Federal health reforms under discussion in Congress have spurred hundreds of questions. Starting today, a team of Free Press reporters will answer your questions. Send them to healthcare@freepress.com.
QUESTION: Do we need health care reform?
ANSWER: Health care expenses in the United States have been rising a lot faster than either inflation or wages, and there is no end in sight. National health spending is expected to be about $2.5 trillion this year—approaching 18% of the U.S. gross domestic product. The Business Roundtable, a group of top American CEOs, says health care costs for employers will rise 166% over the next decade to more than $4.4 trillion if something doesn’t change. Meanwhile, the trust fund that pays for Medicare—the nation’s biggest health care program, mainly for seniors over age 65—could run out of cash by 2017 if ways aren’t found to reduce the increase in health care costs.
Q: But doesn’t the U.S. have the best health care in the world?
A: That depends on who you ask and how you measure it. The World Health Organization, in a 2000 report, ranked the U.S. system 37th in the world (France and Italy were No. 1 and 2, respectively), but the report took into account the issue of “financial fairness.” And by that measure, socialized systems of medicine do better than private ones, like that in the United States. On the other hand, America was No. 1 in responsiveness of care, meaning we do better in getting people care when and where they want or need it. It’s also true though that the U.S. pays far more than other countries for health care but its life expectancy is lower than Japan, France, Italy, Canada, Germany and the United Kingdom.
Q: Why is health care so expensive in the U.S.?
A: There are many theories. One involves the uninsured—an estimated 46 million people. Because they lack insurance, many wait until they get sick to seek treatment, often in costly emergency departments. Hospitals can’t turn away patients without insurance; their unpaid bills are factored in to what insured people pay.
Many other factors are blamed for soaring health costs: doctors practicing defensive medicine to cover themselves against potential lawsuits and ordering too many tests; the high price of medical technology; high salaries and administrative costs at insurance companies and hospitals; and the rising costs of brand-name drug prices and rules that restrict competition from generics are just a few.
Some argue Americans overuse the health care system, driving up costs. Others say patients are forced to overuse hospitals because of a lack of less-expensive community-based centers.
Q: So what can be done to lower costs?
A: Payment reforms, electronic medical record systems and better, coordinated care could help lower costs. But the measures being debated in Washington go much further than that. The White House and congressional Democrats believe by requiring coverage for everyone, costs—at least those attributable to care for the uninsured—can be brought down. They also believe payment reforms in Medicare and Medicaid, as well as reducing subsidies to private insurance companies under Medicare Advantage, will help cut costs. And any legislation passed by Congress is likely to encourage health care providers to find ways of treating patients in a more cost-effective manner and break from a fee-for-service system that gives a financial incentive when a doctor does more tests and procedures.
Also, the legislation is expected to create a federal- or state-run insurance exchange, where insurers would compete with each other, providing different levels of coverage. People without insurance – or those whose employers don’t offer insurance – would pick coverage through the exchange. The belief is, by opening up the exchange to anyone lacking insurance – and requiring everyone to be covered – insurers will get larger pools of customers. That lets them spread out the risk and bring costs down.
Skeptics note that smaller exchanges already created in some states haven’t done much to expand access to insurance or control costs.
Q: What is this so-called public option everyone is talking about and is it a good thing?
A: The public option would be a government insurance plan, with different levels of coverage. It would be an option on the exchange (see previous question) just like the others from private insurers and no one would be required to use the public option. It would not provide universal coverage as in other countries, such as Canada, where government provides health care to all.
Still, the public option is controversial and here’s why: Insurers argue the government would have an unfair advantage in the market and be able to undercut insurance company prices to a level where they could be driven out of business. Supporters of the public option say that’s not the case – no taxpayer money would be used to prop it up, only premiums, like other insurers – and that it’s a good way to ensure that private insurers keep their profits – and monthly premiums for their customers – down.
Q: Are there rules for private insurers competing in the exchange?
A: Yes. There could be limits on premiums. Companies would have to cap out-of-pocket costs for their customers; could not charge for preventive or wellness care; and there could be no annual or lifetime limit caps on benefits. Also, companies would be prohibited from excluding people because of preexisting conditions or dropping beneficiaries once they get ill.
Q: Could I keep my doctor and the coverage I have now?
A: Obama has said yes, but the answer is a lot murkier than that. It really depends on your situation. For instance, most people in the United States have insurance through their employer or union. Strictly speaking, there is nothing in the legislation that would require any change in that coverage. Unlike now, however, businesses would be required to either offer insurance or pay a percent of payroll to help offset the cost of government subsidies to help their low- or moderate-income employees buy coverage on the exchange. (Small businesses would get breaks on these fees.) If your employer, then, decided to drop your policy, pay the government and send you to the exchange to get insurance, your policy could change. But the government wouldn’t force such a change.
It’s also important to note: There is nothing that stops your employer from dropping or changing your coverage now. And supporters of the reform legislation argue they want to ensure you can get coverage even if you lose your job or your company stops offering health insurance.
Q: Will I pay less for health care?
A: That depends entirely on what happens to health care costs, what kind of coverage you have (and through whom) and, potentially, your income. If you don’t get coverage through your job – and you’re paying for insurance that’s a big chunk of your income because of a pre-existing condition or because you make less than three times the federal poverty line—you’re likely to get a break or a subsidy. And you’ll probably pay less. On the other hand, if you don’t pay for insurance because you’re young and healthy and don’t want it, then you’re going to have to pay – like it or not.
If you have coverage through your employer, there’s a good chance your situation won’t change much. Finally, if you have a high-priced plan, it’s likely that an additional fee for that plan is going to be charged to your insurer as a way to help pay for reform, and there’s a very good chance your insurer is going to pass that fee onto you either though higher premiums, higher deductibles or lower benefits.
Q: Does the bill provide health insurance to illegal immigrants?
A: No. The Senate Finance bill expressly requires personal information to keep illegal immigrants out of the health care exchange. Like the House bill, it prohibits federal subsidies to illegal immigrants to help pay for insurance. But the House bill does not expressly stop illegal immigrants getting insurance through the exchange.
Q: Does the bill cover abortions?
A: The Senate Finance bill, which does not include a public option, says the government cannot mandate that companies cover abortion; neither does it require they don’t. The House bill, which has the public option, says it would provide abortion coverage though it would not use taxpayer money to pay for the procedure.
Q: Does the bill cut Medicare benefits?
A: No, it doesn’t. But it looks to find savings in Medicare – hundreds of billions of dollars worth. Supporters say cuts in excess subsidies to Medicare Advantage plans and cutting annual scheduled increases to hospitals, home health care and some other services will not hurt benefits. Critics say otherwise. And it’s more than just critics. The Congressional Budget Office said if Congress cuts the subsidies to Medicare Advantage (which are about 14% more than that paid to other Medicare plans) then it’s reasonable to figure those insurers will reduce benefits or raise premiums. On the other hand, supporters note that those additional subsidies are being paid for by other Medicare beneficiaries — who aren’t getting the added benefits — and that Medicare is quickly running out of money.
Q: What is this so-called public option everyone is talking about and is it a good thing?
A: The public option would be a government insurance plan, with different levels of coverage. It would be an option on the exchange (see previous question) just like the others from private insurers and no one would be required to use the public option. It would not provide universal coverage as in other countries, such as Canada, where government provides health care to all.
Still, the public option is controversial and here’s why: Insurers argue the government would have an unfair advantage in the market and be able to undercut insurance company prices to a level where they could be driven out of business. Supporters of the public option say that’s not the case – no taxpayer money would be used to prop it up, only premiums, like other insurers – and that it’s a good way to ensure that private insurers keep their profits – and monthly premiums for their customers – down.
Q: Are there rules for private insurers competing in the exchange?
A: Yes. There could be limits on premiums. Companies would have to cap out-of-pocket costs for their customers; could not charge for preventive or wellness care; and there could be no annual or lifetime limit caps on benefits. Also, companies would be prohibited from excluding people because of preexisting conditions or dropping beneficiaries once they get ill.
Q: Could I keep my doctor and the coverage I have now?
A: Obama has said yes, but the answer is a lot murkier than that. It really depends on your situation. For instance, most people in the United States have insurance through their employer or union. Strictly speaking, there is nothing in the legislation that would require any change in that coverage. Unlike now, however, businesses would be required to either offer insurance or pay a percent of payroll to help offset the cost of government subsidies to help their low- or moderate-income employees buy coverage on the exchange. (Small businesses would get breaks on these fees.) If your employer, then, decided to drop your policy, pay the government and send you to the exchange to get insurance, your policy could change. But the government wouldn’t force such a change.
It’s also important to note: There is nothing that stops your employer from dropping or changing your coverage now. And supporters of the reform legislation argue they want to ensure you can get coverage even if you lose your job or your company stops offering health insurance.
Q: Will I pay less for health care?
A: That depends entirely on what happens to health care costs, what kind of coverage you have (and through whom) and, potentially, your income. If you don’t get coverage through your job – and you’re paying for insurance that’s a big chunk of your income because of a pre-existing condition or because you make less than three times the federal poverty line—you’re likely to get a break or a subsidy. And you’ll probably pay less. On the other hand, if you don’t pay for insurance because you’re young and healthy and don’t want it, then you’re going to have to pay – like it or not.
If you have coverage through your employer, there’s a good chance your situation won’t change much. Finally, if you have a high-priced plan, it’s likely that an additional fee for that plan is going to be charged to your insurer as a way to help pay for reform, and there’s a very good chance your insurer is going to pass that fee onto you either though higher premiums, higher deductibles or lower benefits.
Q: Does the bill provide health insurance to illegal immigrants?
A: No. The Senate Finance bill expressly requires personal information to keep illegal immigrants out of the health care exchange. Like the House bill, it prohibits federal subsidies to illegal immigrants to help pay for insurance. But the House bill does not expressly stop illegal immigrants getting insurance through the exchange.
Q: Does the bill cover abortions?
A: The Senate Finance bill, which does not include a public option, says the government cannot mandate that companies cover abortion; neither does it require they don’t. The House bill, which has the public option, says it would provide abortion coverage though it would not use taxpayer money to pay for the procedure.
Q: Does the bill cut Medicare benefits?
A: No, it doesn’t. But it looks to find savings in Medicare – hundreds of billions of dollars worth. Supporters say cuts in excess subsidies to Medicare Advantage plans and cutting annual scheduled increases to hospitals, home health care and some other services will not hurt benefits. Critics say otherwise. And it’s more than just critics. The Congressional Budget Office said if Congress cuts the subsidies to Medicare Advantage (which are about 14% more than that paid to other Medicare plans) then it’s reasonable to figure those insurers will reduce benefits or raise premiums. On the other hand, supporters note that those additional subsidies are being paid for by other Medicare beneficiaries — who aren’t getting the added benefits — and that Medicare is quickly running out of money.
It’s also important to note: There is nothing that stops your employer from dropping or changing your coverage now. And supporters of the reform legislation argue they want to ensure you can get coverage even if you lose your job or your company stops offering health insurance.
Q: Will I pay less for health care?
A: That depends entirely on what happens to health care costs, what kind of coverage you have (and through whom) and, potentially, your income. If you don’t get coverage through your job – and you’re paying for insurance that’s a big chunk of your income because of a pre-existing condition or because you make less than three times the federal poverty line—you’re likely to get a break or a subsidy. And you’ll probably pay less. On the other hand, if you don’t pay for insurance because you’re young and healthy and don’t want it, then you’re going to have to pay – like it or not.
If you have coverage through your employer, there’s a good chance your situation won’t change much. Finally, if you have a high-priced plan, it’s likely that an additional fee for that plan is going to be charged to your insurer as a way to help pay for reform, and there’s a very good chance your insurer is going to pass that fee onto you either though higher premiums, higher deductibles or lower benefits.
Q: Does the bill provide health insurance to illegal immigrants?
A: No. The Senate Finance bill expressly requires personal information to keep illegal immigrants out of the health care exchange. Like the House bill, it prohibits federal subsidies to illegal immigrants to help pay for insurance. But the House bill does not expressly stop illegal immigrants getting insurance through the exchange.
Q: Does the bill cover abortions?
A: The Senate Finance bill, which does not include a public option, says the government cannot mandate that companies cover abortion; neither does it require they don’t. The House bill, which has the public option, says it would provide abortion coverage though it would not use taxpayer money to pay for the procedure.
Q: Does the bill cut Medicare benefits?
A: No, it doesn’t. But it looks to find savings in Medicare – hundreds of billions of dollars worth. Supporters say cuts in excess subsidies to Medicare Advantage plans and cutting annual scheduled increases to hospitals, home health care and some other services will not hurt benefits. Critics say otherwise. And it’s more than just critics. The Congressional Budget Office said if Congress cuts the subsidies to Medicare Advantage (which are about 14% more than that paid to other Medicare plans) then it’s reasonable to figure those insurers will reduce benefits or raise premiums. On the other hand, supporters note that those additional subsidies are being paid for by other Medicare beneficiaries — who aren’t getting the added benefits — and that Medicare is quickly running out of money.
