News from Advocacy for Patients with Chronic Illness, Inc.

Health Insurance Reform Update

Things are so up in the air that it's hard to know what to say.

Good things we know: All proposals eliminate pre-existing condition exclusions, lifetime caps, and premium-setting based on gender and health. And there will be an exchange -- a marketplace -- where uninsured, individual, and small group consumers can go and compare and choose the plans that are available to them. And Medicaid almost certainly will be expanded to include adults without children who meet the income limit, and the income limit is likely to increase to 133-150% of the federal poverty level.

Bad(ish) things we pretty much know: Much, if not all, of these changes will not take effect until 2013, when the exchanges are up and running. However, it appears that there may be a temporary high risk pool for people who have not had insurance for at least 6 months and have been denied affordable coverage under a private plan due to a pre-existing condition. And the rules governing coverage of pre-existing conditions for group plans would be relaxed immediately, as well. A timeline of when the provisions of the House bill, including insurance market reforms, will take effect can be found here.

And cost remains a huge problem. We are hoping for caps on out-of-pocket expenses to eliminate catastrophic losses, but especially without a public option, people may be expected to spend as much as 12% of their income on health insurance premiums -- not including deductibles, copays, and coinsurance.

The two biggest things we don't know: Will there be a public option, a choice that people can opt into as an alternative to private insurance? And although I'm pretty sure there will be some kind of individual mandate to purchase insurance, how tough will it be?

House Speaker Nancy Pelosi has introduced a House bill that contains a public option. It is not the version that liberals wanted, which would have tied reimbursement rates to Medicare rates. Instead, rates to be paid to doctors and other providers will be negotiated. Speaker Pelosi is calling her version a "consumer option" instead of a "public option" to try to make it clearer that this is a choice that will be offered to consumers, not a government take-over of insurance.

Senate Majority Leader Harry Reid has said that the Bill he will bring to the Senate floor will include a public option from which states can opt-out. However, several "moderates" -- including, sadly, my own Senator Joe Lieberman -- have pledged to block this and any other version of a public option. Senator Olympia Snowe of Maine -- the only Republican to support any version of health insurance reform in committee -- supports a "trigger," allowing a public option to be activated if and only if private alternatives are not affordable.

There's some talk of offering, instead, a proposal to create a nonprofit-run plan that would function like a public plan in terms of lowering administrative costs, but that would not be run by the government and, thus, that would not be opposed by those who are offended by the growing size of the federal government. From my perspective, this would be fine. What we need is a lower cost alternative that will ensure that private insurers have to control their premium increases to remain competitive.

As for the individual mandate, it looks like there will be a requirement that people purchase insurance, just like we're all required to buy car insurance. Indeed, the House bill also includes an employer mandate, requiring employers with annual payroll over $500,000 to cover their employees. However, it's impossible to say what the penalties will be for people who fail to comply, especially with the individual mandate. Some members are concerned that we not impose large expenses on the middle class; others are concerned that, without a significant penalty, too many people will opt out of the system entirely. Why does this matter? The cost of including people with pre-existing conditions will be balanced out by people who are young and healthy, helping to control premiums, if the young and healthy really do buy insurance.

Speaker Pelosi's bill has been introduced, and debate will begin soon. Senator Reid will follow shortly. Expect extensive debate and amendment before there's a vote. We really won't know what we will end up with until this process has played out. A lot can and will change.

There's a lot more to both the House and Senate bills. I strongly urge you to listen and read actively, aggressively. Wherever you are on the issue, one thing's for sure. This is all going to come down to the next eight weeks. If you want your voice to be heard, now's the time. Write or call your members of Congress; write letters to the editor and op-eds. Talk to your friends and family and get them involved. This issue will affect every one of us -- and it will affect the chronically ill more than others. So be heard.

And by the way, in case you haven't heard, the response to the national health reform call-in day was huge -- over 300,000 people reported their calls to Organizing for America. For those of you who called, thanks!

For more information about some of the truths and untruths of health care reform, see White House Reality Check and Factcheck.org, as well as our blog.

You can reach the Congressional switchboard at 1-866-210-3678. To find your Representative, go here; to find your Senator, go here.