As reform takes shape, dread, hope heighten
No matter your situation, the final outcome may not be ideal
by Ginger Rough and Russ Wiles - Nov. 11, 2009 12:00 AM
The Arizona Republic
As the push for overhauling the nation's health-care system moves to the U.S. Senate, patient advocates, insurers, doctors and employers will be lobbying aggressively for a final bill that suits their needs.
Not everyone will get what he or she wants. Many of the uninsured, who stand to benefit most, want wholesale changes such as those in the House version passed Saturday. The bill would expand coverage to 96 percent of the population.
Many doctors, on the other hand, are concerned the legislation doesn't include comprehensive medical-malpractice reform to cut down on frivolous lawsuits. Businesses fear new requirements that would force them to provide coverage for their workers or face a penalty. Meanwhile, the insured wonder if their out-of-pocket costs will go up or down.
Health reform's journey in the Senate could last months. Senate Majority Leader Harry Reid is meshing proposals into a package aimed at getting 60 votes needed to begin debate and enable a final vote.
In Arizona, the conflicts over reform mirror the national debate. Some physicians think an overhaul will help make Arizonans healthier and will save money. Yet they fear expanded coverage will further strain a system that lacks enough primary-care providers. Many conservatives are opposed to both House and Senate bills, saying they are financially reckless and will undermine quality of care.
A sense of hope and a sense of dread predominate, with each person's view influenced by whether he has insurance, how he earns a living and other factors.
There are key differences between the House bill on health-care reform, passed last week, and the legislation that is being floated and revised in the Senate. Among the biggest sticking points going forward: how to pay for reform, whether the legislation should prohibit federal funding of abortions, and whether the plan should include a government-run public option that competes with private insurers.
But there also are common features in the House and Senate bills, including new regulations for employers, a requirement that all individuals have coverage, minimum standards for private insurers and an expansion of benefits to the poor and uninsured.
Here's a guide to how reform could impact various stakeholders and groups.
Small businesses
How they would benefit: The House legislation would provide temporary tax credits to help pay for coverage at the smallest firms - those with as many as 10 workers (partial credits for firms with as many as 25 employees). While employers generally would face fines for not providing health insurance to workers, the penalties wouldn't apply to firms with annual payrolls less than $500,000, with a reduced penalty for payrolls up to $750,000.
What they may not like: The bill would require all but the smallest employers to pay most health-insurance costs. Firms that don't comply would be taxed equal to 8 percent of payroll (a smaller tax would apply on payrolls from $500,000 to $750,000). Small firms might face more administration and compliance burdens. Taxes on the wealthy could affect small-business owners.
Large employers
How they would benefit: Large companies that already provide insurance to workers might not be affected much and would avoid the payroll tax of 8 percent for not offering coverage. These firms also presumably could handle the extra paperwork.
What they may not like: The House plan requires businesses to provide coverage for full-time and part-time workers. Firms with a large share of lower-paid, part-time employees could face a tough transition period. Firms seeking to avoid penalties would have to pay at least 72.5 percent of insurance premiums for individual workers and 65 percent for families. Many companies don't believe employer-borne health costs will drop. Many executives would face a 5.4 percent surtax, which under the House bill would hit singles earning at least $500,000 and joint filers making $1 million and more.
The uninsured
How they would benefit: The nearly 46 million Americans who fall into this category stand to benefit most from health-care reform. The House bill would cover about 96 percent of the U.S. population, compared with 85 percent now. More people would qualify for Medicaid: the new cutoff would be 150 percent of the poverty level, or just more than $33,000 for a family of four. Patients could comparison shop for insurance via a new "health exchange" offering private plans and perhaps a government option. Those not eligible for Medicaid, but earning less than $88,200 (for a family of four), would receive subsidies to offset costs of premiums and co-pays.
What they may not like: Everyone will be required to have health insurance, even 20-somethings who often choose to go without. In the House bill, those without insurance would face a penalty equal to 2.5 percent of their income starting in 2013. Illegal immigrants won't get coverage.
The insured
How they would benefit: Whether on a private, employer or government-run plan, patients wouldn't have co-pays for preventative care. Their plans would have to meet "minimum benefits standards," and they couldn't be denied coverage because of past medical problems. Children could be on parents' insurance through age 26. Annual co-pays and deductibles would not exceed $5,000 per individual or $10,000 per family. No annual or lifetime coverage caps.
What they may not like: Some insurance companies could modify or drop existing plans that don't meet new benefit requirements. Policy holders could see their rates increase if insurers no longer are allowed to deny coverage or charge pricier rates to high-risk patients. Under the House bill, individuals earning more than $500,000 and couples earning more than $1 million would pay an extra 5.4 percent tax on income above that threshold. Flexible spending plans would be capped at $2,500 a year.
Seniors
How they would benefit: Under the House bill, Medicare recipients no longer would be charged co-pays or deductibles for preventative services. Millions of seniors would pay less for prescription drugs because the reform package narrows and eventually eliminates the "doughnut hole" in Medicare's Part D prescription-drug benefit. The coverage gap causes more than 3.4 million Medicare patients to pay the full price of their prescription-drug costs.
What they may not like: The bill reduces subsidies to the Medicare Advantage program, which covers about 1 in 5 seniors and are offered through some of the nation's largest insurers. They feature robust benefits and low co-pays and frequently include no monthly premiums. The cuts could lead insurers to reduce Medicare Advantage benefits or drop some plans.
Doctors
How they would benefit: Doctors likely will see increased demand for their services, with more customers carrying health insurance. The American Medical Association last week endorsed the House bill and says the bill would empower doctors and patients, invest in quality care and reduce administrative burdens.
What they may not like: Many doctors complain the House bill doesn't offer much in medical-malpractice reform. Nor does the bill address deep Medicare cuts to physicians starting next year. The expected surge in demand for care could strain many medical practices. Doctors could be hit by a proposed 5.4 percent surtax on individuals making more than $500,000 a year or joint filers earning in excess of $1 million.
Hospitals
How they would benefit: With more patients carrying insurance, hospitals might reduce the uncompensated care they provide to uninsured people. Investors seem to recognize the possibility: They bid up the stock prices of leading hospital firms after the House bill passed. Investors were encouraged that the final bill called for negotiated reimbursement rates between hospitals and the government insurance plan.
What they might not like: While more patients would be insured, government reimbursements for treating the uninsured would go down. Also, hospitals could face fines if they readmit Medicare patients for care that the government deems unneeded, although the threat of penalties could prod hospitals to manage outpatient care better.
