Health Care Reform Taking a Turn for the Worse

(MoneyWatch)  After reading the latest developments on health care reform, I'm increasingly worried about the outcome. In my last blog, I mentioned there was a possibility that those of us with health insurance could end up spending more for our coverage. Now that scenario looks even more likely.

Despite campaigning against it, President Barack Obama is now considering taking away at least part of the tax break extended to those with employer-sponsored health insurance. (This was originally an idea put forward my Senator John McCain during the presidential campaign.) What does this mean for you? Right now, those with employer-sponsored insurance get to use pretax dollars to pay their premiums. However, if you and the company you work for are forced to use post-tax money to pay for insurance premiums, your out-of-pocket expenses will increase significantly.

As a possible compromise, there's talk that workers (and employers) could still use pretax dollars to pay for a portion of premiums -- say $11,000 -- and use post-tax money on expenses above that amount. While this may sound like good news, it could actually set off some terrible and unintended consequences. According to MSNBC.com, Elise Gould, an economist at think-tank Economic Policy Institute, says taxation above a certain dollar level may cause employers to cut back on the health benefits they offer their employees.

"Employers will respond by reducing the comprehensiveness of benefits," Gould says. "They'll likely target premiums to fall below the (threshold) value or just at that value, so employees don't have to pay those additional taxes."
If most of our insurance plans were cut back and covered fewer procedures and illnesses, workers, once again, would get stuck spending more on out-of-pocket expenses.

I'm also very concerned that The Washington Post reports a health care reform bill is expected to hit President Obama's desk by October. That may seem a long way off, but seems awfully quick for members of Congress and the American people to get up to speed on the entire current health care system, which can even confuse the savviest health care professionals, and be able to judge if any of the proposals make sense. Under such a tight deadline, and a summer recess to boot, I fear there will be little time for debate and members of Congress will simply vote down party lines without doing the math and trying to figure out how much each proposal will cost the typical health care consumer. Should that happen, I predict the average family will get stuck paying a much higher price for basic health care services for years to come.

I'm not against the idea of health care reform. I think our system is broken and we need to fix it. I just don't see how that can be done by October. I would rather see our government make incremental changes over the next four years and really take the time to analyze if each new program or law is helping or hurting the system. Here are a few ideas that I believe would help millions of uninsured get coverage:

• First, give the uninsured and self employed access to a "group rate" on health insurance through state sponsored plans. Individual states wouldn't need to subsidize these plans. But if they would simply negotiate a fair deal for their "members", individuals wouldn't end up paying more than the rest of us with employer-sponsored coverage.

• Second, don't tax those with employer-sponsored health insurance. Instead, extend the current tax break to everyone so that all taxpayers can use pretax money to pay for health insurance premiums.

• Finally, why limit COBRA (the ability to keep one's insurance for 18 months after leaving a job) just to those who work for large companies? This benefit should be extended to everyone.

Do you have any ideas for health care reform? If so, please share them.

Money, money, money image by borman818, CC 2.0.