Neil's Spotlight What are people in Hawaii saying about healthcare reform?
September 11, 2009
Thousands of people across Hawaii have expressed their opinions, questions, and concerns to Neil about healthcare reform through e-mails, letters, telephone calls, community gatherings, business luncheons, conferences, and town hall-style meetings. Here’s a sampling of frequently-asked-questions and comments that Neil has received via e-mail on this issue and the answers he’s provided.
Topics include the impact on healthcare reform on the average family budget, senior citizens, small business, fiscal matters, the future accessibility and affordability of healthcare, and Neil’s stand on a public option.
THE PUBLIC OPTION
Question:Do you support the public option?
Neil: I strongly support a public plan. Such an approach would compete directly with private insurers to bring down health costs, improve quality, and enable more individuals to buy health insurance. Nonetheless, opponents argue that a public plan would put private insurers out of business, and would be bad for the health market. I believe that we should do what’s in the interests of American citizens, not the insurance companies who have restricted health benefits for our children and families.
Members of Congress who are crafting health reform legislation, like Ways and Means Chairman Rangel and Health Subcommittee Chairman Stark, have committed to a public option, and I look forward to the legislation that they bring to the House floor.
Question:What will a public plan do to the cost of health insurance?
Neil: It is important to recognize that health reform is centered on choice. Currently in Hawaii, two health insurance companies control 98% of the market. Is it any surprise that in the last eight years, premiums in Hawaii increased by 65%? Is it any surprise that they're projected to increase by another 70% (from $10,891 to $18,585) over the next ten years? By adding more competition to the current insurance market through a public plan, it is projected that your premiums will go down as companies compete for your business.
The House proposal, which includes a public option, gives you the choice between your current health plan and another plan that may offer you a better deal.
Under health reform, people will not be denied health insurance due to pre-existing conditions, Congress will establish a cap limiting how much you can pay out-of-pocket, remove co-pays or deductibles for preventive care, no more limits on how much insurance companies will pay for your care, and no reason to ever make a job decision again based on health care coverage. Just as you would benefit from these changes, members of Congress would also benefit, considering they pick from and pay for private insurance just like you.
SMALL BUSINESS & REFORM
Comment from e-mail writer:The small business surtax would devastate small businesses already struggling with a severe recession. This surtax would hit those who create jobs especially hard because more than six of every 10 affected are small business owners, who have led America out of the last seven recessions and create two out of every three jobs during a recovery.
Neil: Ninety-six percent of small businesses will not be affected by the health reform surcharge. Furthermore, 76 percent of all businesses are exempt altogether from the employer responsibility requirements and for those who want to provide coverage for their employees, the House proposal provides a tax credit of up to 50 percent.
Compared to these low costs for small businesses under health reform, small businesses benefit greatly from changes to the health care system. Currently, due to high broker fees, high administrative costs for servicing small groups, and adverse selection, small businesses pay up to 18 percent more per worker than large firms for the same health insurance policy. As a direct consequence, an estimated 27 million of the 47 million uninsured Americans are small business owners and their workers. Without change, small businesses will pay nearly $2.4 trillion in health care costs over the next 10 years.
However, with reform, small businesses could save as much as $855 billion over 10 years, nearly 36 percent, as the high costs of doing business decrease. The House proposal does this by creating a national health insurance exchange where small businesses can shop around and take advantage of lower premiums and lower administrative fees.
It is clear the current health insurance system discourages entrepreneurship. Many employees face the phenomenon of “job lock,” where workers to remain in their jobs at large firms due to health benefits, although they would be more productive and better paid in small business. The high prices of health insurance in the non-group and small group markets and the possibility that a pre-existing condition will prevent a worker from obtaining coverage, distort individuals’ career choices. These factors discourage individuals from launching their own companies, and make many individuals unwilling to work for small businesses.
THE FEDERAL DEFICIT
Comment from e-mail writer:I am writing to express my strong opposition to any healthcare "reform" legislation that inflates the federal deficit and national debt even further, imposes new taxes and mandates on individuals and businesses during this economic recession, and includes a government-run plan that would ultimately crowd out the private insurance market.
With our nation facing a $1.8 trillion deficit this year and a national debt that is expected to nearly double from $11.4 trillion today to almost $21 trillion over the next 10 years, we simply can't afford a new $1 trillion-plus healthcare program.
Neil: First of all, the Congressional Budget Office has stated that the House reform bill will be deficit-neutral and even produces a $6 billion surplus. The first half of the reform bill is paid for by making Medicare and Medicaid more efficient while the rest of the bill is paid for by surcharge on the wealthiest 1.2% of Americans. On Medicare and Medicaid efficiency, the reform bill incorporates productivity adjustments for provider payments, eliminates overpayments to Medicare Advantage plans, and more.
To dig further on the need to control health care costs, as you may know, without health care reform, the federal budget would be in dire straits over the next ten years. Recognizing that Medicare is expected to run out of money in 8 years (2017), the defense budget is being weighed down by growing health costs ($47 billion in FY2010), and that the government currently pays 75% of the costs for uninsured individuals, who end up in our hospitals, we need change. We all pay for our broken system through taxes and higher premiums.
The first step to controlling costs is to increase competition in the health insurance market. Most states are controlled by one or two big insurance companies, who can manipulate the price you pay for insurance. With a new public insurance plan, these companies must start competing for your business and are expected to lower their prices.
The second step is to add more responsibility in the system. By requiring all Americans to buy insurance and by requiring businesses to help employees to pay for it, the government will be freed from certain health care costs. Finally, by putting a cap on out-of-pocket expenses and eliminating lifetime limits, health reform controls costs for you. Right now, 460 families in Hawaii every year go bankrupt due to medical bills. With reform, your family will never have to worry about bankruptcy.
RELIEF FOR AVERAGE FAMILIES
Comment from e-mail writer:I am writing in support of America's Affordable Health Choices Act of 2009. This piece of comprehensive health care reform legislation is critically needed.
As health care costs skyrocket, the cost of doing nothing is far greater. In fact, without reform, the cost of health care for the average family of four is projected to rise $1,800 every year for years to come -- and insurance companies will make more health care decisions.
The bill will finally lower health care costs, provide a public option and offer greater choice and a higher quality of care for all Americans. It is important to me that you ensure these critical components of the bill remain strong.
Neil: Everyday, health insurance companies make life and death decisions for families in Hawaii. Within a three year period, 12.6 million adults in the US were discriminated against in obtaining health insurance. In a community meeting I held in Honolulu on July 1st, one gentleman told us that his daughter had developed ovarian cancer, and, tragically, died shortly after, having been denied medical coverage by an insurance company
This is not acceptable. Under health reform, there will be no more people denied health insurance due to pre-existing conditions, no more bankruptcies considering Congress will establish a cap limiting how much you can pay out-of-pocket, no more co-pays or deductibles for preventive care, no more limits on how much insurance companies will pay for your care, and no reason to ever make a job or life decision again based on health care coverage.
Finally, to decrease costs in our health care system, there needs to be more competition in our health insurance market. Currently in Hawaii, two health insurance companies control 98% of the market. Is it any surprise that in the last eight years, premiums in Hawaii increased by 65%? Is it any surprise that they're projected to increase by more than 70% (from $10,891 to $18,585) over the next ten years?
CLOSING THE COVERAGE GAP FOR SENIORS
Comment from e-mail writer:Millions of Americans are falling into the "Doughnut Hole," or Medicare Part D coverage gap. Once the costs for prescription drugs reach the initial coverage limit (about $2,300 per year), Medicare recipients have to pay out-of-pocket for their prescriptions on top of their premiums, until they reach the catastrophic coverage threshold (about $4,350).
This coverage gap increases the cost of health care for many older Americans -- often, they don't know what hit them until they open their medical bills. The "doughnut hole" is getting bigger as drug prices outpace inflation, and Americans can't keep up.
Nearly 20 percent of Medicare beneficiaries delayed or did not fill prescriptions because of cost and many others don't take their medications just to stay out of the hole. This coverage gap is dragging too many people down, putting both their health and their bank accounts in danger.
Please take advantage of the upcoming health care reform and close the "doughnut hole" so Americans don't have to pay full cost for their drugs as well as drug plan premiums.
Neil: Seniors pay for prescription drugs out-of-pocket when the cost of their drugs hits approximately $2,700. From this point they pay the full cost of drugs once they reach the catastrophic cap, which is roughly around $6,100. Under health reform, this gap will be closed gradually.
First of all, under reform, drug manufacturers have agreed to give seniors a 50 percent discount on brand-name drugs when they enter the doughnut hole. The Pharmaceutical Research and Manufacturers of America (PhRMA) has estimated that, through this agreement, $80 billion over 10 years will go directly to seniors, not the government.
In addition to reducing this doughnut hole, it will lower out-of-pocket costs for preventative services under Medicare. It also makes it easier for low-income seniors to get help paying for Medicare premiums or other health expenses. Finally, it creates incentives for hospitals to reduce readmissions, and for those with chronic health conditions, it will improve the coordination of your care.
