Media coverage of health reform lately has centered on the legislative horse race, as we knew it would. The press has gone wild covering nearly every twist and turn in the chase to get bills passed by the full House and Senate before the August recess—even to the point of a stakeout during deliberations of the Senate Finance Committee. Will the president make his timetable? What does Dick Durbin have to say? What’s the financing option du jour? Which Republicans will play ball with Max Baucus? What are the Blue Dogs barking about now? It has been optimism one day, pessimism the next. This sort of coverage has two downsides: it misses what the special interests are up to, and it shortchanges the public—which needs to know how health reform would affect them.
Some details are slowly leaking out, and they’re crucial for anyone who wants and needs help judging if the pols are telling the straight story. Three recent stories caught my eye because they raise questions whether reform will mean much of anything to the millions of people who have been led to believe the promised land of health reform is near.
In mid-July, a good story by Kaiser News Service reporters Julie Appleby and Mary Agnes Carey started in this engaging way:
President Barack Obama and leading Democrats have stressed that people who like their employer-sponsored insurance would be able to keep it under a health care overhaul. They haven’t emphasized the flip side, however; that people who don’t like their coverage might have to keep it.
The reporters began to crack open a question we’ve been asking: Who really will be able to use the much-contested public plan option? It turns out that the public option may not be so public. The piece quotes Jonathan Oberlander, a professor at the University of North Carolina and an expert featured in our Excluded Voices series, saying that the reality is they (legislators) are erecting firewalls that will prevent people with employer-sponsored insurance from buying a policy through a health insurance exchange—that brokerage-like arrangement that, reform advocates hope, will facilitate consumer choice. One result, said Oberlander: “Any public plan would be substantially smaller and less powerful than many backers are envisioning.”
The point of these restrictions, of course, is to protect the market for private insurers and to maintain “a strong employer-based insurance system.” It’s to avoid “crowd-out,” a phenomenon in which people will choose a lower cost, perhaps more comprehensive government option—to the detriment of private market competitors. In Massachusetts, there are rules that prevent residents with employer coverage from receiving subsidized coverage. The takeaway: Will Americans actually have the choice that pols keep telling us they want?
A column by Martha Burk on the Huffington Post dared to raise the issue of “age-rating.” First, let me explain: age rating is what insurance companies do when they are deciding what premium to charge someone. In most types of health insurance that you buy on your own—-for example, Medigap policies, long-term care insurance, and basic health coverage—the older you are, the more you will pay. This is how insurers compensate for the higher risk of illness an older person presents.
Burk wrote an illuminating post discussing the current deal the industry seems to have struck—companies could not deny coverage because of someone’s sex, if policyholders have filed claims, or if they have preexisting conditions. All sounds good, doesn’t it? But what about age-rating, Burk asks? Can companies do that as a way to get their pound of flesh? She concludes: “Since everybody knows older people are more likely to have preexisting conditions, it’s a back door way to replace exorbitant premiums for preexisting conditions with exorbitant premiums for being older.”
There may be limits on how high premiums can go, but Burk points out that the Leadership Council of Aging Organizations has found that, for those of modest means who won’t qualify for subsidized coverage, age rating could push premiums to as much as 25 percent of pre-tax income. That would greatly affect older, single women who have less income and are more likely to have no employer coverage. AARP, by the way, did not sign a letter of protest to the Senate Finance Committee. The takeaway: Will allowing insurers to age rate make coverage unaffordable for many?
Robert Pear at The New York Times zeroed in on the affordability problem another way. He quoted Oregon Sen. Ron Wyden candidly saying “there are some questions” about whether insurance would be affordable: “People who are making $50,000 or $60,000 a year and are spending $13,000 on health insurance may not get much of a subsidy.” The amount of the subsidies and who is eligible for them will depend on how much money Congress finds to cover the cost.