A first look at the Senate Health Care Bill

Lester Feder has a good short summary of the most contentious points in the Senate Bill that will pass tomorrow at 7 am.  I think that the House version is, except for the very restrictive language on abortion, a better bill and the efforts at reconciliation will be very interesting.

1. Affordability. The House generally does a much better job of helping low- and moderate-income Americans afford coverage. For the very poor, it opens the Medicaid program to individuals who earn less than $16,245 per year, whereas the Senate makes the program available only to those earning less than $14,404. The Senate offers more subsidies than the House to help the middle class buy coverage. But the Senate’s subsidized insurance offers weaker coverage than that mandated by the House and leaves these Americans far more exposed to out-of-pocket costs

2. Enforceability. The Senate would have insurers sell policies in state-based exchanges, relying on state officials to police the market. The House, on the other hand, sets up a national exchange, and many believe the federal government can do a much better job of protecting consumers than state regulators. There are also questions about whether the Senate’s legislative language protects consumers’ right to go to court if insurance companies violate the new regulations.

What’s more, there’s a minor provision in the Senate bill that could undermine one of health reform’s most important regulations. On paper the Senate bans underwriting–the practice of charging higher premiums to those with pre-existing conditions. The Senate, however, allows for the creation of “wellness incentives,” which are theoretically designed to encourage people to do things like quit smoking or exercise by reducing premiums for those who engage in healthy behaviors. But the Senate includes virtually no limits on the “wellness” indicators an insurance company can measure and allows for huge variations in premiums. This could mean people who have been pregnant, have high blood pressure or are HIV-positive could be hit with thousands of dollars in extra premiums.

2. Enforceability. The Senate would have insurers sell policies in state-based exchanges, relying on state officials to police the market. The House, on the other hand, sets up a national exchange, and many believe the federal government can do a much better job of protecting consumers than state regulators. There are also questions about whether the Senate’s legislative language protects consumers’ right to go to court if insurance companies violate the new regulations.

What’s more, there’s a minor provision in the Senate bill that could undermine one of health reform’s most important regulations. On paper the Senate bans underwriting–the practice of charging higher premiums to those with pre-existing conditions. The Senate, however, allows for the creation of “wellness incentives,” which are theoretically designed to encourage people to do things like quit smoking or exercise by reducing premiums for those who engage in healthy behaviors. But the Senate includes virtually no limits on the “wellness” indicators an insurance company can measure and allows for huge variations in premiums. This could mean people who have been pregnant, have high blood pressure or are HIV-positive could be hit with thousands of dollars in extra premiums.

3. Financing. The House bill is funded primarily through a progressive income tax on families earning more than $1million; it also requires employers to either cover employees or pay into the system. The Senate, on the other hand, imposes a poorly designed tax on “high cost” plans and an awkward alternative to an employer mandate, both of which could wind up hurting many of the Americans who most need help from this legislation.

As the process moves forward it will be interesting to see where President Obama lands.  Right now, he appears to be simply encouraging everyone to put something in a bill and pass it. 

The New York Times quotes from his interview on PBS

Unlike the House, the Senate measure omits a government-run insurance option, which liberals favored to apply pressure on private insurers but Democratic moderates opposed as an unwarranted federal intrusion into the health care system.

In an interview with PBS, Obama signaled he will sign a bill even if it lacks the provision.

”Would I like one of those options to be the public option? Yes. Do I think that it makes sense, as some have argued, that, without the public option, we dump all these other extraordinary reforms and we say to the 30 million people who don’t have coverage, `You know, sorry. We didn’t get exactly what we wanted?’ I don’t think that makes sense.”

I’m waiting for the conference bill before I decide whether the  bill is a good one or not.

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