House Health-Care Reform Bill Deserves Public Support

(MoneyWatch)  When the U.S. House of Representatives votes on healthcare reform legislation very soon, those Democrats who favor the measure will be facing well-organized opposition from Republicans, business groups, insurers, and some sectors of the healthcare industry. They will need all of the public support they can get. So if you want to see universal access to healthcare become a reality in your lifetime, please urge your Congressional representatives to pass this bill.

The legislation certainly has flaws, and I have written about some of them in this space. The biggest problem is that the measure doesn't do enough to control the cost of health care and, therefore, of the insurance that everyone will have to buy. As a result, even with government subsidies for those who make up to 400 percent of the federal poverty level, many middle-class people will be required to spend a substantial portion of their income on insurance premiums and copayments. However, as Maggie Mahar points out on her blog, the bill does cap out-of-pocket payments at $10,000 per year for a family, which will prevent many people from being wiped out financially when they get sick. And government-subsidized insurance rates for millions of people who are currently uninsured will be a small fraction of what they would have to pay today.

It has also been pointed out that the elimination of the pre-existing condition exclusion in insurance policies will create a problem if many people don't purchase coverage until they get sick. Now, the House bill does impose a stiff penalty on those who don't buy insurance; but the successful application of this provision depends largely on whether the proposed insurance exchanges reduce rates enough for those who would otherwise receive insufficient government subsidies to buy insurance, or who earn too much to receive subsidies but still can't afford coverage on their own.

Another challenge is the current 10 percent unemployment rate: Most of the unemployed cannot afford private insurance, and their income level would apparently consign them to Medicaid under this legislation, if they wanted government aid. But, even with the income limit on Medicaid being lifted to 150 percent of the poverty level, most states require people to spend down their assets before they can qualify for Medicaid. How many of the middle-class unemployed would sell their houses to buy insurance?

Along with the need for more rapid action on revamping Medicare reimbursement of providers and other structural reforms, these points underline the need for a better bill to emerge from the House-Senate conference and for improvement of the bill's provisions in the regulatory process between now and 2013, when the legislation is scheduled to become effective. Nevertheless, the measure now before the House is infinitely superior to the alternatives: inaction, which would be unacceptable and economically ruinous, and the Republican plan, which, as the New York Times points out, would cover far fewer people than the Democratic bill, and mainly by reducing insurance benefits. So, while we have a way to go to achieve universal healthcare, the House bill is an essential first step. Let's get the ball rolling!