Topic: Political and economic
Those who follow this blog know that I originally supported single-payer national health care, and still think it would be the best approach (though it has no chance of passage now). I later said that I supported the President's public outline for health care reform as the best realistic chance for reform, so long as it contained a "realistic" public option. However, the "bipartisan" plan that is slowly emerging is far from the President's outline.
While few details of the "bipartisan" health care reform package have been settled clearly enough to be fed to the public in written form, the comments of those involved in the process reveal both that few large changes may be expected and that some of the changes that will occur will be good for the insurance industry and bad for a lot of people. Some of these important details may be inferred from single comments that have been repeated, in one form or another, by people on both sides of the process. Other details must be inferred from pairs of apparently contradictory statements that can only be reconciled with each other by assuming certain plan details.
The first and most obvious problem with Congress' bipartsan approach to the issue is that, in counting the "cost" of the program, they are counting only the relatively short-term costs to be borne by the Federal Government through new taxes. To evaluate the REAL COST to the ENTIRE ECONOMY of health care reform would require a balancing of the new taxes required against the savings to individuals, employers, and state and local governments that will result from the reform. But Congress is not even attempting this. What the responsible members of Congress are publicly saying is that a reform that "costs" $1.6 trillion, or even $1 trillion, in new taxes over the next 10 years costs too much. This debate simply ASSUMES that the new taxes to pay for the government's end of the reform will simply be ADDED to the cost of the present system to its participants (individuals, employers and the government), and that none of the other costs will change. However, the immediate cost to the government is NOT the whole picture. It is, in fact, generally agreed that, if this country had a well-functioning health care financing and delivery system, this would ultimately save all of the participants in the system a great deal of money. It may well be that individuals and employers would end up saving more from the existence of a well-functioning system than they would pay in taxes to maintain it. But we will never know.
Second, we know now that, because of the expense, the public plan is off the table. There is still some talk of permitting nonprofit cooperatives into the market, but even that looks a little unlikely. Note that the very fact that a statute would be needed to merely permit nonprofits to offer health insurance amply proves the point I made in an earlier blog post that health insurance is NOT in any way a free market, but rather a market carefully regulated to insure consistent profits for oligopolistic for-profit insurance companies. This is absolutely not going to change. Nonprofit cooperatives, if permited at all, will have to play by the for-profits' coverage, pricing and premium-rating rules.
Third, we know that something at least similar to the current premium rating system, which only pools risks over employment-related groups and not over the whole population, is going to continue. We know this from the comments of some leading Democrats to the effect that the reform must be limited as requested by big labor, so as not to interfere with multi-employer group plans under collective bargaining agreements. But because both coverage for everyone and employer contributions for full-time employees are to be mandatory under the new system, the reform would not in any way interfere with union members' ability to get coverage at their employers' expense. Thus, what these Congressional Democrats are actually telling us is that the rating system that gives many union employees preferential premium rates is not going to change. This, in turn, implies that the current policy rating system is not going to change very much.
This rating system is the source of the largest inequities in the present system. Those who are fortunate enough to be employed by large employers that have large group plans, or by nationwide union-administered multi-employer groups under collective bargaining agreements will still get the best rates--though it's really hard to say whether those rates will go up or down as a result of the reform. Young, healthy people purchasing individual policies, and small employer groups wherein all of the covered employees are young and healthy will still get decent rates, though not as good as those eligible for large group plans. Small employer groups in which some of the covered employees are older or have health conditions will still pay very high premium rates. Individual premiums for older people and people who have ever had any serious health problems will remain often prohibitively high (though the insurance companies will no longer be permitted to exclude coverage altogether).
Fourth, it is obvious that there are going to be no realistic subsidies to support coverage for those who can't afford it. The test for subsidy eligibility is quite obviously going to be a straight household gross income "needs test," fixed as a percentage of the federal poverty line in the reform statute itself. It will make no distinction, for example, between a young healthy couple with healthy children that is eligible for coverage under a union contract and pays 20% of its household income for health insurance, and a couple a few years older with a sick child who must pay 70% of their identical household income in health insurance premiums. If the subsidy threshhold is set at 200% of the poverty line, as seems quite possible right now, and the household gross income of both of these hypothetical families is 199% of the poverty level, both families will receive identical subsidies, probably based on the average premiums for young healthy people. If the household income of both of these families is 201% of the poverty level, neither family will receive any subsidy.
Fourth, it appears that Congress is really intent upon enacting a measure that will make all of us who have been pressuring it for reform sorry that we ever asked, because it will make a large proportion of the population into involuntary lawbreakers. This can be seen by reconciling 1) the repated assertions by lawmakers on both sides of the aisle that the reform will mandate that all persons, or their employers, must purchase health insurance and 2) the apparently contradictory admission, by lawmakers again on both sides, that the packages they are presently considering would leave millions of Americans uninsured. Wait, if it's mandatory, that means everyone is going to be covered, right? Well, no. It means that everyone who can afford coverage is going to be covered. Many will still not be able to afford coverage, though required to purchase it. This group would include the millions of unemployed. Moreover, since eligibility for employer-sponsored group coverage would remain restricted BY LAW (as it is today) to "full-time," permanent employees, most of the millions who work one or more part-time jobs, or can only find temporary work, would also remain uninsured. The comments made by our members of Congress recognize this. These uninsured would not be covered under the new law, but would simply become involuntary LAWBREAKERS, criminals whose only crime was being too poor and/or employed by the wrong employer.
This leads to my final point. In an earlier posting in the "pure satire" channel on this blog, I asked how a law that would make mandatory individual purchase of health insurance would be enforced. In that posting, I facetiously compared compulsory automobile liability insurance laws to the proposal for compulsory health insurance. I suggested, by analogy to taking away the drivers' licenses of uninsured drivers, that the only logical penalty for failure to maintain compulsory health insurance would be to take away the lawbreaker's "breathing license." Unfortunately, Congress appears likely to take my satirical suggestion seriously. Several members of Congress have publicly suggested that the package they are now working out will include provisions that would remove from all health care providers (including emergency rooms, which now bear this burden) any obligation to provide treatment to any uninsured individual unless that individual immediately, at the time of service, pays for enrollment in a health insurance plan. This can only mean one thing for those who are really unable to afford the premiums the health insurance industry demands of them--for their crime they will be sentenced to death, at a random and unpredictable time, by untreated medical emergency. If the statuory income-based subsidy formula says you OUGHT to be able to afford insurance, but in fact you can't afford the rates imposed, we are going to take away your breathing license for your crime!