Health Care Reform, or systematic reduction of choice?

There are many key features that people MUST pay attention to when it comes to the most resent round of “Health Care Reform.” It seems that with any government program people need to be careful for what they wish for, they might just get exactly that.

If you go to page 16 of the Health Care Reform bill H.R. 3200 you will find this:

SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.
(a) GRANDFATHERED HEALTH INSURANCE COVERAGE DEFINED.—
Subject to the succeeding provisions of this section, for purposes of establishing acceptable coverage under this division, the term “grandfathered health insurance coverage” means individual health insurance coverage that is offered and in force and effect before the first day of Y1 if the following conditions are met:
(1) LIMITATION ON NEW ENROLLMENT.—
(A) IN GENERAL.—Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

This means that you can keep the coverage you already have “grandfathered health insurance coverage”, so long as the policy was started before the year the bill becomes law. In and of itself, this doesn’t sound so bad. Then you read the next part.

Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day of Y1.

This means that the insurance issuer (your insurance company) CAN NOT add any individual to the plan after the first day of the year the bill becomes law. There is a provision that will allow you to add dependents, but that’s it.

To sum this up, it means that your current private health insurance plan will become illegal. The existing insurance companies would be able to keep running, but only with the people that they already have in their current plans. Future plans would have to be based on government guidelines.

Once the bill becomes law if you switch employers or start your own business, you WILL NOT be able to purchase the same health insurance, as it will be illegal for insurers to issue new policies with the same attributes. The insurance policies with mandated government specified premiums and deductibles will be the only insurance options available.

This is like telling a grocery store chain that they cannot purchase any new inventory (it will be illegal), they just have to sell what they have currently in stock. Then claim that it is not illegal to own and operate a grocery store, you just can't purchase any new stock. How is the grocery store supposed to stay in business? When later allowed to purchase new inventory, that stock will be determined by the government. This is exactly how the H.R. 3200 proposes private health care insurance is supposed to function.

Up until now, I figured congress would regulate the private industry into failure. But here in this bill they make private insurance illegal. To make it all the more insulting this provision is under the section “PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.” All of this is right on page 16, take a look…

PDF file: H.R. 3200 downloaded from the Thomas.gov website

This is just the beginning though. Remember how Obama said that we have to reform health care because it's killing our economy? You should take a look at the report from the non partisan Congressional Budget Office report.

■ Currently, a significant share of the population moves in and out of insurance
coverage during a year, which complicates efforts to provide effective
prevention and wellness services. As discussed later, though, those services
are less broadly effective at reducing health care spending than might be
expected, and in any event, expansion proposals would not eliminate all of the
churning that makes it harder to maintain continuity of care.

■ Most expansions of insurance coverage that are under consideration would
leave a moderate number of people uninsured, in part because some people
would be ineligible for subsidies or would choose not to buy insurance even
with large subsidies. Therefore, any current problems arising from the lack of
insurance could be reduced but not eliminated.

It also bears emphasizing that if a reform package achieved “budget neutrality”
during its first 10 years, budgetary savings in the long run would not be
guaranteed—even if the package included initial steps toward transforming the
delivery and financing of health care that would gain momentum over time.
Different reform plans would have different effects, of course, but two general
phenomena could make the long-run budgetary impact less favorable than the
short-run impact:

■ First, an expansion of insurance coverage would be phased in over time to
allow for the creation of new administrative structures such as insurance
exchanges. As a result, the cost of an expansion during the 2010–2019 period
could be a poor indicator of its ultimate cost.

■ Second, savings generated by policy actions outside of the health care system
would probably not grow as fast as health care spending. Such would be the
case for revenues stemming from the Administration’s proposal to limit the
tax rate applied to itemized deductions and from proposals to tax sugar-sweetened
soda or alcohol, for example.

Some policy options under consideration would yield savings that grew in tandem
with health care spending—reducing the level of federal spending on health care
but not affecting the measured rate of spending growth after the first few years.
For example, the largest savings proposed in the President’s budget would arise
from a decrease in payments to private health insurance plans operating under the
Medicare Advantage program. If enacted, that change would permanently lower
the level of Medicare spending, but it would probably not offset a noticeably
larger share of the cost of an expansion of insurance coverage in the second
10 years than in the first.

Here is a copy of the CBO report:

PDF file: 06-16-HealthReformAndFederalBudget from the CBO website

There is nothing in the proposed bill that would significantly decrease the number of uninsured, or save money in the long run. What, then, is the purpose of this bill?

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