Getting health reform right
The National Association of Health Underwriters
As I write this, the Senate Finance Committee has just finished its markup of a health reform bill. Although the committee has not voted on final approval -- pending a ruling from the Congressional Budget Office that it will not increase the deficit -- it seems probable that there will be enough votes for it to pass out of committee.
A number of amendments were incorporated during the markup, most of which have improved the bill. Once the Finance Committee passes the bill, the laborious process of combining what the Senate HELP Committee passed with the Finance Committee version will begin. This is actually already going on and, by the time you read this column, it may already have been merged into one bill to be taken to the Senate floor. The final product will be very important since what passes the Senate will most likely look like what the final version of health reform will be.
The merging of the two bills is critical. Not all of the provisions in the Finance bill are good and, in fact, many would be detrimental to a healthy insurance market. And there are numerous areas of concern in the HELP Committee's bill. The HELP bill includes a public plan and an employer mandate, and its proposal on exchanges is very heavy-handed, from a regulatory perspective. It also has a very narrow rating structure that could dramatically increase the cost of coverage. Yes, I said increase the cost. There isn't a chance that coverage will actually become more affordable, because nothing has been done to reduce the cost of care.
On top of that, many of the market reforms will make the cost go up, not down, and in some areas of the country, these increases will be dramatic. When these market reforms are combined with a market where people can get covered any time they feel like it with no penalty, we have a recipe for market failure.
In spite of the technical fact that there is an individual purchase mandate in every bill, the penalties for noncompliance become less each time a new committee considers the bill. Republicans are, in general, philosophically opposed to making people carry insurance coverage for their own protection; they consider this very different from an auto insurance requirement that protects others from physical or financial harm. And Democrats don't like the individual mandate because they feel it is likely to create a hardship for those who can't afford to be covered. So, with every committee's consideration, the likelihood that there will be any effective way to be sure that everyone is actually insured is becoming less and less.
Although we are making it much easier for people to become covered, we aren't giving them any reason to do it now rather than waiting until they are sick. This will, of course, produce higher costs, not greater affordability, and we will be working diligently throughout the next few months to ensure that the final legislation provides real incentives for people to be covered on a continuous basis, not the opposite.
Our members have been very effective in speaking out about the way to get health reform right -- we have sent hundreds of thousands of messages to Capitol Hill throughout the past months. And we've made tremendous progress; many of the most important changes in the bills so far are there because of our strong voice of concern and our expertise in what is important.
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