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Archive for December, 2009

With a title like that I wish I was writing about a true Christmas miracle of health reform, but instead we have two bills approved by both legislative houses that are at best described as iffy and at worst corruption.

Before we get into where we stand on this bill, lets finish up what has to happen next. The next step in getting this bill to become a law will be the reconciling of both bills and passage of the final bill when it can finally be signed by Mr. Obama. The House Bill is a real attempt at health care reform with a Public Health Option for the poor to compete with the health insurance companies that are allowing premiums to rise faster then inflation squared. The Senate version appears to be an attempt to prove that they can approve any kind of Bill to save face politically.

But the real problem lies in the fact that the bill that is likely to be passed is going to be the Senate version which on close inspection appears to reward health insurance companies with increased membership, even if it does force them to accept everyone at one rate regardless of health. The question is which health insurance companies will be able to profit in this type of market and you can bet Blue Cross and Aetna will still be standing in ten years. Most importantly, the Senate bill has no public option to help control medical costs and keep the health insurance companies honest. So why pass it at all? The answer given by the Progressives is that it is a start and this particular start is better then none. Conservatives would argue that this plan just adds more inefficient government at a time when we can’t afford any additional government period.

After reading much analysis of these bills by different journalists from every angle of the political spectrum, I can say for certain that no one is certain of what effect that this legislation will have on the American consumer, the economy, or the health insurance companies. Most seem to agree however that this bill will most likely hurt the Democrats in the short run, while rewarding the health care industry including the pharmaceuticals.

I believe as of today that it is impossible to predict what will happen, as the smartest minds in economics and politics all seem to disagree on what effects this will have on our country, though all agree something had to be done, and thus the question will be this?

Oh, and have a Merry Christmas and remember Jeremy loves you!

Health Reform in the Senate didn't rest for Christmas

Tomorrow the Senate is expected to vote for the third and final time on the health care legislation.  The final vote is expected to take place at dawn on Thursday.  After that the last step before the bill hits President Obama’s desk is to reconcile the bill that was passed in the House with this Senate bill.

While there are major differences between the two including the Public Option being on the House Bill, the two bill do share much in common, most importantly the health insurance mandate, which makes it a “crime” to be without health insurance.  The penalty?  Only a $800 fine, which is about a month of health insurance for many families, and about 5 months for most people under 35 years old.

The final reconciliation which is likely to be stretched into February is going to certainly be difficult but not impossible, and the smart money is betting on the President signing this bill before Valentine’s Day.

The Senate has met for 24 consecutive days to debate the legislation, the second-longest such stretch in history, and Democrats held a celebratory press conference.

The details of the bill as well as analysis can be found just about everywhere in our health insurance news section and we of course wish everyone a merry Christmas and happy holiday season.

From Bnet.com here is Jill Schlesinger’s health reform cheat sheet.  Jill Schlesinger is the Editor-at-Large for CBS MoneyWatch.com. Prior to the launch of MoneyWatch, she was the Chief Investment Officer for an independent investment advisory firm. In her infancy, she was an options trader on the Commodities Exchange of New York.

Boiling down legislative babble was an exhausting exercise, but it was a great opportunity to put together my own “cheat sheet” on health care — here goes!

I will use the House plan as the jumping off point and note differences with the Senate’s version.

• Costs $1.04 trillion over 10 years (Congressional Budget Office) [Senate plan would cost more]
• Covers 97% of legal American citizens
• Mandates all individuals to purchase insurance or pay penalty of about 2.5% of gross income
• Establishes insurance exchange where consumers can compare policies and buy coverage
• Includes Public Options to compete with private insurance
• Individual subsidies: The government will offer assistance (credits) on a sliding scale up to four times the poverty level (up to $43K for individual and $88K for a family of 4)
• Requires employers to provide health coverage or pay a fee to the government [Senate plan is $750/employee for employers with > 25 employees]
  • Payroll > $400,000 =  8% of Wages
  • Payroll $250,000-$400,000 = to be determined (smaller penalty)
  • Payroll < $250,000 = NO FEE
• Bars insurance companies from denying coverage due to illness or health status
• Eliminates insurance company lifetime caps

Where’s this money coming from?

Under the House plan, there are three main sources available to fund health care [The Senate plan seemed to pass over this not-so-small detail]:

1) New Taxes on Wealthy Generating $544 Billion

• 5.4% surtax income > $1M
• 1.5%  surtax on income  $500,000 – $1M
• 1% surtax on income $350,000 – $500,000 (starts at $280,000 for individuals)

2) Surcharges on Businesses (see above)

3) Reduction in spending for Medicare and Medicaid

Sticking Points:

• New taxes on rich
• Impact on small businesses
• Change in care–Americans will wonder whether their doctors will participate in public option