Healthcare 101

05 Nov

The 72 hour clock has begun to tick as Congress begins its final march to a vote on a healthcare reform bill.

After months of internal debate, discussion, talking to experts, and hosting town hall meetings all across America, two things are clear: 1) Health care costs are on an unsustainable rise in America and must be addressed, and 2) there are too many uninsured Americans in the US today. So the big debate in Washington should be how to address these concerns. Right?

Sadly, since the beginning of the year, the debate in Congress has centered on the majority’s desire to completely redesign our healthcare system overnight. No doubt something needs to be done, but no one has convinced me that it needs to be a wholesale re-write of the system.

A few other facts are also important to note: The health care industry represents 1/6th of our nation’s economy and 85% of all Americans currently have healthcare insurance. I add these facts because I believe they are important to keep in mind as one contemplates this important issue.

This week, Republicans introduced what is called a substitute amendment to the current proposal being considered. I am extremely impressed with this alternative and the concepts included in the proposal have restored my faith in the legislative process – when it is allowed to work. My biggest concern now is the fact that this very thoughtful proposal will most likely never see the light of day or get the debate on the House floor that it deserves. The Republican proposal received its CBO score today and the news justifies my excitement over the proposal.

The most positive fact about the Republican plan…it is the ONLY plan that actually begins to reduce costs according to the CBO, the non-partisan Congressional Budget Office. That means that one of the key public policy concerns over healthcare can be addressed immediately. The substitute addresses other aspects of the problem incrementally, realizing that addressing the concern over insuring as many as 30 million people is best addressed in small doses, and not by the creation of larger government bureaucracies.

The CBO reports on these two bills illustrate two entirely different methods to get at healthcare reform. Here are some high points:

  • The GOP substitute decreases the deficit by $68 billion over ten years. The Pelosi plan increases the deficit by $250 billion.
  • The GOP substitute costs $61 billion, or 5% of the $1.3 trillion cost associated with the Pelosi bill.
  • The GOP substitute “would reduce health care costs directly by reducing premiums for medical liability insurance and associated costs and indirectly by slightly reducing the utilization of health services,” according to the CBO.
  • The GOP substitute cuts premiums 7-10% for small businesses (15% of total private premiums); 5-8% for the individual market (5% of total private premiums); and up to 3% for people working for large businesses.
  • In the individual market, Republican plan’s premiums are $5,000 less than premiums in the Pelosi bill. (Under the Pelosi bill, premiums would be approximately $15,000 annually, compared to the current law of $11,000. The GOP substitute would reduce that to $10,120).
  • The GOP substitute does not include any new taxes on Americans. Under the Pelosi plan, there are $729.5 billion in new taxes and fees.
  • The GOP substitute protects small businesses by reducing health premiums. The Pelosi plan includes $152 billion in taxes on small businesses. Additionally, it includes a $135 billion tax over 6 years for noncompliance with the employer mandate to provide insurance to all workers (CBO).

I normally avoid writing about issues and providing laundry lists of facts, but this issue is too important to rely upon three second sound bites. If anyone is truly serious about this debate, you owe it to yourself to understand all the facts – on both sides of the aisle.

I have what I call a healthy distrust of government. I trust the government implicitly with protecting me. I don’t have the same level of confidence when it comes to the delivery of social services. That’s where I am happy to allow some government intervention and lots of private market influence to take root.

The GOP substitute does that and it takes care of lots of “fixes” that must be addressed to attack the high costs associated with medical care today. By CBO’s own admission, it is the only proposal that does so. I am all for taking it slowly, addressing the concerns incrementally, and developing a solid plan to attack one of the key issues surrounding healthcare reform debate today – costs.

The GOP substitute focuses on costs but includes numerous other reforms as well – from enhancing health savings accounts, to allowing dependents to remain on their parents’ health plan, to allowing Americans to buy insurance across state lines, to guaranteeing coverage for pre-existing conditions.

While the GOP approach is not as broad sweeping as the Pelosi plan, its authors realize that it only begins to attack the entire problem. But I see nothing wrong with that. Healthcare is too large a project to re-write at once. It is too large to consider for only six days. It is too important to rush. The GOP substitute is a start.

I am far more comfortable with a more deliberative approach – one that is incremental, slow, with care and debate, compromise, and an open and fair exchange of ideas and views. That’s the way we will fix this problem.

We all deserve at least that much.

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Posted by on November 5, 2009 in Uncategorized


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