Mon 19 Apr 2010
Health Care Reform: The Good, The Bad and The Ugly
Posted by Pam Jones-Sexton under Health Care Services
[4] Comments
Pam Jones-Sexton
In late March Congress passed the Health Care & Education Reconciliation Act of 2010 that amended the Patient Protection & Affordable Care Act. The idea is to change how health care is delivered and provide a path for 32 million more Americans to have access to health care. Most sources report that the reform, while necessary, is imperfect, but it provides a space to build on.
The Good
- Long overdue – last significant change was in 1965.
- Prohibits lifetime caps on coverage for individuals
- Provides continued coverage for dependent children up to 26 years of age
- Prohibits denying insurance for “pre-existing conditions”
- Prohibits denying care
- Expected to lead to better coverage on preventative exams
- Closes Medicare coverage gap with better coverage for prescription drugs
- Potential tax credits to make insurance affordable
- Potential savings from less fraud waste and abuse.
- Potential savings from primary care in the doctor’s office rather than the ER
- Low income consumers will get credits or vouchers to pay for part of the mandatory insurance.
- Incentives to promote wellness
The Bad
- Parliamentary maneuvers led to a 2,700 page document and ways to pass the package with a simple majority rather than a major majority
- Confusing
- Costs will be passed on to the consumer
- Timelines range from 2010 to 2018 for implementation
- Mandatory coverage is viewed by some as unconstitutional because it forces the purchase of insurance or face penalties.
- Limit Flexible Spending Account contributions to $2,500
- Consumer protection to debt collection by NFP hospital (I’m not sure if this is good or bad – may lead to other issues, such as the IRS will not have to review NFP hospitals and their community benefit activities – does this create more cost that will eventually find it’s way into our wallets?)
- Experts show there are 24 – 27 parts to health care costs. All components of the cost containment wheel aren’t addressed which will lead to a lop-sized solution.
The Ugly
- $940 Billion price tag
- Suggestion that this may lead employers to decrease or drop benefits
- Items in law that have nothing to do with health care (i.e. pork bellies that are part of law in order to win a vote from a congressman)
- Increased costs that are anticipated to be passed along to the consumer either directly or indirectly:
- Increased Medicare tax
- Adds Medicare tax to unearned income (e.g. investment income)
- New taxes – e.g. Tanning salons will pay a 10% tax on 7-1-2010
- New excise tax on high dollar “Cadillac” insurance plans
- Taxes to insurance companies
- Employers will pay more tax (exceptions include small business with less than 50 employers and builders)
- New fees on medical device manufacturers (eyeglasses and hearing aids will be exempt)
To learn more about how these reforms will affect you, check out http://www.whitehouse.gov/Issues/health-Care
Sources: Modern Physician, Plante & Moran, Harvard Business Review, Modern Healthcare, Crain’s Detroit Business
Avis, thank you so much for the comment. Under health care reform parents can keep children on their policies up to age 26, regardless of whether or not they are in school. This provision goes into effect Sept 23 of this year and takes effect generally at the start of the new plan benefit year. If you haven’t already done so, you should call your employer’s HR department to find out when this will take effect for the group you are part of. Another great resource is the following Department of Labor website http://www.dol.gov/ebsa/faqs/faq-dependentcoverage.html.
I think insurance reform should go hand-in-hand with healthcare reform. Why shouldn’t I be able to continue covering my children older than 19 years if that is what I choose. I would even be willing to pay a “little” more to continue their coverage. This is a difficult time for children, they are just getting out on their own and usually have only service jobs that pay very little and provide no insurance for healthcare. Even minimal coverage for doctor office visits would keep my daughter out of the ER. Same for my son, he is not considered my dependent child but he is still trying to make it on his own and cannot afford health coverage. The state provides some assistance but if I were able to cover him it would relieve some of the burden from the state. I am sure other parents would be willing to do the same.
Laura, thank you for the comment. I think you are right on – there was a lot of information pushed through the bill over a short period of time and the implementation will take years. Time will tell if the cost outweighs the benefit.
Pam Sexton
The bill appears to have potential and expected benefits, with an absolute certainty in increased cost and confusion. I have my reservations, due to the nature in which this bill was passed, as to whether it will actually benefit the American people. Time will tell the financial burden vs the health benefit!