Health Care Bill Fact Sheet

The FDL health care team has been covering the health care debate in congress since it began last year. They have put together a fact sheet to help readers sort through the myths and facts of the health care bill:

Myth

Truth

1. This is a universal health care bill.
The bill is neither universal health care nor universal health insurance.

Per the CBO:

  • Total uninsured in 2019 with no bill: 54 million
  • Total uninsured in 2019 with Senate bill: 24 million (44%)
2. Insurance companies hate this bill

This bill is almost identical to the plan written by AHIP, the insurance company trade association, in 2009. The original Senate Finance Committee bill was authored by a former Wellpoint VP. Since Congress released the first of its health care bills on October 30, 2009, health care stocks have risen 28.35%.
3. The bill will significantly bring down insurance premiums for most Americans.
The bill will not bring down premiums significantly, and certainly not the $2,500/year that the President promised.

Annual premiums in 2016, status quo / with bill:

Small group market, single: $7,800 / $7,800

Small group market, family: $19,3oo / $19,200

Large Group market, single: $7,400 / $7,300

Large group market, family: $21,100 / $21,300

Individual market, single: $5,500 / $5,800*

Individual market, family: $13,100 / $15,200*

4. The bill will make health care affordable for middle class Americans.
The bill will impose a financial hardship on middle class Americans who will be forced to buy a product that they can’t afford to use.A family of four making $66,370 will be forced to pay $8,628 per year for insurance. After basic necessities, this leaves them with $8,307 in discretionary income — out of which they would have to cover clothing, credit card and other debt, child care and education costs, in addition to $5,882 in annual out-of-pocket medical expenses for which families will be responsible.
5. This plan is similar to the Massachusetts plan, which makes health care affordable. Many Massachusetts residents forgo health care because they can’t afford it.A 2009 study by the state of Massachusetts found that:

  • 21% of residents forgo medical treatment because they can’t afford it, including 12% of children
  • 18% have health insurance but can’t afford to use it
6. This bill provide health care to 31 million people who are currently uninsured.
This bill will mandate that millions of people who are currently uninsured must purchase insurance from private companies, or the IRS will collect up to 2% of their annual income in penalties. Some will be assisted with government subsidies.
7. You can keep the insurance you have if you like it.
The excise tax will result in employers switching to plans with higher co-pays and fewer covered services.

Older, less healthy employees with employer-based health care will be forced to pay much more in out-of-pocket expenses than they do now.

8. The “excise tax” will encourage employers to reduce the scope of health care benefits, and they will pass the savings on to employees in the form of higher wages. There is insufficient evidence that employers pass savings from reduced benefits on to employees.
9. This bill employs nearly every cost control idea available to bring down costs.
This bill does not bring down costs and leaves out nearly every key cost control measure, including:

  • Public Option ($25-$110 billion)
  • Medicare buy-in
  • Drug reimportation ($19 billion)
  • Medicare drug price negotiation ($300 billion)
  • Shorter pathway to generic biologics ($71 billion)
10. The bill will require big companies like WalMart to provide insurance for their employees The bill was written so that most WalMart employees will qualify for subsidies, and taxpayers will pick up a large portion of the cost of their coverage.
11. The bill “bends the cost curve” on health care.
The bill ignored proven ways to cut health care costs and still leaves 24 million people uninsured, all while slightly raising total annual costs by $234 million in 2019. “Bends the cost curve” is a misleading and trivial claim, as the US would still spend far more for care than other advanced countries.

In 2009, health care costs were 17.3% of GDP.

Annual cost of health care in 2019, status quo: $4,670.6 billion (20.8% of GDP)

Annual cost of health care in 2019, Senate bill: $4,693.5 billion (20.9% of GDP)

12. The bill will provide immediate access to insurance for Americans who are uninsured because of a pre-existing condition. Access to the “high risk pool” is limited and the pool is underfunded. It will cover few people, and will run out of money in 2011 or 2012Only those who have been uninsured for more than six months will qualify for the high risk pool. Only 0.7% of those without insurance now will get coverage, and the CMS report estimates it will run out of funding by 2011 or 2012.
13. The bill prohibits dropping people in individual plans from coverage when they get sick. The bill does not empower a regulatory body to keep people from being dropped when they’re sick.There are already many states that have laws on the books prohibiting people from being dropped when they’re sick, but without an enforcement mechanism, there is little to hold the insurance companies in check.
14. The bill ensures consumers have access to an effective internal and external appeals process to challenge new insurance plan decisions. The “internal appeals process” is in the hands of the insurance companies themselves, and the “external” one is up to each state.
Ensuring that consumers have access to “internal appeals” simply means the insurance companies have to review their own decisions. And it is the responsibility of each state to provide an “external appeals process,” as there is neither funding nor a regulatory mechanism for enforcement at the federal level.
15. This bill will stop insurance companies from hiking rates 30%-40% per year.

This bill does not limit insurance company rate hikes. Private insurers continue to be exempt from anti-trust laws, and are free to raise rates without fear of competition in many areas of the country.
16. When the bill passes, people will begin receiving benefits under this bill immediately
Most provisions in this bill, such as an end to the ban on pre-existing conditions for adults, do not take effect until 2014. Six months from the date of passage, children could not be excluded from coverage due to pre-existing conditions, though insurance companies could charge more to cover them. Children would also be allowed to stay on their parents’ plans until age 26. There will be an elimination of lifetime coverage limits, a high risk pool for those who have been uninsured for more than 6 months, and community health centers will start receiving money.
17. The bill creates a pathway for single payer.

Bernie Sanders’ provision in the Senate bill does not start until 2017, and does not cover the Department of Labor, so no, it doesn’t create a pathway for single payer.
Obama told Dennis Kucinich that the Ohio Representative’s amendment is similar to Bernie Sanders’ provision in the Senate bill, and creates a pathway to single payer. Since the waiver does not start until 2017, and does not cover the Department of Labor, it is nearly impossible to see how it gets around the ERISA laws that stand in the way of any practical state single payer system.
18 The bill will end medical bankruptcy and provide all Americans with peace of mind.
Most people with medical bankruptcies already have insurance, and out-of-pocket expenses will continue to be a burden on the middle class.

  • In 2009, 1.5 million Americans declared bankruptcy
  • Of those, 62% were medically related
  • Three-quarters of those had health insurance
  • The Obama bill leaves 24 million without insurance
  • The maximum yearly out-of-pocket limit for a family will be $11,900 (PDF) on top of premiums
  • A family with serious medical problems that last for a few years could easily be financially crushed by medical costs

*Cost of premiums goes up somewhat due to subsidies and mandates of better coverage. CBO assumes that cost of individual policies goes down 7-10%, and that people will buy more generous policies.

Documentation:

  1. March 11, Letter from Doug Elmendorf to Harry Reid (PDF)
  2. The AHIP Plan in Context, Igor Volsky; The Max Baucus WellPoint/Liz Fowler Plan, Marcy Wheeler
  3. CBO Score, 11-30-2009
  4. “Affordable” Health Care, Marcy Wheeler
  5. Gruber Doesn’t Reveal That 21% of Massachusetts Residents Can’t Afford Health Care, Marcy Wheeler; Massachusetts Survey (PDF)
  6. Health Care on the Road to Neo-Feudalism, Marcy Wheeler
  7. CMS: Excise Tax on Insurance Will Make Your Insurane Coverage Worse and Cause Almost No Reduction in NHE, Jon Walker
  8. Employer Health Costs Do Not Drive Wage Trends, Lawrence Mishel
  9. CBO Estimates Show Public Plan With Higher Savings Rate, Congress Daily; Drug Importation Amendment Likely This Week, Politico; Medicare Part D IAF; A Monopoloy on Biologics Will Drain Health Care Resources, Lancet Student
  10. MaxTax Is a Plan to Use Our Taxes to Reward Wal-Mart for Keeping Its Workers in Poverty, Marcy Wheeler
  11. Estimated Financial Effects of the “Patient Protection and Affordable Care Act of 2009,” as Proposed by the Senate Majority Leader on November 18, 2009, CMS (PDF)
  12. ibid
  13. ibid
  14. ibid
  15. Health insurance companies hang onto their antitrust exemption, Protect Consumer Justice.org
  16. What passage of health care reform would mean for the average American, DC Examiner
  17. How to get a State Single Payer Opt-Out as Part of Reconciliation, Jon Walker
  18. Medical bills prompt more than 60 percent of U.S. bankruptcies, CNN.com; The Patient Protection and Affordable Care Act Section‐by‐Section Analysis (PDF)

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Why the White House Probably Doesn’t Want a Public Option

Why the White House Probably Doesn’t Want a Public Option
By: Scarecrow Tuesday October 20, 2009 9:26 pm
F I R E D O G L A K E D O T C O M

The question many health reform advocates have been asking about the public option debate is “what’s the problem”??? Why isn’t the President demanding it, pushing it, selling it? Well, maybe he doesn’t want it.
Why, given strong Congressional majorities in favor of a public option, continuing strong polling support across the country, and overwhelming support from Democratic voters, is Harry Reid treating the matter as though it were a close call?

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To be sure, getting 60 votes for cloture is a challenge, but that is not the same as needing 60 votes for a public option, no matter how many times the media equates the two. Only 5 or 6 Senate Democrats are even opposed in concept. Yet not one of these holdouts has publically declared that he/she would join a filibuster to keep a public option from getting a simple majority-rule vote. Sen. Harkin correctly asks, why should these five be empowered to force over fifty to give in?

Everyone also knows that if Harry Reid puts a viable public option in the Senate bill, there aren’t 60 votes to remove it. So why is Harry Reid behaving as though Democrats had something to fear if they demand party loyalty on a cloture vote and then push through a measure that has more voter support than any health reform measure they’ve proposed outside banning insurers from denying coverage to the sick?

Night after night, we are reminded (thanks to Nancy Pelosi prodding CBO) that a strong public option will save tens of billions, give consumers a choice in an industry that is dangerously concentrated and lacking in competition, and put pressure on insurers to lower premiums in the face of their promises/threats to raise them. Everyone now realizes a strong public plan could provide a credible, government-guaranteed alternative even if the private insurers succeed in evading new government regulations banning their most outrageous practices — practices whose evil effects we see repeated on a daily basis. So what’s the problem?

The Beltway conventional wisdom, steeped in cynicism, is that the White House is being disingenuous when it repeatedly says the President supports a public option. WH officials claim Obama believes it is “the best way” to provide an affordable choice and reduce costs. But then why is he not working to get it adopted in the Senate, and explicitly directing his OFA troops to help that effort? Why has he ducked every opportunity to make even the logical argument that the burden is on detractors to show there’s a better measure? No one has seriously attempted such a case.

In House and Senate leadership efforts to merge their respective bills, it’s curious that no one has noticed that House Speaker Pelosi does not seem to need the White House to tell her how to merge three House bills while improving them. But apparently, Harry Reid is not capable — or cannot be trusted — to merge two Senate bills without having Rahm Emanuel, Peter Orszag and Kathleen Sebelius present every meeting.

There’s nothing wrong with the Senate consulting with the White House about what they’re willing to push and pay for. But the White House told reporters that all the key decisions would be made by Harry Reid. So why are these senior White House people, including the man who sees himself as the center of the universe, there if not to tell Harry Reid what he can and cannot decide?

It is hard to avoid the fear that this White House has now become a principal obstacle to getting meaningful health care reform. It claims it wants major cost reductions in Medicare, via a semi-autonomous cost-cutting commission. But the White House has already bargained away the savings it can achieve from most of the major providers: PhRMa ($80 billion), hospitals ($155 billion) so they can give it back to the doctors (for whom AMA is demanding $240+ billion more over ten years in relief from automatic Medicare reductions).

Why should we not also believe that the White House has a deal to shield insurers from competition by preventing the creation of a public option in exchange for the insurers agreeing to reforms on guaranteed issue and limited community ratings (with the flexibility Baucus provided) and to support this framework with tv ads? (Read Ignagni’s WaPo op-ed today; while defending the PwC study, she says they made a deal, but Baucus broke it; she didn’t say the deal’s off.)

The White House isn’t taking up most of the chairs in Harry’s Reid’s meetings just to watch him make decisions on his own. They’re there to make sure Harry Reid doesn’t undo the White House deals and wander off the reservation.

This President has filled the White House with people who have no inclination to pose any major challenge to the economic power of America’s dominant financial industries (GM being an exception). We’ve already seen this in their dealings with Wall Street investment banks and their too-big-to-fail is too-big-to-challenge approach to financial regulation. We’re seeing it now with efforts to shield the major health and insurance industries from any fundamental challenge.

Sure, there are changes being offered, new regulations being proposed, and more people will be insured than before. But there is no framework being laid for a new structure for how health care is delivered and paid for in America. That is the pattern of this White House, and there is little basis to expect otherwise.

Watch the decisions Harry “makes” in coming days. My bet is they’ll shore up the underlying deals — they’ll make mandated insurance modestly more affordable and fix the mandates a bit, while protecting the insurers from a viable, functioning public option. The industry will still control a system in which consumers will be forced to buy their unreliable products with government subsidies.

And seeing this coming, Nancy Pelosi will push a more reform-minded House to fight back as hard as they can. The House now carries the hopes for even limited reform. Sadly, her opposition is not just the Senate’s 60 vote barrier; it’s in the White House.

Why Do The Insurance Companies Have Anti-Trust Exemption? ~ Rep. Alan Grayson on Olbermann

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Shepherd Smith Vs. Bill Nelson

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Alan Grayson to Republicans: We Don’t Give A Flying Hoot About Your F@cking Feelings

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