According to the article “Taxing Pricey Insurance: No Health-care Cure” by Kate Pickert on Time.com, Congress is trying to figure out a way to pay for the expensive health insurance reform and taxing health insurance benefits is on the table.  The plan may cost up to 1 trillion over the next 10 years and many are left wondering where this money will come from.  Employers have been offering tax free health benefits for more than 50 years and changing this system makes many people very uncomfortable.

Approximately 2/3 of Americans receive their health insurance through their employer so it may be here to stay.  One idea being considered is a cap on the amount of employer-sponsored health insurance that can be provided tax free.  This would leave only very expensive, elite plans to be taxed.  But even this proposal is being frowned upon.

This leads Congress to consider taxing health insurance companies.  The Senate Finance Committee has reportedly shifted towards a plan that would tax insurers who offer the most expensive health care plans.  This would generate some tax money as well as encourage more affordable health insurance.  The complex health care reform debate continues.

A traditional health insurance plan operates on the system of copayments (copays) and coinsurance. You will pay a monthly premium for the coverage. In addition you will pay a copay for every doctor visit, as well as trips to the hospital and emergency room. The copays are set, and usually increase when you see a specialist or go to the emergency room.

You may also be required to pay coinsurance on certain procedures such as tests or hospital stays. The coinsurance is the percentage of the bill that you are responsible for in addition to the copayment for the procedure. For example is you have 80/20 coinsurance, the insurance company will pay eighty percent of the cost and you will be responsible for the other twenty percent. This coinsurance applies after you have reached any deductible set by your insurance policy.
Many policies have a maximum out of pocket payment limit. Once you reach this limit the coinsurance no longer applies, although you do need to continue to pay your copayments. You will also pay coinsurance on the amount that your insurance has contracted to pay for procedures with the hospital and doctor. For this reason it is important to pay attention to both your doctor’s bills and the insurance statements that you receive outlining the payment amount.

It is important to understand how much a procedure could cost you. For example if you had to undergo surgery and stay overnight, you would have to pay your hospital copayment amount, pay the deductible amount if you have not already met it, and then pay your coinsurance amount on the remaining balance of the bill. You can call and talk to a representative at your insurance agency to learn the estimated costs of the procedures before you have them done. Additionally you should make sure that you get preapproval for most tests and surgeries before you have them done. This is one reason why it is very important to go with a reputable insurance company and not a discount plan.  Most hospitals work with all the of the major insurance companies therefore they will already know what is covered and not covered.

A common thread is emerging in the right wing response to healthcare reform. Its opponents aren’t claiming that public healthcare will be bad. Rather, they are terrified that the new system will be so good that no citizen would buy expensive private insurance–or vote for politicians who wanted to take public insurance away.

The Obama team is sending clear signals that healthcare reform is a core economic issue, and the health insurance industry is becoming increasingly anxious by the future administration’s determination to bring healthcare costs under control. Some Americans are seeing their healthcare premiums rising at four times the rate of inflation, if they have insurance at all. Healthcare reform is a pocketbook issue for all of us, according to the Obama team.

In tough economic times it might be tempting to postpone healthcare reforms, but Obama is adamant that delay would be a false economy.

In the American Prospect, Joanne Kenen and Sarah Axeen support claims about the high cost of doing nothing:

A recent report by the New America Foundation’s health-policy program estimates that the cost of doing nothing about health care, including poor health and shorter lifespan of the uninsured, is well above $200 billion a year and rising. That’s enough to cover the uninsured and still have some left over for other public-health needs.

If healthcare costs continue to rise at their current rates, it will cost $24,000/yr to insure a family of four by 2016, an 84% increase from today. At these rates, half of American households would have to spend at least 45% percent of their income to be insured.

In the Nation, Willa Thompson describes how a bicycle crash made her appreciate the connection between healthcare and politics. Thompson was 21 years old when she suffered major injuries after a collision with a truck. Luckily, she was covered by her parents’ medical insurance until she turned 22. She later realized that if she had been just a few months older when the accident happened, she wouldn’t have been able to pay for her medical care.

We all agree that something needs to be done. Let’s briefly review the options that have been proposed so far. Obama wants to provide healthcare for all by requiring private insurance companies to cover everyone and creating a public health insurance plan to compete with private insurers.