Friday, July 24, 2009

The Obama Healthcare Reform Plan

At the forefront of American politics at the present time is Obama’s plan to reform the healthcare system in this country. Healthcare reform was one of his biggest platforms during the election, and he is following through with his promise to make it a priority during his presidency.

There are a lot of rumors and unsubstantiated accusations flying around the media, the internet, and the water cooler in regards to this new plan, so I decided it was time to add my two cents into the mix in the hopes of clearing up some confusion for the 1½ people who follow my blog.

Among the most common misconceptions about Obama’s healthcare plan involve catchphrases like “socialized medicine” and “the government takeover of healthcare,” and include the idea that if Obama’s plan is passed, our general welfare and ability to receive good healthcare will dramatically decrease, while at the same time our country will be thrown toward the brink of economic meltdown due to cost.

In this article, I want to specifically address those issues, look at Obama’s plan and compare it to other similar plans around the world, and demonstrate why those concerns are not legitimate, but instead are functioning as fear-mongering political spin aimed at defeating anything Obama brings to the table.

I realize most people have not actually read or studied the legislation that is currently being discussed in Washington. Lucky for you, I have read and studied it. I accessed it through links on the website of the House of Representatives. It is over 1000 pages. Fortunately, there are links summarizing what is contained in each section.

AMERICA’S AFFORDABLE HEALTH CHOICES ACT

This is the title of the new plan being discussed in Congress. As I noted above, the bill is over 1000 pages in length, and seeks to make healthcare more accessible and more affordable for all Americans. It is not a “socialized medicine” healthcare reform bill. I’m not even sure what “socialized medicine” means, but presumably it gives the impression of the government taking control of everyone’s healthcare choices. You pay thousands of dollars a year for health insurance, get bogged down in government bureaucracy, can’t get the treatment you need because some government official decides you don’t need it, you wait for weeks to see a doctor about a cold, months or years for major surgery, your doctors are all haggard government employees who hate their jobs, and you end up dying of government-induced cancer at age 43.

Sound silly? Ask the roughly 273 billion Americans who seem to believe it’s true.

There is nothing in the current proposal that is in any way related to the government taking over American healthcare. The bill is aimed at passing laws that improve healthcare, make healthcare more accessible and more affordable for all Americans, and improve competition among insurance companies. If such efforts represent a “government takeover,” then the same argument would apply to any laws passed by government to control the free market. Does anyone, for instance, have a problem with anti-trust laws – those laws dictating what corporations can and can’t do in the public market? Of course not. We all benefit from laws like that.

The healthcare reform bill is similar. It passes laws that control what insurance companies can and can’t do in the free market; like anti-trust laws that protect investors, the healthcare reform bill passes laws that protect healthcare investors – that is, patients.

It does not establish government-mandated and government-controlled healthcare. It does not eliminate the for-profit nature of the health insurance industry or establish a single government program for everyone. It does not establish precedents that will make going to the doctor similar to standing in line at the DMV or the Social Security office. It’s not a government-run program like Welfare or Social Security. It is a government-protected program like the free market.

KEY POINTS IN THE BILL

There are a number of important reforms to the healthcare industry contained in this bill. I will list the major points and provide commentary.

1. Protects and guarantees private health insurance plans. Private health insurance carriers – like Blue Cross, Humana, etc., will continue on a wide scale, as they do today. Anyone who wants and can afford a private health insurance plan is entitled to enroll in such a plan. No one is required to take a government-funded plan. Those of us with private health insurance that we are happy with will not be forced to change anything.

2. Establishes a “Healthcare Exchange.” Think for a moment of those commercials for LendingTree.com that assert “when banks compete, you win.” That’s what the Healthcare Exchange is like – insurers coming together to compete for business. The Healthcare Exchange will be an organization that allows those who do not have private health insurance plans to find a plan that fits their needs and is affordable. Among the plans on the Healthcare Exchange will be a government-funded public plan.

3. Establishes a Government-funded Public Plan. The public plan will simply be one of dozens that are available to those who do not have private insurance. The public plan will be required to conform to the same standards as private insurance plans. For those who cannot afford the normal premiums of this plan, the premiums will be cut on a sliding scale, based on income. The lower the income, the lower the premium. Even this public plan is not just a free lunch for lazy people – there are premiums associated with it.

4. Maintains Medicare and Medicaid. Sweeping changes to the way money is allocated and spent within Medicare and Medicaid will provide most of the funding for the new healthcare system. However, those two government programs will continue as they have before. Medicaid, for instance, will still be the option for those below a certain income level. That is, if someone is not able to afford the public plan offered on the Health Exchange, even at the reduced rates based on income, then they will be eligible for Medicaid, as they would be now. This would represent, however, only a fraction of the general population.

5. Guarantees coverage. Insurance companies, including the public plan, will no longer be allowed to discriminate based on pre-existing conditions, put a limit on how much they will pay, or rescind coverage for any reason other than fraud. Penalties for fraud, on the other hand, are increased. Additionally, insurance companies will no longer determine what treatment a patient can and cannot receive, or what treatments will and won’t be covered. Doctors and patients will now make that decision, not insurance companies, and not the government. This is a vitally important point, because it is one that is often misrepresented by opponents of healthcare reform.

6. Increases training and incentives for healthcare workers. The bill aims at putting more healthcare workers into the field by providing for more attractive loans and grants for healthcare students, better training programs, and more lucrative careers. This includes healthcare workers from doctors to nurses, dentists and dental hygienists.

7. Establishes an agency to analyze the program’s benefits and weaknesses. This agency will analyze how the program works, and seek to strengthen it when weaknesses appear. This provision helps ensure that the program is self-correcting.

OPPONENTS OF HEALTHCARE REFORM

Some health insurance carriers oppose this legislation because of fears that it will reduce their profits. They have long been able to more or less name their own price and determine their own enormous profit margins, all at the expense of patients – you and me. This bill will put an end to that. It’s not difficult to understand, then, why some health insurance carriers are opposed to it. They will now be forced to price their services competitively based on the free market; power is, in effect, being taken from their hands and given to the market.

Some have argued that this plan will hurt healthcare workers. Doctors and nurses and other healthcare professionals won’t have as much job security and won’t be able to afford to keep practicing. This is simply not supported by the facts or the content of the bill. It’s simple fear-mongering. The American Medical Association and the American Nurses Association both endorse this new bill, and the reason is because they see that it will help, not hinder, medical professionals. As outlined above, it contains specific provisions to encourage better training and better benefits for doctors, nurses, and others in the industry. Doctors who now enjoy 6-figure salaries are in no way threatened by this legislation. Instead, this legislation is aimed at ensuring that doctors and hospitals get paid for the work they do. Presently, millions of dollars are absorbed every year by hospitals because of uninsured patients who cannot afford to pay their medical bills. That will be all but eliminated under the new plan, making hospitals – and their doctors, nurses, and other professionals, better protected and better compensated.

Many conservatives in Washington are opposed to this healthcare reform bill. For instance, a writer for the Cato Institute – a public policy research foundation in Washington D.C. – wrote that opposing Obama’s healthcare plan was key for maintaining support in the Republican Party. The writer noted that if a universal healthcare plan is passed, many middle-class Republicans who benefit from it may be more likely to vote for Obama and the Democrats in later elections. He pointed to a similar trend in the UK after universal healthcare was passed.

Senator Jim DeMint, of South Carolina, recently argued that it was necessary to delay a vote on the bill until after the August recess, in order to “break” Obama and make healthcare his “Waterloo” – Waterloo, of course, being a reference to the major battle lost by Napoleon that spelled the end of his reign of power. He describes the bill as a “government takeover” of healthcare and a jeopardy to American freedom. Clearly, he agrees with the writer from the Cato Institute – just as passing this bill may lose the Republicans some support, defeating the bill will “break” Obama and the Democrats.

It is easy to see from these stories that opposition to healthcare reform isn’t actually about healthcare; it’s about political ideology and power. “We can’t permit Obama to win, because it may undermine our power,” these sorts of arguments are saying between the lines. So they use distortions, misrepresentations, “spin doctoring,” false analogies, and slippery slope fear-mongering to twist perceptions. And they succeed because they know most Americans don’t actually have a clue what the healthcare reform bill contains. It’s easy to fool people when those people’s only source of information is you. Confirmation biases reign supreme. If I am a Republican, and the Republicans tell me that Obama’s plan is “socialized medicine,” then I accept that on face value and viciously oppose Obama’s plan.

One of the ways opponents of the healthcare reform bill have waged their attack is through “personal testimonies” of people in other countries. I recently saw an ad with a woman in Canada talking about how terrible their “government” healthcare is, and how she would have died of a brain tumor if not for the fact that she was able to travel to the U.S. for treatment. The Canadian healthcare system, she asserts, was going to make her wait 6 months for surgery.

In addition to being full of political spin and unsubstantiated attacks, and in addition to ignoring the millions of Canadians who are happy with their health insurance, it has come to light that the woman in the commercial didn’t even have a brain tumor. She had a benign pituitary cyst that was not life-threatening. That is why she had to wait for treatment. Immediate treatment for her took a backseat to those people who did need immediate treatment.

Still, the woman’s misrepresentation about her condition aside, isn’t “waiting” for health services one of the primary arguments of the opposition? If I had even a benign brain cyst, I certainly wouldn’t want to wait 6 months to get treatment.

The problem, of course, is that Canada’s healthcare program is, in fact, a state-run program. All Canadians have one health insurance carrier – the Canadian government. That is not what the current bill in our Congress is proposing, as I have already argued. A public plan is only one of many available to Americans to choose from. It is simply one of the competitors, competing with private health insurance companies, within the free market. Furthermore, as I have already noted, the current bill denies insurance carriers – including the public plan – to determine who gets treatment and when. Doctors and patients determine that.

The bill currently before Congress is not in any way related to these sorts of fear-mongering, politically-motivated advertisements. They are complete and total misrepresentations of reality. Again, confirmation bias reigns supreme.

A poll on Facebook right now asks if the respondent supports a “government run healthcare plan.” Something like 90% have said no. Well of course not! I don’t support a government run plan either!

Referring to this plan as “government run” is misleading political spin. This plan establishes protocols for interactions between health insurance carriers – of which the public plan will be one – and patients, just as anti-trust laws establish protocols for interactions between publically-traded companies and their investors and clientele. The reason those anti-trust laws exist is to protect Americans and the American economy. The healthcare reform bill seeks to do the same thing in regards to our suffering healthcare system, which is rife with discrepancies, soaring costs, income gaps, and inefficiencies.

WHY WE NEED HEALTHCARE REFORM

This is a section that I shouldn’t even need to write about. Unless you live under a rock, you should be aware that our healthcare system is broken. 50 million Americans live without any health insurance at all. Many who do have health insurance would still be in dire straits should a serious illness arise, because their insurance would only cover a fraction of the cost.

In the last 9 years, employer-based health insurance premiums have increased at four times the rate of wages. They have literally doubled in that period of time. According to one report cited by the Obama administration, nearly half of all personal bankruptcies in America are caused at least in part by healthcare costs. Another report says that in 2007, 60% of personal bankruptcies were related to medical costs. To put that in perspective, about a 1.5 million personal bankruptcies are filed every year. That means medical expenses cause a bankruptcy in America every single minute.

I ask my readers to consider the following scenario. Imagine you have lost your job and have no health insurance. Perhaps you don’t even have to imagine it; it may be a present reality. Now imagine that tomorrow you find out you have a terrible disease that will take months and perhaps years of treatment to control or cure. The ultimate cost will be somewhere in the range of 80,000 to 100,000 dollars. A month from now, you get a new job, which offers health insurance. But the insurance company will not cover your condition because it is pre-existing. Would your bank account cover those costs, or would you end up in bankruptcy like so many others, with the economy at large absorbing your medical costs?

We are the only major industrialized country in the world with no public healthcare option. We are also the only major industrialized country in the world with a verifiable “healthcare crisis” on our hands. Will we continue to let healthcare drain our economy, or will we tackle it head on to strengthen our economy and make people healthier?

The current bill does not propose to copy government-run programs like what are present in Canada and Europe – even though those programs, by all accounts, work very well and are strongly supported by the people. Instead, it supports the American free market and maintains private insurance carriers as for-profit businesses, while seeking to make the system better by forcing insurance companies to compete and by laying the groundwork to end exploitation of patients and healthcare workers by the system. It takes the power out of the hands of the insurance companies and puts it into the hands of the patients. It guarantees affordable coverage for everyone. It eliminates personal bankruptcies due to medical bills, eliminates the need for hospitals and healthcare workers to absorb the costs of those millions who are uninsured, and promises to not only protect our health, but also to strengthen our economy.

A BRIEF COMMENT ABOUT THE COST

The cost of this new healthcare bill is a concern for a lot of people. A large part of the present bill seeks to tighten the reigns of expenditures in Medicare, providing up to 66% of the cost of the program from smarter spending itself. A full two-thirds of the cost will be taken care of right there, without the need of a single penny spent by anyone.

The other portion of the program will be paid by a healthcare surcharge on the wealthiest 1% of Americans. Specifically, families with joint incomes over $350,000 per year, or individuals with incomes over $280,000 per year, will pay a 1% surcharge on their income to cover healthcare costs. For those over $500,000, the surcharge will be 1.5%. That, of course, is a trifle compared to how much they already make. And it is justified by the fact that these wealthiest of Americans also benefited disproportionately from tax cuts enacted over the last eight years. That 1% of Americans has experienced far more growth in their personal wealth over the last decade than the remaining 99% of us. Despite that, the program provides for lowering the surcharge if cost goals are maintained. The percentages could drop as low as 0.1% - or a few hundred dollars on a $350,000 salary.

CONCLUSION

It’s time to put an end to the political spin-doctoring from conservatives over the healthcare reform bill. It’s time to stop lying about what the bill contains, knowing that it will fool many Americans who only get their information from like-minded politicians, commercials, and slanted media outlets.

If you don’t like the healthcare reform bill, state why you don’t like it, and provide evidence for why your perspective should be taken seriously. Don’t just sit back and say it’s “socialized medicine” and assert that we’ll all be spending $1600 a month to stand in line for 8 hours to get cold medicine, like some pathetic 1960’s Communist toilet paper line.

Otherwise, you are just buying and selling oceanfront property in Arizona.

3 comments:

Alenthony said...

Very nice summary, Scott. Thanks for the well-written analysis.

Scott said...

Thanks S.A.

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