Health Reform Leaves Millions Uninsured, and the Rest Must Wait

Barack Obama made providing universal health care a key goal of his campaign and presidency. "We have decided that it's time to give every American quality health care at an affordable cost," Obama said as recently as June 11. But as the U.S. Senate prepares to vote on a health-care reform bill that would still leave 23 million people -- or nearly 8% of the U.S. population -- uninsured, it's becoming clear that the coverage being proposed would be far from universal.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%%To be fair, both the Senate and House versions of health reform legislation would help many of the U.S.'s estimated 54 million uninsured get some form of health insurance. About 31 million would gain coverage under the Senate bill and 36 million under the more generous -- and more expensive -- House's, according to the Congressional Budget Office.

But even the House bill, which passed on Nov. 7, would still leave 6% of the country, or 18 million individuals (more than the entire population of the Netherlands, which incidentally, recently overhauled its health care system to offer universal coverage), without insurance.

Nearly $900 Billion over 10 Years

"The bottom line is, there is going to continue to be a significant number of uninsured," says Alwyn Cassil, a spokeswoman for the Center for Studying Health System Change, a Washington, D.C.-based nonpartisan policy research organization.

So what happened to giving "every American" coverage, to quote the president? A government goal of keeping health care reform from adding to the nation's deficit is the main reason a coverage gap will remain, Cassil says. The net cost of both the House and Senate bills is just shy of the $900 billion mark over 10 years. The cost of closing that gap, which would involve providing more government subsidies so that more individuals could afford to buy insurance, would push the cost over that level, Cassil says.

Here's another fact that that's not as loudly trumpeted amid the euphoria -- among Democrats, at least -- that some kind of health reform may become a reality: People without health insurance today aren't going to see relief anytime soon. Under the House bill, the "private exchanges" that would allow people to buy coverage from insurers wouldn't be active before 2013. The Senate bill calls for the reform to kick in a year later still, in 2014.

However, many of the funding mechanisms -- fees on medical-device makers, cuts to Medicare, taxes on tanning salons (under the Senate plan) and other measures -- would take effect pretty much after any legislation becomes law. (For a rundown on the costs and payment mechanisms of both bills, check out this comparison chart by the Associated Press.)

Health Reform's Image Problem

"There are 10 years of new taxes but only six or seven years of actual benefits in the bill," says Steffie Woolhandler, co-founder of Physicans for a National Health Plan, a physicans' group that favors a single-payer system. "The only way to make it budget-neutral is to have taxes in place right away, but to delay the benefits."

Cassil says this lag may create an image problem for any health reform, particularly in the short term. "It will be a long time before uninsured people see any benefits," Cassil says. "And for insured people, they are going to see as high a premium increase as they've been seeing in recent years."

As for Woolhandler, whose group opposes the Senate version of health reform on the grounds that it offers too many concessions to the insurance industry, among other reasons, the delay in benefits poses a more worrisome threat. She fears that more people could die from the lack of insurance, perhaps as many as 135,000 individuals before 2013.

She cites a recent Harvard University study that estimates 45,000 people die every year because they don't have access to health insurance, which means they're less likely to seek care for treatable conditions such as hypertension, diabetes and heart disease.

No Subsidies for Illegal Immigrants

Without a doubt, America needs to overhaul its highly dysfunctional health care system, for which costs are rising by double-digits every year. At the very least, both bills will seek to eliminate the practice of insurers denying coverage based on preexisting conditions.

Coverage is expected to increase -- to 94% of legal residents under 65, compared with 83% today. Under the Senate version, 96% of legal residents under 65 would be covered. Subsidies will help, with families making up to 400% of the federal poverty level ($88,200 for a family of four), for example, getting government help on a sliding scale to buy coverage.

But millions would still fall through the cracks. Some of those who'll remain uninsured are immigrants. Neither bill provides any government subsidies for buying insurance to illegal immigrants, estimated to number about 11.6 million across the U.S. Also excluded from government aid would be immigrants who are in the country legally, but don't qualify for federal benefits because they've been living in the U.S. for less than five years, says Woolhandler, who is also a professor of medicine at Harvard University.

But perhaps the bigger group of individuals that would remain uninsured are those who would find it cheaper to simply pay the fines imposed on individuals who don't purchase mandatory insurance than to actually buy health insurance. In Massachusetts, which has a mandatory insurance program much like the proposed national one, some 4% of the population (people who filed tax returns) in January 2009 remained uninsured, says Woolhandler, a Massachusetts resident. These include young college grads, working professionals not covered by their employers and others.

Fine with Paying a Fine?

Under both plans in Congress, individuals are basically required to get insurance though their employers if they can, or through a private insurance exchange. But Woolhander says many of those obligated to buy insurance might end up opting to pay the fine -- up to $750 annually in the Senate plan or a tax penalty of 2.5% of income in the House version -- instead. "Despite subsidies for low-income people, these plans would still leave people paying thousands of dollars out of their own pocket for health insurance," she says.

Under the Massachusetts plan, which Woolhandler says is even more generous than the national plan being proposed, someone her age (in her 50s) at three times the poverty rate, or about $32,000, would qualify for the cheapest plans. The premium would be under $5,000 annually, but the plan also includes a $2,000 deductible along with co-pays and other requirements, she says.

"The large problem is that most of the new insurance offered to people will be quite skimpy," says Woolhandler. "They might rationalize that they are better off paying a fine."

As Woolhandler and her group sees it, the main problem is that insurers have had too much influence in the legislative process, allowing them to limit the quality of coverage people will receive. As part of a compromise, lawmakers dropped a so-called public option, a government-run health program that would have competed with private insurers on the exchanges. Proponents of such a plan said it would have increased competition and lowered costs in health insurance.

Obama Likes the Bill

"The reason that health care is such a mess right now is because of the powers of private insurance," she says.

But if you believe Obama, the emerging reform -- now that the sausage is nearly made -- will improve the nation's health care and lower costs over the long run. "Every single criteria for reform I put forward is in this bill," the president said in a recent interview with The Washington Post. Problem is, we won't really know for sure for three years, at least.

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