By Matt Murphy
The Sun, Lowell, Mass.
Aug. 16–One thing about President Obama’s health care reform plan is abundantly clear — there is a lot of confusion about what it does and does not do.
From the creation of government sponsored “death panels” to the suggestion that health care will be rationed, misconceptions and half-truths about the plan abound. Attempting to cut through the noise reverberating around the country this week, The Sun has put together answers to some of the nagging questions about the Democrats’ plan to reform the nation’s health-care system and help you, the consumers, understand better what is being debated on Capitol Hill. (See readers’ letters on Page B3.)
Is health care required?
Yes. Like in Massachusetts, the federal plan includes an individual mandate to have health insurance. Those who do not have coverage that meets the mandatory basic coverage requirements will be penalized by the IRS in their tax returns. Small businesses with a payroll of over $500,000 will also be required to offer employees health insurance or face a tax penalty.
What is the public-option plan?
Like Medicare, the public-option plan would be a government-run insurance plan for consumers under 65 years old. Doctors and hospitals would not be publicly run, but the cost of care through this plan would be covered by the government instead of a private insurer. President Obama said the public-option plan would not be subsidized with taxpayer dollars, instead relying on premiums paid by
consumers similar to how private insurers operate.
What is the ‘Exchange?’
Like the Commonwealth Connector in Massachusetts, the federal exchange would be a marketplace for consumers to purchase an insurance plan if they do not receive coverage through their employer. Private insurers would compete for customers among the pool of small-business owners, self-employed citizens and others who must purchase insurance on their own. The public-option plan would be one of many choices available to consumers, providing competition for private insurance and theoretically driving overall cost down.
Is this plan socialized medicine like in Canada or the United Kingdom?
No. Those countries use a single-payer model where the government is the lone provider of health insurance. Under the House Democrats’ plan, the United States will still rely on an employer-based health care system with a public option competing for customers with existing private insurance companies.
Does the bill create government-sponsored ‘death panels?’
The short answer is: No. The idea of “death panels” has been suggested publicly by former Alaska Gov. Sarah Palin and Sen. Charles Grassley, R-Iowa. There is nothing in the legislation that would create empower “death panels” or any government entity to cut off care for the elderly or dying to save money. What the House bill does allow is for doctors to be reimbursed through Medicare for “end-of-life counseling.”
The Senate said on Friday it would not include this language in its version of the bill. Republicans approved a nearly identical plan in 2003 when it passed the Medicare prescription-drug bill.
The other provision in the bill is for medical review boards to provide guidelines for treatment based on medical research that could help eliminate costly, unneeded tests. The recommendations would not be mandates, but could inform doctors’ decision making process on how to treat patients.
Did Congress vote to exclude themselves from the public-option health plan?
Yes and no. House Democrats, including Lowell Rep. Niki Tsongas, voted against an amendment that would have forced members of Congress to give up their current health coverage and enroll in the government-run public plan. Instead, members of Congress would continue to have a choice between private providers and the public plan as all citizens will.
How much will health-care reform cost?
The nonpartisan Congressional Budget Office estimates the cost of Obama’s plan to be $1.042 trillion over 10 years, or about $100 billion a year.
Obama says he would generate $177 billion by eliminating subsidies to insurance companies. He further estimated $500 billion to $600 billion in savings by making Medicare more efficient and switching to systems like electronic medical records that would cut down on redundant testing by allowing doctors to easily share patient information.
The remaining $30 billion to $40 billion a year requires a new revenue stream. Obama has called for limiting the number of tax deductions on people earning more than $250,000 a year. The Senate Finance Committee is still working on its own plan.
The conservative-leaning Tax Foundation reported this week that Obama’s surtax would actually generate $88 billion in new revenue by 2011, and cost the economy $76 billion a year in lost activity.
Does the health-care reform bill address TORT reform to reduce the cost of malpractice insurance on doctors?
No. Congress has decided to deal with TORT reform separately at a later date.
Will Obama’s plan achieve universal health care for all Americans?
No. An estimated 47 million Americans are currently without health insurance. The Congressional Budget Office estimates the Democrats’ plan will cover about 37 million of those nonelderly residents by 2019. That leaves approximately 10 million nonelderly residents of the United States still without health care, about half of which are unauthorized immigrants.
Will Medicare benefits for seniors be cut?
Benefits received under Medicare will remain the same, but funding for the program will be cut deeply to help pay for those currently uninsured.
New benefits for seniors will include an elimination of co-payments and deductibles for preventative services under Medicare. The bill also fills the “donut hole” in prescription drug coverage that currently forces many seniors to pay out-of-pocket for prescriptions after they reach a certain threshold.
The House bill, however, does drain $500 billion in savings from Medicare and Medicaid, the government run program for the poor. The AARP says about $231.4 billion of that comes from Medicare.
Some of the savings come from what the administration calls “efficiencies” such as cracking down on unnecessary or redundant medical tests.
Payments to hospitals and doctors for services will also be reduced by $220 billion over 10 years. Medicare Advantage plans, provided by private insurers, will also be cut by about $177 billion by eliminating subsidies that often result in higher reimbursements for doctors. Seniors worry this might lead to reduced access to doctors and specialized care.
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