Not unexpectedly, the politicians are all a “buzz” about healthcare reform right now. The President even did a live radio/television talk-show to “clarify” what healthcare reform is really about; to translate as it were. From CNN to Fox to certainly every Sunday talk show, politicians or members of the President’s cabinet are trying desperately to get across the Washington party line. It seems as if the more you watch the more confusing the issues become. Frankly, the ongoing clatter is similar to watching an Italian opera when you don’t speak Italian; the plot is lost and the words in the songs make no sense.
The gist of the matter is who is telling what truth and if truth isn’t exactly to be found straight-up, how does one know who is saying what. Fortunately, translations are available and knowing what is said is less important than what is really meant or what the bills actually say which, can be as hard to understand as what a politician says. For certain, as I have written before, HR 3200 is a massive mess of a bill, confusing and littered with inexact benefits and even more vague concepts. It is after all, a new healthcare system Washington insider style meaning that it is very political, heavily influenced by special interest, and tackles more than just healthcare.
So, below are some translations for common words, phrases and concepts presently bantered about by politicians on both sides of the aisle and of course, the President. I won’t bother to give credit to who said what, mostly because who said what has been said by many, many times over and will be re-stated perhpas verbatim or nuanced ever so slightly.
- Public Option: A government crafted healthcare plan or Washington healthcare.
- Co-Op: See Public Option in some cases though meant to be a hybrid. A co-op is a plan where individual members are the plan’s owners so to speak, similar to a mutual insurance company. Co-ops are non-profits though they are not in the business of “not making profit”. Kaiser is perhaps the most famous health insurance co-op. In Washington speak, depending on who is using the words, a co-op may be a guise of a Washington plan created via a quasi-private entity.
- Budget Neutral: In Washington there is no such thing and don’t believe any politician when he/she uses this term in the context of healthcare reform. The present menu as laid forth in HR 3200 and its Senate companion is far from capable of being budget neutral and the savings that are purportedly factored in by reforming Medicare and Medicaid don’t come anywhere close to paying the bill of the new legislation. Without significant tax increases (beyond the wealthy), budget neutrality for the legislation as presently configured is a fantasy of immense proportion.
- Health Insurance Reform: A better sounding phrase than healthcare reform although they are one in the same in the current debate. The pending legislation includes a series of governmental mandates that would be imposed on health insurers to theoretically create a more even playing field for consumers such as required issuance without pre-existing condition limitations, elimination of life-time maximums, rating restrictions based on incurred claims and/or chronic illnesses, and portability (something interestingly enough, that was supposedly addressed under HIPAA (health insurance portability and accountability act) but as is often the case, not really in Washington).
- Keep Your Own Doctor: A phrase used to calm people who fear that Washington will somehow Federalize even physician practices, similar to in the United Kingdom where doctors work for the British Health System. In reality, who knows what doctors will do and whether any given physician will choose to play in and amongst the insurance options proposed of course, unless they are forced to.
- Nuclear Option: Democrats (in this case) attempting to use their majority to pass the present legislation without any Republican support. This phrase is pretty much a good descriptor of what would happen – significant explosion with an untold amount of collateral damage. Deploying this option is unlikely as elections are close (the entirety of the House is up in 2010) and the Senate margins are slim and unworkable to achieve a sufficient majority.
- Coverage for Illegal Aliens: Yes and no, depending on how the language in the House bill is translated into regulatory or administrative law. The language is not precise on coverage of people without legal resident status but there is language expanding CHIP and creating a series of new programs for medical and dental care provision to disaffected groups. Assuming that illegal aliens are likely to seek care through one or more of the programs (school clinics, community health centers, hospital emergency rooms, etc.) they remain capable of accessing care. The question however, is whether the Public Option proposed would be accessible to anyone and the legislation provides no clarity as to who is eligible to access this plan (citizens or not).
- Protection for Union Plans: The legislation protects the rights of Unions to collectively bargain for healthcare, theoretically creating a protection or special class for Union health plans.
- Exchange Plans/Insurance Exchange: A new bureaucracy created by the legislation is the Health Choices Administration, charged with establishing how health insurance plans qualify to participate in this program (other than Union plans and government plans, plans that don’t participate in the Exchange will no longer exist over time). The Health Choices Administration establishes the benefit levels of plans, required levels of employer participation and funding, establishes consumer protections and operates a risk pooling mechanism. Translated, this new agency regulates all private health insurance plans nationwide.
- Medicare is an Efficiently Administered Program: Offered as proof that the Government can provide efficient health plans or health benefit administration. This may be one of the biggest lies or jokes in this debate. Medicare is efficient for the government to administer only because providers bear the brunt of administration expense – not the government. The costs to a provider are enormous and the provider is tasked with every step from claim submission to adjudication to determining eligibility, etc. In addition, Medicare is hardly comprehensive insurance covering only a single defined group with specific benefits and of course, Medicare is unregulated by state insurance commissioners or the Federal government (no additional regulatory requirements are imposed by the Feds on itself, unlike the same imposed on private health plans (e.g., HIPAA)).
- Savings will be Achieved by Eliminating Wasteful and Duplicative Programs: Nothing in the legislation does this. The legislation establishes significant cuts in Medicare reimbursement for providers and Medicare Advantage plans (Managed Medicare plans) but does nothing to substantively change how these programs run or work. The legislation does create more fines and oversight authority to theoretically fight fraud and abuse but no specifics are offered. In reality, it is anyone’s guess how many dollars can be regained by creating the so called efficiencies but one thing is certain, the dollars won’t come close to paying for even a modest portion of the legislation. Perhaps more important to understand is that the savings at whatever level attained, will only come over time and far more gradually than the immediate expenses associated with the legislation.
- Covering the Uninsured: Whatever number is used as the official tally of the “uninsured”, the legislation does not necessarily cover all of them. In reality, the means are in-place for everyone to acquire coverage but there is no requirement that every citizen (on non-citizen for that matter), have health insurance or health coverage. There is no question that significant resources would be expended to increase coverage options and to lower the cost of insurance, particularly at lower income levels. In spite of the provisions in the legislation, it is unlikely that everyone would ultimately purchase coverage even through a private option. Estimates suggest that about one-third of the current uninsured will remain uninsured.
- Keep Your Own Health Insurance: Another confusing half-truth; in the short-run yes, in the long-run no. The legislation essentially requires the Health Choices Administration to determine what insurance is offered nationally and without question, if a person’s present plan is outside the Exchange initially, within two to three years it won’t be (either changed or cancelled). Health insurers will either drop or modify plans altogether in order to comply with Exchange rules – it is that simple. If the Public Option remains viable, it is very conceivable that most private plans will ultimately evaporate as they will have no viable means to compete against a government run, government subsidized plan.
- Tax the Wealthy: The legislation does this as a means of providing additional revenue for the reform. The tax is factored on 1.2% of the top individual earners and supposedly, 4.1% of small businesses (no way to prove the math). Married couples earning between $350,000 and $500,00o would pay a 1% surcharge. Those earning between $500,000 and $1,000,000 would pay a 1.5% surcharge and earners with incomes over $1 million would pay a 5.4% surcharge.
- The Wealth Tax is a Trigger Tax: This means that the tax in-place won’t automatically change unless certain things happen. The legislation provides for an escalation of the tax from current levels if the projected savings aren’t attained. In reality, the tax will go up automatically as the projected savings are unlikely to be attained and the legislation doesn’t specify what these savings targets even are.
Sadly, I could go on for quite some time but I’ll stop here and wait for more Washington rhetoric to expand, if expansion is even warranted. I will offer this summary as a conclusion: The legislation as it sits is far from budget neutral. It is without question, a Federalization of health care in the United States. It is not health insurance reform although there are such provisions embedded within the legislation. It does precious little to create efficiencies and savings, save cuts to programs already in-place such as Medicare and Medicaid. Finally, it creates another level of Federal bureaucracy, politically controlled by the President (he appoints the new Health Choices Commissioner or as some have said, Health Care Czar) specifically tasked with regulating all health insurance, save government and union plans, in a very short period of time. This provision alone provides for the direct end of private health insurance in America.