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Meet the New Health-Care System, Not That Different From the Old Health-Care System

Baucus letter 10_7_09 - Powered by Google Docs_1254950369314.jpeg

You probably can't see that table particularly well. Click on it, and it'll enlarge. It comes from one of the final pages of the Congressional Budget Office's score (pdf) of the Senate Finance Committee's bill, and it lays out the CBO's expectation of the bill's impact on health-care coverage. This is it. This is what our new health-care system will look like. This is the chart we've been waiting for.

The verdict? It will look a lot like our old health-care system.

Unless you're uninsured, or on the individual market, this bill is not expected to affect you. CBO estimates that 29 million Americans who would've otherwise been uninsured will be covered. That's a very big deal. Five million Americans who would otherwise have been left to the individual market will find a better option. And 3 million Americans who would've otherwise been in employer-based health insurance will be on the exchanges or, in some cases, on Medicaid. The insurance exchanges are projected to serve 23 million people come 2019, and 18 million of the members will be low-income and on subsidies.

That leaves 245 million non-elderly Americans who will pretty much be in the exact place they would've been otherwise. As for the elderly, the CBO doesn't include them because they're on Medicare. They, too, will be where they otherwise would've been.

Remember this next time you hear some congressman talk about how this bill will revolutionize the American health-care system, either for better or for worse. This bill will change the insurance situation for 37 million legal residents, 29 million of whom would otherwise be uninsured. That's a big step in the right direction. But most people will never notice it. When I got an early glimpse of the Senate Finance Committee's bill back in June, I called it "comprehensive incrementalism," and I stick by that label. It makes a lot of things a bit better, but it's not root-and-branch reform.

Which is only to say that this is not the end. That's true also for the House and HELP bills. All these proposals are major improvements for the uninsured and those left out of the employer-based market. That means they're major improvements for those who are hurting the worst. And in constructing exchanges and beginning the hard work of delivery system reform and creating a system of subsidies and an individual mandate, they're building the foundation of a better health-care system. But as they embark on that project, they're leaving most of our current health-care system virtually untouched, which means most of the systemic problems will remain unsolved.

By Ezra Klein  |  October 7, 2009; 6:23 PM ET
 
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Comments

Just to nitpick - as President said - indeed any one can be in that group of 37 Million because of involuntary or voluntary job losses and still have:
- recourse to affordable health insurance and
- will not have to resort to bankruptcy in case the person falls sick.

So in that sense 37 Million number is deceptive. There are some substantive changes for the remaining folks.

Just that it has never been put in any 'politically dramatic language'. That has been probably the Achilles' heel in any case.

Posted by: umesh409 | October 7, 2009 6:43 PM | Report abuse

No rescission and no pre-existing conditions are still a pretty big deal.

Posted by: chrismealy | October 7, 2009 6:59 PM | Report abuse

Yeah, but rescission and pre-existing conditions are primarily against folks who aren't in the employer market. Don't get me wrong, as I say in the post, I think this is a big step forward. It's just also worth keeping in perspective.

Posted by: Ezra Klein | October 7, 2009 7:11 PM | Report abuse

25 million still uninsured-- and now paying penalties because of it. No public option, exchanges that won't phase in until the 2020s. And, near as I can tell, limited protections against medical bankruptcy.

This is a sick joke.

Posted by: adamiani | October 7, 2009 7:15 PM | Report abuse

"But most people will never notice it."

How about the people who have to pay for it? Do you think they will notice it?


Posted by: kingstu01 | October 7, 2009 7:15 PM | Report abuse

If the exchanges are successful and regulated well, and all employers are eventually allowed to join it seems like this could possibly be the beginning of a pretty major change.

Posted by: Mollie2 | October 7, 2009 7:27 PM | Report abuse

You are delusional, Mr. Klein. The government will define bloated "minimal" insurance policies that will be mandatory and will include chiropractic, acupuncture, abortion, in vitro fertilization ad nauseum. The freedom of somebody to choose a catastrophic policy (and therefore be more repsonsible for their routine care) will be eviscerated. Look for helath costs to continue to skyrocket, just as they have with Medicare over the last decade.

Why are you so viscerally opposed to personal choice (ability to buy policies across state lines, HSAs, etc.) and instead insist on a government solution ?

Posted by: dan1138 | October 7, 2009 7:31 PM | Report abuse

Just another lie!!! Obama has lied so much about so many things that another lie to get his way is automatic. Tell "0" to take a slow boat to China and leave something that does not need reforming alone!!!

Posted by: springco1 | October 7, 2009 8:09 PM | Report abuse

Just another lie, "0" has been caught lying so many times, that no one in their right mine would believe him. His Czars and SIEU Buddies intimidate anyone who does not agree, therefore why believe the CBO were not threatened?

Posted by: springco1 | October 7, 2009 8:16 PM | Report abuse

Much more work needs to be done but this isn't the end. Far from it. This is really only the 4th inning of a 9 inning ball game.

Posted by: maritza1 | October 7, 2009 8:21 PM | Report abuse

Ezra:

The take away here is "This better only be the beginning and not the end"...Otherwise all of this has been a colossal waste of time..and the insurance monopolies that the republicans have bet their futures on have won. IF that is the case, expect riots sooner than later...

Posted by: rbaldwin2 | October 7, 2009 8:26 PM | Report abuse

As you said, most people won't notice this immediately. How about the people who will be directly affected? According to surveys, less than 40% of those who were supposedly helped by the Romneycare support it. You may think they should prefer half a worm-infested loaf to nothing but, as you say...it doesn't affect you anyway.

Except that it does. Our national health care problem is growing tumor that will eventually eat us all out of house and home. This is not the foundation of a better "system"; it's a jackleg addition to a building with a crumbling foundation.

Posted by: Athena_news | October 7, 2009 8:28 PM | Report abuse

springco1 if you get sick and lose your job you'll still be able to get health care because of this bill. It creates exchanges which could eventually mean more competition for insurance companies so lower prices for health care.
I agree with Dan1138 about the minimal plans, people should still be able to get catastrophic coverage if they want.

Posted by: Mollie2 | October 7, 2009 8:28 PM | Report abuse

@springco1

Get a life. Passing on wingnut talking points does not a valid life make. You're hitting all the buzzwords but you're not making an actual argument.

The bit about "Czars and SIEU (sic) Buddies" is pure fantasy. No, nobody is threatening the CBO.

Posted by: rick_desper | October 7, 2009 8:28 PM | Report abuse

I really think this is not adequate. We need to have cost lowering drivers. That arises by additional choice for the the 200 odd million people who are not going to be affected. That can be quickly provided by extending to these people the existing Medicare that today is available only to folks above 65. It seems so breathtakingly simple to me and I have tried hard to understand the arguments against it and I find none. I like my health care but cannot tolerate the annual increases of 12-19% that I have been subject to.

Posted by: rocky | October 7, 2009 8:47 PM | Report abuse

The Virgin Mary, Joseph, Jesus, the three wise men and Moses can all endorse this bill and the Republicans WILL NOT VOTE FOR IT. At this point, I have no idea what objection they will trot out next.

Posted by: ATLGuy | October 7, 2009 9:09 PM | Report abuse

*No, nobody is threatening the CBO.*

You forget that government employees are out-of-control bureaucrats accountable to no one who can't be fired _and_ they are buckling under the intimidation of the SEIU, ACORN, and the trilateral commission.

More seriously, though: 25 million still uninsured? That's a joke.

Posted by: constans | October 7, 2009 9:11 PM | Report abuse

Then, this is a very good health care bill. Cause I'm an uninsured, 30-something, poor writer...no way to pay for a health plan...haven't had it for nearly 10 years. And, if it covers pre-existing conditions...even better. What it means is that it wiped out the "Dubya" era reforms that wrecked healthcare in the first place. Thanks for highlighting that for the rest us.

Posted by: kitten2 | October 7, 2009 9:24 PM | Report abuse

what about if wyden's amendment passes? would that change the equation? and does it have a chance of passing? I recall a number of republican co-sponsers...

Posted by: senkiri | October 7, 2009 9:36 PM | Report abuse

Well that's what the country kinda wanted. The president said this reform was about getting people covered that weren't covered before and making sure that people weren't being bankrupted by sickness. And this bill appears to accomplish that.

We can save the other battles for another day.

Good job Mr. President herding these cats toward at least something worthwhile. Now let's hope they continue to reduce the budget...

Posted by: onifadee | October 7, 2009 10:08 PM | Report abuse

Only 2.5 million people are affected by death every year, and it's still pretty bad.

This is a balanced budget act masquerading as health care reform. I'm deeply disappointed.

Posted by: bmull | October 7, 2009 10:09 PM | Report abuse

No, the new health care system will significantly more expensive than the old one. Lets start with the key pay fors in the Finance Bill-- the tax on high premium plans the various excise taxes on insurers and drug and device manufacturers. First, the misnamed Cadillac Plan 40% excise tax. Interestingly, just today 154 House Democrats wrote to the Speaker stating that they would never vote for any health reform bill that had this or a similar tax in it. The AFL, SEIU, and most labor unions are on the war path about this tax, so politically this tax is problematic. The Joint Tax Committee has put out income distributional charts showing that 56 percent of this tax will fall on those making $100,000 or less. It is highly regressive on those who have decent health care plans, live in high cost cities, and/or are members of a risk pool that is older and sicker. This tax will either increase premiums significantly or will lead to employers significantly cutting benefits to stay under the limits in the bill. Over time almost all plans will cross the thresholds because the limits will grow by statue less than health care inflation
.
Now to the fee (excise taxes) on health industry. First of all, Joint Tax had to put out a correction yesterday which raised the fees from $93 to approximately $123 billion over ten because they mis read the Finance mark which clearly stated that the excise taxes were not deductable from corporate federal taxes. A mere $30 billion dollar mistake. CBO has clearly stated that these taxes will also be passed through in premiums to all Americans. CBO stated that it will increase premiums 1 percent of premiums. Insurers believe it will be more like 3 percent. Again will are bending the growth curve -- BUT in the wrong direction.

So there lots of problems that are still unresolved concerning this bill.

Posted by: hcohen3 | October 7, 2009 10:32 PM | Report abuse

But as they embark on that project, they're leaving most of our current health-care system virtually untouched, which means most of the systemic problems will remain unsolved.

--------------

Indeed, reducing the deficit by 89 billion dollars by 2019 - a drop in the bucket, really - will do nothing to address this:

http://www.cbo.gov/publications/collections/health.cfm

One of the original stated goals of health care reform to "bend the curve downward" - remember that? - eventually morphed into a promise not to increase the deficit "by a single dime."

Now that's change!

Posted by: JamesSCameron | October 7, 2009 10:39 PM | Report abuse

Klein: "Unless you're uninsured, or on the individual market, this bill is not expected to affect you."

Look at the data on the # of people who switch jobs in a year, the # of new jobs created, and the # of old jobs destroyed. Something like 7-10% of the US economy refashions itself every year or 50% every half decade.

The idea that this bill doesn't effect you because you happen to be in a stable job with health coverage now is based on a misreading of the turbulence in the everyday economy, even in good times.

The bill won't effect current coverage but a majority of Americans will be exposed to the benefits of the exchange within 5 years based on typical employment shifts and job creation. Your coverage underemphasizes this point.

Posted by: jamusco | October 7, 2009 10:40 PM | Report abuse

As self-employed self-insured, I'll look for any help I can get.

Is there any consideration of what is "fair?" re personal cost?

Personally, I think all basic insurance should be based on income (somehow.)


Posted by: dadada | October 8, 2009 12:31 AM | Report abuse

2020-2030 there is supposed to be a much greater increase in savings, around a trillion +/-.

Posted by: Mollie2 | October 8, 2009 12:38 AM | Report abuse

Mollie2: The "savings" of which you speak is actually a huge middle class tax increase, and most of it will not accrue to the treasury but instead be subsumed by exploding health costs.

Posted by: bmull | October 8, 2009 1:09 AM | Report abuse

Pardon my French, but it's all a pile of garbage. There is no reform, no change coming through without single payer.

By 2013, what'll we be paying for health insurance, anyhow? My family's weekly Blue Cross Blue Shield (Anthem) payment is slated to go up nearly 40% next year alone.

Posted by: wanderindiana | October 8, 2009 1:15 AM | Report abuse

"By 2013, what'll we be paying for health insurance, anyhow? "

Well, by 2023, it's looking like "every cent you have, plus the gold fillings you haven't finished paying for because you don't have dental."

Posted by: pseudonymousinnc | October 8, 2009 3:00 AM | Report abuse

Ezra - thanks for the chart, wish you had read it all before you wrote your article - little problem at the bottom you didn't address, the average subsidy per exchange enrollee, which is projected to be around $5K - let's see, with 20 million subsidized exchange enrollees per year, that means there's roughly $100 billion dollars in new spending per year - since this isn't going to add one cent to the deficit, per the president, that means $100 billion per year has to come from other government programs or new taxes - oops, not much change forcasted for medicaid/medicare, so it's new taxes. Since there are roughly 100 million federal taxpayers(those returns that actually send money to the federal government), that means an additional tax of $1,000 dollars per year per taxpayer - pretty much just the same as today, Ezra? Assuming the average after all taxes income (federal/state/local) is roughly $50K, that means the average family will be out 2% of their disposable income for the rest of their lives to pay for this plan - but hey, what's a grand a year among friends? Let's assume at some point the subsidy eventually extends to the remaining 29 million uninsured, so this goes to 6% of all disposable income of all families. hey, jsut a small change, right? let's get a major change going, I've still got some money left!

Posted by: xeniarules | October 8, 2009 5:24 AM | Report abuse

I think that those arguing for this plan as a significant improvement over the status quo are paying insufficient attention to several big potential problems.

First, it is really naive to expect that mere fiats prohibiting insurance companies' abuses, such as exclusion of pre-existing conditions, will be at all sufficient in practice. Insurance companies will continue to have strong incentives to limit coverage of the most risky and to deny payments. As a number of analysts have pointed out, companies can and will find ways to at least limit coverage of people with pre-existing conditions and other requirements in the bill, for example by designing policies that are less useful but expensive to those with such conditions, or by imposing long delays or unrealistically high paperwork requirements for paying claims. Other countries such as the Netherlands and Switzerland limit these abuses only through strong regulation of the insurance companies that, as far as I can tell, is largely absent from this bill.

Second, again as many have pointed out, the limited subsidies could lead to substantial numbers of lower middle-income people having to buy policies that provide very little value for the money. This may well get worse over time if, as seems virtually certain, medical costs and therefore premiums continue to rise much faster than the overall CPI.

Third, the bill seems likely to at least further entrench the limited competition among insurers in many markets. It could make matters worse to the extent that state insurers powers are pre-empted by the bill's provisions.

No public option that seems remotely possible to enact is likely to appreciably address any of these problems.

Finally, passage now of a bill that achieves incremental improvement overall is not necessarily costless in terms of future reform options. Nearly everyone understands that more fundamental reforms are going to be needed in the future to contain costs (which this bill does almost nothing to address), the remaining uninsured, and other issues. Those future reform efforts could be fatally undermined if the bill that passes this year backfires and ends up disadvantaging substantial numbers of people and allowing insurance companies a wider pool of people to abuse. Unfortunately, this seems all too possible an outcome, at least with the bill likely to come out of the Senate.

I understand that the expectation is that the SFC bill will be substantially improved, but there is no guarantee. If it doesn't happen, it would be better to have no bill at all.

Posted by: cpigott1 | October 8, 2009 6:47 AM | Report abuse

While any move towards universal coverage is something, this plan is a huge disappointment. Health costs are going to continue to plague us until we get it right. Stop with this insane insurance company enrichment system that has spiraled out of control. This plan does not take us even remotely far enough. We as Americans, living in the "land of the free and the home of the brave" should be DEMANDING a national, single-payer health care system where the right to adequate health care - preventive, medical & mental - is bestowed upon EVERY man, woman and child in this great nation. It can be done, it has been done elsewhere in nearly every modern democratic nation and the United States will be a stronger, healthier country because of it.

Posted by: Braszman | October 8, 2009 8:14 AM | Report abuse

"By 2013, what'll we be paying for health insurance, anyhow? "

Well, by 2023, it's looking like "every cent you have, plus the gold fillings you haven't finished paying for because you don't have dental."

Posted by: pseudonymousinnc | October 8, 2009 3:00 AM | Report abuse

nice bait and switch pseudo as usual.

But hey let's all go to Canada, they have great outcomes and great care and whoops.

NO COVERAGE FOR DENTAL AND NO COVERAGE FOR PRESCRIPTIONS if you're 18-65 and working. Wait a minute??? I was told that the government in Canada paid for everything??

Well then sucker you were sold a bill of goods from the left.

Posted by: visionbrkr | October 8, 2009 9:25 AM | Report abuse

Ezra, WRONG. The CBO fundamentally misses the practical effect of guaranteed issue combined with relatively modest "fines" for non-enrollment - that more, not less, people will decide to become uninsured. They will just pay the fine of $1900/year or less, knowing they can enroll whenever they wish, no matter if they have become deathly ill. Why pay $13000 a year for a govt approved, comprehensive policy (remember, high deductible, low premium policies will be banned), when you can just pay $1900 and get the same coverage when you need it? Wife gets pregnant? Sign up now! Get in a car accident? Sign up at the emergency room!

This whole idea is a huge joke. It is going to fail big time. Average citizens are going to be outraged at the lack of choice and the skyrocketing cost, especially for the those who are healthy and currently insured. Millions and millions of people are going to see their premiums double, or more, immediately when this plan is implemented.

But that's the point - the Democrats want this to fail, to be perceived as too expensive, because they figure Americans will then be clamoring for a cheap government alternative = public option.

I predict it will backfire on the Dems, big time. Once people realize they can pay doctors and hospitals directly, without insurance companies, they will demand wholesale changes that get the government the hell out of our healthcare decisions. "Insurance" should be for catastrophic events only.

Posted by: mpaterso | October 8, 2009 9:26 AM | Report abuse

I understand that the expectation is that the SFC bill will be substantially improved, but there is no guarantee. If it doesn't happen, it would be better to have no bill at all.


Posted by: cpigott1 | October 8, 2009 6:47 AM | Report abuse

Yes the DUNCE has spoken. Let more people die without healthcare until you get YOUR VERSION of reform. Here's a proponent for reform asking for an increase to the talking point of 14,000 that die every year from a lack of healthcare.

Posted by: visionbrkr | October 8, 2009 9:32 AM | Report abuse

With underemployment at over 20%, rescission & pre-existing seem more important. At least they do to this person w. MS.

Posted by: JaneG | October 8, 2009 9:49 AM | Report abuse

It won't be that different, except it will cost a half a trillion dollars more.

Posted by: invention13 | October 8, 2009 2:18 PM | Report abuse

"nice bait and switch pseudo as usual."

Oh, don't be so stupid, walletbreaker. Haven't you got turds to polish?

My point is simple enough: the graphs don't lie, and healthcare expenditure in the US will expand to take every spare penny (including the ones stuck at the back of the sofa) if given the chance. And then it will crash in all sorts of unpredictable and nasty ways.

Posted by: pseudonymousinnc | October 8, 2009 3:58 PM | Report abuse

This is nothing more than an Obama Shell Game to facilitate his "redistribution" philosophy. DO NOT agree that the majority of us will not experience a "change".

If you are self-insured or insured through employment your premium costs will SKYROCKET. The direct and indirect taxes, fines and penalties will be passed on via higher premiums and/or reduced coverage percentages....which means increased costs to the consumer. The "poorest" have medicaid. Many of the uninsured do not have insurance because of a pre-existing condition (which a simple bill would have handled). The majority of those who will gain coverage are those who just don't want to improve themselves by working full-time, educating themselves to elevate themselves.

This bill does "nothing" to reduce or to slow down rising health care costs.

Posted by: maxandmurray | October 9, 2009 4:57 PM | Report abuse

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