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Thursday, September 28, 2023
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Deficit busting through reform

Health care reform passes but will it work?

For the first time since the Civil Rights Act of 1964, the United States Congress has passed progressive legislation. After a year of strenuous debate, the House of Representatives passed the Senate's health reform into law.
Everyone agrees that health care costs are rising and actions must be taken to keep costs from spiraling out of control. Americans want results.
Many in America are displeased with such action. Millions of Americans don't want to provide health care to people who can't afford it. The United States government is mandating every citizen to have health insurance regardless of whether or not Americans want it.
Other arguments against the bill include moving resources from the private sector that tends to be more efficient to the public that is less efficient. But the biggest argument against the bill is the cost. Many Americans are familiar with how to purchase insurance rather then reforming the complex way health care is administered in this country.
But the bill isn't all that bad either.
It does some very good things as well. For example, it allows young Americans to stay on their parent's health insurance plans until the age of 26. Young Americans from the age range of 19 to 29 make up nearly one third of the uninsured population and have the highest uninsured rate of any other age group according to a study done by the Center for Disease Control in 2008.
The major part of the country's most controversial law is exactly how it will keep costs in check. The Congressional Budget Office, the official scorekeeper projects that the new law will save one trillion dollars over 20 years. Here is how the new law proposes to do it.
1.) Create a competitive insurance market
There is little competition in the insurance market. For most part insurance companies avoid the sick and only insure the healthiest of potential customers. Offering the best plans isn't a real priority, since many Americans don't know which coverage is best.
Insurers can no longer discriminate against pre-existing conditions. Companies will have to answer to regulators if they increase premiums, in addition to allow customers to rate their insurance company for other consumers to see.
As any advocate of the "magic" of the free market these steps should drive costs down and quality up. In addition the law stipulates that even government officials must partake in this.
2.) Taxing "Cadillac" plans
This is definitely the least popular part of the new law. The average employer pays for about 70 percent of a workers premium, which happens to be tax-free. Many workers who receive employer provided coverage have no idea how much their plans cost. Imagine how workers would feel if they actually saw the amount come out of their pocket rather than their paychecks.
So what the law calls for is by 2018 a tax is put on such plans which costs are above $27,500 annually. So if American's current plan is worth $27,600 that last $100 would be taxed.
But the thought process behind this part isn't for people to actually pay that tax. The goal is to make employers choose plans under that threshold to hold down costs more aggressively. In turn, it allows insurance companies who adhere to this policy, a competitive advantage over those who don't.
3.) Bundling programs
The single biggest problem within the health care system is American's pay doctors like they pay car salesman. The more product sold the more they get paid. And lets be honest America, Americans will disagree with car salesmen but not their doctors.
Instead of getting paid for everything doctors do to treat a cancer patient, the hospitals would be paid once for treating that patient's cancer and all related conditions over an extended period of time.
If this leads to lower costs and doesn't harm the treatment patients receive the program will be expanded. This would usher in a new era of quality health care versus quantity health care.
The simple truth hasn't changed when it comes to health care reform. America needs results. The law is passed. And regardless of political ideology, every American should hope this reform allows for a healthier, richer, more solvent United States.



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