Pros and Cons of Health Care Reform
Sommer Brokaw | 10/12/2010, 12:12 p.m.
As Law Unfolds, Critics and Supporters Brace for Impact
There's no consensus on what will result from the federal health care overhaul. Insurers and conservatives say premiums will increase. Progressives and advocates for the underinsured say it will help millions who couldn't access coverage before.
They all have a point.
Lou Meyers, who owns a small business in Durham, said the law doesn't go far enough in saving costs without a public option, which died in the Senate. That option would have made government-run health insurance available to more Americans.
"Most of us - small businesses and individual policy holders - are sitting ducks between now and 2014 as the insurance companies will surely have their way with us," he said. "Recent across the board premiums escalations and their attempts to circumvent the new rules is just a taste of the misery coming over the next three years."
Laurie Ellis, director of health policy at Blue Cross Blue Shield North Carolina, expects elements of reform will drive up premiums for two reasons. The first is that the floor on benefits will be higher because of the establishment of a particular level of benefits that must be provided. As a result, some lower-cost benefits are no longer available. The second reason is covering everyone, regardless of condition, means higher rates.
"That is a great thing in terms of increasing access for all," she said, "but what it does without a significant requirement for folks to stay in the system is the individual mandate encourages folks to make the best choices for them and hop in and hop out of the system."
President Barack Obama signed the Patient Protection and Affordable Care Act into law on March 23. The individual mandate is one of several provisions that will come into effect during the next eight years. It requires Americans to buy health insurance by 2014 or pay a penalty. But, Ellis said the mandate is not strong enough.
"The penalty for not getting insurance is very low compared to the cost of an insurance premium, so it's easy for folks to do the math and make the decision to opt out of getting insurance," she said.
Sept. 23 marked the law's six-month anniversary. Beginning on that date, the law prohibited insurance companies from denying coverage to children on the basis of a pre-existing condition.
By 2014, the individual mandate and the provision preventing denial of coverage to all Americans with pre-existing conditions and preventing insurance rates from varying based on health status will go into effect. Studies have estimated 200,000 to 400,000 Americans with pre-existing conditions could be helped, doubling the number insured through existing high-risk pools.
"We do continue to up until 2014 to underwrite folks with pre-existing conditions to determine their rate for coverage," Ellis said. "The individual mandate is what brings people into the system, and you really need that as you bring people with substantial pre-existing conditions. That's what makes insurance work - everyone in the swimming pool together."
Until 2014, if the insurance rate is too high there is a temporary federal high-risk pool open to individuals with pre-existing conditions who have been without insurance for six months that offers the same standard rate as the standard population. Critics contend that those that have pre-existing conditions and had insurance sometime within the last six months and need this coverage are locked out.
Other key aspects of health reform include: free preventive care such as free mammograms, colonoscopies, immunizations, and pre-natal care; allowing young people to stay on their parents' insurance until they turn 26, prohibiting insurance companies from rescinding coverage due to technical mistakes, and providing up to 4 million eligible small businesses with tax credits.
Health care reform also begins to close the Medicare Part D prescription "donut hole," fully eliminating it by 2020, and extends access to lifesaving drugs to an estimated four million seniors.
Reform supporters say the new law will end the worst abuses of the health care industry and empower consumers.
"The health care law controls exploding health care costs, increases access to care and reduces our long-term deficit by as much as $1.2 trillion over 20 years," U.S. Sen. Kay Hagan (D-N.C.) said in a statement. "We were headed in the wrong direction. Family premiums were projected to cost $24,000 per year by 2016."
"This law reduces health care costs for families, seniors and small businesses for the long term, and gives families access to family doctors. It prevents insurance companies from dropping coverage when people get sick or denying coverage to people with pre-existing conditions."
Republicans oppose health care reform almost unanimously.
"My concerns about the bill are being confirmed by one analysis after another," said U.S. Sen. Richard Burr (R-N.C.). "This new law increases government spending by trillions of dollars and drives up the cost of health insurance premiums for millions of Americans. It also cuts more than half a trillion dollars from the Medicare program to pay for new government programs, which could jeopardize seniors' access to care. The unfortunate reality of this law is that the costs are too great for the American people."
Adam Searing, project director at N.C. Health Access Coalition, said a public option would have been a way to help control costs because of increased competition.
"It was clear politically that it wasn't going to pass, but changes were made that will make it so much more affordable and accessible for so many people that the lack of a public option is not something I'll tear my hair out over," he said.
Timeline of changes under the new health care reform provisions can be found at: