President Obama, from his speech to Congress, September 9, 2009
“…for decades, the driving idea behind reform has been to end insurance company abuses and make coverage available for those without it…”
And there you have the basis for why we cannot have true reform in health care. He is right of course in what he says, that has been the driving force.
The problem is that the so-called insurance company abuses are not the problem. The problem is the cost of health care and the inefficiency in delivering it. Yes, there is a lot behind each of those factors, some of it caused by governments both state and federal, but the essence of the problem is not the insurance companies or even the uninsured.
To illustrate why even today we are not looking at any real solution I have taken a high level look at some of the provisions in the proposed legislation and the probable consequences. Despite what politicians think, everything is connected. Are these unintended consequences?
|Provision of Legislation||Probable Impact|
|Remove Medicare donut hole||Increases Medicare costs|
|Require insurance companies to accept anyone regardless of health status||Increases costs to insurer and likely to already insured Americans|
|Require payment for health and wellness and preventive services at 100%||Increases costs for all individuals covered under the insurance or employer plan|
|Remove annual or lifetime limit on coverage||Increases costs to all insured|
|Reduce Medicare payments to physicians and hospitals||Higher costs passed on to non Medicare population|
|Reduce Medicare payments to Medicare Advantage Plans||Increase premium costs to Medicare beneficiaries, possibly reduce number of plans available and thereby increase out of pocket costs to enrolled beneficiaries|
|Require minimum level of benefits for health plans||Eliminates choice for employees who have a lower value option through their employer|
|Tax insurers and self insured employers on health plans cost above a set limit||Higher costs passed on to insured, benefits reduced and higher out of pocket costs result for insured|
|Tax on insurers, clinical labs, and manufacturers of prescriptions and medical devices||Higher costs to consumers|
|Tax employer reimbursement under Medicare Part D||Employers drop coverage resulting in higher costs for retirees|
|Expand coverage for additional 40 million Americans||Increase demand for health care services, increase overall health care spending (and increasing federal subsidies)|
|Prohibit employers from reducing retiree health benefits unless same reductions are made to active employee coverage||Accelerate the demise of retiree health benefits|
|Limit FSA contributions to $2,000||Higher out of pocket costs to employees, especially younger families using such programs for things like orthodontics|
|Report value of health benefits on each employees W-2, including FSA elections||Higher administrative cost and complexity for employers, possible decline in availability of the FSA|
|Government to negotiate Part D drug costs||Higher costs for non Medicare consumers and for employers|
|Over the counter drugs eliminated from FSA||Higher out of pocket costs for employees|