Analysis of the House Health Reform Bill

Over the weekend the U.S. House of Representatives passed landmark legislation to finally reform health care in a meaningful way. I just read an analysis of the legislation by the Center on Budget and Policy Priorities that I think is a must read. Although I encourage you to read the entire analysis, here are the highlights:

About those deficits

The analysis cites Congressional Budget Office (CBO) numbers stating that the bill's cost will be more than fully offset by reducing deficits by $129 billion over ten years. In short, the bill's revenues and spending reductions would grow faster than the cost of the coverage provisions. The CBO estimates that the bill would actually reduce deficits in years after 2019 as well.

Expanding Coverage

CBPP finds that under the House bill that 96 percent of non-elderly legal residents would have health insurance by 2019. The bill would reduce the number of the uninsured by 36 million (or two thirds) by 2019. The House bill would cover 7 million more of the uninsured than the bill that the Senate Finance Committee approved earlier this month.

Slowing Health Care Costs

The bill would take a number of steps to increase efficiencies, particularly within Medicare, to lower costs while improving quality. The CBO estimates that the bill would significantly slow Medicare's growth rates because of these various measures.

Reforming Health Insurance Market

It would bar insurance companies from denying coverage because of preexisting conditions and it would limit how much an insurance company can charge simply based on an applicant's age. It would also set minimum standards for what insurance companies can offer including an annual cap on out-of-pocket costs and a ban on annual or lifetime benefit limits. The House bill would also establish a national insurance exchange in order to make a wide range of options available to individuals and small businesses. That exchange would include a public option (among many other options) that would help create real competition in the insurance market and reduce costs for consumers.

Other Important Measures

• Expanded Medicaid Eligibility for the lowest-income people
  
• Premium and cost-sharing credit for those with low and moderate incomes
  
• Shared responsibility requirements for both individuals and employers
  
• The elimination of Medicare Advantage overpayments
  
• A surcharge on very high-income households
  

Reading this kind of an analysis makes me wonder just how much we could have saved by reforming health care a long time ago. Not just savings by individuals and employers but also government entities both large and small. We know that the massively increasing health care costs are a major factor in the budget problems being faced by government on all levels. For example, how much different would the Milwaukee County budget look right now if real health care reform was enacted in this way years ago? Hopefully we can look back on this landmark legislation in a few years and objectively look at the facts. Until then we can only hope that our representatives in Congress don't fold to political bullying from the extreme right and instead opt for real solutions and real reform.