The Good News and the Bad News about Health Care Reform

I.     The Good News

• Congress has finally recognized that the United States remains the only industrialized nation that does not guarantee health care to its citizens, and it is now debating the "Patient Protection and Affordable Care Act," which would be the most sweeping health care reform legislation since Medicare. You can access a summary of the bill here.

More Info: • Health Reform FAQs • Sanders' Health Care Reform Amendments • Download Sanders' single-payer bill (S.Amdt.2837) (pdf) • Download the Sanders single-payer amdt factsheet

• The nonpartisan Congressional Budget Office (CBO) has determined that the bill before the Senate would provide coverage to more than 94 percent of non-elderly Americans and to an even larger percentage of total Americans. It would also save money, reducing the deficit by $130 billion over the next ten years. You can access the CBO's analysis here.

The insurance industry would be reformed.  The bill would change the way that health insurance companies do business in order to protect consumers from harmful (and unfortunately common) insurance industry practices. 

• Insurance companies would not be allowed to stop paying for coverage after a certain lifetime or annual limit.
• Insurance companies would not be allowed to charge co-pays for preventative services, such as checkups, immunizations, or recommended mammograms.
• Young adults under 27 would be able to stay on their parents' plan.
• Beginning in 2014, insurance companies would be barred from discriminating against applicants based on pre-existing conditions, health status, or gender. Before 2014, uninsured Americans with a pre-existing condition would have access to an immediate insurance program, which would help them maintain affordable coverage.

More people would have access to coverage.

• The bill would create "exchanges" for people who do not have access to affordable coverage through an employer and for small employers who have trouble paying to insure their employees.
• In these exchanges, people would have access to a variety of insurance options, including, in some states, a public insurance option that would compete with insurance companies.
• Low- and middle-income people who purchased insurance through the exchanges would be eligible for government subsidies to help them afford insurance.

The Medicaid program would be expanded.

• The bill would expand the Medicaid program so that it covered all non-elderly Americans with income below 133 percent of the Federal Poverty Level.
• Procedures for Medicaid enrollment would be streamlined so that more eligible people are able to take advantage of the program.

The Medicare program would be protected and strengthened.

• Without action, the Medicare hospital insurance trust fund is expected to go broke in just over seven years. The bill would make Medicare a stronger, more sustainable program by streamlining Medicare payment procedures.
• The bill would crack down on waste, fraud, and abuse in Medicare, as well as in Medicaid, CHIP and private insurance, thereby strengthening Medicare's solvency.
• Medicare currently reimburses health care providers on the basis of the volume of care they provide rather than the value of the care they provide to the patient. For example, for each procedure, test, or scan that a doctor performs, Medicare reimburses the doctor for a particular dollar amount, thus rewarding doctors who do more, even if they are ordering unnecessary care. The bill contains a number of proposals that would change the way that Medicare pays doctors, moving away from a system that rewards unnecessary tests and towards a system that rewards quality care.

The bill promotes preventative care, which saves money and lives by keeping people from getting sick in the first place.

• The bill would invest in a national prevention and public health strategy and improves education on disease prevention and public health.
• It would authorize enough funding to establish a Federally Qualified Community Health Center in every underserved community in America.
• It would address shortages in primary care and other areas of practice by funding the National Health Service Corps, a scholarship and loan repayment program for students entering the health care workforce. It would also reward those professionals who choose to become primary care practitioners and those providers who choose to practice in underserved areas with higher reimbursement rates.

Other good changes:

• Under the transparency portions of the bill, consumers would have access to crucial information about care providers, including to information about physician ownership of hospitals and high tech medical equipment.
• The bill would expand the scope of an existing drug discount program, so that patients at children's hospitals, cancer hospitals, rural hospitals and in other underserved communities have access to medicines at lower cost.
• The bill would make long-term support and services more affordable for millions of Americans by providing a lifetime cash benefit that would help people with severe disabilities remain in their homes and communities.

II.     The Bad News

• The bill is huge (over 2,000 pages) and enormously complicated.
• Implementation of the plan would take too long. The insurance exchanges, the affordability credits, and increased Medicaid eligibility wouldn't occur until 2014. There is simply no reason that the American people should wait another five years for reform.

Although there are some insurance reforms in the bill, certain industry abuses would be allowed to continue.

• The bill contains few provisions that would drive down the cost of insurance, and insurance companies would be allowed to continue reaping windfall profits. While there is a cap on the amount that insurance companies could spend on non-medical costs, such as executive salaries, there are no penalties for insurance companies that exceed the cap.
• Insurance companies would be allowed to sell catastrophic plans with very high deductibles to certain young people through the exchanges. This would help the insurance companies, who would get premiums from this generally healthy population, but it would not do much to help the individuals insured, who would face large out of pocket costs if they became ill.
• Under the bill, insurance companies could vary premiums by as much as three to one for different customers, based on age. This may make a plan unaffordable for some people.

There are some problems with the Medicaid expansion.

• The House bill would expand the Medicaid program so that it covered all non-elderly Americans with income below 150 percent of the Federal Poverty Level; however, the Senate bill would only expand Medicaid to cover Americans up to 133 percent of the Federal Poverty Level.
• Currently, Medicaid reimburses doctors at so low a rate that many providers refuse to take Medicaid participants. Although it puts more people into the Medicaid program, the bill does not do anything to fix this situation.

The bill should do more to help seniors on Medicare

• Currently, seniors on Medicare face a coverage gap - known as the "doughnut hole" - in their prescription drug coverage. Medicare does not cover prescription drug purchases if the beneficiary has spent between $2,700 to $6,200 in the year. It only covers purchases if the beneficiary has spent less than $2,700 or more than $6,200 on prescription drugs. The House health care bill closes this "donut hole" but the Senate bill does not.
• Currently, the Secretary of HHS is precluded by law from negotiating better drug prices for seniors in the Medicare program. The Senate bill would not do anything about this situation.

Health care reform should do more for workers.

• Under the Senate health care bill, many workers would have to keep the plan offered by their employer, even if that plan were inadequate. Workers with employer based coverage would only be allowed to access the exchange if they had unaffordable premiums. They would not be allowed to access the exchange if they had an affordable plan that did not cover many services.
• The bill includes a fee on insurance companies that sell high cost health insurance plans. This fee would be passed on to consumers, and it would affect many workers who have forgone pay raises for better health care.

Other problems with the bill:

• The bill establishes a way for FDA to approve generic biological products (like vaccines), but it gives big companies twelve years of exclusive rights before generics can compete. This "period of exclusivity" is too long - a five year period would be more appropriate.
• The bill creates a public option that would compete with insurance companies through the exchanges. It also, however, allows states to opt out of the public option. The opt out provision in the bill weakens the public option's ability to compete with insurance companies and jeopardizes consumers that live in states that choose to opt out.