October 21, 2009
by William Pilgrim
Health care reform, and universal coverage, are one step closer after the Senate Finance Committee voted 14-9 October 13 to pass the America’s Healthy Future Act. Senate Majority Leader Harry Reid (D-NV), will now work to blend the bill with the Affordable Health Choices Act passed by the Senate Health, Education, Labor, and Pensions (HELP) committee on July 15, 2009. Debate before the full Senate could begin by the end of this month, and work can begin on the delicate task of combining the Senate proposal with the competing House Tri-Committee’s America’s Affordable Choices Act.
By most measures, the Senate Finance Committee’s version appears to be the leading bill. At $892 billion over ten years it is the least costly measure, and the Congressional Budget Office (CBO) estimates that it could shave $81 billion off the federal deficit by 2019. Unfortunately, it is also the least aggressive and most conservative approach, and the only bill that doesn’t contain a public insurance option. After months of wrangling, and making concessions to appease conservative lawmakers, will the final bill be strong enough to protect workers?
Health care costs are expected to reach $2.5 trillion in 2009, 17.6% of gross domestic product (GDP), with spending is expected to double by 2018. The United Kingdom, France, Canada, and Japan all spend less than 10% of their GDP on health care, with significantly better health outcomes. America is the only industrialized nation without universal coverage. These bills would go a long in way providing coverage to the 45 million uninsured Americans, a number that’s growing as the recession drags on. When these bills begin being phased in, starting in 2014, it’s estimated that 95% of Americans could be insured.
The acts represent the most comprehensive and far-reaching efforts to expand health care in decades. They aim to achieve most of the benchmarks President Obama set for reforming health care including: lowering costs while improving quality of care; providing more accessible and affordable care; and eliminating discrimination in offering plans. The Senate Finance Committee’s bill does the least towards accomplishing these goals.
All three competing bills would require some employer contribution. The House bill, America’s Affordable Choices Act, contains the strongest mandates. The bill would “require employers to offer coverage to their employees and contribute at least 72.5% of the premium cost for single coverage and 65% of the premium cost for family coverage of the lowest cost plan that meets the essential benefits package requirements.” Employers choosing not to provide coverage would be forced to pay 8% of payroll into a Health Insurance Exchange.
The House bill, and both Senate bills, contain articles that would establish health insurance exchanges through varying mechanisms. Through these exchanges, all state licensed insurers would be forced to participate, making information on premiums and benefits from a variety of plans available to individuals and small businesses shopping for quality insurance. Under the House bill, hardship exemptions are allowed for employers that would be negatively affected by job losses, and the smallest employers, those with payrolls under $500,000, would also be exempt. To encourage employee coverage, though, tax credits would be offered to employers contributing at least 50% to their employees health plans. In contrast, the Senate Finance Committee’s bill leaves many workers unprotected.
Senate Finance Committee Chairman Max Baucus (D-MT) crafted the America’s Healthy Future Act in an effort to win bipartisan support from Republicans and conservative Democrats. Of the proposals, this bill contains the weakest protections for workers and only one Republican, Olympia Snowe of Maine, voted for the measure.
Although all Americans would be required to carry insurance, employers with fewer than 50 employees would not be required to offer insurance or be penalized if they don’t. Employers with more than 50 employees would only be penalized if their employees use federal tax credits and subsidies to purchase their own coverage.
Employers with more than 200 employees that do offer health insurance would force any uncovered employees to be automatically enrolled in whatever plan the company provides. This denies employees the right to choose their own health care and strong-arms them into accepting whatever the company currently offers.
Oregon Senator Ron Wyden, a Democrat and long-time supporter of health care reform, was blocked by his own party from amending the bill. His amendments would have made employers offer the choice of a minimum of three insurance options. Forcing insurers to compete among employees could have lowered premium costs.
A public insurance option could also force down insurance premiums. Private, for-profit insurances companies would be forced to lower their premiums and administrative costs in order to compete with a low cost public alternative. Conservative commentators decry a public option as “socialism”, but enrollment would not be mandatory and no one would be forced onto the plan. After initial federal support to start a public non-profit insurance entity, the program would be solely funded by the premiums it collects. The America’s Healthy Future Act is the only bill without a public option.
Requiring all Americans to be insured is likely to be a boon to the insurance industry. All three bills strip the insurance companies of the right to deny coverage because of preexisting conditions and charge higher premiums to women or older insurees. The insurance industry has fought these profit-encroaching measures for years. While these measures guarantee more equitable access, the industry stands to gain millions of new clients, and dollars, as rules are phased in requiring the uninsured to find coverage.
There are positive trends in these bills. Medicaid, which provides federal insurance to the poorest Americans, would be dramatically expanded to include those below 133% to 150% of federal poverty level (FPL). Those between those levels and 400% of FPL would be provided credits or subsidies on a sliding scale to purchase coverage.
There would also be caps on out-of-pocket expenses and the top 1-3% of the most expensive plans would be taxed to pay for the expansion of coverage. The bills also support using information technology to reduce administrative cost and better coordinate patient care, as well as shifting focus from the current pay-for-service model to a preventative/wellness based system.
Congress’ most radical proposal, the United States National Health Care Act, was brought to the floor of the House January 26th, 2009, and has received virtually no attention since. H.R. 676, sponsored by Rep. John Conyers (D-MI) would establish a single payer universal health care coverage through the United States National Health Care (USNHC) Program. This program would provide all individuals residing in the United States and U.S. Territories with free health care. This would include primary and preventative care, long-term care, emergency care, mental health, as well as dental and vision care.
By raising taxes on the top 5% of wealthiest Americans, adding progressive taxes on payroll and stock and bond transactions, and diverting all federal health care spending to the USNHC program every U.S. resident could be covered. In the past President Obama has advocated for a single payer system similar to Canada’s. However, the President now views transitioning to such a system as too disruptive since our health care system has been historically run privately.
But current public options, like Medicare for seniors, are run more cheaply than their private counterparts. In the case of Medicare Advantage, the privatized portion of Medicare, the cost to the government is 14% more per beneficiary. H.R. 676 would allow coverage through a variety of insurance providers, but would require all companies providing insurance be run as non-profit. Removing the profit motive from insurance ensures that what is paid as premiums is used for the health of the beneficiaries, not to pad the pockets of insurance executives.
America can no longer afford to pay more and receive less, while leaving 45 million Americans vulnerable. The America’s Healthy Future Act may finally bring America closer to the health care reform, but in an effort to receive the stamp of bipartisanship, many progressive ideas have been left out. Workers are penalized for not carrying insurance, but there are no strong employer mandates to improve coverage. And there is no public option to force private insurers, who’ve enjoyed massive profits for years, into real competition. The America’s Healthy Future Act is certainly an improvement over the current system, which operates with exorbitant rates and little else to show for it. But it doesn’t go far enough in guaranteeing workers quality, affordable coverage.