Health Care will (almost) be a right not a privilege

The Patient Care and Affordable Care Act was not everything we progressives wanted. Many of us were distraught over losing something that is important to our vision of health care reform: a public option that would compete with private insurance and hold down health insurance costs. Make no mistake, that was, indeed a loss. But the public option was not the only important feature of the legislation we have been supporting. Indeed, while holding down costs are important to this country, the fundamental moral issue is making sure that everyone can get affordable health care. And, the legislation we won goes incredibly far to attaining that goal.

The Affordable Care Act will take this country close to the ideal of making health care a right not a privilege. It will, over ten years, save perhaps 100,000 lives. It will reduce the suffering of millions of people. And it will save money for tens of millions

It will make health insurance affordable for almost all Americans and do more to help working and middle class Americans than any government program since Social Security. And they will do more to improve the well-being of working age Americans than any government program in our entire history.

The ACA takes a number of steps towards this end.

First, the ACA puts in place incredibly important regulations that will protect everyone how has health insurance: Insurance companies will not be able to deny coverage to people who have pre-existing conditions or charge them more. Women will not be charged more than men and the role of age in setting insurance rates will be limited. Insurance companies will not be allowed to drop people from coverage when they get sick. There will procedures to appeal insurance company denials of insurance on the grounds that they have defined some medical procedures as experimental or medically unnecessary. There will be no annual or lifetime limits on insurance coverage.  And there will be no co-pays for preventive care.

Second, the legislation includes a number of provision that make health insurance affordable for those who can’t afford it now.

The legislation expand Medicaid for families up to 150% of the federal poverty line (FPL) under the House bill and 133% under the Senate bill.

Aove that level, individuals and families who do not receive affordable health insurance from their employer will be able to buy health insurance through a government run Insurance Exchange. The Exchange itself will lower premiums by allowing these individuals and families—and small businesses, too—to come together in one large insurance pool to purchase insurance at the same low rates that large businesses receive today. Insurance purchased by individuals and families in the Exchange will have to meet federal standards that define comprehensive health care benefits.

And most importantly, small businesses will receive tax credits that enable them to provide insurance to their employees and individuals and families whose income ranges from 150% to 400% of the federal poverty line (FPL) will receive substantial subsidies in the form of tax credits that limit insurance premiums to a proportion of their income.

Premiums will vary on a sliding scale as show in the accompanying table, from 3% or $40.61 per month for individuals at 150% of the FPL under the House bill to 9.8% or $353.78 per month under the Senate bill.

*in comparison to average premiums in 2009 for in employer based insurance of $4824 per year / $402 per month for individuals and $13,000 per year / $1082 per month for families.

For families of three, premiums range from 1.5% of income or $30.44 per month at 150% of FPL under the House bill to 9.8% of income or $598.13 per month at 400% of FPL under the Senate bill.

These premiums are still costly. Health care is expensive and we have to pay for it. A single payer plan such as they have in Canada pays for it through taxes. Here in American, as in France, Germany, and other European countries, health insurance will be paid for by a combination of government, employers—for those who receive partly employer-paid health insurance—and the premiums paid individuals and families.

Individuals and families in the Exchange will pay premiums that are not cheap, especially at higher income levels. But comparing these premiums to the cost of average health insurance policies shows that this program will provide huge subsidies to working and middle class families. And these same families will be exempt from the new taxes and savings in Medicare that pay for them.

For individuals, these subsidies range $402 per month at 150% to $48.22 per month at 400% of FPL. For families of three, the subsidies range from $1083 per month at 150% of FPL to $484 per month at 400% of FPL . As health insurance premiums continue to rise, the value of the subsidy will increase. While the percentage caps can also increase–and thus premiums go up–there will undoubtedly be enormous pressure on Congress to keep premiums low. In addition, the legislation will limit out of pocket costs—deductibles and co-payments—to a percentage of individual and family income as well.

To see how extensive and unprecedented this level of help is for working and middle income people, the subsidy for families at 150% of the FPL is worth five times what such a family receives from the earned income tax credit. And at 130% of the FPL, the expansion of Medicaid will provide a benefit that is worth at least 35% more than the combined value of food stamps and the earned income tax credit. Moreover, this legislation will provide support for middle income individuals and families far above the cut-off point for these other programs.

This is a huge achievement. But that is not all that is valuable in the legislation before Congress. In another post, I’ll point to the provisions in the legislation that will help reduce costs for people who have insurance now, and how the political dynamic set in motion by this health care reform bill will help us get more of what we want, including a public option or even tougher regulations on insurance companies, down the road.