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Q&A: Your healthcare reform questions answered

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Updated 10:47 PM Saturday, August 29, 2009

Q: What would it do?

A: In principal, most of the bills attempt to reduce rising costs and extend coverage to the estimated 46 million Americans who are currently uninsured. The Kaiser Family Foundation estimated that health spending in the United States averaged $7,421 per person in 2007 or 16.2 percent of the nation’s economy. That’s a dramatic increase from 1970, when it was 7.2 percent of the nation’s GDP, or even 1990, when it was 12.3 percent of the GDP.

Q: What would it cost?

A: Estimates differ, but the short answer is a lot. One estimate of the House bill by the Congressional Budget Office is $1.04 trillion over 10 years.

Q: How would it be paid for?

A: That’s being hotly debated. The Senate Finance Committee still is drafting its proposal, but the House version of the bill would pay for about half of the bill through savings from Medicare and Medicaid, including changing drug rebate provisions and reducing payments to Medicare Advantage plans, as well as reducing potentially preventable hospital readmissions by reimbursing less for readmissions. The rest would come by taxing families with incomes above $350,000 and individuals with incomes above $280,000. The “surcharge” would increase depending on income; families with modified adjusted gross income above $1 million would pay up to 5.4 percent.

Q: How would it work?

A: House and Senate bills include an individual and employer mandate. Under both plans, individuals would be required to purchase a “qualified” health insurance plan, or pay a tax or fee. The employer mandate would work the same way. Employers would be required to offer insurance to their employees or pay a tax. The bill also would include health insurance exchanges for individuals who don’t have insurance or small employers — it would serve as sort of a wide menu with an array of choices that individuals and small employers could pick from. Up for debate is whether that menu would include a government-run insurance program aimed at competing with private plans. President Obama had earlier signaled that he thought such a plan was necessary; recent comments indicate he’d be satisfied with a plan if it didn’t include a public option as long as increased competition was provided. The public option is considered one of the most controversial aspects of the bill, and a big reason why critics equate health care reform proposals to a government takeover of the health care system.

Q: How would a “public option” work?

A: The Senate plan creates state-based “community health insurance plans” that would be financed through revenues from premiums. That plan would require the plan to negotiate payment rates with providers and contract with qualified nonprofits to administer the plan. The House would create a federal public health insurance plan that must meet the same requirements as private plans regarding benefit levels. That plan would have start-up costs but would ultimately be financed through revenues from premiums.

Would small businesses have to provide health insurance? Not all of them. The House bill would exempt employers with an annual payroll of less than $250,000 and reduce the fees charged for employers with $400,000 or less in annual payroll. The House Energy and Commerce Committee would exempt companies with $500,000 or less in annual payroll and reduce taxes charged to companies with less than $750,000 in annual payroll. The House bill also would provide tax credits and other mechanisms aimed at encouraging small businesses to provide coverage for their employees. Small businesses with fewer than 25 employees received an exemption in the bill passed by the Senate Health, Education, Labor and Pensions Committee.

Q: How would the bill handle “end of life” issues?

A: This was a source of heated debate and has spurred Obama to declare in public programs that the bill is not intended to “pull the plug on Grandma.” At issue is a provision in the House version of the bill that would allow Medicare to pay for end-of-life counseling. Proponents say such counseling is helpful to those who face terminal disease or who know that they will pass; critics say it’s a step toward euthanasia and could lead to government making recommendations about the way people choose to die. The measure is not expected to remain in the final bill.

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