America's (Un)Healthy Future Act of 2009

I know I am spending a lot of time on Health Care recently, but I have run out of markers and poster board for poorly written, irrelevant signs, so I guess I will stick to actual issues based on actual proposed legislation. I know it's a stretch in this political climate, so try and stay with me.

Yesterday, I finished reading the 220 page proposal that emerged from the Senate Finance Committee's "Bi-Partisan Six", and I feel the need to illustrate some of the frustrations that emerge when you read this proposal, as well as some points that will clearly improve the system we struggle with today. I encourage everyone to read it, so you can actually have an informed opinion, and not just take the words of the media, or me for that matter. You can read the document here

http://www.opencongress.org/baucus_bill_health_care.html

First off, let me tell you that this is simply one of six proposals that have come out of various committees in both the House and the Senate. These proposals will next go to the floor, where they will be debated and shaped into one final bill that will go before the House for a vote. If it passes, the Senate will then have their input, then they will vote on the bill as they have modified it. After that, the two will find a common ground in one final proposal that, if passed, will go to the President for his signature, enacting it into law. So when I talk about the issues in this proposal, I am pointing out issues I believe can be improved, or should be left just as they are, and why. Let me start with some of the positives I found in this proposal.

New Federal Rating Standards

This will help standardize how insurers can set premium rates, eliminating a great deal of the arbitrary way it is done now. It does not eliminate it entirely, but it is a step in the right direction. Here is a breakdown of how they propose to standardize premium rates;

• Tobacco use – 1.5:1
• Age – 5:1
• Family composition:
o Single – 1:1
o Adult with child – 1.8:1
o Two adults – 2:1
o Family – 3:1

There is also a "geographical consideration" that may also be factored in, but the premium ratio is capped at 7.5:1. While this is not a true cost reduction measure, it at least standardizes how rates are determined.

Pre-Existing Condition Exclusions

Finally, it seems we have a common ground on all proposals. Insurance companies would no longer be able to deny someone because of a pre-existing condition. This proposal also states that "Within a year of enactment, any uninsured individual who has been denied health care coverage due to a pre-existing condition can enroll in a high-risk pool." The problem is while you can certainly get coverage, it will most likely be limited and expensive. Good progress, but we can do better.

Personal Responsibility Requirement

This is one of the topics that has generated lots of debate, and rightfully so. As President Obama stated at his joint address to Congress recently, reform will only work if we are all involved. Just as it is important that all people carry some form of minimum coverage on their vehicles, it is also important we carry at least a minimum level of coverage on ourselves. That being said, until health insurance markets can be truly open and competitive, true affordability cannot be achieved, making it unfair and unrealistic to mandate coverage. This proposal does define the possibility of what they call "Minimum Creditable Coverage". The details of what this coverage would entail are still not defined, but it paves the way for a limited scope coverage that could be for catastrophic illness or injury. A good start, but we can do better.

Excise Tax on High Cost Insurance

Here is one of the first serious measures that can contain premium costs. This proposal calls for a tax on any policy that exceeds the threshold amount, to be paid by the insurance company. Just like a Luxury Tax in sports, insurance companies are not going to want to pay a 35% penalty for having premiums exceeding the threshold. Thus, they will more than likely keep premiums at or below the threshold. The downside to this is the threshold is unrealistically high, at $8,000 for an individual, and $21,000 for a family. Once again, a good idea, but we can do better.

Quality Care Payment Incentives

How's this for a concept; instead of rewarding providers for adding more and more procedures, how about rewarding them for the outcomes and the quality? This one should be a slam dunk. The downside is it currently would only apply to Medicare/Medicaid providers. Sounds like an example where the government run system would be ahead of the private industry. I know, blasphemy, right?

Incentives For Cooperative Care

Another novel idea. Instead of having everyone fend for themselves, without regard for what the rest of your providers are doing, what if they all worked together to come up with a truly comprehensive plan of care? Oh man, this is almost logical. What could possibly be the downside? It would only be for Medicare/Medicaid providers. Do I sense a theme here?

Insurance CO-OPS, or Insurance Exchanges

Some people are familiar with CO-OPS, but I will try to explain them anyway. A CO-OP is essentially a business organization owned and operated by a group of individuals for their mutual benefit. A group of people band together to create essentially a purchasing group, enabling them to secure better pricing. They have many different food CO-OPS in my area, and I know varying areas have utility CO-OPS, but the concept is the same. In the insurance market, CO-OPS would allow the formation of new non-profit insurance companies, with no affiliation to any existing insurer. The idea would be that a non-profit insurance program could compete against the private for profit (lots and lots of profit) insurance companies as a viable option. Of course, you could only enroll in one of these if you are not covered by an employee based plan. I may have said this before, but decent idea, but we can do better.

There are more concepts like this addressed in this proposal, and many, many needed revisions and improvements to the Medicare/Medicaid system that are long overdue are also in here. If that was all this proposal was intended to be about, I would be shouting it's success from anywhere I could. But as usual, with this version of health care reform, the bulk of the people in this country will be left saying "Um, what about us?". This proposal is supposed to accomplish 3 major goals. The first is to find an affordable option to insure the 47 million+ people who have no coverage. The second is to stabilize and reverse the trend of growing health care costs to the Medicare/Medicaid program. The third is to reduce the massively expanding premiums the rest of us are facing. Let's break down how we've done on each of these goals.

Coverage For The Uninsured

By establishing CO-OPS and the expansion of Medicaid, followed by a personal mandate to carry minimum coverage and proposed fees to qualified employers who do not offer some form of coverage, the number of uninsured is certain to drop. BUT, and I cap and bold that but for a reason, are the options affordable? As I mentioned above, there is a proposed tax for insurers on policies that exceed the threshold, but many of the insured can't afford a premium that is at the threshold. An $8,000 a year individual plan would cost over $665 per month (Not realistic, which is why I say the thresholds are inflated). That is cheap by comparison to the family coverage at $21,000 a year, which would be $1,750 per month. Cut those numbers in half, then add some contribution that covers 50% of the premiums and you still have individual cost of more than$165 per month, and family coverage at almost $440 a month. I guess affordable is a matter of opinion. Then, if you don't have coverage, you will pay up to $750 for individuals, and up to $3,800 for a family, deducted right from your taxes at the end of the year. Hmmmm, make sense to you?

Medicare/Medicaid Cost Control

I absolutely have to concede that even with an expansion of Medicaid benefits, the current proposal would most definitely help reducing costs for these programs, assisting in ensuring it will be available when people my age (40) reach Medicare age (65). It is extremely interesting to note that MANY of the changes, such as focusing on preventative/wellness care to limit or reduce chronic illness later, paying incentives based on outcomes and on cooperation, and creating care home models that appoints someone as a care leader, coordinating an individual's care are all taken from the same model. What model is that you ask? The National Health Care System in place in other modern nations. I'll give you a second to settle your stomachs before I carry on.

Cost Control For The Rest Of Us

Here's where this proposal just dies, plain and simple. In the proposal, it states that the preference is to have most individuals covered under the existing employer based system, even creating fines and fees for qualifying companies who do not offer health care coverage to their employees. Fines that can reach up to $40,000 A YEAR. Now that's a way to promote small business growth in this country. Here's the bigger catch. If your employer offers a plan, you cannot utilize the CO-OP or other options. So, if your employer is stuck with a horrible provider, with premiums that are many things, but not affordable, and coverage that is a mockery, you are stuck!!!

So, who does this plan benefit the most? The answer is frustrating, but sadly predictable. It is the same insurance companies that are the root of the problem now. All of the benefits that are being gained from the changes in Medicare/Medicaid do not apply to the private sector. Private sector insurers must guarantee coverage, unless they have a predetermined cap on enrollees, then they can decline you because it wouldn't be based on any medical condition. They have to pay a tax on any plan that exceeds thresholds we have already determined to be unrealistic. They have to use standardized rate factors, but can modify those based on "geographic considerations". They will pick up countless new enrollees through the employer based system, as neither the employer nor the individual will want to be fined or taxed, yet have to make virtually no concessions on quality improvement or cost containment. It's a good time to be in the private insurance business for sure.

Now, if the CO-OPS actually become a viable competitor to the conglomerates, and employers are allowed to opt in, we could see a dramatic shift. But if congressional leaders and conservatives don't want a National Health Plan because it would put big insurers out of business, what is the bet they want CO-OPS to do the same thing? Yeah, not likely.

So, what is the answer? I have spent the last few weeks researching health programs of various modern, industrialized nations and found one troubling fact. Ours is the only one whose citizens pay privately for insurance. Now I don't mean that there isn't a co-payment or charge of some kind in other nations, but we are the only ones who pay for our premiums, then pay those co-payments and charges. With that in mind, you would think that our government must have one of the lowest spending rates for health care in the world. I thought so to, but alas, I was wrong. We actually pay more per capita (per person) and more as a percentage of GDP (Gross Domestic Product, the amount our nation costs to exist) than any other modernized nation. So even though 200 million people in this country pay out of pocket for their premiums through private insurers, we spend more as a nation on health care. The reality is it's the private insurance companies that prevent us from truly achieving Universal, Quality Health Care. I know, I know, I struggled to type it, but it is the truth. One proposal for reform called for expansion of Medicare to people ages 55 - 64 on a buy-in basis, along with expansion of Medicaid/CHIP (Children's Health insurance Program). This expansion would have narrowed the gap on "universal" coverage, but still left a huge number of us under insured and over priced. One of the selling points of the buy-in Medicare program was it was budget neutral, as private citizens would pay what the government allots for them each year. A good idea, AND EXACTLY WHAT A PUBLIC OPTION WOULD BE. The reality is simple, a Public Option, "Medicare for all", if you will, is the only way we will see the corporate giants in insurance back down from their positions of unyielding profit mongering. No matter how I look at it, however, I draw one conclusion from the existence of a true Public Option. Private insurers would rather cut their losses and run than do business that doesn't paint the walls with money. In essence, it would mean the beginning of the end of private insurance. Not because it was all part of a socialistic plot for the government to take over and run your health care, but because the greed of the insurance companies simply won't bend.

How long would it take? Hard to say. There is no doubt that we would see legislation to try and limit how many people could take advantage of the Public Option. There would unquestionably be campaigns to show how poor the quality of care is (much like we see all the time regarding National Health Plans), and money would be flying at any lawmaker who stood still long enough in an effort to make the Public Option go away. Eventually, as enrollees dropped and the veil was finally lifted, they would simply take their enormous profits and go home, leaving us with the only cost effective, quality assured universal coverage, A NATIONAL HEALTH PLAN. While I have said before that this country may not be ready for it, reality says it is the only logical solution to this monumental problem.