I have just finished reading the House version of the America's Affordable Health Choices Bill of 2009.
I will give a detailed account in this multiple parts. This post will be the overall summary. See Part 2 for detailed dissection so you can judge for yourself.
Here are my qualifications, or lack there of: I am simply an American who does not want to be screwed over by the health care industry or the government. My political alignment is "pragmatic libertarian". I am generally skeptical. I am intelligent, but I am not a lawyer. I have zero law training nor any training in the medical or health fields. In fact, I generally hate the topics of law and health because they bore me. I only chose this task because 1) I was challenged to it, 2) I happened to have time this weekend, and 3) lots of people are claiming to be experts, but few actually seem to be reading the damn thing.
This is probably the last time in a very long time I will attempt something like this.
The AAHCA was 1018 pages long, approximately 200,000 words. I did not log my hours, but I'm guessing it took me about 6 hours total, spread out over 3 days. I spent 2 hours writing this summary blog post, and expect to spend at least another 2 hours compiling my notes for the detailed posts.
I am not a speed reader. My intent was to find the truth of what the bill actually does, so my decisions were in good faith, i.e. if I felt I understood a section, I skimmed over details that were repetitive, reinforcing what I understood, or making minor modifications to existing laws. There were vast pages of "hereby changing the semicolon to a period in title IV of USC blah blah". There were vast pages of tweaks to Medicaid. These I read enough to make sure there was no overt funny business, but I did not spend many brain cells trying to comprehend these sections.
When I did hit a section which seemed important (of which there were many) I slowed down until I reached comprehension. At times I did additional internet research to make sure I understood what it meant. In my followup "detail" posts, I will make a note of anything I felt I didn't fully understand.
There were complications on my understanding of sections which amended existing laws. Since I have no understanding of those laws, and did not want to increase my reading time by ten to go read those laws, I made some assumptions. Overall, I didn't get the sense that there was any trickery going on. The intent of the law seemed clear and in good faith, so my assumption is those amendments were in that same letter and spirit.
The intent of the law seems to be to improve quality care for everyone, lower or control costs in the industry, to help those who have no coverage to get covered, and to regulate against abuses that are currently going on in the health industry.
I did not see any attempt to replace the insurance or health care industries with government health care. I did not see any overt violations of individual rights other than the usual: increases in certain taxes and increases in bureaucratic mass. No death panels, no government takeovers of health care, no limits in doctor choice, no letting grandma die.
So let's get started.
Division A: Affordable Health Care Choices
The bill will create a Health Exchange. Insurance companies can list a coverage plan on the Exchange if they meet coverage requirements. Anyone can shop for insurance on the Exchange. People who do not have adequate or any employer coverage can opt for the Exchange. People under a certain income level (under 400% of poverty) can receive credits to buy coverage on the Exchange. Plans listed on the Exchange will have a limited profit margin -- i.e. most of the money paid into those plans must go to cover actual care. (This is known as a Medical Loss Ratio.)
Insurance companies can offer enhanced plans for additional premiums. Enhanced plans will not have any of the above rules, profit limitations, etc.
Employers must offer coverage to full time employees, covering at least 72.5% of individual premiums and 65% of family premiums. They can continue with or choose their own coverage or choose a plan from the Exchange. They must also cover part time employees in proportion to the hours they work.
If an employer opts out of covering employees, they pay an 8% payroll tax. There are exceptions for small businesses under $400k/yr payrolls. Small businesses receive a credit to use on the Exchange.
To pay for Exchange credits, individuals making between $350-500k/year have a 1% "surcharge" (tax). $500-1m/year is 1.5%, and $1m+ are 5.4%. All individuals who are not somehow covered by insurance or other medical coverage have a 2.5% tax.
The Insurance industry will have additional regulations:
- Premium increases have to be the same for everyone in the same risk pool.
- Insurance companies must always renew coverage for anyone who has not overtly committed fraud and who is making on time payments.
- There are new limits to charging variable rates based on age, family status, or gender.
- They cannot deny anyone coverage based on pre-existing conditions.
- Cost sharing (copays, deductibles, coinsurance) is limited to $5000/yr for individuals and $10k/yr for families.
- Health plans must be transparent, written in plain English so that regular people can easily understand them.
- They must publicly publish data on things like the number of claims denials, data on enrollment and unenrollment, rating practices, etc. These must also be understandable and accessible to laymen.
- Proper notice of plan changes must be given to consumers ahead of time.
- Claims must be paid in a timely manner.
- Complaints must be addressed.
- Whistleblower employees of the industry will be protected.
(These all directly address existing abuses that are ongoing in the system. If you are unaware of these abuses, it's pretty easy to find information about each of these problems on the internet.)
The insurance industry is charged to create a standardized electronic system for administrative transactions (claims, provider paperwork, bill payment, etc). This means all insurance providers, where possible, will use standardized forms. Patients, where possible, would know at the time of service what their portion of the bill is. Where possible, paper forms will be eliminated. The insurance industry has two years to adopt a standard.
There will be a Public Option on the Health Exchange. This will be a government run insurer that will compete with insurance companies. Aside from initial start up capital from the US Treasury, which must be repaid in 10 years, the Public Option will be self-sustaining. i.e. people will pay premiums, and health care will be paid out of those premiums.
Rules are described by which the Public Option will operate, for instance rates will be adjusted geographically, medical providers will be paid at market value, the government can exclude providers who don't meet standards, etc. The public plan is allowed to innovate new payment mechanisms, bundled services, types of services, etc, with the goal of improving health outcomes, increasing efficiency, etc.
The public option is not providing direct care -- it is merely an additional insurance provider.
Various committees and appointed commissioners and secretaries would give oversight to implementing the above programs, doing research, gathering data, addressing consumer appeals, writing recommendations, and so on.
Division B: Medicare and Medicaid Improvements
Div B starts on page 215 and ends on page 856. This is by far the bulk of the bill. All it does is make adjustments ("improvements") to existing Medicare and Medicaid laws. I don't know enough about Medicare and Medicaid to properly judge if these are "improvements" or good ideas, but the intent at least seems good. (Yes, I know what they say!)
It went into great detail on coverage adjustments for wheelchairs, vaccines, tobacco cessation drugs, HIV treatments, cancer screenings, ad naseum.
There were many interesting parts related to creation of pilot programs and identifying successful best practices to implement them. There were also a number of transparency measures I found interesting. For example, a website would be set up to rate nursing homes on quality, number of criminal and civil violations, etc.
More committees and panels and commissioners are established or modified to give oversight, conduct studies, gather data, and so on.
I will go into greater detail about this section in my longer followup posts. Since it goes on for 641 pages about coverage under existing programs, there seems to be a lot of fodder for taking things out of context to create scares. However, once read in context, it makes total sense. The government runs these programs, so one would hope the law goes into detail about how they are run -- otherwise anyone within the program, both provider and recipient, is free to abuse it how they see fit.
Here is one example. One specific program allows States, if they choose, to use funds to create programs for home visitations for poor families with young children. During these visitations, health practitioners can make recommendations related to prenatal and childrens' health and parenting practices. This program is only for Medicaid recipients, and it is voluntary on every level. The aim is to help low-income parents who may have few skills for child rearing and little knowledge of how to increase the health of their children. It is also to help prevent abuse and neglect. As creepy as it may sound, the voluntary nature of this program alleviates my concerns, and I wholeheartedly approve.
UPDATED 8/11: Pages 425-431 of the Medicare/Medicaid section are under a special level of controversy right now. I have no idea why there would be. This is the section which supposedly would "kill grandma" and create a "death panel" to judge whether you should live or die. All this section says, is, if you are on Medicare, every 5 years, if you choose, you can have a benefit that pays for you to have a consultation with your Doctor or Nurse Practitioner, to get expert information about having a Living Will. A living will, of course, is a statement about your medical wishes in the case you become incapacitated.
This section was written by a Republican in response to the Terri Shiavo case.
Division C: Public Health and Workforce Development
This section expands existing laws, grants, programs, and funds which go towards improving and increasing the numbers of doctors, nurses, medical administrators, and other health care workers. Generally these are education programs and scholarships. It also expands health infrastructure in the form of providing funds, research arms, and other resources to the CDC and health departments on the State, Local, and Tribal levels.
And again, more committees, task forces and commissioners are set up OR existing positions are modified. This wasn't always clear, since much of Division C was amending existing law. This was one of those areas where my lack of being a lawyer impacted my ability to interpret this bill. I was able to quickly research some of these. I would guestimate that half of the bureaucratic taskforces, committees, and commissioners mentioned in this Division already exist.
I was looking for evidence that the scary bogyman exists in this bill, for gross violations of the Constitution, the death of the Free Market, the supposed End of America as We Know It. I found none.
I'm bothered by these strawman claims, because they distract from the real debate! While I have some praise for this bill, I also have critiques. I wish the Right would generate real and factual arguments instead of the noisy rhetoric of fallacy. This is completely discrediting them. It's bad for health care reform, bad for America, and frankly bad for their own cause -- unless maybe their actual goal is to keep the status quo of health care industry abuse and fraud.
I have both praise and critique for this bill. These are the kinds of points I wish conservatives were making right now.
Over all, I think it makes a good faith effort to address current abuses and problems in the industry. It attempts to do so without removing the free market aspect of American health care. It still allows insurance companies, providers, employers, and individuals to buy, sell, and make contracts with one another. Choice is not limited in any way on the consumer side. Employer choice to not cover employees has been limited. Insurance choice is limited so they can no longer defraud, trick, cheat, and otherwise abuse consumers.
This Bill does increase taxes for some. However, considering the current cost of health care -- the cost to businesses both large and small, as well as costs to consumers -- these taxes are a drop in the bucket. The payroll tax only exists if employers choose not to cover their employees. These funds go toward covering those employees via Exchange credits.
The "surcharge" for being rich bothers me somewhat. The 1% tax on the lower side of that doesn't bug me much. However, the 5.4% for $1m+ earners seems pretty high. My reasoning for this -- thinking 1% is low and 5.4% is high -- is complicated and worthy of another blog post. I'll try to inadequately summarize a few points: our taxes are high, but not nearly as high as they were for most of the 20th Century. Nor are they as high as our medical care costs, which are now the highest level in the world (and no, we do not receive the highest level of care). Our total tax burden on all levels of government are high enough already that they ought to cover a fully socialized health care system, but for some reason they don't. 1%-5.4% seems cheap if it can actually solve the problems with the system.
There were many "smaller" chunks of money, $1b here, $4m there, that come from the general fund. These don't directly increase taxes directly, but it has to be paid for somehow. Most of them seemed like good uses of money and cheap, compared to say, the Iraq War or the Drug War, or many other examples of government waste.
I do like that the Public Option is designed to be self-sufficient. I'm a big fan of government that only charges people for services received, wherever possible.
There are indeed a lot of bureaucratic positions, committees, ad naseum. These concern me a little, but they could also be good. There seems to be a lot of thought put in to how they will be set up, with representatives from many parts of the health industry (doctors, consumers, insurance reps, drug reps, etc). Most of the committees also have a rotating 3 year term to keep it fresh. Many are tasked with doing research and increasing transparency, which I approve of! My hope is they will serve as a good check and balance against the other strong forces currently operating in the government and the industry. At worse, it's just another drop in the already huge ocean of bureaucrats in Washington -- something to be possible concerned with, but nothing to freak out over.