I have not done a complete analysis of the bill. I just came back from California and am still recovering from my In-N-Out animal style burger feast. There's also the NCAA college basketball tournament where I now have no regrets that I didn't fill out a bracket due to all the upsets. However, the passage of this House bill and improvement in some provisions might have been the biggest upset of the weekend.
To reiterate, the bill is not a government takeover, socialism, or a case of dictators not doctors. I do love how the right manages to accuse the Obama administration of socialism and fascism at the exact same time. In its simplest forms, the bill simply requires everyone to have insurance and forbids insurance companies from denying insurance to anyone. To pay for it, the Medicare payroll tax is raised on the wealthy, some high end or Cadillac plans (although this provision was gutted like the Kansas Jayhawks basketball team) lose their antiquated tax exemption, and health care companies pay more as an entry fee to being 1/6th of the American economy.
You can find a good summary here. Here are the new provisions that got me excited:
1. Primary care doctors will get paid more by Medicaid: Medicaid payments to primary care physicians and pediatricians will be increased to the same payment levels as Medicare. Keep in mind, that's not all doctors but just the primary care physicians. Primary care is finally getting the respect that it deserves. At med school reunions, they can start to make fun of urologists who sold out by making a career choice to look at penises all day.
Given there are complaints about how little Medicare pays, you can imagine how little Medicaid must pay if it needed to be raised to Medicare levels. Since Medicaid will be expanded to cover more people, doctors needed to be paid higher than current levels. This will dramatically increase the odds of a Medicaid beneficiary being able to get a doctor's appointment before 2014. This provision was so logical that even the Republicans thought that it was a good idea and they weren't even paying attention.
2. Medicare Advantage payments are getting fair: Seniors sacrifice in health reform was the loss of benefits for those with Medicare Advantage plans. However, not all seniors were treated equally. Health plans received 50% more money from the government to offer Medicare Advantage plans to seniors in Florida than to seniors in Oregon. As a result, seniors in Oregon did not have access to the same level of benefits. Nor did they have access to the same level of providers who are also paid less in Oregon than in Florida for services. These are the results of antiquated payment methodologies. This bill works to correct that by paying 5% less to Florida Medicare Advantage plans and 15% more to Oregon Medicare Advantage plans. There will still be hair cuts in overall payments but Oregon will just get a trim while Florida gets the mohawk that its needed for a long time.
Overall, there will still be cuts to Medicare Advantage plans but the party had to stop eventually.
3. Congress is starting to understand the importance of the mandate to purchase insurance: If no one can be denied insurance coverage, than everyone needs to purchase insurance to keep costs from blowing up like most people's NCAA tournament brackets. In previous versions, the penalty for not buying insurance was so low, that people would probably ignore the mandate. This is like removing one leg on a stool with 3 legs. Individual mandates goes together with no denials for coverage like peanut butter goes with chocolate, like Batman and Robin, like child movies stars and drug overdoses. I think that you get the idea.
The penalty for not buying insurance was increased slightly, from $695 to $750 in one version of the penalty. That increase is probably too small to actually change behavior so that's why I'm celebrating that Congress is starting to understand. They haven't quite fixed it.
4. Death Panels for our grandparents and more money for abortions for babies! You betcha! Actually, no. No cross generational jihad was ever really planned but some folks who had no actual ideas for health reform needed something to talk about.
There will be some unanticipated consequences, of course. That's the fun part of looking at legislation, kind of like trying to guess which #3 seed in the NCAA tournament will lose in the first round.
For example, the improvement of the individual market and penalties on large employers (those with 50 or more employees) who don't provide affordable insurance will probably result in employer dropping coverage. They may give employees some extra money in their flexible spending accounts to go buy insurance on the open market. However, that is not a terrible consequence as employers who are uninterested in offering health insurance or can't really afford it, can get out of the health insurance business.
The doughnut hole in the Medicare prescription drug plan will likely be filled. I always thought the doughnut hole was an elegant benefit design that was unfairly attacked. It simply provides a powerful incentive to slow down on the prescription drugs use. However, if someone really needs all that Viagra, there is a catastrophic cap after the beneficiary has spent a certain amount of money for their erections. It provides an incentive to limit utilization and a cap or protection for those who need it.
Wonkish analysis of geographic disparities in Medicare payments aside, this bill make the United State a more humane country. In 2014 when the provisions are all in place, we will no longer be a lay off away from not being access medical care. Also remember that desegregation was met with huge protests in its time.
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