Posts Tagged - ‘high-cost health insurance plans’

Post border

How Could Health Insurance Reform Reduce the Deficit?

Thursday, April 1st, 2010

(Image: stopnlook under CC 3.0)

It seems like somewhat of a paradox: a piece of legislation costing nearly $1 trillion reducing the national deficit? Yet that’s what proponents of health insurance reform believe will happen.

Of course, the American government’s debt won’t be wiped out immediately. Rather, it is supposed to be a process with four steps:

  1. Controlling costs through insurance exchanges intended to make the market more competitive.
  2. Creating an Independent Medicare Advisory Board, which will suggest methods to save money on the expensive program. The members, appointed and confirmed, will not be as beholden to politics. If Congress rejects their proposals, they will have to come up with alternative measures that will result in as much savings.
  3. Taxing the most expensive employer-based health insurance plans. Many believe that such high-cost health plans encourage the overuse of care. Employers and consumers will be more likely to choose more frugal plans, which will remain tax-exempt.
  4. Promoting the bundling of health care services over a period of time, instead of paying doctors on a per-procedure basis. It will start with Medicare, and will expand to private insurers if proven successful.
Post border
Post border

How Will Health Insurance Reform Curb Overuse of Care?

Wednesday, March 31st, 2010

(Image: a.drian under CC 3.0)

Unfortunately, health insurance reform does relatively little to reduce the use of often medically unnecessary and less effective–yet expensive–medical care, such as tests. Overuse may make up 10-30% of health care spending in the United States. When some people try to reduce it, they are often accused of rationing.

However, the legislation will eventually do something: starting in 2018, there will be a tax on high-cost health insurance plans. These plans are accused of encouraging consumers to utilize expensive care, especially when they are provided by employers. By transferring more of the cost to patients through higher co-payments and deductibles, they may think twice before demanding a MRI they may not need.

In order to lower their premiums, health insurers may also decide to exclude unnecessary procedures from some of their coverage options. This may make them more competitive in the soon-to-be-launched exchange markets.

Post border
Post border

Cadillac Health Insurance Tax Hurts Non-Union Workers, Too

Wednesday, February 24th, 2010

(Image: Manuel Van De Weijer under CC 2.0)

The so-called tax on “Cadillac” health insurance plans has been very controversial. However, most of the talk surrounding it is focused on the impact a tax on high-cost health insurance would have on union members. With relatively few Americans represented by organized labor, the Obama administration has appeared to think that it is a small price to pay in order to encourage companies and individuals to keep health care costs down.

However, a recent study from the Berkley Labor Center in California predicts that up to 80% of those affected would be in non-union jobs. The tax is approved of by Senate Democrats as a way to pay for comprehensive healthcare reform, but Democrats in the House are wary. They received some concessions in Obama’s proposal, but it will still have a far reaching impact on group health insurance.

Supporters believe that less spending on health insurance will result in higher wages, but many are skeptical. People also fear that the quality of their plans will deteriorate, and that the tax will not effectively distinguish between plans that are expensive due to heavily female or older workforces and those that are high-cost due to nonessential coverage (i.e. massage, acupuncture).

Post border
Post border

Poll Shows Obamacare Branding Struggles

Tuesday, February 23rd, 2010

(Image: Beverly & Pack under CC 2.0)

Confused? Many are puzzled at the findings of this Newsweek poll. Republicans, independents, and even some Democrats have criticized President Obama for attempting to move forward on healthcare reform when a majority of Americans have expressed opposition to his plan. Meanwhile, the administration has claimed that the opposition is more of an issue of bad marketing than the actual merits or lack thereof of the proposal.

Although those justifications for ramming the bill through with budget reconciliation seem pompous, they may be onto something. There are legitimate concerns that the health insurance cost spiral will not be stopped by the bill, and that the amount of government spending and involvement is far too high. However, while the generic “Obamacare” legislation is opposed by 49% of Americans, 48% support the plan once they are told of its specifics.

In fact, a whopping 81% are in favor of a new national health insurance plan exchange, while 76% want health insurance companies to be required to cover people with pre-existing conditions. Three-quarters of respondents also want employers to be mandated to provide health insurance coverage to their employees (with tax incentives for small businesses that do so).

There may be some weight to those who claim that healthcare reform opponents have succeeded in framing the debate, and that the current bill shouldn’t be dumped completely. However, they shouldn’t cheer too much, because certain Democratic proposals–like a tax on high-cost “Cadillac” health insurance plans, and a mandate that would impose fines on those who fail to buy individual health insurance–are very unpopular.

Post border