I’ve begun my preliminary examination of the new, merged Senate health care reform bill. So far, my first impression is pretty negative. There are many bad provisions that I think need to be changed or removed. Here are eight I noticed last night:
1) Delays Start Until 2014 – One of my biggest criticisms is the delayed timing. The House bill starts most of the reforms in 2013; I already thought that late start was both a moral and political disaster. Many Americans desperately need reform now, not several years from now. I also would not want to be a Democrat who voted for health care reform trying to explain why there were still so many uninsured Americans during both the 2010 and 2012 elections. To make the Senate bill appear cheaper, Reid made the disastrous decision to push back the start date until 2014! In effect, his bill is not really cheaper than the House bill, it is just scored over only six years instead of seven years.
2) Pre-Reform Public Option Opt-Out – I’m relatively pleased with the general design of the public option, but I’m very disappointed with the design of the opt-out provision. It allows states to opt-out right away, years before reform begins. It basically insures that many red states will opt-out sometime between now and when public option would be made available. This problem is made even worse because reform is pushed back until 2014.
3) Multiple Exchanges - The bill would create two exchanges per state. There would be an exchange for individuals and a “Small Business Health Options Program” know as the SHOP exchange for businesses. This is, pure and simple, a dumb idea. The more customers using one exchange the larger the risk pool and the better the bargaining power. Creating multiple exchanges is unnecessary administrative waste. It also does not move our country towards one, single, integrated health care system. States would be allowed to merge the individual and SHOP exchanges, but that should already be the default.
4) Nationwide Plans Gutting State Regulation - The merged bill still has the “nationwide plans” (formerly “national plans”) from the Senate Finance Committee bill. They are a top priority of the health insurance lobby. National plans would not be required to follow the minimum benefit laws in the states in which the policies are sold. These “nationwide plans” effectively gut state law regulating insurance coverage.
5) “Free Rider” Provision – Instead of the employer mandate there is the terrible “free rider” provision. The CBPP does a good job explaining why this terrible provision would disadvantage many low income Americans.
6) Incredibly Low Actuarial Value – The minimum actuarial level of the lowest level qualified health insurance is 60%. This level is far too low. This is even lower than the requirement in the Senate Finance Committee bill, which was 65%.
7) No Coverage For Undocumented Immigrants With Their Own Money - Undocumented immigrants will not be able to buy private health insurance even with their own money. This policy is not just cruel, but also bad fiscal policy. Undocumented immigrants will be forced to go to the emergency room for their medical care. Everyone else will be forced to pick up the tab for this uncompensated care. If an Undocumented immigrant wants to buy health insurance with their own money, so as not to be a burden on our health care system, that is not something we should discourage.
8) Sell Insurance Outside The Exchange – Health insurance companies will still be allowed to sell health insurance outside of the new exchanges. Until you get every insurance company playing by the same rules, in the same marketplace, you are never going to address the cherry-picking and efforts to game the system.