Pros and Cons of the Healthcare Reform Proposal(s)

Thursday, August 20, 2009

Pros and Cons of the Healthcare Reform Proposal(s)

squashed, as usual, provides a great service by summarizing what’s in the current version of the health care bill:

Adeventhis asks,

Can someone explain to me, or point me in the direction of a website that can explain to me, in a clear, 10-yr. could understand, nonpartisan matter the elements, pros and cons of the proposed HealthCare reform?

In full disclosure, I have some partisan leanings—but I’ll do my best to put them aside. I’ll do my best for 10-year-old, but it’s complex enough that it will take a pretty gifted 10-year-old to understand. Fortunately, I also have some conservative followers who will be very quick to let me know if I fail to set them aside. (I’ll update this.) I should also caution that none of this is set in stone yet.

Pros:

Everybody can have health insurance if they want it.

Insurers will not be able to stop paying for people who are sick, even if they lose their jobs.

People who cannot afford health insurance won’t have to pay as much money.

People who are already sick will be eligible for healthcare.

In the long run it will (hopefully) reduce medical costs significantly. Rising medical costs are the main reason the long-term budget projections are so alarming. Something has to be done. Unfortunately, this bill might not do enough. While there will definitely be some savings, it’s not clear that they will be as transformative as hoped.

Health insurers can no longer cap coverage. In other words, they will no longer say that they have spent enough on you and you’re on your own for the next hundred thousand dollars. This should reduce medical bankruptcy.

There will be increased competition in the insurance market. It might be from a public option. It might also be from some kind of non-profit, state-specific co-operative. This might push the healthcare companies to lower costs and provide better service.

Cons:

For the first ten years, it will cost about $100 billion a year. This is about the yearly cost of the Iraq War.

The bill might increase the cost of health insurance. This depends on whether the gains from increased efficiencies and increased competition is outweighed by the cost of providing additional benefits.

The Individual Mandate. You will have to either buy health insurance if you don’t have it or have a 2% tax increase. This insurance will be subsidized—but there is no guarantee that the subsidy will suffice for your specific situation.

There will be a tax increase on very high income people. If you are making more than half a million (or maybe a full million) you will have about a 1% tax increase.

Other stuff that might be good or bad, depending how you see it

Increased government involvement in healthcare. Government already pays for huge amounts of healthcare—so this won’t be anything new.

Additional regulation on insurance companies. This might increase costs. It will increase quality.

Physicians will have increased access to information about what treatments are most effective for their cost. If two treatments work equally well and one is cheaper, doctors can recommend that one. This was almost universally considered a good thing until a few years ago, but some people have started criticizing it lately.

Large employers may also have to offer health insurance to more of their employees. If they do not, there may have to pay some extra tax.

Things that aren’t true:

Death Panels

Nazis

Inability to choose your doctor

Healthcare will be “rationed.” My conservative buddies will claim that this will “inevitably lead” to rationing. I disagree. I do think we can agree that there is nothing in the healthcare bill that will reduce the amount of healthcare available. The topic of what counts as “rationing” healthcare (and whether we already do it) is complex and contentious—but the healthcare bill will not directly cause additional rationing.

Bureaucrats will tell doctors how to do their jobs (in ways that they don’t already do).

Did I miss anything important?