For those without coverage: The president finally articulated the individual mandate—that those without coverage from another source will have to buy it. That was something he did not support when he was running for president. Remember, he was going to require coverage only for kids? But as part of a bargain with insurers, everyone has to buy coverage or the carriers won’t agree to clean up their act. Basically it boils down to this: everyone, sick or well, has to be in the individual market’s risk pool in order for insurers to agree to cover those who are ill.
But last night the president did not talk about the fines and potentially steep tax penalties that will be assessed on those who don’t purchase coverage. Nor did he talk about the taxpayer-funded subsidies that some people will get to help them buy this insurance. (Who will get help and who won’t is still a very big missing detail.) Instead, he said that the cost of the subsidies would only amount to $900 billion over the next ten years—less than the cost of the wars in Iraq and Afghanistan and the tax cuts to the wealthy. That apparently was still a lot for some of the people whom The Wall Street Journal interviewed. One man told reporters: “I’m all for coverage for everybody. But as a small business owner I don’t want to pay for it.”
The president more or less explained the new insurance exchange, a kind of glorified insurance brokerage service offering an assortment of policies to facilitate shopping—restricted, of course, to individuals and small businesses. He said that “these customers will have greater leverage to bargain with the insurance companies for better prices and quality coverage. This is how large companies and government employees get affordable coverage.” Did he really mean that these loosely connected shoppers were going to have the clout to bargain with the likes of Partners HealthCare system in Boston and Blue Cross?
What he didn’t say was that these individual market policies are likely to be age-rated, meaning that an older person will pay much more than someone younger. The Senate Finance Committee draft bill would have them pay as much as five times more.
For those on Medicare: The key things he told elders were that he would not privatize Medicare and turn it into a voucher system—“that will never happen on my watch” –and that cuts in overpayments to Medicare Advantage plans were still on the table. He said that not one dollar from the Medicare trust fund would be used to subsidize the uninsured—a bit of inside-the-beltway jargon that probably doesn’t mean much to most beneficiaries. What he was saying was that he was not going to rob Peter to pay Paul, and that his plan would eliminate the “hundreds of billions of dollars in waste and fraud as well as unwarranted subsidies in Medicare that go to insurance companies.”
Aside from setting up a commission to find waste and fraud, he didn’t say how this would be eliminated. Cutting payments to Medicare Advantage plans is easier, and an issue on which Obama has shown consistency. Cutting the overpayments is likely to stop insurers from offering these plans that many consumers like because they may offer extra benefits and cheaper premiums. It’s fair to expect a big debate before this thing is settled; no doubt insurers are already mobilizing their grassroots on this one.
Obama reassured seniors that the government had no plan to set up “panels of bureaucrats with the power to kill off senior citizens.” “Such a charge would be laughable if it weren’t so cynical and irresponsible,” the president told them. “It’s a lie, plain and simple.” That line then led to his assurances that his plan would not cover illegal immigrants and to the statement from South Carolina congressman Joe Wilson that the president was lying. That was a media-ready remark made in heaven.