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10 Awesome Reasons to Pass Health Reform
Posted on Aug 16, 2009
By Joshua Holland, AlterNet
3. Medical Bankruptcies Would Plummet
One of the most significant of these regulations is in the House bill: a cap on out-of-pocket expenses. If the measure passes, individuals would face a maximum of $5,000 in out-of-pocket expenses a year, and families no more than $10,000. For poorer families, the limits would be much lower: $500 per year, for example, for a family making less than 1.33 times the poverty rate.
In 2007, Harvard researchers studied thousands of bankruptcy filings and found that medical causes played a role in more than 6 in 10.
4. People Who Could Never Get Decent Coverage Will Finally Be Able To
So far, one of the great victories for the anti-reform movement has been convincing many small-business owners that health reform will put them under.
The reality is that small-business people, their employees, independent contractors, freelancers, entrepreneurs, part-timers and the "marginally employed" would be the biggest winners from the legislation if it passed as currently drafted. Small business owners and their employees—as well as those other groups—would, for the first time, be able to get decent coverage at a fair price, and if eligible, both employer and worker would be able to get extra help paying for it.
Under the current system, most of the largest employers in the country self-insure—they pay their employees’ claims directly and cut out the middleman.
Big firms that don’t self-insure buy insurance on the large-group market, where risk is spread out over a large pool. Large-group plans tend to be more or less comprehensive and, relatively speaking, affordable.
But those forced to purchase coverage on the individual or small-group markets have little buying power and are routinely forced to pay budget-busting premiums for the worst possible coverage—plans with high deductibles, caps on benefits and strict limits on what is and isn’t covered.
This gets to the heart of the "public insurance option"—the most contentious point of debate in the reform battle. It would work like this: The government would establish regional exchanges, or "gateways," that would be open to those who would otherwise be forced into the individual and small-group markets. These gateways would have relatively large insurance pools just like large employers—and public programs like Medicare—have now.
Within these large purchasing pools, people would be able to choose from among different insurance plans—one a government-run "public option" and the rest offered by private insurers.
In order for private insurers to sell plans through the exchanges, they would be required to offer a standard set of benefits (which the public option would have to offer as well). They’d also be permitted to offer plans with more bells and whistles at a premium price.
For those enrolled in the public exchanges, the process would be quite similar to what employees in many large companies experience—they would simply choose from among a variety of plans, with slightly different levels of coverage and costs.
Compared to the plans now available in the individual and small-group markets, they would pay a lot less for significantly better insurance (which, in reality, is what those "teabaggers" are protesting).
Because of pressure from Republicans and conservative Blue Dog Democrats, the public exchanges will phase in slowly, over a period of four to six years.
5. (Almost) Everyone Gets Covered
That brings us to another "controversial"—but ultimately commonsense—piece of the puzzle, the "individual mandate." It means that (almost) everyone would either have to buy health insurance or pay a modest penalty that would contribute to the system. In the House bill, the penalty would max out at 2.5 percent of income. Waivers would be available in the cases of economic hardship or for those who have religious objections.
There will be those who get those waivers; others will be left behind—it’s not a truly universal system. But according to preliminary projections, the result would be an uninsured rate of 3-5 percent, rather than the 16 or so percent who lack insurance today, reducing the rolls of the uninsured by some 20 million-30 million.
6. Those Who Can’t Afford the Premiums Will Get Help Paying
Ultimately, even if the public exchanges were to succeed in bringing the price of health insurance back to earth, a lot of people would still be priced out of the market.
All of the Democratic plans come with subsidies to help those at the lower end of the economic ladder get access to decent health care. The most generous are in the House bill, and how extensive the subsidies will be in the final legislation will be a point of heated debate.
In the House bill, individuals making less than 400 percent of the poverty line—$43k per year and families earning under $88k—will be eligible for subsidized coverage on a sliding scale.
Those at the lowest income levels (but who earn too much to get Medicaid) will be required to pay no more than 1.5 percent of their total income for health coverage.
Subsidies would also be available for co-pays—also for people earning up to 400 percent of the poverty line.
Finally, many small businesses would be eligible for tax credits for insuring their employees.
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