If reform fails…

Here’s how health care reform will work, and what will happen if there’s no reform, according to an editorial in the New York Times:

HOW REFORM WOULD WORK: Under the new system, all people would be required to have health insurance or pay a penalty. If you are poor or middle class you would also get significant help through Medicaid coverage or tax credits to pay the premiums. The legislation would create exchanges on which small businesses and people who buy their own coverage directly from insurers could choose from an array of private plans that would compete for their business. It would also require insurance companies to accept all applicants, even those with a pre-existing condition. And it would make a start at reforming the medical care system to improve quality and lower costs.

While it’s important to know how the health insurance reform proposals would work, it’s equally important to understand what will happen if health care reform isn’t passed into law:

• 46 MILLION AND RISING: If nothing is done, the number of uninsured people — 46 million in 2008 — is sure to spike upward as rising medical costs and soaring premiums make policies less affordable and employers continue to drop coverage to save money. The Congressional Budget Office projects 54 million uninsured people in 2019; the actuary for the federal government’s Centers for Medicare and Medicaid Services projects 57 million.
• BUT I HAVE INSURANCE: While most Americans have insurance, many pay exorbitant rates because they have no bargaining power with insurers. That includes many of the tens of millions who buy their own insurance — the unemployed, the self-employed, and those whose employers do not offer insurance. The recently announced plan by Anthem Blue Cross in California to raise annual premiums by 35 to 39 percent for nearly a quarter of its individual subscribers is a chilling harbinger of what is to come if reform fails. There are another 48 million people who work in relatively small firms that often cannot get the better rates of large-group coverage. All of these groups should be able to get a better deal if they can buy their insurance through new, competitive exchanges. If current trends continue, the number of underinsured Americans — those who have coverage too skimpy to pay substantial medical bills or protect them from high out-of-pocket spending — will also rise from an estimated 25 million in 2007 to 35 million in 2011, according to the Commonwealth Fund, a respected research organization.
• BUT I LIKE MY INSURANCE: Most Americans get their insurance through large companies, with large group bargaining power. While they complain about premiums and paperwork, most seem satisfied with their coverage. For them the real fear is what happens if they lose their jobs or decide to change jobs. Will they be shut out of coverage because of a pre-existing condition or forced to pay high rates to buy their own insurance? For this group, the real advantage of reform is security. If they get laid off, decide to be self-employed or switch to a smaller employer that offers no insurance, they will still be guaranteed coverage — even if they are a cancer survivor or have heart trouble or any other pre-existing condition. And they will be able to buy insurance on the exchanges.
• I’M JUST WORRIED ABOUT COSTS: You should be. The cost of medical care is rising far faster than wages or inflation. And despite all of the talk about reform “bending the curve,” no one is yet sure how to do that. Many reforms that people instinctively believe should cut costs — computerization of medical records, paying doctors for quality not quantity of services, and prevention programs to promote healthy living and head off costly illnesses — cannot yet be shown to lower costs. Pending reform legislation, specifically the Senate bill, would launch an array of pilot projects to test reforms in delivering and paying for care. It would also create a special board to accelerate the adoption of anything that seemed to work.
• WHAT ABOUT THE DEFICIT?: Republican critics of health care reform have done an especially good job of frightening Americans with their talk of bankrupting the Treasury. The truth of the matter is that the pending reform legislation has been designed to generate enough revenue and savings to more than offset the substantial cost of expanding Medicaid and providing subsidies to the middle class. The Congressional Budget Office estimated that the Senate bill would reduce deficits over the first 10 years by $132 billion and even more in the second decade. What critics certainly do not talk about is what happens to the deficit if Medicare costs continue their relentless rise. That is something that should keep Americans up at night. The pending reforms would cut the growth in Medicare spending per beneficiary in half — from 4 percent a year to 2 percent — by demanding productivity savings from Medicare providers and cutting unjustified subsidies to the private plans in Medicare.

It seems pretty clear now’s the time to act, so hopefully Congress will get health care reform legislation passed sooner rather than later.