Health Reform? Huh?

If you find yourself asking the above question, look no further.

Well, look further if you'd like, as I'm only posting my summary, but the info is pulled from both my school and the Kaiser Family Foundation (a great resource for impartial info- I recommend it over any news-media sources).

I'm going to outline what's up and then give my brief opinion of the situation for those who are interested. More extensive information will follow after my opinion. It should be a pretty good outline as to what's going on as of today. (Certain things might change if the reconciliation package passes the Senate- namely the removal of special preferences for specific states and a restriction on the proposed minor tax on really wild insurance policies.) Let's go!

What's going to happen change right now? These things will happen in the first year.

• People who are currently deemed "uninsurable" due to preexisting conditions will be able to enroll in a new federal insurance program that should be established in 90 days. This will serve to kind of get the ball rolling until such conditions are banned outright for adults in 2014.
• Children under 19 cannot be denied covered due to preexisting conditions. Parents will be able to continue covering their children on their plans up until the age of 26 (unless they are offered insurance through their employer). This helps give kids access.
• The Medicare Part D Coverage Gap (the giant "doughnut hole" in coverage for drugs for the elderly) will be halved, with 50% being covered (up from zero). This helps fix a huge cost issue in providing pharmaceuticals to the elderly. Fun fact: Want to know the quality of the legislation that made Part D coverage, passed in 2006, so awesome? The main proponent of the legislation and head of the committee on pharmaceuticals, Former Congressman Billy Tauzin (R-LA), quit Congress two days after it passed and then immediately started working for the PhRMA lobbying group. Insane.
• Small businesses (less than 25 employees/wages of less than $50,000) qualify for a tax credit of up to 35% of the costs of health insurance premiums for employees.
• No more lifetime caps on insurance coverage and restrictions will be placed on annual limits.
• Insurance companies not cancel coverage retroactively except in cases of fraud.
• Increased government oversight of insurance costs and overhead. Companies must report how much they spend on medical care against administrative costs.

Fast Facts

- Everyone will be mandated to have health insurance. To help with this, insurance subsidies will be available to individuals making $14,404 to $43,320 or families making $29,326 to $88,200. People below these ranges already qualify for coverage through Medicaid, or if old enough, Medicare. The subsidies would be given on a sliding scale. If you already possess insurance through an employer or group, nothing changes. You keep your insurance and continue as usual.

-If you do not purchase insurance, you will be fined. It is $95 dollars for an individual, starting in 2014, and increases to $325 in 2015, and $695 (or up to 2.5% of income) in 2016. For families, the maximum would be $2,085 in 2016, however, people can be exempt from this fine because of financial hardship or if they are Native American (and thus already provided with a degree of federal health insurance).

-Preventative health care visits, regular check ups, and many cancer screenings can no longer have a co-pay and will be free in some cases.

-The Medicare payroll tax of would be raised to 2.35% (from 1.45%) on individuals making more than $200,000 a year and couples making over $250,000.

-The reform is estimated to cost $940 billion dollars over the course of a decade. However, with all of the changes being made, the reform will actually decrease the federal budget deficit by $138 billion over the same decade. In addition, it is estimated to reduce the deficit by ~$1 trillion over the second decade.

My Thoughts?

Very briefly, I think that the bill will do much more good than harm. It extends coverage to people who need it while adding regulation and changes to the industry that will help make it more viable for the future and help the national economy (Health care is currently ~16% of the GDP and rising, that needs to change. In comparable countries it's less then 10%). I get frustrated with people who want something that is XYZ-more liberal or ABC-more conservative. To me, and I view this as being more practical, the question must be if this is the best step in the right direct that we can take at this moment? Does it lay the groundwork for things being better both now and in the future?

In my opinion, belief, and thoughts, it does. The reform does not murder Liberty or kill Freedom. The Constitution is still intact and well. We are not becoming a crazed totalitarian nation and this doesn't set us on that path, or close to it; such notions are nothing more than the rantings of those trying to make money or short-term political capital, preying on fear and appealing to the extremes.

Nothing will ever be perfect. Remember, the object is to form a more perfect Union. I think this qualifies as more perfect than what we have now.

Your thoughts?

P.S.- Want more info? About how this affects things in the industry? Here's some summary:

HOSPITALS: "The hospitals are ultimately the winners — one doesn’t increase spending on health care by nearly $1 trillion without some significant part of it flowing to hospitals," said Sheryl Skolnick, a hospital analyst with CRT Capital Group in Stamford, Conn.

· Pros:

o Worried they might get hit hard by the health legislation, hospitals were the first industry to make a deal with President Barack Obama and the Senate Finance Committee last year. Hospital groups agreed to give up $155 billion in Medicare funding over the next decade. But they are expecting that to make more than that – at least $170 billion - by having to treat fewer uninsured patients.

o An individual insurance mandate and subsidies for low-income Americans to buy coverage means hospitals will have more paying customers.

o Hospitals got guarantees that cuts in federal Disproportionate Share payments that they receive for treating the uninsured wouldn't occur until the insurance expansion is in place. And even then, some of the funding will remain to help hospitals treat illegal immigrants and recipients of Medicaid, the state-federal program for the poor.

· Cons:

o Hospitals are slated to lose $155 billion in federal funding over a decade.

o A new independent commission would have broad authority over Medicare spending, though most of its powers don't kick in until 2018.

· Mixed

o The bill sharply expands Medicaid, which will reduce the number of uninsured patients. But Medicaid typically pays less than private insurers or Medicare.

INSURERS : In the short term, insurers will gain enrollment but the bill may cost them in the long run if health costs don't come under control," said Peter Kongstvedt, a McLean, Va.-based insurance industry consultant.

· Pros

o The individual health insurance mandate, along with subsidies for low-income Americans, will bring insurers tens of millions of new customers.

o The expansion of Medicaid will also provide new customers; many recipients will be covered by private managed care plans.

· Cons

o The bill calls for $132 billion in cuts to Medicare Advantage plans, the private health plans that cover one in five seniors (only one in ten seniors in Kansas).

o New taxes on the industry total $70 billion over 10 years, beginning in 2014.

o Insurers are facing a new requirement to spend 85 percent of their premium dollars on health care, potentially leaving less money for administration, marketing and profits.

o The so-called "Cadillac" tax on high-cost health plans is aimed at insurers, though it won't take effect until 2018.

o Lawmakers called for relatively low penalties -- just $95 in 2014 – for not buying insurance, which could encourage many healthy people to skip coverage.

PHARMACEUTICAL COMPANIES: "Pharma is one of the big winners," said Nancy Chockley, president of the National Institute for Health Care Management, a nonpartisan health policy research organization funded by Blue Cross and Blue Shield plans and government grants.

· Pros

o The drug industry will put up $84.8 billion to help fund the legislation. Part of that goes to making brand-name drugs more affordable for seniors who hit the Medicare coverage gap - the "doughnut hole." But pharmaceutical firms stand to make much more in return. With more Americans insured, more can buy brand-name drugs.

o Expensive biologic drugs would get 12 years of exclusivity protection from generics. Obama, AARP and the generic drug industry were calling for a 5- or 7-year limit. While biologic drugs are only a small portion of industry sales, they represent the fastest-growing segment of the market.

o The legislation, despite the pleas of some lawmakers, doesn't make it easier for Americans to buy less expensive drugs from abroad. Nor does it allow the government to negotiate lower drug prices for Medicare.

· Cons

o The industry will pay out $84.8 billion in new fees, rebates and discounts over the next decade.

DOCTORS : "Primary care doctors got a bump up in funding and overall doctors got a pass," said Gail Wilensky, a senior fellow at Project Hope and former head of the Medicare program.

· Pros

o Primary-care doctors and surgeons practicing in areas with a shortage of physicians get a 10 percent bonus payment from Medicare from 2011 to 2015. Medicaid will pay primary care doctors Medicare rates in 2013 and 2014, to coincide with the Medicaid expansion. Medicare typically pays at least 20 percent higher rates than Medicaid.

· Cons

o No significant medical liability changes are in any of the overhaul bills, though there is money for states to run pilot programs.

· Mixed

o The Medicaid expansion, to everyone under 133 percent of the federal poverty level ($29,326 for a family of four) means more patients have insurance, though at the lower Medicaid rates.

o The current Medicare physician payment formula that each year threatens to slash doctor payments was left untouched. But Congress traditionally steps in to nullify the cuts.

NURSING HOMES: Because most nursing home patients are covered by Medicare or Medicaid, reducing the number of uninsured doesn't really help the facilities. As a result, the industry doesn't see much gain in the overhaul.

· Pros

o The bill would establish the Community Living Assistance Services and Supports (CLASS) Act, a national voluntary insurance program that would allow people to finance their long-term care in advance through payroll deductions. It would provide a cash benefit of about $50 a day for long-term care, including nursing homes, in the home and adult day care.

· Cons

Nursing homes would see their Medicare reimbursements cut by about $15 billion over the next decade. While Medicare comprises only about 13 percent of nursing home revenue, the industry relies on the money to offset low Medicaid reimbursement.