First off, healthcare insurance fascinates me. I’ve been doing plan design for years and I couldn’t tear myself away from watching this unfold on CNN last night or from the internet updates for the past several weeks. As you know by now, the House passed the healthcare reform package and reconciliation legislation. This is one of those “love it” or “hate it” proposals and with opinion polls running nearly equal (46% for and 45% against). There’s been a tremendous amount of debate. It’s mostly done now and the new question is: What does this mean for business?
This is an emotional topic, so there’s been a fair amount of misinformation on both sides of the aisle. Let’s start with some things that are not included in the reform package: Death panels, government provided or socialized healthcare (other than Medicaid and Medicare), coverage for illegal immigrants, and, if the reconciliation package is passed by the Senate, government funding of abortions.
What is included? Here are some of the main items of the combined legislation:
- Elimination of lifetime benefit maximums
- Coverage for dependents up to age 26
- Removal of rescission provisions
- Elimination of pre-existing condition exclusions
- A requirement that companies with more than 50 employees either provide healthcare coverage or pay a $2,000 per employee penalty
- A requirement that every individual either obtains insurance through his/her employer, purchases it independently, or pays a $695 fine or 2.5% of income, whichever is higher.
- A new tax on individuals earning greater than $200k per year ($250k for couples).
- Subsidies in the form of tax credits for families of four earning less than $88,000 per year to purchase insurance.
Will healthcare cost more or less in the future? I looked into my crystal ball and it looked like my bathroom mirror after a long shower. Here are some things to keep in mind:
- When you increase benefit levels, you increase costs.
- Since insurance companies will be insuring everyone, not just those who have to have insurance based on their health conditions, the cost per person for individual purchasers could be reduced.
- If more people are able to get preventive care, that will help reduce costs. We’re already paying for the uninsured in the form of pass through costs for emergency care at the highest possible rates.
Only time will tell what the real impact of this legislation will be. In the meantime, I’ll be watching how this develops and will keep you posted. I’m certain that there won’t be any shortage of communications on this leading up to our elections in November.