On The Health Care Reform

As I expected, Professor Smith opposed this bill. But very surprisingly, he mentioned his support of a sustainable universal health care.

Here are some important facts about the health care legislation that was passed in U.S. House of Representatives yesterday after two years of annoying politics, along with some background knowledge.

1- This bill does NOT include a public option or the "single-payer system".

["Public options" in these two years of debate, are plans

1) offered by the federal governments, 2) competing with private insurance plans in an internet based exchange or market place, 3) accessible to persons who are NOT covered by employer plans or by state insurance plans such as Medicare ONLY.

The plans would be financed ENTIRELY by premiums without subsidy.

Single-payer system is basically the "government takeover" of the provision of health care to some extents, i.e. government will use the taxes and premium it collects from the citizens to pay most, if not all, medical expenses of the population.]

2- Way of payment: Increases the Medicare payroll tax from 1.45% to 2.35% on incomes over $200,000 for individuals and $250,000 for families. **Actually this is a change from 2.9% to 4.7%.

[The current Medicare payroll tax structure: 2.9% of wages without upper limit (1.45% by individuals, 1.45% from employers, 2.9% for self-employed. But the 50-50 share means nothing. The actual tax incidence depends on labor elasticity.) No FICA tax for university students.]

3- Expanding Medicaid to 133% of federal poverty level.

[Current policy: very complicated. I am not sure. Things I do know 1) the eligibility criteria vary a lot among states; 2) Being very poor alone does NOT make one automatically eligible for Medicaid. Number of people that may benefit from this expansion: remained to be checked.]

4- Regulation 1--No discrimination on "pre-existing conditions". Law now prohibited health insurers from refusing coverage or differentiating premium based on patients medical histories and/or gender.

5- Regulation 2--States-run health exchange.

Here "states" mean state governments, not "the nation state". State governments run the exchange, not "federal government"! The federal government will mandate that newly-created State insurance exchanges include at least two national plans that are created by the Office of Personnel Management, among which at least one will have to be a private non-profit plan.

6- Illegal immigrants: CAN NOT take part in the exchange, even if they are willing to or can afford it.

7- Abortion: Theoretically, no federal money will be used for elective abortion unless "extreme" cases, like rape. etc.

Comments:

People don't know what need to know. People don't care what they should care. And they are easily deluded. Stupid protesters in front of the Capitol Hill these days....

It is uniquely American that a $871b/10 year bill will go down to fetuses. Americans are obsessed on "abortion".

This bill is a small step towards the right direction. But from Hilary Clinton's loss in the Democratic Primary, thus the burial of her demonized idea of the "government mandate of employer-provided health care" and such, to Obama's zero support on the "single-payer system" in the debate, to the kill of the "public option" in the Senate Bill, this reform has been full of compromise and regression. "econjeff"'s opinion that "The bill we got is a tax and spend bill, not an evidence and efficiency bill" makes some sense.