Health reform: A holiday gift for every consumer?

Steven Findlay, senior health policy analyst with Consumers Union, explains why health reform would benefit everyone, even if it is initially disorienting.

The great health reform debate of 2009 has moved into a new phase this month with the full Senate now debating the legislation. I can’t imagine a more profound Christmas, Hanukkah, and Kwanzaa present for the nation than a Senate bill by December 24. The redeemed Scrooge himself would be proud.

Though initial Senate passage won’t seal the deal, it would create momentum that could be tough to stop.

Misinformation about how this legislation will affect consumers has abounded amid the hyper-partisan debate and the complexity of the bills. So let’s be very clear on this critical point: This legislation will benefit every American in the long run. Every single one of us. And we are not talking about some vague social good, or an indirect trickle-down effect. The legislation will directly impact our lives for the better by expanding health insurance coverage and making it more secure, by making the health system fairer and more consumer-friendly, by taking solid steps to improve the quality and safety of care, and, over time, by constraining health care costs and premiums.

To be sure, if it becomes law, the legislation will also create anxiety and confusion. Change always does. New choices and new rules would bring initial stresses. And, of course, the legislation creates a new and far-reaching demand — the requirement to have health insurance. There’s no way around it: That requirement will trigger some tough moments for millions of currently uninsured families. They will have to choose whether to adjust their budgets and obtain coverage or pay a tax penalty (and remain uninsured) because they decide they simply can’t afford the coverage even with the government subsidies that will be available.

Imagining the pain of such decisions already makes us sad. But we at Consumers Union believe that the “individual mandate” or “shared responsibility” requirement will provide people with something of significant value. First and foremost, it could spare your family from severe financial strain or even bankruptcy if serious illness strikes or an accident occurs. Health insurance also lowers the barrier to ongoing care with coverage of routine doctor visits and preventive health services.

And hard as it may be to grasp or accept, the individual mandate is the critical piece of the health reform puzzle that allows a new insurance marketplace with far less discrimination and restrictions to be built. Everyone gains access to insurance, even if they have a medical condition. No one is denied.

Critics have complained lately that the bills don’t go far enough to constrain soaring health costs and premiums. I understand this criticism but also believe that the legislation lays a solid foundation for initial cost constraint and for additional steps in the future. The plain fact is our society no longer has the luxury of ignoring escalating health costs. They threaten to overwhelm not only family budgets but also the budgets of most companies and the federal government (our tax dollars) if not attended to. At Consumers Union, we feel confident that if the measures in the reform bills don’t reduce the growth rate in health costs over the next few years that lawmakers and society will be compelled to revisit the issue.

We urge more Americans to download summaries of the House and Senate bills and learn more fully what’s in them. You may be surprised. We’d note the following in the Senate bill that would begin in 2010 alone if the legislation becomes law this year.

• Federal and state governments will conduct an annual review of premium rates and increases.

• Insurers will be required to publicly report the percentage of premium dollars they spend on actual clinical services and quality improvement, as opposed to administrative costs and overhead.

• Insurers will be required to abide by new standards in presenting easy-to-understand information about policies and plans. This will allow you to better compare insurance offerings.

• A government sponsored Web site is created that allows you to search for affordable insurance options and compare plans and policies.

• Plans that cover children are required to do so until they reach age 26, allowing college grads who are not quite on their feet yet to stay on their parents’ plan.

• Insurance plans are prohibited from canceling people’s policies except in cases where a person has willfully lied or given false information.

• A $5 billion program will fund an insurance program for people who, because of a pre-existing condition, have been unable to get health insurance (either because it was denied or just too expensive).

Again, those are the benefits and improvements the bill provides almost right away. The major provisions of the bills — expanding coverage and improving the quality of care — don’t kick in until 2011 to 2014.

No piece of legislation, let alone one this complex, can possibly be perfect. But, by a long shot, the major provisions of the health reform bills are good news for consumers.