After watching NCAA basketball all day Sunday I know what you did. You tuned to CNN to watch the votes on the health care bill, right? Okay, neither did I. But I did wake up Monday morning to the news that the bill had passed. On Tuesday, President Obama signed the Affordable Health Care for America Act into law.
I’m not quite sure how I feel about this.
The New York Times describes this bill as the most sweeping social legislation enacted in decades. Yes, I can agree with that statement. But does it accomplish what we need it to? I have maintained that the problem with health care is about both coverage and cost.
Let’s take a look first at coverage:
I think there’s some good news here. In January I wrote about my concern about continuing medical coverage for my son graduating from college. The Health Care Reform bill does address this concern. Instead of coverage to age 23 if the child is a fulltime student, young adults will now be eligible for coverage under their parent’s policy until the age of 26. It’s no longer necessary to be a student to qualify, but this does help the case for students going on to graduate school, as well as those who don’t yet have their own coverage through an employer.
Insurance companies will no longer be able to exclude those with pre-existing conditions from coverage. Nor will they be able to drop coverage for those who get sick. This is a big win. After all, what is the point of having health insurance all your life if you can’t get medical care once you get sick?
Everyone will be required to have coverage… sort of. For the record, I am in favor of this. We need everyone in the coverage pool to have any chance of costs coming down. But, the penalties for not having coverage may not be compelling enough to ensure compliance. The fine for not having coverage will start at $95 per year (or 1% of income) in 2014, and will increase to $695 (or 2.5% of income) in 2016. Low income families (with subsidized insurance) will need to spend up to 2% of their income for insurance premiums. But middle income families with an annual income of $88,200 will need to spend up to 9.5% ($8400) of their income on insurance premiums. For many, the penalty will cost less than the cure.
Everyone who would like to have health insurance, will be able to. The bill will help those currently uninsured, and those with chronic and critical medical conditions. CBS MoneyWatch has more details on who gains and who loses.
So how are we going to pay for this?
In theory, taxing individuals and families making more than $200,000 and $250,000 per year, respectively, will pay for the expanded coverage. They will pay an additional 0.9% in Medicare tax, and a proposed (additional) 3.8% tax on unearned income (including interest, dividends and capital gains). Yes, we are taxing the rich to cover the poor. Or, some may prefer to look at this the way this New York Times article does, as an attack on economic inequality.
And in theory, the new taxes will outweigh the costs. In theory.
But now let’s get to the elephant in the room – the rapidly rise cost of care.
Aside from a provision that will require new plans to offer basic preventive care, nothing has been done to address the fact that we are sicker than ever before. And yes, we love the fact that we have better technology, and better techniques, and drugs that can work wonders. Sure, the doughnut hole (which leaves seniors without prescription coverage after they spend $2830 on drugs but before they reach their annual out-of-pocket cost of $4550) will be phased out (starting with a $250 rebate in 2010). But let’s stop and ask why we need to spend so much on prescription drugs? How about incentives to stay healthy? How about incentives to eat better, exercise more, lose weight?
And dare I mention the costs associated with medical lawsuits and malpractice insurance? What about medical malpractice reform?
I’m happy that we’ve taken steps to expand coverage. Fundamentally, I do believe that everyone should have access to medical care. But our medical insurance premiums today are already way too expensive, and I continue to be concerned about costs.
What do you think? Do the positives of the bill outweigh the negatives?