Current Reform Proposals

SIDE-BY-SIDE COMPARISON OF REFORM PROPOSALS >

Introduction and Overview

In February 2009, President Barack Obama outlined eight principles for health care reform in his fiscal year 2010 budget, which include the following:

  • Assure affordable, quality health coverage for all Americans.
  • Protect families from bankruptcy and debt from health care costs.
  • Guarantee choice of doctors and health plans.
  • Reduce long-term growth of health care costs for businesses and government.
  • Invest in prevention and wellness.
  • Improve patient safety and quality of care.
  • Maintain coverage when individuals change or lose their job.
  • End barriers to coverage for people with pre-existing medical conditions.

Since then, numerous health care reform proposals have been put forth by various individuals, groups, and committees, with the three most important proposals being those set out by the following:

  1. Senate Finance Committee
  2. Senate Health, Education, Labor and Pensions (HELP) Committee
  3. House Tri-Committee

Since some of the bills are several hundred pages long, we will summarize the major points for you. The major elements of the reform bills that have been proposed by the Senate Finance Committee, Senate HELP Committee, and House Tri-Committee are as follows:

  1. Employer Mandate:
    • The new bills will require that large businesses either offer their employees health care coverage, or contribute toward the cost of care through penalties that will be imposed if they do not provide coverage.
    • Small businesses will be exempt altogether, or will pay reduced penalties (depending on the size and income of the business).
  2. Health Insurance Exchange:
    • To help people who have to buy insurance on their own, the plan will create an exchange - a virtual marketplace - where individuals and small businesses can compare and purchase insurance plans.
    • The government will regulate the exchange so that insurance companies cannot discriminate against people with pre-existing conditions, or charge widely varying amounts for similar coverage. Companies will be able to set rates based on an individual's age, though to what extent is yet to be determined.
  3. Public Health Insurance Option:
    • One of the insurance choices on the exchange will be a public option, which will be an insurance plan offered by the government.
    • A public option would drive costs down by forcing insurance companies to compete with an affordable high-quality option.
    • President Obama has said the public option will increase patient choice . The President also said that the public option will keep private insurers honest by competing with them so they are unable to charge unfair rates.
    • Many experts believe that the public option will be the least expensive option on the exchange.
  4. Increased Aid for the Underprivileged:
    • The plans will expand eligibility for Medicaid and the State Children's Health Insurance Program to help a broader segment of the population.
    • "Affordability credits" will help individuals with modest incomes to purchase plans through the Health Insurance Exchange.
  5. Individual Mandate:
    • A primary goal of the reform is to provide affordable health care coverage to all citizens.
    • All individuals will be required to have health care insurance, either through their employer or through purchasing it through the exchange.
    • Except in cases of extreme financial hardship or religious obligations, individuals who choose not to purchase insurance will pay a tax penalty (specific amount to be determined).
  6. Medicare:
    • Contrary to numerous claims in the media, the bills will not reduce current or future benefit levels for seniors.
      1. The bills propose an approximately $245 billion increase in spending for doctors by canceling a scheduled 21% cut in physician pay.
      2. The nonpartisan Congressional Budget Office has estimated that the House bill would result in savings of $219 billion by trimming projected increases in payments for hospitals, insurance companies, and pharmaceutical companies.
    • The new rules surrounding Medicare aim to pay doctors for good patient outcomes (“pay-for-performance”) instead of paying them per procedure (also called "fee-for-service"). For example, two hospitals admit a patient who has suffered from a heart attack:
      1. Hospital A stabilizes and treats the patient, then discharges him home on aspirin. He does well over the next year. The hospital is paid the full $15,000 for the costs of care.
      2. Hospital B stabilizes and treats the patient. However, they forget to place the patient on aspirin upon discharge. The patient suffers another heart attack 4 months later and is re-admitted. Hospital B is reimbursed $15,000 minus a $5,000 penalty for a preventable re-admission.
  7. Electronic records:
    • To reduce inefficiency and duplication of services, the government will invest in electronic health records.
    • This will allow doctors to see which tests and procedures patients have already had so that they are not repeated.
  8. Research on better treatments:
    • A comparative effectiveness research center will conduct and publish scientific research to find which treatments are the most effective.
    • The government hopes that easy-to-access information for doctors and patients will reduce procedures and treatments that don't really work, reducing the waste in the system.

For more detailed reading, we have put the House Health Reform Bill (H.R. 3590 - passed November 9) and Senate Health Reform Bill (H.R. 3590 - passed December 24) into everyday language for an easier side-by-side comparison (SEE NEXT PAGE):

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