In my last column, I discussed the health care bill and how it might help or hinder me and many others in getting quality, affordable care. There was so much ambiguity in the bill when I last wrote that I was not even sure what the bill was called.
Well, now it has an official title. It is the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010. So I went to the Kaiser Family Foundation to see the Cliff-notes version. Who wants to read over 2000 pages again?
I did see a benefit right away for me (my coverage cannot be cancelled because I am sick), I also saw that since my PPO premiums had gone up over 200 percent since 2004, I now had a taxable "Cadillac" plan. Bummer. After looking it all over, what concerned me most is that I now had more questions about what the bill did not cover than what it actually did. Maybe some of you could help me with a few grey areas.
After seeing what offering benefits to people on current entitlement programs did to increase the deficit in the past (example: Medicare passed in 1966 with enrollment in 1967), the bill is front loaded. That means fees and taxes are going into effect four years before the majority of benefits are available. Without this, the CBO would not have been able to find any savings in the plan. I can understand that.
The tax will primarily be on high income Americans, pharmaceutical, medical device, health insurance and managed care companies. The offset would be that millions of Americans will go out and buy insurance now. The CBO is estimating that this legislation will reduce the number of uninsured by at least 32 million by 2019. But will it really?
The CBO is basing it's projections on having 24 million new enrollees in the insurance exchanges and an additional 16 million on Medicaid or the SChip program. The assumption is that many of these new enrollees will be healthy.
The most significant uncertainty relates to the newly created "insurance exchanges" not scheduled to appear until 2014. Exchange rules require insurance companies to accept those with preexisting conditions, remove lifetime spending caps and to guarantee coverage to all legal residents. This may result in a delay in buying coverage until people are actually sick and have higher costs or are facing fines for not having insurance.
The negative effects of such an occurrence would be offset by reforms attracting younger, healthier people who have much lower costs into the system. But with obesity, diabetes and autism on the rise along with many other diseases, young people have never been less healthy. In addition, the actual population demographic in the USA is that of an aging population with the glut (80 plus million) being in the soon-to-retire baby boom. These offsets create great uncertainty since the mandate requiring people to buy health insurance is relatively weak. My guess is that new exchange members may be sicker and thus costlier than originally planned, creating a drag on managed care profits. This will also create unforeseen deficits for federal and state budgets not accounted for by the CBO.
The gorilla in the room is that this bill does not directly address the underlying problems of rising health care costs, tort reform and the overall cost of adding millions to Medicaid or Medicare programs.
I noticed in this weeks treasury auctions that the cost of financing our debt appears to be rising. Ratings agencies are already mentioning that the U.S. may loose its AAA rating soon, requiring us to pay more in interest to those willing to buy our debt.
Over the next 10 years, with the above mentioned concerns, we may be paying a significant portion of our budget to debt service. Where is the money to cover ever-increasing entitlement costs going to come from? All this is food for thought. It is not meant to be a negative on health care reform. I, more than anyone agree that the current system was not sustainable. The big question is, is this bill going to make health care better, accessible and more affordable? Only time will tell.
• Carol Perry has been a Northern Nevada resident since 1983. You can reach her at carol_perry@worldnet.att.net.