Senate Health Care Bill Comes Into Focus

Senate Health Care Bill Comes Into Focus


So it looks as if the Senate’s bill will be released tomorrow and WSJ shares the broad strokes…

Employers with more than 50 workers wouldn’t be required to provide health insurance, but they would face fines of up to $750 per employee if even part of their work force received a government subsidy to buy health insurance, this person said. A bill passed by the Senate Finance Committee had a lower fine of up to $400 per employee.

The bill to be brought to the Senate floor would create a new public health-insurance plan, but would give states the choice of opting out of participating in it, a proposal that Senate Majority Leader Harry Reid of Nevada backed last week.

The bill is expected to expand health coverage to tens of millions of Americans by giving low- and middle-income Americans subsidies to offset the cost of insurance, and expanding the Medicaid federal-state insurance program to cover a broader swath of the poor. Most people would be required to buy insurance or pay a fine, though exceptions would be made for those deemed unable to afford it.

So this would be a federally funded plan that allows states to opt out if they so choose. That means we’re going to see the blue states adopt it and the red states reject it, plain and simple…even though the red states usually have the highest number of uninsured and underinsured folks.

Personally, I’m not a fan of a federally run system. I’d rather have the federal government give states seed money to build their own public co-ops and have the states figure it out themselves.

I also think it’s unclear whether or not Reid can get the 60 votes he needs to avoid passing this thing via reconciliation.

However, putting all that aside…let’s remember the most important part of health care reform…

Also expected are new rules on insurers to prevent them from denying coverage to people with pre-existing health conditions and from dropping customers’ insurance once they become ill.

Yes, the plan is bound to have flaws since politics is the art of the possible, not the ideal. But if we can outlaw the pre-existing conditions clauses and lifetime coverage caps, that will go a long way towards delivering the type of health care we all deserve.

In any event, I’ll have more once the final bill is released.

  • Aaron

    I’m still not thrilled with the mandatory insurance bit of this bill, but I’m glad they at least put in the ability for folks well below the poverty line to avoid it. The rest of the bill I’m happy with. Its a decent compromise.

    Also you’re absolutely right on the most important part of said bill. Pre-existing conditions and dropping needs to go away. I have a few “uninsurable” friends who’ll be happy to hear this.

  • Frank Hagan

    I’m not sure when we got the idea that “health insurance” should pay for everything. I tried to use my auto insurance policy to pay for my tune up last week, and the evil insurance company wouldn’t pay! I tried to use my homeowner’s insurance to pay for my electric bill, and the immoral insurance company denied the claim!

    Insurance is used to cover rare events; only in health care do we think that an insurance policy can cover every cost, every time. It is unsustainable to have the type of first-dollar coverage that the original Finance Committee’s bill had, with no deductibles and no co-pays.

    Whatever final form this legislation takes, it will fail unless it includes a mandate that every man, woman and child have insurance. A company penalty of $500 or $750 per employee not covered will ensure that many companies bail out of providing health insurance, as the typical family policy is thousands of dollars more (and companies pay, on average, 80% of the insurance cost). The penalty for a company will have to be on the order of $6 to $7,000. The penalties for individuals will have to be closer to that amount to force people to buy insurance (even if they don’t need it).

    The real test will be if the Constitution allows the feds to compel individuals to buy health insurance. The Congress may have to pass an amendment to facilitate it.

  • Chris

    Frank, employers aren’t required right now to buy insurance for their employees, so I don’t see how this would force them to “bail out”.

    But you are right about the first part, our system is so screwed up we’re dependant on insurance to be able to even see a doctor. Maybe if a normal appointment was 15 dollars instead of 200, or a prescription of nexium was 10 dollars instead of 180 per month, then we wouldn’t need insurance.

  • Jim S

    Justin, would you really expect the current crop of far right Republicans in Jeff City to do the right thing by the state of Missouri? I don’t.

  • http://sidewaysmencken.blogspot michael reynolds

    The red states won’t opt out. Just like they didn’t opt out of stimulus money. No doubt some loudmouth governors will try but they’ll backtrack soon enough.

  • Frank Hagan

    Chris, you’re right that employers don’t have to provide insurance. But if they are faced with two things that don’t exist right now, a fee if they don’t provide insurance and a “public option” to provide coverage, what do you think they will do? It will be much cheaper for an employer to give an employee a one-time $5,000 raise, take the $750 penalty, and not provide health insurance. The employee will even like it … the first year. Most employees don’t have a clue that their portion of the total insurance premium is, on average, only about 20% of the total cost.

    Health insurance costs are not “real” in the sense that doctors and hospitals charge much more than they expect to collect. Its more akin to a rug bazaar than any other financial transaction you make. We’ve had some pretty large health expenses this year, with one hospital bill over $50,000. But that’s a phony number; the insurance company’s negotiated rate with the hospital was just short of $13,000. That’s the “real cost” of the service provided by the hospital. Office visits at the doctor are much the same way. And Nexium …. Prilosec OTC is available at Costco (and a generic OTC version of it that’s even cheaper), and it is often just as effective. Doctors often prescribe Nexium because it doesn’t have an OTC version so patients can bill their insurance for it.

    One more note, we get our prescriptions from two places. One has our insurance, and every generic drug is ours for a co-pay of $10 with name brands at $20. We fill one drug there. The rest we fill at another pharmacy without our insurance … for $2 to $3 per prescription.

  • Chris

    Are you a doctor Frank? You can leave the medical advice out of it, same with the insurance companies.

    I still disagree, my point is that companies could drop their coverage right now if they wanted. They keep it because it’s a “benefit” to the employee. People would leave their jobs at a higher rate if not for those benefits.

  • Nick Benjamin

    Frank you make some good points.

    I agree with a lot of them. Pricing of health products is simply bizarre.

    I agree the $750 penalties won’t be enough. That’s why I much prefer the House plan, where the penalty is higher.

    I do think you put the penalties too high. They aren’t supposed to encourage more employer-based insurance, they’re supposed to finance our first step in getting away from the employer-based health system. As long as they balance the books we’re good.

    They are supposed to encourage young people to buy insurance. Over time an average person’s insurance premium payments must add up to the total benefits they receive. But many “young invincible” refuse to buy insurance because they don’t need it, and then act surprised at gigantic premiums when they hit 45.

    Many of those folks could buy a $2,000 policy right out of college, or even High School. And they probably would if it was a choice between spending $2,000 on insurance and paying a $1,500 penalty for nothing.

  • Frank Hagan

    Chris, not a doctor, but I took first Protonix and then Prilosec for 15 years, so I know those particular drugs (I am free of them by an extremely cheap and effective route: a diet change). The other things are my personal experiences; co-pays through insurance three times the cost of the generic version of the drug, etc. Hard to see why you took umbrage at my comments.

    Nick, great points. The employer-based system is generally thought to have come about because of the wage controls after WWII, and it is an odd system. Until the 1970’s, it was mostly a reimbursement plan, where consumers paid the medical bills and got reimbursed at some percentage by the insurer. The consumer was still the customer, and medical bills were kept in check.

    I think your idea that health insurance be treated more like life insurance, where the younger you start to buy it the smaller your premiums, is a sound idea from an actuarial basis. In this way its more like a “prepaid” health plan, and probably a suitable idea for the middle class. The poor will always need something like Medicaid.

    And you might be right that the “young invincibles” will pony up and pay $2000 for a policy they don’t need to avoid a $1,500 penalty. We’ll have to wait and see.

    But none of this is healthcare reform; it is healthcare payment reform. No matter how we pay for it, it is still too expensive, and it should be much cheaper BECAUSE of the medical innovation. A great article pointing out some of this is at (“How American Health Care Killed My Father”).

  • kranky kritter

    I’m totally with Mike here. His point is the very first thing I thought of while reading this post. If we add a shiny new entitlement, you can bet your bottom dollar that when push comes to shove, everyone will want their slice of pie.

    Just like Mike says, any number of opportunistic grandstanding bigmouths will make a showy stink. But there isn’t a state politician alive who is stupid enough to ask for a vote while telling that voter that they won’t be getting benefits that the folks in the neighboring state are stampeding to line up for.

    Principle, shminciple. You can count on Americans to demand at least as good a deal as the next guy got.