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.”