Subsidies to cover uninsured critical to health overhaul

Covering the uninsured - a leading principle of health care reform - depends on the critical issue of who gets subsidies to pay for health insurance coverage and when.

The New York Times: "All the bills offer some kind of assistance to lower-income people who do not get health benefits through the workplace. The bills would provide premium subsidies to millions of people and would establish limits on consumers' out-of-pocket costs. But lawmakers and consumer groups say insurance could still be out of reach for many families with modest incomes who receive small subsidies or none at all."

"Subsidies are a major factor in the cost of the legislation, and lawmakers are desperately hunting for ways to pay for it. The Congressional Budget Office says the government would spend $773 billion on subsidies from 2013 to 2019 under the House bill" (Pear, 7/26).

Kaiser Health News: "As Congress continues to try to scale back the costs of health care legislation, some patient advocates, health care policy analysts and lawmakers fear the plan may be pared to the point of leaving millions of Americans with either inadequate benefits or large out-of-pocket costs." Drafters are trying to cap out-of-pocket expenses at $5,000 for individuals and $10,000 for families, but more cost-sharing seems to be gaining ground in Congress. "In a bill recently approved by the Senate health committee, insurers would be required to cover at least 76 percent of health care expenses incurred by the average plan member, and the Senate Finance Committee is considering setting the requirement at 65 percent (Rau and Pianin, 7/27).

The Washington Post: "As health care consumes more and more of the total economy, it reduces the money available for other expenditures. The question is whether Americans are getting a good return on the investment. Achieving Obama's goal, say [Budget director Peter] Orszag and other experts, requires covering every American, digitizing records, encouraging healthy behaviors and, perhaps most important, rewarding medical teams that deliver evidence-based care rather than those with the highest volume. … The amount of money (spent on health care) is not the problem, said former Bush administration official Mark B. McClellan -- it's what we get for it. 'If we're living longer, better lives, that health-care spending is a good thing,' he said. 'The problem is that a lot of that spending is not leading to productive improvements in the quality of life'" (Connolly, 7/26).

The New York Times in a second story says it's who sets costs, not who pays them, that will affect reform and quality in the United States: "Last week's back and forth, when Congressional Democrats squabbled and Mr. Obama took his case to the public, highlighted how difficult his task will be. Reform of health care has the potential to threaten profits and incomes that make up one-sixth of the economy. More daunting, perhaps, Americans seem to have great trust in their doctors - more, certainly, than they trust the government on medical matters" (Leonhardt, 6/25).

Kaiser Health News, in a separate story, reports on asking insurers to foot more of the bill: "...the ideas [legislators are] exploring, including taxing companies that sell costly policies and imposing a 'windfall' tax on profits, all have drawbacks and could have unintended consequences. … Insurers say they are doing their share by promising to stop rejecting applicants with medical conditions if health reform legislation also includes a requirement that almost every American carry insurance." Ideas on taxing insurers include taxing them for policies with high premiums, taxing their profits, taxing each sale of a new policy, ending tax-free coverage or ending or capping the tax exclusion for workers (Appleby, 7/24).