An Introduction...

As the two houses of Congress work to form health care reform bills to propose to its constituents, there is much left for debate among Americans, stakeholders and members of Congress.  The current issues on deck are that of a public plan, employer mandates, expanding Medicaid, financing a proposal and the last but not least elephant in the room: cost containment.  In President Barack Obama's speech on 9/9/09, he made it clear that the single payer option was not a consideration.  This type of government run program, thought to be very successful in other nations, namely the UK, faces criticism that it would require those already happily insured to switch to a government run program.  I'm sure you've heard the phrase, "if it isn't broken, don't fix it."  What Obama did explain, however, were his goals for health care reform, stated in the clearest, most concise terms I've heard explained since it was debated nearly a year ago during his campaign for president.  In the simplest of terms, Obama proposes security and stability for those who are already insured (eliminating and/or restricting limitations for those with pre-existing conditions and who are subject to cost discrimination), creates a new insurances marketplace or "exchange" for the uninsured (including tax credits), and promises to not contribute to the current deficit (in a one dollar in, one dollar out method of spending).
Obama's Health Care Plan

Over the next ten weeks, you can look forward to weekly break-downs of the latest proposals in congress and issues raised among experts in the industry, including the current issues mentioned above.  In this first post, I will provide a brief explanation of what is at the forefront of policy development based on Senate Finance Committee Chairman Max Baucus' (D-Mont.) proposal last week, discuss how his proposal will raise the cost of health care for the middle income families and more specifically young adults, and address the advantages and disadvantages of such a plan.

Senator Baucus' long awaited bill made headway on the idea that public option should be mandated for all U.S. citizens and legal residents, and is necessary to keep the cost of health care down for all American's provided low premiums for those who are young and healthy.  From what I can tell, this is really the lifeline of the proposal:  young and healthy people are needed to help spread the risk and keep costs down in order to finance health care reform.  Sounds great, but the major problem with this is that in practice, with the cost of premiums as high as they are now and the offered subsidies out of reach for many uninsured, the young and healthy demographic are precisely the ones who are opting out of coverage, and are taking the risk and betting on their good health. Just to give you an idea of who this includes, more than 10 million of the total 46 million current uninsured Americans are adults between the ages of 19 and 26. 

I think a policy disadvantage to this proposed bill is that for those who opt out of mandated insurance, annual fines will be incurred of anywhere between $750 and $950 for single people, depending on income.  This may sound like a lot but considering the average cost of a bare-bones health care plan under this bill could be more than $100 per month, it may be cheaper for people to pay the fines.  Not necessarily a win-win situation, but looking at the bigger picture, the government ends up making some of the money back from the fines and that money will hopefully go right back into the system to help offset costs of premiums and offer subsidies to those who need it.  This also brings up the issue of moral responsibility, but I will address that in depth in the coming weeks. 

View side-by-side comparison of Health Care Reform Proposals

In response to this bill media has been addressing the issues facing middle income single people and families who under the current plan cannot afford to pay for insurance, even if it is offered by an employer.  Under the microscope is Massachusetts, who in 2007 imposed a state law requiring all residents to have health insurance.  Of the 600,000 people uninsured in 2007, 200,000 are still uninsured.  This is a result of private insurance policy reform not being in place to protect people from exclusions from plans caused by pre-existing conditions, employer plans that do not cover dependents, and those who simply cannot afford to pay high premiums for themselves and their families. However the proponents of such a plan argue such a mandate is necessary to keep premiums affordable under the argument that healthy people are relatively cheap to cover and therefore help pay for the "high risk" population.  The state offers subsidies for low-income families and exclusions from the mandate for those it determined could not afford even the cheapest plans, but this again leaves us with a portion of the population who at the end of the day will be living without insurance.  Subsidies, under Sen. Baucus' plan will be offered to those who are within 133-400% of the federal poverty level ($22,050 for a family of four in 2009).  With non-subsidized monthly premiums of $300-500 for many Americans, if a person is making $40K a year, not only do they not qualify for subsidies but they also cannot afford private insurance. 

The bill proposed by Sen. Baucus and his Senate Finance Committee is popular with Democrats, but for Republicans, who by in large believe the market should run the cost of health care and that people should be allowed to shop around in a competitive marketplace, the challenge to get all of the stakeholders on board for a plan to reduce premiums and cut out limitations from current plans is great.  It's undeniable that health care in our country is a commodity, but there needs to be limits in place.  It needs to be cost effective so that all persons that want insurance can afford it under their income and there needs to be incentives in place for all stakeholders involved to include every citizen.  But here I am getting idealistic on you.