Current Health Care Legislation – An Overview of Improvements

The House passed HR 3962 on November 7, 2009. The Senate bill is still pending. With the Senate voting Nov. 21st to begin debate, chances are strong that the Senate will pass a bill similar to the House version.

The House and Senate bills will then be combined (reconciled), and the reconciled bill will be voted on by both houses of Congress. With majorities in both chambers, the democrats will control this reconciliation process. A reconciliation bill isn’t subject to the Senate’s cloture rule. That means that it only takes a 50% majority to get the bill to final consideration and passage in both the House and Senate.

While the current bills for national health care reform legislation will benefit many U.S. residents there are still key problems left unresolved.  Some provisions are effective immediately, but others will not take effect until 2013 and some will not be entirely phased in until 2019.  By most reports the danger to our economy from rising health care costs is imminent. We need stronger action sooner, but this is a start.  

The Congressional Budget Office estimates that between 29 and 31 million of uninsured Americans will gain health insurance. Insurance companies will no longer be able to deny coverage for pre-existing conditions and will not be able to cancel policies except for fraud or non-payment of premiums. 

Affordability credits, to be paid directly to insurance companies, will help subsidize the cost of premiums and out-of-pocket expenses (deductibles/co-pays) for persons with income under 400% of the Federal Poverty Level ($88,200 for a family of 4 in 2009).  Affordability credits will be based on a sliding scale tied to income levels. Bankruptcies will be reduced as a result.

Many Medicare recipients will pay lower drug costs:  The donut hole, which leaves some drug costs uncovered, will be reduced $500 in 2010 and phased out in 2019.   Effective in 2010 ,brand name drug prices will be lowered 50% for those in the donut hole.
A national high risk pool, with available affordability credits, will be established in 2010 to cover those with serious medical conditions who have been denied insurance or who have been uninsured for six months.

Troubles Remain

Because the bills retain private health insurance companies and establish only a weak public option with premiums as high as or higher than current private insurance company premiums, and because they do not provide full health care coverage to all U.S. residents, the following problems will remain:

1) Many U.S. residents will not receive adequate coverage.  According to the Congressional Budget Office 4% to 6%, approximately 12 to 18 million people, will still not have health insurance.

2) Currently 31 cents of every health care dollar is spent on administration due to profits, overhead costs, and the burden on health care providers by unique filing requirements for reimbursement.  Many policy experts doubt that provisions to lower costs will result in substantial savings. (Compare to Medicare at  2-5%)

3) Except for those in the national high risk pool, affordability credits will not be available until 2013.  People will remain uninsured for the next three years.

4) The high risk pool is underfunded - $5 billion has been appropriated for the high risk pool but it is estimated that $15 billion is needed.

5) Medical bankruptcies  will still exist for those ineligible to benefit from affordability credits.  Out-of-pocket costs can be as high as $10,000 for a family, per year—figures high enough to result in bankruptcy, especially if paid over several years ($10,000 times 5 years = $50,000 medical debt).

6) The Stupak Amendment bars any federal funds to pay for abortion services except for cases of incest, rape, or where the mother’s life is endangered. This includes any affordability credits which would be issued to private insurance companies. Effectively, this requires low income families to pay for abortion services out-of- pocket.