Excellent, realistic article.

Health reform in America

Signed, sealed, delivered

Barack Obama has transformed health reform from near death to fact. So how will Obamacare change America’s health system?

Mar 25th 2010 | WASHINGTON, DC | From The Economist print edition

EXCERPTS with emphasis added:

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The heart of the new reform is a restructuring of America’s flawed insurance market. Insurers now face tough new regulations forbidding such practices as dropping people with “pre-existing conditions” (real or trumped up), or putting lifetime caps on coverage.

In return, though, the insurance industry will benefit from a big expansion of the country’s private insurance market. Heavily regulated exchanges, or insurance marketplaces, would be set up so that consumers not covered by employer-provided plans today could shop for ones more easily. Insurers would be required to offer plans that meet minimum government requirements for health coverage, and to price them transparently.

Some 32m of the country’s 49m or so uninsured (most of those left out of the new scheme are undocumented aliens) would, starting in 2014, be required to take out insurance. The working poor and uninsured earning up to $88,000 a year get subsidies on a sliding scale so that they can afford to buy coverage; the poorest of all will be added to the rolls of Medicaid, a health scheme for the indigent. It is this binding requirement on individuals that exercises conservatives most.

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If coverage is the new law’s strong point, cost control is its weakness. That is not to say that most ordinary people will pay more for coverage, as critics of reform noisily insist. True, some of those forced to buy insurance will earn too much to qualify for subsidies, and so will be spending more than they do today—but, in return, they will get insurance plans that offer more generous coverage than current basic plans. What is more, many other Americans may end up with lower premiums.

The vast majority of workers enjoy health insurance today through employer-provided schemes. RAND estimates that by 2019 the employer-provided system will benefit from 6m new (mostly healthy) customers, and that premiums for everyone in that system will drop by 2% versus business-as-usual.

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All this points to the only certain thing about Obamacare: that this is just another episode in the long saga of health reform. Indeed, by adding tens of millions of people to an unreformed and unsustainably expensive health system, this reform makes it all the more urgent to tackle the question of cost.

On that, at least, left and right seem to agree. Paul Krugman, an economics professor at Princeton and a liberal booster of reform, wrote on the eve of the votes: “There is, as always, a tunnel at the end of the tunnel: we’ll spend years if not decades fixing this thing.” Robert Moffit of the Heritage Foundation, a conservative think-tank opposed to the effort, agrees, albeit in darker terms: “This marks the beginning of the next phase of this hundred years war.”

Read @ The Economist

There is no better person than Hillary Clinton to get a handle on the cost side of this. She is the best in macro economics.

-- Edited by Sanders on Friday 26th of March 2010 09:27:53 PM