Posted by: Jeff | December 26, 2009

On Passage of Health Care Reform

The Senate voted on Thursday to pass its version of comprehensive health care reform.  The bill does not include a robust public option, but does represent the most substantial piece of progressive legislation to pass through Congress since Lyndon B. Johnson’s Great Society (War on Poverty, Civil Rights, etc.).  It’s a huge piece of legislation that spans thousands of pages – so it’s no surprise that characterizations of the bill are flying around the blogosphere and mainstream media and that they don’t necessarily jive with one another.

So what does the bill say?  From Think Progress:

At its core, the bill creates a federally-regulated exchange for private insurance firms to compete for consumers that aren’t covered by their employer.  This isn’t about government takeovers of insurance or socialism – it’s about regulation.  This competition will increase transparency and help drive premiums down – also aided through government subsidies for those with incomes below 400% of the established poverty line.  These lower costs help make insurance affordable for an additional 18 million Americans that are not currently ensured.  With more Americans ensured, the burden on emergency services that typically care for the uninsured goes down, driving down costs at emergency rooms.  Furthermore, premium costs will be forced lower by the provision that 85% of the cost of insurance premiums must go toward actual medical care.  In other words, insurance profits are capped at 15% for many plans.  This protects consumers from rapidly rising premium costs, as does the provision that insurance companies cannot reject basic coverage for pre-existing medical conditions.

The most controversial (and most misunderstood on both the right and left) is the individual mandate.  Ezra Klein has the best handle on this provision:

So long as insurance won’t cost more than 8 percent of your monthly income, you have to buy into the system. You can’t wait until you get sick or get hurt and and then buy insurance, shifting the costs onto everyone else. The cost of having a universal, or near-universal, system is that people have to participate. The promise is that, for the first time, participation will be possible [. . . .]

If you don’t have employer-based coverage, Medicare, Medicaid, or anything else, and premiums won’t cost more than 8 percent of your monthly income, and you refuse to purchase insurance, at that point, you will be assessed a penalty of up to 2 percent of your annual income. In return for that, you get guaranteed treatment at hospitals and an insurance system that allows you to purchase full coverage the moment you decide you actually need it. In the current system, if you don’t buy insurance, and then find you need it, you’ll likely never be able to buy insurance again. There’s a very good case to be made, in fact, that paying the 2 percent penalty is the best deal in the bill.

If you read anything else on health care reform this holiday season, read this piece by Ezra.  His ability to digest and explain this bill has been very impressive.

All in all, this bill is a landmark piece of legislation worth celebrating.  It cuts costs, expands coverage, and increases transparency.  It may not be the perfect bill some progressives hoped for, but it marks a beginning and not an end to improving health care in this country.

The bill now heads to a conference committee with the Senate, where for various reasons the final output will likely resemble the current Senate bill (leaving out the House version’s public option).  Once approved, it goes to President Obama for his signature, and the President will have achieved his number one legislative priority.

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