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F.A.Q.: Everything you've wanted to know about health care reform

Health care reform has created a whirlwind of facts and fictions. Feeling confused about the issue? Walletpop cuts through the noise to give you clear and simple answers:

Isn't the public option for freeloaders? Why should we adopt it when critics are calling it socialist?

A public option won't have freebies. Everyone will pay a premium to get coverage from the public plan or option, although the uninsured with low incomes will get a subsidy from the government to afford coverage. Many individuals cannot get insurance now because they have pre-existing medical conditions, such as diabetes. These patients, under reform, could buy coverage through a private insurer or a public plan or option, if it's approved by Congress.

Users of a public option could include small businesses, their workers and many young adults, who account for a large number of uninsured.

Supporters of the public option, including President Obama, say it will increase competition in health insurance.
The public plan would be operated by the government, similar to Medicare. But the care will be delivered by private doctors, also just like Medicare. Not many people call Medicare ''socialist,'' but it's a term that opponents of the Democrats' initiative use to attack the public option. Still, there's no doubt that the public plan has become a divisive issue, and even some Democrats oppose the idea.

What kind of care would the public option give you?

The public plan would have to compete with private health plans for customers in an ''insurance exchange,'' or marketplace, so it would have to deliver comparable medical services. Democrats say the exchange would give consumers more information about the quality of medical services they're buying. So if a public plan didn't give good care -- if its customer satisfaction was low, for example -- consumers would vote with their feet. Obama and Democratic leaders have noted that the current U.S. health care system doesn't get good marks on medical quality. The system is plagued by medical errors. The life expectancy and overall health of the U.S. population ranks much lower than in many developed countries.

Is this financially feasible? Will I have to pay more in taxes? How will the government pay for a program to cover more than 45 million uninsured Americans?

The $1 trillion price tag (over 10 years) of health reform, Democrats say, would be covered by a combination of savings to Medicare and Medicaid along with new sources of revenue -- in other words, tax changes.

The House legislation calls for a surtax or surcharge on the richest Americans. Obama has called for a cap on itemized deductions for the wealthy. Other ideas include taxing costly, ''Cadillac'' benefits plans and capping the tax exemption on employer-based benefits. Much of the cost of the legislation would go to fund the subsidies for uninsured individuals with low to modest incomes to buy insurance.

With all of the uninsured getting coverage, demand for physician services will skyrocket. Are we prepared if it does? How will the proposed health reform affect wait times to see a doctor or to have surgery?

We're already facing a shortage of primary care doctors. The American Academy of Family Physicians projects a shortage of 40,000 family doctors in 2010. Some geographic areas are already underserved. Reform will add demand for such doctors. Massachusetts, for example, expanded insurance to almost 97 % of state residents and quickly found that the supply of primary care doctors wasn't adequate. Most doctors now work in higher-paid specialties. But Congress and the White House have pushed for incentives for doctors entering residency programs to pursue careers in primary care. Besides training more internists, pediatricians, ob/gyns and family physicians, the U.S. may need more nurses and nurse practitioners to handle the primary-care load.

How will the public option drive down the overall cost of insurance?

It really depends on how a public option is structured. Proponents of the public option believe it would ''keep the insurance companies honest'' and help contain the cost of coverage by injecting more competition into the market through a health insurance exchange. Opponents say a public plan could have an unfair advantage because it's backed by the government. Nevertheless, lack of competition already is a problem: Many U.S. markets are dominated by one or two giant insurance companies. Some new blood is needed, reform proponents say.

What will happen to my current insurance company? If others leave my private insurer and register for government health care, will I pay a higher premium/co-pay because there are fewer people in the shared system?

President Obama has repeatedly said that if you like your health plan, you can keep it under reform. And private insurers – and their policyholders -- may actually benefit if a large number of people with medical conditions choose the public option, thus making the private insurance company's plan, with fewer medical ''risks,'' less expensive to run, says Bill Custer, a health insurance expert at Georgia State University. Consumers who work for small employers may also benefit from lower costs because those businesses would wind up in a bigger insurance pool, which would make the firms' premiums more stable. Many people with individual insurance now will come out ahead because they will be pooled with others.

Will health care reform drive down pharmaceutical prices?

An agreement between the drug industry and the White House would bring some relief to seniors from the doughnut hole in Medicare drug coverage. The hole is an area of non-coverage where Medicare beneficiaries face huge out-of pocket costs after their prescription costs for the year hit $2,700. The doughnut hole would narrow, but not close entirely, under this deal.

With health care reform, will I still have to worry about whether or not the anesthesiologist or MRI technician is in my network even though the hospital and doctor are?

The practice of ''balance billing'' -- where doctors and hospitals bill patients for a balance that insurers refuse to pay -- can saddle consumers with huge expenses. And in emergencies, a patient may not be able to choose a network doctor or hospital and thus be billed for thousands of dollars of services. It can occur even in regular scheduled surgery as well, with a non-network physician. None of the reform bills addresses this problem, according to Kaiser Health News, though it's increasingly a concern for consumers.

How will Medicaid and Medicare be affected by the proposed health care reform, especially the public option?

Medicaid, the government insurance for the poor and disabled, would be expanded to cover millions of low-income adults who don't currently qualify for the program. Medicare's benefits would remain the same under reform, according to AARP. But President Obama and other Democrats have pushed ending subsidies to Medicare Advantage plans, privately run by insurers, that give extra benefits to seniors. Those subsidy cuts could lead to fewer of those extras for seniors in Medicare Advantage plans, or to some of those plans closing down.

Will people still be able to appeal a denial-of-coverage decision?

Private insurance would likely work the same as before. But Professor Custer, of Georgia State, says that consumers may have more appeal power by being able to ask the insurance exchange itself to evaluate a coverage decision.

What's up with these so-called "death panels?" Is that just political rhetoric or really in the proposal?

The reform legislation contains no death panels. But the rumor won't die.

The prevailing myth is that a provision of reform could lead to the government promoting euthanasia. The House legislation has called for something entirely different: If a senior chooses to have an end-of-life conversation with a doctor, on issues such as a living will or hospice, then Medicare would cover it. These conversations would be voluntary. AARP has denounced the death panel reference as a distortion of an idea that can help people.

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