FAQ: Making Sense of Health Care Reform
What You Need to Know About Proposed Legislation to Reform the Health Care System
By Andy Miller
WebMD Health News
Reviewed by Brunilda Nazario, MD
July 17, 2009 -- Congressional committees are working hard on President Barack Obama's top domestic goal: passing health care reform. It's the most significant effort to enact health reform in many years.
Here's a rundown of some of the issues being discussed and what they may mean to you:
What plans are being seriously considered?
Several ideas are circulating through Congress. But the most politically viable plans would preserve the current job-based benefits system while trying to extend coverage to all Americans. House Democrats introduced their reform plan Tuesday, but the stronger focus is on the Senate, where the Health, Education, Labor, and Pensions Committee approved its own version of health reform. When the full Senate takes up the bill, major sticking points are likely to involve expanding government's role in health care and how to pay for a massive overhaul.
Some people have advocated a 'single-payer' system. Why has it not gained more support?
Single payer is a health system run entirely by the government. It would replace the private insurance market, creating a Medicare-like structure that would cover all Americans. The government, the single insurer, would pay hospitals and doctors for their services. The idea has not gained traction, despite passionate advocacy, because of widespread opposition to government-controlled health care and to dismantling the current system. "It's not politically feasible,'' says Donald Taylor, a Duke University health policy professor.
Would reform require individuals to buy health insurance?
It's very likely. People from low to middle incomes would receive subsidies to afford it. Medicaid, a government program for the poor and disabled, could be expanded to cover more lower-income people. The goal: drastically reduce the number of uninsured Americans, currently at 45 million. Meanwhile, people who get insurance through their employer would likely retain that coverage.
Would reform require employers, including small businesses, to cover their workers?
Despite opposition from the business community, a plan that requires businesses to provide insurance benefits for their employees likely will be included. That could mean that companies with more than 25 employees (or possibly 50) would have to provide insurance for their workers or pay a penalty. Smaller businesses would be exempted. The House bill unveiled Tuesday would exempt firms with a payroll of less than $250,000 a year. Wal-Mart's recent endorsement of such an employer mandate ''made a huge difference on this issue,'' increasing chances of this provision passing, says Karen Davis, president of the Commonwealth Fund.
What is the most controversial aspect of the Democrats' reform overhaul?
Democrats are pushing for a public plan, run by the government, to compete with private health insurers. President Obama says it would ''keep insurance companies honest.'' Individuals and small businesses could shop for an affordable plan in an insurance ''exchange'' or marketplace, which would offer different choices. But Republicans feel a public plan eventually would drive health insurers out of business and leave a health system run entirely by the government. This could be the issue that blows up a potential agreement, says Paul Ginsburg, president of the Center for Studying Health System Change.
Is there a compromise idea to settle this conflict?
One middle-ground proposal being floated is to create a network of private, nonprofit health ''co-ops,'' run in states or regionally, to compete with private insurance companies. But questions arise about how quickly co-ops could be established and how effectively they would control costs.
"I'm not sure it's a plausible alternative,'' Taylor says.
Another idea is to hold off on a public insurance option, but add it later if the initial reform legislation fails to contain health costs and extend coverage to a sufficient number of uninsured.
Will someone with pre-existing medical conditions be able to get insurance under the proposed plan?
Today, many people with chronic medical conditions such as diabetes cannot get health insurance. Reform would bar insurers from denying coverage and from basing premiums on health status.
Many people don't have health insurance because they can't afford it. Will reform make health care more affordable?
It will depend on each situation. An ''exchange'' with real competition would likely lower health insurance premiums for many individuals and small businesses, which don't have the buying power that large corporations have. Individuals also will get help if they qualify for subsidies. Young and healthy individuals, though, may wind up paying more. People with job-based coverage likely ''won't see much of a difference,'' says Bill Custer, a Georgia State University health insurance expert.
What interest groups are involved in influencing the debate?
The big groups with much to gain or lose are the health insurers, doctors, hospitals, and prescription drug companies. It's too early to say who will be real financial winners under health reform. That will become apparent after legislation is passed, Custer says.
What's the price tag for legislation?
The magic number appears to be $1 trillion over 10 years. It could go higher, but congressional leaders are working hard to keep it to that level or below. Obama has said he wants a reform plan to be fully paid for and not add to the federal deficit.
How are Congress and Obama proposing to pay for it? Will we be taxed?
Reform likely will produce a mix of tax hikes and spending cuts on programs like Medicare. The House plan would apply an income tax surcharge on the wealthiest Americans. Another idea is to limit the tax exemption on the most expensive health benefits plans from employers; job-based benefits for workers are currently excluded from taxes. Other proposals would raise taxes on alcohol and even introduce a levy on sugary drinks.
What's the outlook for major reform passing into law?
The outlook is probably 50/50. "It's the best chance in a long time,'' Taylor says. It could get messy this fall, though, when a deadline for a deal nears. "There's a real risk of an inability to compromise,'' Ginsburg says. Still, Obama and the major stakeholders are pushing hard on the issue. Davis, who is optimistic, says, "The president has made it a high-stakes issue. In the end, they'll find solutions to these problems.''