Proposals may limit health insurance choices and squeeze some middle earners

"President 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. But they haven't emphasized the flip side: That people who don't like their coverage might have to keep it," Kaiser Health News reports.

"Under the main health bills being debated in Congress, many people with job-based insurance could find it difficult to impossible to switch to health plans on a new insurance exchange, even if the plans there were cheaper or offered better coverage. The restrictions extend to any government-run plan, which would be offered on the exchange." But "there are a few exceptions: Workers would be allowed to buy insurance through the exchange if their job-based coverage gobbled up too much of their incomes or was too skimpy. Also, under the House proposal, people could get insurance through the exchange if they paid their entire premiums- a cost that would be prohibitive for many workers."

Some critics say the rules "could be especially unfair to some lower-income workers who are enrolled in costly job-based insurance. Also, they argue, the restrictions would hurt the proposed public plan by limiting enrollment." But "lawmakers and some health care analysts say that legislation has to create barriers around the exchange to protect the stability of the employer-provided insurance market. Without the restrictions, called firewalls, younger and healthier workers, they say, might find cheaper options on the exchange, leaving older and sicker workers in their employers' plans-and driving up their costs" (Carey and Appleby, 7/15).

The Wall Street Journal reports that the proposals requiring individuals to carry insurance "could squeeze a small group of middle-income earners who make too much to get the government's help buying insurance, but aren't so wealthy they can easily absorb the high cost of coverage," The Wall Street Journal reports. Lawmakers have proposed to help low-income Americans by expanding Medicaid and providing subsidies to help them buy insurance. "Under a proposal unveiled this week in the House, the subsidies would be available to individuals with incomes as high as $43,000 a year and a family of four earning as much as $88,000 a year. Those who fail to comply would pay a penalty of 2.5% of their income, levied when they file their annual tax returns."

But "people with incomes just above the subsidy line could consider the mandate a burden. 'They'll be put in this funny dilemma where they can't afford health care, but they have to pay a fine,' said Richard Kirsch, national campaign manager for liberal advocacy group Health Care for America Now." The Senate Health bill and the House bill both "contain a provision that could help those who rise just above the subsidy cutoff. It would grant those who can't afford insurance a 'hardship' waiver that would exempt them from the mandate. But the details might not be determined until after Congress passes legislation" (Adamy, 7/16).

Meanwhile, "The New Jersey Health Care for America Now Campaign released a report Wednesday that details how minorities are adversely affected by what the organization sees as the nation's broken health care system" and "emphasized the need for health care reform that corrects what HCAN believes is inequality and an injustice," NewJerseyNewsroom.com reports. Raymond Castro, senior policy advisor for New Jersey Policy Perspective, said "The much lower rates of health insurance and poorer health outcomes for African-Americans and Latinos compared to whites in the wealthiest state in the nation should be an embarrassment to all of us, and a call to action." Proposals currently being considered by Congress, activists say, would "offer one of the best opportunities since the creation of Medicare and Medicaid in 1965 to erase persistent health disparities" (Hester, 7/15).