10 Questions About Health Care Overhaul

Janet Adamy, health care reporter for the Wall Street Journal, recently published an excellent article in a question & answer format about health care issues. Before we get into a summary of her Q&A piece, here is a brief video from her.



1. What is the problem with health care, anyway? Is it as bad as they say?

The problem boils down to two big areas: high costs and lack of coverage.

Even though the U.S. spends $2 trillion a year for health care, some 46 million people don't have health coverage. To be sure, that oft-cited number from the Census Bureau is somewhat misleading because it includes:

• Illegal immigrants,
  
• Healthy young adults who don't think they need insurance and
  
• Poor people who are eligible for Medicaid.

2. Can Democrats and Republicans agree on anything?

Actually, yes.

• There is broad support for changing the way hospitals and doctors are paid so that they are compensated for the quality of care they provide, not the quantity of procedures they do.

• Democrats and Republicans also back the idea of creating online marketplaces where consumers and small businesses can comparison shop for plans.

• Both parties want to bar insurance companies from denying coverage to people who are already sick.
  

3. Where are the main points of disagreement?

The sharpest divide: Whether to create a government-run insurance plan (otherwise known as a "public plan") that would go up against private plans in online marketplaces. President Barack Obama says a public plan will keep private insurers honest. Republicans say it would give the government too much control over health care.

The other main battle, which doesn't break down as easily along party lines, is how to pay for a plan expected to cost at least $1 trillion over a decade.

Congress also remains divided over whether to make employers (except really small ones) provide insurance. House Democrats propose that if companies don't offer insurance, they should contribute as much as 8% of their payroll spending toward helping workers buy insurance on their own. Republicans argue that companies will make up for it by cutting jobs and lowering wages.

4. What would a public plan look like?

The country already has a huge public plan -- Medicare, which covers the elderly and some other groups. It generally pays doctors and hospitals less than private insurers.

Liberal Democrats would like to replicate it in the new marketplaces. They want the government directly to set premiums and services under the plan, perhaps with basic and premium options.

Conservatives figure the government would quickly drive private insurers out of business by undercutting them on price.

Two other scenarios have emerged as compromises. One is to hold off on creating the plan and instead impose heavy regulations on insurance companies aimed at making coverage accessible and affordable. If that doesn't work, then the government insurance plan would kick in after several years.

The other idea is to create a batch of regional nonprofit insurance cooperatives to compete with private insurers.

5. Why is the total price of the overhaul so expensive, especially considering that it is designed to bring down costs?

The cost mostly comes from giving people subsidies to buy insurance, and from expanding Medicaid, the federal-state insurance program for the poor, to cover more low-income Americans.

6. What are the most likely ways to pay for the overhaul?

The White House has proposed about $950 billion in savings over 10 years to pay for the plan that include things like lower reimbursements to hospitals that treat Medicare patients.

The wealthy are a natural target. One proposal is limiting itemized tax deductions for families who earn more than $250,000 annually.

7. Which industries are most likely to lose, and which to gain, from any overhaul?

Pharmaceutical companies would sell more prescription drugs because more people would have coverage for drugs and access to doctors who prescribe them. Hospitals and doctors wouldn't have to provide as much free care as they do now.

Health insurers could be hurt if some kind of public option drives down their profit margins. Other losers would be retailers, restaurants and other businesses with low-income workers who provide little or no health insurance, since they would be forced to start paying for it.

8. I already have insurance through my job - what happens to me?

Not too much at first. A handful of tax-free perks for the insured could get axed. For instance, lawmakers want to end the practice of allowing people to put money into so-called flexible spending accounts.

Longer term, a lot could change. For instance, your employer could drop coverage, preferring to pay the penalty for doing so and deflecting employees to Uncle Sam's plan.

9. Politicians have tried for decades to push universal health insurance. Why did they always fail before?

These efforts stretch back to the 1930s, when President Franklin Roosevelt proposed creating a compulsory health-insurance system for all Americans, run by the states. Doctors, worried it would hurt their pay, helped kill the measure, buoyed by opposition from business and labor groups.

Another attempts by President Bill Clinton died because powerful interest groups feared their members would either earn less or have to pay more under the new system.

10. What happens if the effort once again fails?

Lawmakers would likely scale back their plans and try to at least pass a measure that partially expands insurance coverage or helps stall the increase in health costs.