This is really starting to shape up far less disastrous than Obama’s original proposal, specifically –
Expanded Medicaid – The original income levels this was to be expanded to have been scaled all the way back to the poverty line for adults, and around 133% for kids. Subsidies will be phased in over a few years, which is basically a way for Congress to hide true costs at the time of enactment.
Insurance Subsidies – Eligibility has been scaled back to around 300% of the poverty line. This is still way too high in my opinion. I’d much rather see reform that cuts costs vs. simply having government pay the bills. However, future reforms will have the ability to decrease costs by regulating the level of care, so it gives future politicians the opportunity to scale this back.
Public plan – It’s looking more and more like this is not going to be part of the plan, with some sort or consumer run co-op non-profit corporation taking its place. This is really good news IMHO. The public plan (which was based on Medicare) was flawed in a thousand different ways, so it’s good to see Congress is finally making some changes. IMHO whatever this “co-op” thing is, the idea that it’ll be “consumer governed” seems like a great idea. Another good thing about this is that the financials would likely be completely separate from the general accounting of the federal government. (Like a Freddie or Fannie for health.) The details though are still thin, so we shall have to see.
Mandates – A foregone conclusion. It’s unfortunate we have to implement stuff like this as its basically playing Robin Hood with health, but it’s also easy to understand the financial issues revolving around not having it.
Insurance regulation – In return for mandates, insurance companies would be regulated more. For example they would not have the ability to refuse coverage for those with pre-existing conditions. IMHO trading the mandate for this is probably a worthy trade.
Employer provider / funding mandates – It may get scratched completely, or phased back significantly.
Misc. “preventative health measures” – Mostly provided through existing systems or tax incentives for business who provide preventative health service for employees. Note that last part.. Congress it seems, is not filled entirely with idiots.
Funding – A whole host of major tax hikes are under consideration. Predictably Obama wants to tax the rich, but it seems Congress is thinking that something a little more fair might be the right solution. Options range from payroll tax hikes (fair), VAT taxes (fair), taxes on the rich (not fair), taxes on company provides health benefits (levels the playing field). It’ll be interesting to see what they come up with. Tax hikes are inevitable, so if I had to choose I’d go with a payroll tax (so everybody pitches in their fair share and gets a feel for the cost) or even better, a new VAT tax that could be leveraged down the road to implement a more broad based “fair tax” at the federal level.
Senate Finance Committee PDF Link
All-in-all, it seems some real progress is being made.