Health Care Reform Series: The Affordable Health Choices Act.
- President Obama has requested that Congress have a bill ready for his signature by the fall. He has largely left the craftsmanship of the legislation up to lawmakers, but has indicated his desire to reach three primary goals:
- Reform the system by: expanding coverage, improving quality, lowering cost, honoring patient choice, and holding insurance companies accountable
- Scientific and technological advancements
- Preventative care
- The AHCA would create state health insurance exchanges, modeled similar to those in the Massachusetts universal health care plan. But unlike the PCA, which left participation in the health exchanges optional, the plan offered by democrats would make participation mandatory. The goal of the exchanges is to streamline services in the health insurance sector by creating a one-stop-shop where consumers can compare different plans.
- Individual mandates are an essential piece to the overall puzzle and the wisdom behind “community rating.” The only way the health care system will be able to absorb the costs of including individuals with pre-existing conditions, is by ensuring the young and healthy demographic are enrolled in a minimal “catastrophic illness” plan, thereby allowing the healthy to subsidize the costs of the sick.
- The AHCA would mandate employers either provide insurance and contribute to premiums for their employees, or contribute to a public option. Small employers would be exempt, but there is no definition yet on what defines a small employer. Since the penalty of not participating will likely be less than the cost of participating, employees can expect their employers to discontinue offering insurance. The economic incentive to not provide coverage has been growing, and with a public option, the moral and social incentive to provide it becomes even less, as employers rationalize it is better for business to allow employees to purchase their own plan—and they are probably right. How many businesses suffer from a one million dollar yearly surcharge when someone on the payroll develops a serious illness?
- According to Jonathan Gruber, an economist with the Massachusetts Institute of Technology, removing the burden of employer-sponsored coverage would incentivize a boom in entrepreneurialism. He further notes:
The example I think of is the 50-year-old engineer at IBM whose wife is a cancer survivor and who wants to start his own company. He's just not going to do it in today's world, because he just can't take that chance on health insurance. In a world of health reform, he can do that.
These points are excerpted from
Health Care Reform Series: The Affordable Health Choices Act.