Health Scare

WARNING: Slightly biased political content ahead.
So, this thing happened today.

President Obama’s proposed health care law was upheld by the Supreme Court in a 5-4 vote framed within an incredibly dense political maelstrom. President Obama released a statement extolling the virtues of his plan as he celebrated the victory, while the presumptive Republican nominee for president, Mitt Romney, stated that this new law is nothing more than a “tax on the middle class.”

Which side is correct? I am not a constitutional scholar. I cannot speak to the legality or constitutionality of the law. I can, however, express how I feel about it. It’s a good change. Unfortunately, it is an incredibly complicated law. The popular info-grabbing website called Reddit featured a post a few weeks ago that explained the basic tenets of Obama’s health care policy. Here it is in its entirety (Explanation provided by Reddit user CaspianX2):

What people call “Obamacare” is actually the Patient Protection and Affordable Care Act. However, people were calling it “Obamacare” before everyone even hammered out what it would be. It’s a term mostly used by people who don’t like the PPACA, and it’s become popularized in part because PPACA is a really long and awkward name, even when you turn it into an acronym like that.

Anyway, the PPACA made a bunch of new rules regarding health care, with the purpose of making health care more affordable for everyone. Opponents of the PPACA, on the other hand, feel that the rules it makes take away too many freedoms and force people (both individuals and businesses) to do things they shouldn’t have to.

So what does it do? Well, here is everything, in the order of when it goes into effect (because some of it happens later than other parts of it):

Already in effect:

  • It allows the Food and Drug Administration to approve more generic drugs (making for more competition in the market to drive down prices)
  • It increases the rebates on drugs people get through Medicare (so drugs cost less)
  • It establishes a non-profit group, that the government doesn’t directly control, PCORI, to study different kinds of treatments to see what works better and is the best use of money. ( Citation: Page 665, sec. 1181)
  • It makes chain restaurants like McDonalds display how many calories are in all of their foods, so people can have an easier time making choices to eat healthy. ( Citation: Page 499, sec. 4205 )
  • It makes a “high-risk pool” for people with pre-existing conditions. Basically, this is a way to slowly ease into getting rid of “pre-existing conditions” altogether. For now, people who already have health issues that would be considered “pre-existing conditions” can still get insurance, but at different rates than people without them.
  • It renews some old policies, and calls for the appointment of various positions.
  • It creates a new 10% tax on indoor tanning booths. ( Citation: Page 923, sec. 5000B )
  • It says that health insurance companies can no longer tell customers that they won’t get any more coverage because they have hit a “lifetime limit”. Basically, if someone has paid for health insurance, that company can’t tell that person that he’s used that insurance too much throughout his life so they won’t cover him any more. They can’t do this for lifetime spending, and they’re limited in how much they can do this for yearly spending. ( Citation: Page 14, sec. 2711 )
  • Kids can continue to be covered by their parents’ health insurance until they’re 26.
  • No more “pre-existing conditions” for kids under the age of 19.
  • Insurers have less ability to change the amount customers have to pay for their plans.
  • People in a “Medicare Gap” get a rebate to make up for the extra money they would otherwise have to spend.
  • Insurers can’t just drop customers once they get sick. ( Citation: Page 14, sec. 2712 )
  • Insurers have to tell customers what they’re spending money on. (Instead of just “administrative fee”, they have to be more specific).
  • Insurers need to have an appeals process for when they turn down a claim, so customers have some manner of recourse other than a lawsuit when they’re turned down.
  • New ways to stop fraud are created.
  • Medicare extends to smaller hospitals.
  • Medicare patients with chronic illnesses must be monitored more thoroughly.
  • Reduces the costs for some companies that handle benefits for the elderly.
  • A new website is made to give people insurance and health information. (I think this is it:http://www.healthcare.gov/ ).
  • A credit program is made that will make it easier for business to invest in new ways to treat illness.
  • A limit is placed on just how much of a percentage of the money an insurer makes can be profit, to make sure they’re not price-gouging customers.
  • A limit is placed on what type of insurance accounts can be used to pay for over-the-counter drugs without a prescription. Basically, your insurer isn’t paying for the Aspirin you bought for that hangover.
  • Employers need to list the benefits they provided to employees on their tax forms.

8/1/2012

  • Any health plans sold after this date must provide preventative care (mammograms, colonoscopies, etc.) without requiring any sort of co-pay or charge.

1/1/2013

  • If you make over $200,000 a year, your taxes go up a tiny bit (0.9%). Edit: To address those who take issue with the word “tiny”, a change of 0.9% is relatively tiny. Any look at how taxes have fluctuated over the years will reveal that a change of less than one percent is miniscule, especially when we’re talking about people in the top 5% of earners.

1/1/2014

This is when a lot of the really big changes happen.

  • No more “pre-existing conditions”. At all. People will be charged the same regardless of their medical history.
  • If you can afford insurance but do not get it, you will be charged a fee. This is the “mandate” that people are talking about. Basically, it’s a trade-off for the “pre-existing conditions” bit, saying that since insurers now have to cover you regardless of what you have, you can’t just wait to buy insurance until you get sick. Otherwise no one would buy insurance until they needed it. You can opt not to get insurance, but you’ll have to pay the fee instead, unless of course you’re not buying insurance because you just can’t afford it.
  • Insurers now can’t do annual spending caps. Their customers can get as much health care in a given year as they need. ( Citation: Page 14, sec. 2711 )
  • Make it so more poor people can get Medicaid by making the low-income cut-off higher.
  • Small businesses get some tax credits for two years.
  • Businesses with over 50 employees must offer health insurance to full-time employees, or pay a penalty.
  • Limits how high of an annual deductible insurers can charge customers.
  • Cut some Medicare spending
  • Place a $2500 limit on tax-free spending on FSAs (accounts for medical spending). Basically, people using these accounts now have to pay taxes on any money over $2500 they put into them.
  • Establish health insurance exchanges and rebates for the lower and middle-class, basically making it so they have an easier time getting affordable medical coverage.
  • Congress and Congressional staff will only be offered the same insurance offered to people in the insurance exchanges, rather than Federal Insurance. Basically, we won’t be footing their health care bills any more than any other American citizen.
  • A new tax on pharmaceutical companies.
  • A new tax on the purchase of medical devices.
  • A new tax on insurance companies based on their market share. Basically, the more of the market they control, the more they’ll get taxed.
  • The amount you can deduct from your taxes for medical expenses increases.

1/1/2015

  • Doctors’ pay will be determined by the quality of their care, not how many people they treat. Edit: a_real_MD addresses questions regarding this one in far more detail and with far more expertise than I can offer in this post. If you’re looking for a more in-depth explanation of this one (as many of you are), I highly recommend you give his post a read.

1/1/2017

  • If any state can come up with their own plan, one which gives citizens the same level of care at the same price as the PPACA, they can ask the Secretary of Health and Human Resources for permission to do their plan instead of the PPACA. So if they can get the same results without, say, the mandate, they can be allowed to do so. Vermont, for example, has expressed a desire to just go straight to single-payer (in simple terms, everyone is covered, and medical expenses are paid by taxpayers).

2018

  • All health care plans must now cover preventative care (not just the new ones).
  • A new tax on “Cadillac” health care plans (more expensive plans for rich people who want fancier coverage).

2020

  • The elimination of the “Medicare gap”

.

Aaaaand that’s it right there.

The biggest thing opponents of the bill have against it is the mandate. They claim that it forces people to buy insurance, and forcing people to buy something is unconstitutional. Personally, I take the opposite view, as it’s not telling people to buy a specific thing, just to have a specific type of thing, just like a part of the money we pay in taxes pays for the police and firemen who protect us, this would have us paying to ensure doctors can treat us for illness and injury.

Plus, as previously mentioned, it’s necessary if you’re doing away with “pre-existing conditions” because otherwise no one would get insurance until they needed to use it, which defeats the purpose of insurance.

If you read through that whole thing, then you have a reasonable idea of what the health care law is going to do for people in this country. Fox News has immediately begun spinning Obama’s Supreme Court victory as a tax. How is it, however, a tax?

Essentially, it is the mandate. If you do not have health insurance and have enough money to afford it, you will have to pay a penalty fee (what is being called the tax) that comes down to about 1% of your total income. Approximately 6%  of the population will have to make a choice about buying health care or face the possibility of a penalty, as the demanding majority of the country already has some form of health coverage through traditional plans or senior plans.

That’s it. That’s the giant tax that will destroy the country, according to conservative rhetoric. Plans for health care will be provided through the state level, once the system gets rolling, and can then be adjusted according to the individual desires of each state. If you don’t have enough money to afford a plan, the government will help you. Pre-existing conditions are covered. College students and young adults can stay on the plans of their parents until they are 26. How are these changes perceived as bad?

Personally, I don’t see an argument against the law that makes sense to me. If you want to argue that the Federal government should not have this sort of control over the states, then I suggest you take up that argument with the majority of the (conservative) Supreme Court. I don’t mind this level of Federal control in my issues. By 2014 I will have to purchase my own type of health care, and I will gladly do so — it does not matter where it comes from, Federal or state.

I believe that health care should be mandatory. I believe that it should be provided to all. So, naturally, this ruling pleases me. I understand, though, that there are many who would disagree with this perceived encroachment of Socialism into the American political sphere. That’s fair. It is, at its core, an ideological issue that is harshly divisive. Informed dialogue and debate about the health care law is the best way to move forward into this election year.

Fox News and CNN are not good places to get news from. They are horrifically biased and do not impart intelligent messages to their respective audiences. The information that people need to know is information that can be found, but it must be found from original and non-biased sources (which are very few and far between). Whether, then, you agree with this ruling, find information about it on your own and draw your own conclusions. We are all intelligent enough to understand what our elected “leaders” understand in Washington. They aren’t special — they just have money.

This debate will be the focal point of the soon-to-come election, and both sides will talk around the issue, trying to display it as a “win” for their respective side. In my view, it is a win for the truly average American (who is not the 200,00+ a year American that this law taxes), and that is a good thing.

If I were a guessing man, I would guess that the health care ruling will, ultimately, favor Obama in November. Mitt Romney has the unfortunate history of creating the formula for “Obamacare” in his home state of Massachusetts. If the Liberal side of the argument frames it correctly, it is inescapable for Mitt Romney to dodge accusations of precedence.

Don’t let the rhetoric scare you. That’s all they want to do — scare you into preventing any type of change in the status quo. Get the facts.

Think for yourself.

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4 thoughts on “Health Scare

  1. The Capitalist Case for Government Health Care

    It is possible to argue for privatization in education, energy, retirement planning, venture capital, and other sectors while also arguing for government healthcare. This position is not self-contradictory. Why? Health care is different from most other industries because prices do not bring about market efficiency in health care they way they do in other markets. The main difference is that, in most industries, people can delay making purchases, such as going to college, buying a car, house, computer, or iPhone, and not die or become physically disabled.
    The same cannot be said for health care. People are forced to buy health care already. They are forced to buy health care because disease or accident forces them to. That a force of nature, and not a human being, forces them does not change the reality of the use of force. Just as the force of government leads to an inefficient allocation of resources in education and energy, the force of nature, of disease and death, leads to an inefficient allocation of resources in the health care market.
    The inefficiency happens in the following way. An individual who is dying of cancer will not delay a treatment for four years to wait and see if a better treatment comes out. Nor will a person bleeding to death choose to go to a hospital in a different city because the service there is better. Prices do not influence individual behavior in health care–that is the difference between health care and other industries. This difference has an implication: because prices do not influence customer behavior, there is no accountability mechanism in healthcare. Because prices influence behavior in education, private schools have incentive to provide superior service. But because prices do not influence behavior in health care, the incentive to provide superior health care mostly disappears.
    The main argument against government health care, that it would lead to an inefficient allocation of resources, is a non-starter because this inefficiency already exists. Yet another question arises: why should we replace the force of nature with the force of government?
    Although war analogies may be tiresome, they are actually quite appropriate with regards to health care. In a war, the U.S. federal government uses force, but it uses force to reduce the total amount of force used. If the U.S., for example, refused to conquer the Nazis or contain the Soviets, then the U.S. government itself might use less force, but a greater total amount of force–the forced used by foreign governments–would affect the world in general and possibly U.S. citizens in particular.
    This idea–of using force to reduce the total amount of force in existence in the long-term–also applies to crime fighting. The idea is that, if governments use aggressive force against criminals, there would be less force being used in general because criminals would not be able to use force against civilians.
    The problem with force is that, in addition to being inherently wrong in some cases, force also leads to inefficiency. If people are forced to make one decision, they are forced to not make other decisions which could be more productive for themselves and society. The great goal of any society is to reduce the total amount of force distorting people’s decisions. In some cases, such as war or crime-fighting, the use of force by government reduces the total amount of force. In other cases, such as education or energy, the use of government increases the total amount of force and negatively distorts individual decisions.
    How do we know health care is analogous to war and crime-fighting, and not to schools and oil rigs? Because of the extent to which natural force interferes with a person’s decision-making. Of course, any judgment of degree is ultimately an intuitive judgment which cannot be formulated into any perfectly symbolic process. Yet this is why we have legal systems in the first place, to restrain and add rigor to intuitive judgments. So we must ask what our intuition tells us: is delaying chemotherapy a decision subjected to same cost-benefits analysis as choosing to take a year off school?
    If the answer is “no”, if the degree to which the forces of nature distort economic decisions–and eliminate the accountability they imply–then government health care is not only acceptable. It is necessary in the same way crime-fighting is. It is necessary it reduces the total amount of force in existence, resulting in an increase in individual freedom.

    • Josh M. says:

      I had to read that a few times, but I got it in the end. It’s a strong argument — I wish I thought more in terms of economics, but it really does go quite over my head. Well said.

      • Thanks, your post gave me a ton of information, and you drove your point home. There’s a dozen different angles to issues like this. Thanks for being cool with me posting on here a couple times, it’s more fun to talk politics in a political “setting” than on Facebook in general haha.

  2. Josh M. says:

    It’s all good — Politics and Facebook can be a very tricky enterprise.

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