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Will It Be Enough?

15 Jul

Draft health reform legislation has emerged from committees in both the House and the Senate and now the question is not so much will it pass (although that certainly remains priority number one), but will it be enough? The two bills are largely similar and include the following elements:

1. Individual mandates – Everyone is required to have insurance coverage and the government will provide subsidies to help lower-income individuals who do not qualify for a plan like Medicaid, purchase insurance.

2. Play-or-Pay – Employers with payrolls in excess of $400,000 have to offer and help provide (read: pay at least a defined minimum amount) coverage to their workers or pay a fee to the federal government that would be roughly equivalent to 8% of employee salaries.

3. Public plan option – The much-discussed government plan loosely modeled after the Massachusetts reform that is intended both to offer a source of coverage for those who for one reason or another “fall through the cracks” in the system and is also touted as a way to make private insurers more cost-effective and more transparent to consumers via head-to-head competition.

4. New taxes – The tax-exemption of employer-based benefits remains untouched, but there is now a newly proposed tax on high-income individuals (those earning $280,000 or more). At the low end, this would equate to a person earning $280,000 paying an additional $2,800 a year in taxes, whereas a person earning $1 million a year would cough up an additional $54,000. As you might have figured out the income-based “success tax” varies on a sliding scale from a low of 1% to a high of 5.4%.

So, in a nutshell, that’s the reform we’re looking at. I’m good with it. I think it will face A LOT of political resistance (health reform, go figure), but if it’s passed roughly as-is, I believe that we will see a great decrease in the number of uninsured in this country. Of course, it won’t be universal. There will still be a VERY sizable number of undocumented individuals and others, who–even with insurance–face important non-financial barriers to accessing care. There’s not much in the reform bills to address these issues.

Furthermore, the basic fee-for-service setup remains intact. That is, the more services a clinician provides, the more income they stand to make. Without doing something to eliminate such perverse financial incentives, I’m afraid the problem’s not going to go away.

The bottom line as I see it: This reform will cover many more folks, but it isn’t likely to control costs, create universal access, or improve quality. In the words of Frost, we “have miles to go before we sleep.”

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3 Comments

Posted by on July 15, 2009 in Congress, ObamaCare

 

3 responses to “Will It Be Enough?

  1. Dan

    July 15, 2009 at 9:38 pm

    Ok, so essentially the proposed reforms stand to further accelerate cost increases, overburden safety net providers, and massively enrich pharma and providers able to manage the stampede. Clearly the Obama team must have some plan for implementing cost control policies once they get the big reform passed. Any ideas what this might look like? Also, care to venture any speculation on whether this will actually pass on the backs of the rich? So far I don't see any sacrifices for anyone but folks making enough money to be powerful. And that's not exactly a recipe for success…PS: might be a nice show of HPM solidarity to throw up links to Dean and Tom's N&O pieces on reform (http://www.newsobserver.com/opinion/columns/story/1597303.html, http://www.newsobserver.com/opinion/columns/story/1588431.html)

     
  2. Anonymous

    July 16, 2009 at 5:14 am

    As a future provider, I can see both sides of the coin with fee-for service. In it's purest form, I think it is the way to go -get paid for what is done. At the pure level it is the most caring because providers have autonomy over patient care.What's unfortunate is the concept of preemptive medicine that has grown out of this litignous era that we are now forced to practice medicne in. This entails ordering a much broader battery of diagnostics and imaging modalities than are necessary for diagnosing, to essentially "CYA". Preemptive medicine is not the norm. Most providers are genuinely concerned for their patients and wish to have more control over their care, even if it means a more thorough work-up (i.e.: more labs and imaging.)And no feeling sorry for the top 5% who will have to forgo a new Gucci bag ($2,500) or that new Escalade ($54,000) awww. Look at our Gini Coefficient -this much wealth disparity is not helping at all.This is a step in the right direction.

     
  3. Janice

    July 16, 2009 at 12:04 pm

    Hi Brad, I enjoyed the read. The information you have here to date is very informative. I will look to you to put things on a level that I and many others will be able to understand, therefore allowing for a more informed opinion. I thank you now Brad, for what I know will be lots of good information to come! Looking forward to future topics!Janice

     

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