By Joshua Holland, AlterNet
This article was previously published on AlterNet.
Unable to win the debate on the merits of their arguments, opponents of health care reform have resorted to a dizzying array of outright falsehoods to terrify Americans into opposing a process that might deliver real benefits to their families.
They’ve falsely claimed that the government would "take over" the health system, put private insurers out of business and let pasty bureaucrats decide what treatment Americans would receive.
They’ve spun wild tales of federal agents coming into Americans’ homes for lifestyle checks and faceless government officials making end-of-life decisions for patients.
They’ve falsely claimed that the legislation being considered by Congress would cover undocumented immigrants, and they sent around elaborate-but-wholly-fake "analyses" of the supposed bill, with references to made-up page numbers and all.
All of these serve the same ends: using the politics of distortion and distraction to capitalize on people’s natural fear of change and compelling them to fight noisily against their own interests. And it can be somewhat effective—that’s clear from the raw, populist anger unleashed into the health-care debate in recent weeks by well-heeled corporate-lobbyists bent on derailing the democratic process.
The industry-approved fog-and-monsters strategy has another benefit: It puts advocates of reform in the position of batting down a series of nonsensical arguments based on an endless string of health-policy straw men when they could be explaining why getting something decent done would in fact be good for the country.
So let’s get past the fearmongering and look at some of the highlights of what’s really in the more progressive legislation working its way through Congress. The proposals aren’t perfect. As I’ve written before, in their current form, the bills fail the test of having a truly "robust" public insurance option, and as such has limited potential for cost savings.
But they are also substantial reforms that would go quite a way toward beefing up the health and economic security of a lot of American families if enacted.
The following breakdown is based on the legislation developed by three committees in the House of Representatives (HR 3200) and the Senate Health, Education, Labor and Pensions (HELP) Committee. A third piece of legislation is yet to emerge from the Senate Finance Committee. Reports suggest that the legislation coming out of Finance will be much more accommodating to the insurance industry and other corporate stakeholders.
Much of the real legislative fight will come when the two Senate bills are combined and then, later, when the final Senate and House bills are reconciled.
1: The First Thing That Will Happen Is Absolutely Nothing
At least that’s the case for a lot of people who now have quality health insurance.
If you have a decent health plan through your job, nothing will change for you in terms of your insurance.
In fact, if you work for a large or medium-sized company and have decent coverage at a price you can afford, then nothing can change for you—you’ll be ineligible to enroll in the public insurance option (which is discussed below).
If you have already have government-run health care—if you’re a vet, or are on Medicare or Medicaid or have a child in the State Children’s Health Insurance Program, nothing will change for you in terms of your coverage. (One exception: Under the House bill, eligible children would be shifted from S-CHIP to a new public insurance program in 2013).
The only thing that would change for you in these circumstances would be this: your current insurance company would have a harder time screwing you over if you get sick. That’s because, although your policy wouldn’t change, it would be governed by new public-interest regulations for the entire health insurance industry. (See next item.)
2. New Protections for Consumers
Regardless of your place of employment or the kind of coverage you have now, new regulations would take effect in 2010 that would go a long way toward curtailing the insurance companies’ worst abuses.
- Insurance companies could no longer deny coverage to people because they’ve had health problems in the past, nor could they charge hugely different rates for different groups of people (premiums could only vary by age, geography, tobacco use and family size).
- The House bill bans recissions—the insurance industry’s habitual practice of collecting premiums until someone gets sick, and then digging through their histories for an excuse to cancel coverage.
- Insurers wouldn’t be allowed to cancel an individual’s coverage for reasons other than failing to pay the premium.
- Insurers would no longer be permitted to impose annual or lifetime caps on benefits.
- Insurers that sell insufficient, cheapo plans that leave people vulnerable to medical crises would be required to disclose that fact to their customers.
- All insurers would be required to disclose how much of their spending is on health care and how much goes to costs like overhead, advertising, etc.
- The legislation (especially the Senate HELP bill) creates new tools for fighting insurance fraud and abuse.
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.
7. No Free Lunch for Businesses
Currently, large employers that rely on low-skilled workforces usually offer little or no health coverage, and much of these workers’ health care is already subsidized by taxpayers in the form of Medicaid and Medicare payments, other public programs and unpaid bills for emergency-room visits. Under the proposals in Congress, medium and large firms would face a simple choice: Offer their employees decent coverage or pay something into the system to offset the burden their employees’ health needs impose on the American taxpayer.
8. More Low-Income Workers Eligible for Medicaid
All of the plans being considered by Congress make more of the working poor eligible for Medicaid by lifting the income limits on eligibility.
9. Some Things Will Change, but You’ll Never Notice
The right’s fearmongering is only effective because the health care debate is often so complex. Opponents of reform paint dark conspiracies about some of the more-obscure provisions in the reform package (a good example being the gross mischaracterization of a rather innocuous provision that makes counseling on living wills and other end-of-life decisions available to ill seniors as a "government death panel").
It is true, however, that the proposed legislation contains a number of provisions that aren’t getting a lot of attention in the debate.
For example, there are measures that would impact the way doctors are paid, allocate additional dollars for developing the health care workforce and bring new technologies online.
These provisions will have a significant impact on a variety of stakeholders—mostly health professionals—but ordinary people looking for health coverage are not going to notice anything different about their health care.
10. Over Time, the System Will Become Healthier
Everything depends on what the final legislation entails. But if it were done right, those systemic changes—greater competition, tighter regulation, technological improvements, a greater emphasis on prevention, the buying power and efficiency of less-fragmented insurance pools and an end to treating the uninsured in emergency rooms—would gradually "bend the cost curve" of health coverage and offer insurance to tens of millions of people who today struggle with the health problems and stressful economic insecurity of living without insurance.
As I’ve argued before, the Democrats’ approach is far from perfect. But the things outlined here are essentially what would come about if the more-progressive version(s) passed.
Understanding what’s actually contained in the legislation leads to an unavoidable conclusion about the anger we’ve seen in recent weeks: it’s doubtful that at anytime in the history of our nation have a group of people been so furiously opposed to something that would so obviously be an improvement over what they now have.
It’s nothing less than a testament to the power of industry propaganda.