So, I promise, its coming... really soon. All of it. Seriously.
In fact, here's Part I: Health Insurance Reform
Please be forewarned, this is not intended to be a up-to-date analysis of the latest House or Senate bill. Those damn things change every other hour as our elected representatives are busy making sure there isn't anything drastic enough in there to upset anyone, ever, about anything. Its like ripping all the teeth out of T-Rex: not nearly as effective, what's he going to do, get you with those gimpy little arms? Ha! Yeah right...
What this is intended to do is review several of the key components to effective health insurance reform that are currently being debated (and a few ignored). The next two posts will focus on what needs to happen once we complete the slow, painful crawl towards passing an insurance reform bill.
So, the big thing about the current proposal is that the Dems, and even some Republicans think we ought to have universal coverage, meaning every legal citizen of the United States should be covered by some sort of health insurance plan. The current proposal going forward is to have individual or employer mandates, basically requiring that people have health insurance by law, much in the same way that most states require that drivers have auto-insurance. An individual mandate would mean that each person is personally responsible for acquiring their own insurance, either through their employer, a private plan, or via government programs like Medicare and Medicaid for those that qualify. An employer mandate would mean that employers must provide health insurance for their employees through one of the aforementioned means, the way many businesses currently do. There would be certain exceptions for small businesses and the like due to the cost-burden that comes with this. Some argue this would stifle growth in an already hurting economy, others say (and its been proven) that over the long-term, at least, the costs are simply passed on to the employees in the form of lower wages.
Depending on the final version of the bill, both employers and individuals who do not have insurance will face fines. The government intends to provide subsidies to businesses in the form of tax breaks so that they can afford to provide insurance to their employees, as well as direct subsidies to individuals in the lower-income brackets who cannot afford insurance on their own. The insurance industry is currently all about this plan, because it adds millions of customers to its base. Much in the same way that hot-dog vendors would be really psyched if the government suddenly passed a law saying everyone had to eat hot dogs, or face a fine.
What the insurance companies do not want to see is the emergence of a public option. This is where much of the contention over the final bill lies. A public option would be an OPTIONAL government-run health insurance plan (like Medicare and Medicaid) that anyone could purchase. It would essentially provide competition to private health insurers and force them to keep their costs low, since the government wouldn't be worried about making profits. Much in the same way that the Post Office competes with companies like FedEx and UPS. This public option would, ideally, be financed by the premiums it charges for its customers. An analysis by the Congressional Budget Office determined the bill passed by the House (H.R. 3962) would actually reduce the federal deficit over 10 years. Of course the Dems have been very strategic about what they put in the bill so the price tag comes out at a politically palatable number, meaning some spending related to health care will likely be passed in separate bills. I'd be more comfortable, at this point anyways, that the entire plan will come out roughly even, give or take a few billion dollars.
I'm not going to make exhaustive arguments about why I think there should be a strong public option, since you can easily find those with a Google search. I will, however, say that major health insurers, on average, spend 16-20% of their budget on overhead (pretty inefficient by most standards) and since 1970 the number of health care administrators in the U.S. (not confined solely to insurance companies, but hospitals and other providers as well) has risen 3000% (yes, three-thousand) while the number of physicians in the U.S. has risen just 200%. Something to think about... I'll delve into that more in the next post.
But anyways, the public option would become part of a 'national insurance exchange' and compete with private insurers. But what in God's name is an insurance exchange? Professor Jacob Hacker of Yale's political science department describes it as such...
"It’s a place where individuals can go and shop for a health plan. Today, large employers can select from a choice of plans that spread risk and reduce administrative costs because of the large work force. But the options available to small employers are much more expensive. And individuals find it very difficult to get coverage. The exchange would make a range of more affordable options, including a public plan, available to individuals and employees of small businesses." The full Q&A with Dr. Hacker regarding the insurance exchange can be found here.
There are also those out there who are communist enough to want to go even further than a public option; they want a single-payer system, such as the British National Health Service (NHS). Essentially this would mean that the government is more or less the sole provider of insurance. This is not a political reality on the national stage, but there are certainly reasonable arguments in favor of this type of system. California is one state where there is considerable momentum behind the idea of a single-payer system. While politicians on the national stage don't want to touch anything this toxic for fear of being labeled a Marxist-Nazi, we may see experiments in this type of system on a state level in the coming decade.
Lastly, making these structural reforms is important, but efforts also need to be made to reduce operating costs of insurance companies (remember the overhead cost thing?). If the government is going to force millions more into the arms of insurance companies, they ought to make sure that all that money is being spent efficiently. The same applies to the government, both to its potential public option, and its current Medicaid and Medicare programs. There are several provisions within the current bill aimed at reforming Medicare and making it more efficient, and while many out there would have your grandmother thinking that Obama is going to destroy Medicare, this is hardly the case.
There you have it folks, health insurance reform. We've taken the first steps, but we're a long way off from acheiving anything. The Senate has to force a bill to the floor to be voted on, and even if something gets passed with the unlikely help of a few key 'centrist' democrats and the ever-agitating Joe Lieberman (just another reason to hate Connecticut), the House-Senate conference committee to hammer out final legislation promises to be a circus in its own right.
Parts 2 & 3 of my health care reform series will be posted by weeks' end... but don't hold me to that.
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