Thursday, July 16, 2009

Health Reform Blogging

Last night I was talking to my friend Legs about the health reforms bills that Congress is working on.  I felt like I was having trouble explaining the bill and so I refreshed my memory today.  What follows is a summation of what I found out today.

Both the House and the Senate HELP committee have released their plans, and both are pretty similar.  The underlying goal is to keep the existing employer based health system for those who are in it but find a way to maker it more efficient.  The plan also wants to cover those people who care currently not covered by health insurance.  To that end both bills include an individual mandate which would make having health insurance mandatory.  The key then is too make that mandate affordable.

Both bills include a strong public plan which would compete alongside plan from private insurers in a health insurance exchange.  The exchange would be a place where individuals and businesses would use their large numbers as leverage to choose among competing health insurance plans.  In the House bill there are various types of plans that vary based on much the the ratio of cost sharing.  The insurance exchanges in both bills are nationally run, but states can opt opt out if they agree to certain conditions.  

In addition there are subsidies for people and families to buy  the insurance and cap on how much a person will be forced to pay out of pocket for insurance.  The subsidies are based on a sliding scale that goes up to 400% of the poverty line.   There is also an increase in Medicaid eligibility that increases coverage to include up to 133% of the poverty line and also sets the stage for a potential complete federal take over of Medicaid.

The real issue then is how to pay for this bill.  The Congressional Budget Office has scored the bills to be in the neighborhood of 1 trillion dollars over a 10 year period.  About half the bill will be paid for by making Medicare and Medicaid more efficient.  Both bills also include a marginal surtax on incomes above $350,000.  The President has proposed eliminating some tax deductions and raising the marginal tax tates to Clinton era level, and some in Congress are considering some type of value added tax(VAT). 

There is still some concerns about how the bill will control costs, which is way the Senate Finance Committee has not presented their bill yet.  The major concern for the Finance Committee is how to contain costs.  What the Finance Committee wants to do is cap the tax exemption for employer based health care but nothing is definite.

I did most of my research by looking at the House Education and Labor website and by reading Matthew Yglesias and Ezra Klein.

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