Why Congress' Health Care Bills Are Better Than You Think

By Maggie Mahar, Health Beat. Posted November 6, 2009.

Many progressives are expressing deep disappointment with the health reform legislation now moving through Congress.

Some suggest that some legislators made deals with lobbyists and let them write the bills. Others complain that both the subsidies and the penalties are too low. Still others don't like the fact that states can "opt out" of the public insurance option and decide not to offer "Medicare E" -- Medicare for everybody.

Finally, many ask: "Why can't everyone sign on for the public plan in 2013? Why do we have to wait until 2013? Why can't they roll out universal coverage next year?"

Normally, I would be among the first to critique the bills. By temperament and training, I'm both a skeptic and a critic.

But in this case, I think it is important to recognize that we cannot expect this first piece of health reform legislation to be anything but wildly imperfect. In fact, I'm impressed by the progress Washington has made in just 10 months.

I've been watching the struggle for health care reform since the early 1970s, and compared to what has happened over the past 39 years, this is mind-boggling.

I also believe that those who favor overhauling our health care system should send a strong signal to legislators: We support you for having come this far. We realize that you have three years to strengthen, change and refine the plan before rolling it out in 2013.

What Has Been Accomplished So Far: Affordability

What is astounding is that this Congress has made as much progress as it has. We may have a new administration in the White House, but we do not have a brand-new group on the Hill.

The majority of our legislators are moderates; many are conservatives. Nevertheless, a sufficient number have found the will to stand up and back changes that would make health care affordable for millions of poor, working-class and middle-class Americans.

For example, under the House bill, a family of three making $32,000 a year would pay $1,360 in annual premiums for good, comprehensive coverage; under the Senate Finance Committee bill, that family would be asked to lay out $2,013. Today, without reform, if that family tried to buy insurance, it would find that the average plan costs $13,500. For this household, the current legislation makes all the difference.

Too often, the press suggests that such a family would be expected to pay $10,000 out of pocket to cover co-pays and deductibles. That just isn't true.

Even if the entire family were in an auto accident and racked up $200,000 in medical bills, at their income level, the House bill caps out-of-pocket expenses at $2,000 a year. Under the Senate Finance bill, the family would have to pay $4,000.

Moreover, under both bills, there are no co-pays for primary care. Even private insurers cannot put a $25 barrier between a family and preventive care.

Moving up the income ladder, a median-income household earning roughly $55,000 would pay premiums of $4,300 to $6,500 -- depending on whether the Senate Finance bill or the more generous House bill sets the terms.

Without legislation, they too would face a $13,500 price tag -- and that is if they could get a group rate. If they are buying insurance on their own, coverage could easily cost $16,000.

For self-employed workers, early retirees and those who work for (or own) a small business, the legislation offers major savings.They will be able to buy coverage on the Insurance Exchange, where they would suddenly become part of a group -- which makes their premiums much lower.

Whether rich or poor, this is great news for anyone who works for himself, retired early (voluntarily or involuntarily) or is part of a small firm.

Granted, the legislation now on the table still doesn't make insurance affordable for many Americans at the upper edges of the middle class -- or the upper class. They don't qualify for subsidies. But, as I discuss below, the legislation does point the way to lowering their premiums.

Before reform becomes a reality in 2013, I am convinced that this will happen, in part because it must. We can no longer ignore the waste, inefficiency and pure fraud in our health care system. There is absolutely no reason why we should pay so much more for health care than any other nation in the developed world.

And at least the current legislation protects these more affluent households from medical bankruptcy. No matter how much a family earns, they cannot be asked to pay more than $10,000, out of pocket, in a given year. For households that have savings and property to protect, this means that they don't have to worry about being wiped out by a medical disaster.

Even if you and your family are in that car accident that leads to $200,000 in doctors' and hospitals bills, you will owe only $10,000. In that situation, doctors and hospitals will let you pay off your bills over time, because they know you can. You won't be forced into bankruptcy court. This represents an enormous step forward.

In addition, under reform, private insurers will not be able to put a cap on how much they will pay out to you and your family, over the course of a year or over a lifetime. If tragedy strikes and a child needs six or seven years of cancer treatments, your insurance will not "run out."

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Maggie Mahar is a fellow at the Century Foundation and the author of Money-Driven Medicine: The Real Reason Health Care Costs So Much (Harper/Collins 2006).

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