Frequently Asked Questions about Health Insurance Reform
Uninsured vs. Costs
Insurance Exchange & Public Option
Health Insurance Reform will end current forms of rationing, not expand it.
First, there is widespread rationing in today’s system. Right now, decisions about what doctor you can see and what treatment you can receive are made by insurance companies, which routinely deny coverage because of cost or the insurance company rules. Health reform will do away with many of those rules that result in rationing today.
Health Insurance Reform will prevent insurance companies from denying coverage because you have a pre-existing condition; prevent them for canceling coverage because you get sick; ban annual and lifetime limits on coverage, which often force people to pay huge sums out of pocket if they develop a serious illness; and prevent discrimination based on gender.
With health insurance reform, we will also put treatment decisions back into the hands of doctors in consultation with their patients.
One of the reasons we spend too much on health care today is that our incentives are perverse: Doctors are paid by the procedure, rather than for quality. We want reform that rewards quality of care not quantity of procedures. Having dozens of procedures doesn’t necessarily make you better. In fact they can make you worse. Right now roughly 100,000 Americans die every year from medical errors, which, in many cases, were the result of treatments that were wrong for them. We want to reduce preventable hospital re-admissions that are frequently caused because patients are not getting the right care in the first place. We want to give doctors the ability to make the best treatment decisions for you and your family.
Controlling health spending is critical for the fiscal health of the federal government and the states. For example, health care spending today consumes 30 percent more of state and local budgets than it did 20 years ago, forcing governments to choose between cutting services and raising taxes.
And the Council of Economic Advisors recently released a sobering report on the impact of health care spending on the federal government. It found that if we do nothing by 2019,
- Health care expenditures will be 21 percent of GDP—one fifth of our economic output.
- Spending on Medicare and Medicaid will be 8 percent of GDP.
- Nineteen percent of the non-elderly population, or 54 million Americans, will be uninsured. The cost of caring for the uninsured burdens all of us. Families with insurance pay a hidden tax of $1000 to cover the cost of uncompensated care in this country.
For working Americans who rely on employer-sponsored health insurance, rising costs mean that an even greater proportion of their compensation will be in the form of health benefits rather than take-home pay. In ten years, the estimated percentage of average total worker compensation that comes in the form of health insurance will be 26 percent.
- Resources that are devoted to health care cannot be used to provide the other goods and services that Americans want, including education, investment, and infrastructure.
- The federal deficit will continue to rise and, if meaningful health care reform is not enacted, more painful choices about how to deal with our unsustainable fiscal situation will be unavoidable in the future.
- That is why the President has been clear that he will not sign a health care reform bill unless it is deficit neutral and on a stable trajectory as the decade ends.
- We have to expand coverage and bring down costs for families as well as transform health care so that it costs less and delivers high quality in years to come. Adding more people to a broken system will only cost us more in the long run.
The majority of the initiatives that would pay for reform will come from cutting waste, fraud, and abuse within existing government health programs; ending big subsidies to insurance companies; and increasing efficiency with such steps as coordinating care and streamlining paperwork. We want to take money that is already being spent on health care and re-allocate it toward reforms that lower costs and assure quality affordable health care for all Americans.
The cuts we are talking about involve spending that currently does not improve care for Americans. For example, we would save $177 billion in unwarranted subsidies to the insurance industry in the next ten years and put that money into actual care for people. These and other reforms will strengthen and stabilize Medicare.
But it’s not enough to stop there. Health insurance reform must also encourage the kinds of reforms we know will save money in the long run: preventive care; computerized record-keeping; and comparative effectiveness studies to expose wasteful procedures and hospitalizations and give doctors the tools to make the right treatments for you.
We currently spend more than $2 trillion dollars a year on health care. Health insurance reform will make a short-term investment of roughly $100 billion a year to lower costs and relieve the crushing financial burden that is eating into family budgets, forcing families into bankruptcy, making it hard for businesses to expand and grow, and preventing the government from using your tax dollars to create jobs, improve education, rebuild our infrastructure. Health insurance reform would be fully paid for over 10 years, and it would not add one penny to the deficit.
Let’s also remember that we can’t afford not to reform health care. The cost of inaction is too high. Health care spending has grown in recent years three times faster than average wages. Premiums have doubled in this decade. Out of pocket costs for people with insurance have gone up by 32 percent. Businesses are buckling under health care costs. One out of every six dollars in this country is spent on health care. Soon it will be one in five. If we do nothing, in 30 years, one third of this country’s economic output will be tied up in the health care system. Health care is the fastest-growing item in the federal budget. It is absolutely unsustainable. These costs are crushing families and businesses, keeping wages flat, stunting our economic growth, strangling our government. We have to bring costs under control now.
American families with insurance pay a hidden tax of roughly $1000 for the cost of caring for people without insurance. As more Americans become insured, that hidden tax will begin to disappear. In addition, covering everyone will put downward pressure on costs. Bringing younger, healthier people into the system will spread the risk. As more Americans become covered, insurance companies will compete for their business. That will begin to lower costs. And health insurance reform will create stability and security for everyone. If you lose or change jobs you will have the peace of mind of knowing that you will always be able to find an affordable health insurance option for your family.
The savings being proposed from Medicare won’t harm patient care. In fact it will improve it. We are talking about eliminating billions of dollars in overpayments to insurance companies that do nothing except benefit the insurers’ bottom lines. We will go after waste, fraud and abuse that do not improve care for seniors. Not only will these changes enable us to improve the quality of care for seniors, they will stabilize Medicare and put it on better financial footing.
What’s clear is that if we don’t begin to rein in escalating health care costs, Medicare will be threatened over the long-run.
Health reform will benefit seniors in many ways:
- We are committed to shrinking the donut hole in Medicare Part D that has forced so many seniors—more than 4 million every year—to pay exorbitant costs out of pocket or go without the drugs they need.
- We are also committed to creating a pathway for the approval of generic biologic drugs. Cutting-edge biologic medications are currently very expensive and are out of reach for many seniors. It is important to make generic versions of these drugs available as soon as possible.
- For those of you who retire between the ages of 55 and 64, health reform will provide financial assistance to employer health plans that cover early retirees, bringing down health costs and premiums by as much as $1,200 per family per year for some plans.
- We want to strengthen preventive care under Medicare—no co-payments for checkups and wellness visits. Much of the money we spend on health care goes to treat chronic diseases which could be prevented from becoming more serious if patients received more preventive care. Preventive care is especially important for seniors, because it will increase the chance that your doctor can catch an illness in its early stages.
- Most importantly, by reducing waste and improving the efficiency of Medicare, the Administration will strengthen the program to be sure it is always there for you and the generations to come. As you know, the Medicare Trust fund is projected to run out of money in about 8 years. Health insurance reform would extend the life of the fund for additional years—through at least 2022—and give it greater stability and security.
A lot of seniors seem to be concerned about a provision in the House bill that would provide counseling for end of life care. They think it sounds like the government will come along every five years and require you to talk about how you want to end your life.
This provision, which has been supported by the AARP, would allow senior citizens access to a professional medical counselor who will provide them with any information they might need about preparing a living will, providing medical power of attorney, and—if they are seeking this kind of advice—end of life decisions. These counseling sessions are not mandatory; they are simply made available to those who wish to use the service because they are unable to receive the information from another source. This means that if a senior is seeking such advice and guidance, Medicare would cover it. This measure would allow Medicare to compensate doctors for discussing with their patients the most difficult care choices—those that happen at the end of life. It would actually empower individuals to make the best decisions for themselves and their families, and better ensure that their wishes will be followed.
The health insurance exchange is a marketplace that will offer affordable high-quality health insurance options. It will provide relief to families who have no insurance or do not get adequate insurance at work and cannot afford to buy it in the costly individual or small group market. It is also for small businesses that cannot afford small group health insurance. It is one-stop shopping that will enable you and your family to find a plan that is right for you.
For workers at big companies with group coverage, you can keep what you have with new protections against unfair insurance regulations that could limit your coverage if you get sick. And if you lose your job, move or decide to leave that company, you will know that there will be high-quality affordable health insurance options available for you on the exchange.
Health reform must be built on three fundamental principles: It must lower the skyrocketing cost of health care; guarantee choice of doctors and plans; and assure quality affordable health care for every American. A public option would achieve those goals and give the American people more choices. It would foster greater competition; lower costs; and give consumers a greater variety of affordable choices.
The President is committed to ensuring that America’s servicemen and women have high quality care. This was an issue he fought for when he was a United States Senator and will continue fighting for as President. You have given much to your country, and we are determined to provide you and your family with good, reliable health care.
Health reform will only build on our commitment to military health care. TRICARE will continue to be available for all eligible servicemen and women, and their families. The health reform legislation that is being considered would enable those who are covered by TRICARE to meet the shared responsibility requirement for individuals to have insurance, thereby exempting such members of the uniformed services and dependants from being assessed penalties. If enacted, the President will ensure that this exemption is implemented aggressively. The Secretary of Defense would continue to maintain sole authority over the system and for enhancing the quality and access for all eligible members of the uniformed services.
Recently a partisan op-ed in the Wall Street Journal distorted the purpose of an important Veterans Affairs planning tool called "Your Life, Your Choices." The booklet is designed to help Veterans deal with excruciating questions about what kind of health care they would like to receive if they are unable to make decisions for themselves.
It is viewed in the field of advance care planning as a groundbreaking tool. It was developed in the 1990s. In 2007, the Bush White House received a complaint about the planning tool from Jim Towey, the author of the op-ed. Towey developed and markets a competing advance care planning product called Five Wishes.
VA was asked to respond to the complaint that the product was biased against the right-to-life viewpoint. Veterans Health Administration convened an outside panel of experts to review the tool and assess its merits. Overwhelmingly, panel experts praised "Your Life, Your Choices" and endorsed its use in VHA. They also provided a range of excellent suggestions for strengthening the product through streamlining and reorganization of the material, and they asked that some of the clinical content be updated.
The op-ed initiating this rumor also contains a number of inaccurate and misleading statements. Political posturing and misrepresentation of the facts on the backs of our nation's Veterans is unacceptable.
- Towey states “the VA panel of experts that sought to update "Your Life, Your Choices" between 2007-2008 did not include any representatives of faith groups or disability rights advocates.” In fact, the panel included 5 VA representatives and 12 nationally recognized experts from outside of VA, representing diverse perspectives. Members included a priest, a rabbi, a renowned disability rights advocate, and the President of the organization that produces "Five Wishes," the alternative advance care planning document that Mr. Towey created and is now actively promoting.
- Towey states, "under President Obama, the VA has now resuscitated "Your Life, Your Choices." In fact, VA's current plans to update and release the document were developed under the Bush administration and have not changed. The document is currently under revision. The updated version is due to be released in the fall.
- Towey is critical of VA's policy requiring primary care providers to raise the topic of advance care planning with all patients. Federal law requires health care organizations to educate all patients about advance care planning since 1991.
- Towey's article suggests the goal of "Your Life, Your Choices" is to pressure Veterans into choosing death. Unfortunately, unfounded accusations like this have become too commonplace in the current political debate. The goal of "Your Life, Your Choices" is to help patients express their end-of-life wishes, so VA can honor those wishes, regardless of what those wishes may be.