The Truth about Health Care Reform

Retired Congressman Dave Obey, with his intimate knowledge of the entire process, explains the basic facts about Obama's health care reform in his usual easy-to-understand, if blunt, way -- what it does for all of us, how it was passed, how it has been maligned, and how to discuss it with friends & family. A worthy read, and feel free to pass it on:
 

Dave Obey

Statement of Congressman Dave Obey (ret) July 12, 2012

IT’S LONG PAST TIME FOR HEALTH CARE REFORM

It is time to finally end the rear guard attacks on the new health care reform act and pull together to make it work.

Let’s start by remembering why we took on the issue in the first place.

We did it because we faced two problems.

First, we faced a profound moral problem. Health is at the very core of a decent life. Next to love, health is probably the greatest most desirable aspect of any human being's life. But a full decade into the 21st Century, although we are the most powerful, the most dominant and the richest society in the world, quality health care has been beyond the reach of almost 50 million Americans. For many of them, health care has been rationed by cost. And, for many who did have ready access to it, that access could be taken away in a flash.

You could suddenly find it beyond your reach:

If you lost your job; If your insurance companies abandoned you in your hour of greatest need because you, your spouse or your child had a preexisting condition or because you passed your lifetime limit on what insurance would pay; If you were divorced; If your employer went out of business; If you changed jobs. The second problem we faced was economic.

Skyrocketing costs--a 130% cost increase in 10 years; 1/2 of housing foreclosures were caused by medical bills (in my Congressional District alone in one year, 900 families lost their homes because of medical bills; Free riders—today many people who would rather skip on paying anything for their health care bet on staying healthy. If they guess wrong, they send the bill to their more prudent neighbors --a bill of $1,000 per year; Health providers are also being paid on the basis of the number of procedures rather than on the quality of treatment—exactly the wrong incentives if you want to save money.

For 100 years, we failed to do something about the fact that we were the only modern western society that in effect said: “I’ve got mine, screw you!” to those without insurance who were unlucky in their genes or life’s circumstances.

1912, Teddy Roosevelt first raised the issue. 1929, Baylor University originated group health insurance which grew into Blue Cross. 1935, FDR wanted to pass universal health care but settled for only doing Social Security. 1942, FDR imposed price and wage controls during WWII. To attract good workers, businesses provided health benefits as a substitute for higher wages. 1947, Harry Truman fought for and lost the effort to provide national health insurance. 1954, President Eisenhower proposed a plan to help health insurance companies cover health care losses. It failed. 1961, JFK proposed Medicare. I remember as a college student participating in “Operation Support” to help promote it. He died before he could get it passed. 1965, Lyndon Johnson passed Medicare and Medicaid. I served on the Wisconsin task force that wrote the Wisconsin Medicaid law. We were attacked then as promoting “socialized medicine”. I thought it was a godsend regardless of the label. 1971, President Nixon pushed a plan to cover all Americans with private insurance, required employers to cover their workers, and provided federal subsidies to buy insurance. Sound familiar? It failed. 1993, President Clinton tried again and failed again. 2010, 98 years after Teddy Roosevelt called for it, President Obama finally passed this long overdue reform. All along the way, it has been attacked as socialized medicine and a threat to freedom.

Let’s look at those silly charges.

Socialism? Nonsense! Most people who parrot that line don’t even know what socialism is. The dictionary defines it as “an economic system under which the Government owns and administers the means of production and distribution of goods.”

Let’s see. Under the new bill:

Are doctors and nurses owned and employed by the government? Nope! Are hospitals owned by the government? Nope!

How about the second charge--that Obamacare is a government takeover of insurance?

The truth is just the opposite!

The very first decision made was not to set up a Canadian style single payer system— not even a Medicare for all system.

Now keep in mind that is what I would have preferred. But we could count; we didn’t have the votes. So the decision was made to build on the preexisting system of private insurance with government filling the gaps.

Instead of setting up government run health care, on a state by state basis (no one size fits all) we set up a system to supplement employer based private insurance. Under that, in all 50 states, we set up a system to allow private insurance companies to offer competing plans through state run clearinghouses to people who did not get insurance from their employers.

That is similar to the way that the federal government, for years, has provided a clearinghouse for private insurance companies like Blue Cross, Aetna, and Kaiser to offer competing private plans to Federal employees -- exactly the opposite of a government takeover of insurance.

Now the third point of attack on Obamacare is the dreaded “mandate” which requires people who can afford it, to buy private insurance with help from government subsidies geared to income and family size. Opponents attack it as if the mandate is a left-wing commie pinko dream. In fact, it originated with conservatives:

Richard Nixon called for it; Romney called it “ultimate conservatism;” The Heritage Foundation—Ronald Reagan’s favorite think tank—called for it;

You know, politics is funny strange. I thought personal responsibility was a conservative value.

Loss of freedom? Really?

Why should you have the “freedom” to gamble that you won’t get sick when, if you guess wrong, the consequences are visited on someone else? Why should you choose not to buy your own insurance and if you guess wrong and wind up in the emergency room, shift the bill to your more prudent neighbors who did get insurance?

That so called “freedom” costs the average person who does pay for health insurance, $1,000 per year. Nationwide over $40 billion a year in uncompensated care is transferred to those who pay.

Now, I believe that, morally, health care is a right. But, that doesn’t mean you should get a free ride if you can afford to help pull the wagon.

What is wrong with saying everyone but the very poor should at least pay something for their own care--especially when the plan provides subsidies to help you pay.

In that way, you are being both personally responsible and socially responsible at the same time.

Now the mandate is also being attacked as a huge tax. The fact is it will only be imposed on about 2-3% of the population. No matter what you call it - a penalty or a tax – it will only be imposed on people who, up to now, have been free riders.

Now let’s a look at the 4th attack--that we will hurt seniors because of Medicare cuts. Just the reverse is true.

The bill specifically prohibits cuts in benefits and it eliminated the donut hole for prescription drugs for seniors which will save 5 million people about $600 per person.

Medicare is expected to spend $8 trillion over the next decade. Obamacare calls for cutting about 5% of that $8 trillion by targeting waste, fraud and abuse.

Does anyone who has ever dealt with medical bills believe that there is no waste or fraud in the system? That’s why we have task forces to go after Medicare fraud and recover billions for the taxpayers.

The bill also sets up, at the request of providers like Marshfield and Mayo, pilot programs to base payments to doctors and hospitals on quality of outcomes, not the number of procedures.

What else does the bill do when it goes into effect in a major way in 2014?

The vast majority of people who get insurance from employers will still do so.

In return for requiring all but the very poor to buy insurance:

Insurance companies have to give up the ability to discriminate against you, your spouse or your kids because of a preexisting condition. Insurance companies have to give up the right to drop you or jack up your premium if you get sick. Insurance companies have to give up the right to put lifetime limits on what they will pay if your family develops an extensive illness. Insurance companies have to give up the ability to charge small businesses and arm and a leg more than they charge large companies for the same coverage.

What about small businesses?

If you own a small business with fewer than50 employees, you are exempt from having to provide health insurance to them. If you employ fewer than 25 people and want to provide coverage, you will be eligible for tax credits to help cover costs. If you employ more than 50 people, or are a smaller firm that volunteers to provide coverage, you will be able to receive more affordable large group rates.

Before the new legislation passed, the number of small businesses providing health insurance declined from 70% in 2000, to 60% a decade later. Since passage, that percentage has remained the same at just under 60%.

What else does it do?

If you have several part-time jobs that have no coverage or if you are divorced and can’t keep your spouse’s coverage, you are eligible for subsidies to purchase private insurance through the new insurance clearinghouses that will be set up in every state. You can comparison shop on the basis of your income and the subsidies you will be eligible for. If you are a farmer or an individual, you can buy coverage from the insurance clearinghouse using tax credits to make it affordable. In my own State of Wisconsin, 640,000 seniors will receive free preventative care and over 40,000 young adults up to age 26 are now covered by their parents plan. In my old Congressional District alone, 17,000 small businesses will get financial help to make coverage affordable.

So the bottom line is this:

Insurance for those who already have it will be more reliable. For the very poor, with income below 130% of poverty-about 15,000 for an individual-you will be eligible for coverage under expanded Medicaid, unless right wing governors try to block that assistance. Half of the 30 million uninsured who will gain coverage will now be eligible under Medicaid. The remainder will be able to buy insurance on their own with most eligible for income-based subsidies.

Now, this plan is very different from my fist preference. It is more complicated and less efficient than I wanted. I would have preferred Medicare for all. But, after 100 years of failure, this is the approach that we could get the votes to pass, in the teeth of fierce opposition to doing anything meaningful at all.

Some will continue to attack us for passing a bill without significant Republican support. My response is that, sadly, if we had waited for that, we would have waited forever.

The only version that they were willing to vote for was an approach that did next to nothing. This bill provides coverage to 33 million more people. The only approach offered by Congressional Republicans covered only 3 million people-–a 10% solution, political tokenism.

Congressional Republicans have now tried 31 times to eliminate or repeal the bill. If they had spent as much time working with us to improve the product as they did to kill it, we would be a lot further down the road to successful implementation.

But history tells us we should not be surprised by their foot dragging or their obstruction. Congressional Republicans promised that they would not move to repeal until they had an alternative in place. They are still nowhere near having one.

That has been the pattern of Congressional Republicans, going all the way back to the passage of Social Security.

When Social Security was before the Congress in 1935, they tried to kill it. 91% of Congressional Republicans first voted to kill Social Security. Only when that failed did they reluctantly switch and vote for it, because they were afraid FDR would scald them when they didn’t.

When Medicare was up for passage in 1965, the pattern was the same. 90% of Congressional Republicans first voted to kill Medicare. Only when that vote failed, did they switch to yes on final passage.

Their resistance to this bill is in that same tradition.

Their effort this year and last on the budget fight to eliminate the guarantees under Medicare shows their persistent antagonism toward Social Security, Medicare, health care reform, and other related parts of the national safety net.

Today, we hardly remember the fights over the details of Social Security and Medicare; we are just thankful we have them on the books. Twenty years from now, we will feel the same about health care reform. One more forward step to make this a more decent society.

We will adjust and refine this package as we move forward and can see how it works in practice. It will need to be strengthened and adjusted regularly, just as we have done with Social Security and Medicare through the years. And in the process, we will have improved the lives and the health of millions of Americans.

That’s not a bad thing to do, even if it took 100 years. That is what our government was created to do--to promote the general welfare.

To Tea Party resistors, I would simply say: “It’s in the Constitution!”

You know, in the first part!

In the Preamble, which all of us were supposed to memorize in high school.

It’s never too late!

Paid for by A Lot of People for Dave Obey

P.O. Box 1322 Wausau, WI 54402