them with the care they deserve. However, with America's aging population, Medicare in all its parts is an unsustainable program that does nothing for the free market. It may provide a service to the elderly, but certainly not the best one nor the one they deserve. No amount of government improvements in this program will ever change that. The people and their creative forces through the marketplace is the best and surest way to provide quality, value and Justice in health care. This is also an obvious win for the pharmaceutical companies.
If You Don't Have Insurance
Quality, Affordable Choices for All Americans
· Creates a new insurance marketplace – the Exchange – that allows people without insurance and small businesses to compare plans and buy insurance at competitive prices. The President’s plan allows Americans who have health insurance and like it to keep it. But for those who lose their jobs, change jobs or move, new high quality, affordable options will be available in the exchange. Beginning in 2013, the Exchange will give Americans without access to affordable insurance on the job, and small businesses one-stop shopping for insurance where they can easily compare options based on price, benefits, and quality.
Translation: The health insurance exchange is an excellent idea that must be included in reform. However, the President’s version of the exchange excludes everyone that has or is eligible for group or government insurance. It protects insurance companies, does nothing to improve competition and solidifies the employer and government sponsored health plans. It keeps the status quo for those with insurance.
· Provides new tax credits to help people buy insurance. The President’s plan will provide new tax credits on a sliding scale to individuals and families that will limit how much of their income can be spent on premiums. There will also be greater protection for cost-sharing for out-of-pocket expenses.
Translation: Rather than encourage health insurance which furthers the monopoly of the insurance industry over health care, the government should ensure equal tax treatment for all health care costs – be it insurance, co-ops, health shares or out-of-pocket expenses.
· Provides small businesses tax credits and affordable options for covering employees. The President’s plan will also provide small businesses with tax credits to offset costs of providing coverage for their workers. Small businesses who for too long have faced higher prices than larger businesses, will now be eligible to enter the exchange so that they have lower costs and more choices for covering their workers.
Translation: Rather than deepen the hold of employer sponsored health plans, the President and Congress should seek to open up the health care marketplace and end the complete hegemony of employer sponsored health plans over American health care.
· Offers a public health insurance option to provide the uninsured and those who can’t find affordable coverage with a real choice. The President believes this option will promote competition, hold insurance companies accountable and assure affordable choices. It is completely voluntary. The President believes the public option must operate like any private insurance company – it must be self-sufficient and rely on the premiums it collects.
Translation: Reasons enough have already been given that demonstrate this proposal to be unjust, costly, destructive to the marketplace, inefficient and unsustainable. Rather than seek to reduce the marketplace, the president should seek to build the marketplace.
· Immediately offers new, low-cost coverage through a national "high risk" pool to protect people with preexisting conditions from financial ruin until the new Exchange is created. For those Americans who cannot get insurance coverage today because of a pre-existing condition, the President’s plan will immediately make available coverage without a mark-up due to their health condition. This policy will offer protection against financial ruin until a wider array of choices become available in the new exchange in 2013.
Translation: The high risk pool is an excellent recommendation and should be included in the health care reform plan. However, this should not be part of a National Health Plan and should be state specific.
For All Americans
Reins In the Cost of Health Care for Our Families, Our Businesses, and Our Government
· Won’t add a dime to the deficit and is paid for upfront. The President’s plan will not add one dime to the deficit today or in the future and is paid for in a fiscally responsible way. It begins the process of reforming the health care system so that we can further curb health care cost growth over the long term, and invests in quality improvements, consumer protections, prevention, and premium assistance. The plan fully pays for this investment through health system savings and new revenue including a fee on insurance companies that sell very expensive plans.
Translation: I agree with the principle whole heartedly. Today's generation should be responsible for today's expenses. However, setting a fee on “very expensive plans” ultimately means setting a new tax on plans that employ elderly and unhealthy individuals. Plan design is only one factor in health care costs. The largest factor is the utilization of the plan. The more people use it the more it will cost them. Accordingly, the most expensive plans are the ones that are the most used. And presumably they are the most used because of the unhealthy or older workforce. Furthermore, the real translation is: your taxes are guaranteed to go up. If it’s not going to add to the deficit it is because it will be paid for which means that the taxes will have to be increased. I have already shown that based on the House version of the bill, the wealthy alone will not be able to pay for this legislation – despite what they may say. The numbers don’t add up.
· Requires additional cuts if savings are not realized. Under the plan, if the savings promised at the time of enactment don’t materialize, the President will be required to put forth additional savings to ensure that the plan does not add to the deficit.
Translation: Although this language is nebulous, it is impossible to disagree with the concept. However, what will be cut? Will the government actually cut spending on health care? Will it be politically feasible to begin cutting a certain kind of cancer drug, therapy or technique because it costs too much? It is unlikely. The concept is noble. Putting it into practice however will be very difficult. The government has only increased spending over time. History shows that cutting spending won’t happen.
· Implements a number of delivery system reforms that begin to rein in health care costs and align incentives for hospitals, physicians, and others to improve quality. The President’s plan includes proposals that will improve the way care is delivered to emphasize quality over quantity, including: incentives for hospitals to prevent avoidable readmissions, pilots for new "bundled" payments in Medicare, and support for new models of delivering care through medical homes and accountable care organizations that focus on a coordinated approach to care and outcomes.
Translation: Quality over quantity is a concept that must be included in the reform.
· Creates an independent commission of doctors and medical experts to identify waste, fraud and abuse in the health care system. The President’s plan will create an independent Commission, made up of doctors and medical experts, to make recommendations to Congress each year on how to promote greater efficiency and higher quality in Medicare. The Commission will not be authorized to propose or implement Medicare changes that ration care or affect benefits, eligibility or beneficiary access to care. It will ensure that your tax dollars go directly to caring for seniors.
Translation: Any measure that can improve the value of the service and lower the cost is one that seems to need no defense.
· Orders immediate medical malpractice reform projects that could help doctors focus on putting their patients first, not on practicing defensive medicine. The President’s plan instructs the Secretary of Health and Human Services to move forward on awarding medical malpractice demonstration grants to states funded by the Agency for Healthcare Research and Quality as soon as possible.
Translation: Although medical malpractice is a factor in the rising health care costs, it is small. This is a complicated problem and one that is included because the Republicans have been calling for this kind of reform for years. It is tangential to true health care reform.
· Requires large employers to cover their employees and individuals who can afford it to buy insurance so everyone shares in the responsibility of reform. Under the President’s plan, large businesses – those with more than 50 workers – will be required to offer their workers coverage or pay a fee to help cover the cost of making coverage affordable in the exchange. This will ensure that workers in firms not offering coverage will have affordable coverage options for themselves and their families. Individuals who can afford it will have a responsibility to purchase coverage – but there will be a "hardship exemption" for those who cannot.
Translation: Again, if the President wants to reduce health care costs and ensure that all Americans have coverage, he must move away from this kind of model. This goes in the exact opposite direction than the end we desire: quality health care for each American. The president’s direction keeps the monopoly of the insurance industry and maintains the dominion of the employer sponsored health plan. Furthermore, fining Americans for not purchasing insurance should never be considered a crime worthy of a fine.
_________________
Now that you know the forces at work, it is easier to see who is really benefiting from this plan. If you go bullet by bullet you will be able to see which lobbyist was at work. Take those same tools and look at the HELP or Baucus bills. It is most revealing.
In sum, the president's plan contains many important provisions that should be included in the final reform bill. However, it is important to realize that it does nothing to fundamentally improve the American health care system. Even the health care exchange in this system would be a lost reform because, with the exception of the public health care plan, it would offer exactly what we have which is exactly the problem we are dealing with. The government plan would only worsen the situation. If anything, the majority of the President’s proposals would weaken the already dying marketplace that does exist and increase costs and taxes for all Americans.
_____________________________________
Footnotes
1. http://www.whitehouse.gov/issues/health_care/plan/
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