Sixty-five years after President Truman proposed a national health care program and 17 years after President Clinton’s failed attempt to radically alter health care financing, President Obama, with the help of a Democratic Congress, finally passed a compromise bill that is clearly an improvement over the old system. The non-partisan Congressional Budget Office (CBO) estimates that the plan will save more than a trillion dollars during the next 20 years by increasing the pool of insured persons, and it will clearly greatly benefit poor and minority Americans who are currently uninsured. Of course, there is a real possibility of repeal, especially if the Democratic Party loses large numbers of seats in the mid-term elections. Several states have already mounted legal challenges to the legislation on constitutional grounds and states may succeed in imposing barriers to implementation. Most likely, though, the health care landscape of the country has changed for good and probably for the better.
In addition to cost savings over the long term, the legislation benefits individuals and society at large in many other ways. Most obviously, insuring the health of the labor force represents a major investment in future productivity, which will be essential as the baby boom generations retire and as the U.S. finds itself competing with emerging economies like those of Brazil, China and India. The shorter-term advantages are also clear. In general, what the legislation does is make health insurance accessible to nearly all Americans, control its cost for middle class families, and place rational and needed restrictions on the health insurance industry.
The basics of the legislation are by now widely available. There are too many specific aspects to summarize here, but among the most important are provisions that, either immediately or by 2014, ban health insurance companies from denying coverage to children or adults with preexisting conditions or dropping individuals when they become ill. Health insurance premiums will be monitored to identify those that are excessive. Insurers will also be prohibited from placing annual or lifetime limits on coverage. Middle class families and small businesses will receive tax credits for premiums. State health exchanges will be established to compete with the private market and to offer affordable coverage to individuals.
The bill clearly improves health care access for minority and other poor Americans. Medicaid coverage will be expanded to an additional 16 million people. Eleven billion dollars will be provided to community health centers to increase their staffing and facilities; this will encourage poor individuals and families to seek preventive care. Another benefit results from the fact that Medicaid and Medicare payments to doctors will be increased. Many doctors do not accept Medicaid patients because of the low reimbursement and many poor families have trouble obtaining the care they need even when they have Medicaid. In addition, drug coverage for individuals on Medicare will be extended to eliminate the “doughnut hole” in drug coverage.
The bill also deals with the potentially serious shortage of doctors that the country is facing as a large fraction of the current medical labor force retires. Scholarships and loan repayment programs will be available to train doctors, nurses and other medical professionals. Hopefully it will increase the number of minority physicians, nurses and ancillary medical professionals. Incentives will be offered for professionals to practice in under-served areas, a provision that will increase access in minority and poor communities. The legislation will also increase access to mental health services for individuals with mental illnesses and substance abuse disorders.
Unfortunately the new legislation will not cover everyone. According to CBO estimates, by 2019 32 million individuals who would have been uninsured will be covered, but 23 million non-elderly adults will still be without coverage. One might ask who these 23 million individuals are — about a third are illegal immigrants who are not eligible for coverage and the rest consists of individuals with incomes below the individual mandate threshold. If the least expensive plan costs more than eight percent of one’s monthly income, then one can opt out. Other individuals will simply choose to pay the annual penalty rather than buy into the system. Even with less than universal coverage, though, the new legislation is a huge step in the right direction.
I should mention what health care reform is not. It is not a complete and comprehensive overhaul or redesign of the health care system. Despite claims that it represents socialized medicine it does not. As health care costs increase toward 20 percent of gross domestic product, issues of efficiency and rationing will have to be addressed. Increasing health insurance coverage is a noble objective, but the current plan does not address the larger issues related to the organization of the health care system.
