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Please Explain: Health Care Reform

Friday, November 19, 2010

President Obama's health care reform has been seen as too much intervention by some and not enough of an overhaul by others, but few people know exactly what the new law includes and how it changes health care and health insurance in this country. On this week's Please Explain, Washington Post correspondent T. R. Reid explains the ins and outs, the costs and the savings, of the 2010 Patient Protection and Affordable Care Act. He's the author of The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care.

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T.R. Reid

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Comments [47]

Mr. Bad from NYC

@ Bill from New York

"Of course you might view that the employer might just eliminate the benefit, as a cut to the workers, but at that point the $100 becomes profit, so you can figure it is taxed at 30% or more, leaving the company with less than $70 anyway."

Yes, employers MIGHT view it that way - in fact, MOST WILL. As for how profits are taxed I can only say that you embody the soul of disingenuous, either that or willful deception approaching fraud. Grow a pair. Why would their profits be taxed at 30% or more - name one company (Like a multinational with numerous tax havens ala Google) that pays a 30% tax and is incorporated in the good ole' US of A? I DARE you to name 10 US corporations that pay over 15% net tax rate on their annual profits. You are a LIAR and an apologist. Nice try , link to your proof - public corporations only!

Nov. 20 2010 06:26 PM
Bill from New York

Mr. Reid's response to the woman who called, asserting that all company health care coverage would be dropped, and we would all end up on plans from the exchange, costing us more was really poor. Her claim was that the maximum of 8% of gross, above which people get subsidy, would not be enough to offset the loss of the employer paid subsidy. Apparently, Mr. Reid's mind went blank, and he agreed with her. What she did not know, and Reid forgot, was that employer plans now get a government subsidy of 25% to 50%, and will continue to. It costs companies far less to buy insurance, than the price they ostensively pay.
Companies, particularly large ones that employ half our workers, get a substantial tax subsidy, which will continue. Consider how the tradeoff looks for a company looking to save $100 by dropping a tax deductible benefit, like health care, which is not taxed either to the company or the employee.
To give the employee an extra $100, the employer will need to pay employer FICA match, of about $7, making the cost to the company $107. What happens next is that the employee pays another $7 for FICA, so the net is now $93. Next, the employees marginal tax rate, from 10% to 35% is taken out. Now the amount available to the employee is between $58 and $83. Finally, most states have income taxes, where the marginal rate is likely to be between 4% and 8%. This leaves the employee with a net of between $50 and $75.
Employers get Health Care policies that are about 15% less expensive, because they are buying in bulk. If a company drops $100 worth of health insurance, it means that the employee will now have 50% to 75% of the amount, with which to purchase insurance that will be 15% more expensive.
Employers have taken to Health Insurance, because they can buy it wholesale, for tens of thousands of workers, at low rates, They also love it because it allows them to compete for workers, particularly higher pay workers, through untaxed benefits, which are worth much more to employees than money to buy them would be. Companies that drop health care will be faced with loss of workers, particularly their more valuable workers in the higher marginal brackets.
Of course you might view that the employer might just eliminate the benefit, as a cut to the workers, but at that point the $100 becomes profit, so you can figure it is taxed at 30% or more, leaving the company with less than $70 anyway.
Just in case the employer is willing to lose employees, the HCR bill also has a tax that must be paid by large companies that do not offer company plans.
This tax subsidy continues to exist under HCR. This was an important consideration in the crafting of HCR. Too bad Mr Reid blanked out at the wrong moment.

Nov. 20 2010 05:48 PM
Mr. Bad from NYC

@ amalgam from Manhattan by day, NJ by night

Medicare or Medicaid? I was talking about Medicaid not Medicare - there is a big difference in reimbursements FYI. Medicare beneficiaries will be fine - the AARP and all the lovely, lazy fat and happy baby boomers will ensure the young are screwed so that they live on pointlessly to be 100+ but for the poor and working/middle class the only choice is to start gaming the system - mark my words, this Obamacare will lower the quality of care for EVERYONE but the super rich who pay all medical bills cash. BTW - I am no rightwing nutjob, I know what everyone else with a brain knows, only single payer (government controlled universal health care) will solve this countries health care and budgetary crisis. I tentatively supported this plan at its inception because I believed that eventually the revisions to the cost structure would reduce the profits made by Health Insurance companies that eventually they would be amenable to direct government intervention but the bill passed will have the exact OPPOSITE effect - every worthwhile object of this bill will be defunded by congress and the few remaining gains (preexisting condition) will be rendered moot by bureaucratic fiat -wait and see what happens. TR Knight is a stupid cheerleader selling a book, why do we listen to these idiot journalists who are all, invariably, bought and paid for by the interests they transparently advocate for. F*** the "Fourth Estate", these people are leading us down the garden path to perdition in order to cash a check - take a minute from your day and think for yourselves!

Nov. 20 2010 05:41 PM
Ed from Larchmont, N.Y.

A problem with health care and with social security is that there aren't enough young people to work and pay into it. And this was predictable in 1973: once we killed so many people in abortion, who would be young and working and contributing to these systems, and not using them, it was predictable that we would not be able to fund them, no matter how you arrange things. It sounds good to give everyone insurance, but the county can't afford it, at the prices now. It's a demographic problem.

Nov. 20 2010 03:09 PM
amalgam from Manhattan by day, NJ by night

@ Mr. Bad - Just like the caller, you are making assumptions without merit since your expectation is that doctors will become inundated with patients using Medicare. Contrary to your expectations, most people will buy various types of insurance that fit their cost and needs (catastrophic care, high premium-high care, low premium-lesser care, etc.)

Certainly this healthcare bill won't stamp out the outrageous rate of inflation in the industry, but it will surely bring it down with major state pools, best practices, information sharing, and newly yet-as-of-now-undefined programs.

And guess what: eventually there will be national healthcare insurance across state lines, more choice, market-based selective procedures, etc. These will happen because innovation is key to the healthcare industry, which wants to make a buck (and sometimes screw people) while people will always need to be treated. While I'm not so sanguine, improvement in healthcare delivery is maybe the most important economic and quality of life issue there is, making it a priority/necessity and therefore likely.

Finally the likelihood is that insurance coverage of all sorts will move slower than what the the right-wingers are bleating, in part, because of their obstructionism.

Nov. 19 2010 03:43 PM
Joanne from Brooklyn

Many of us rely on alternative therapies like acupuncture, cranio-sacral therapy, etc. Will these now be covered based on the new health care reform?

Nov. 19 2010 02:51 PM
Donna Yankowitz from Oradell, NJ

I didn't understand Reid's answer to the caller who said he would pay more for insurance on the exchange than getting it from his employer. Assumedly, the Post would save money by ditching the insurance and paying the fine. Wouldn't market forces redistribute, at least to some extent, that savings to Reid by increasing his base pay? Does Reid have any economic analysis in his book about how this scenario would change salaries?

Nov. 19 2010 02:40 PM
Chuck from Suffern

Good discussion of the healthcare bill. I think the response to the woman who questioned the cost of healthcare if ones employer drops your coverage was faulty. Her comment/question assumes all employers will drop coverage of their employees with implementation of the bill, and as a consequence those employees will pay more for their insurance. There is nothing preventing an employer right now from dropping coverage for their employees without a reason unless a contract is involved. Why would one assume that their employer would drop coverage with the new plan other than that they could blame the government for cuts that they want anyway?

Nov. 19 2010 02:36 PM
Ken from Upper West Side

Churchill said it best: "You can always count on Americans to do the right thing -- after they've tried everything else." The right thing is single-payer and this is just another incremental waystation.

Nov. 19 2010 02:32 PM
Henry from Katonah

Mr Reid said he wrote a 70 page summary of what is in the Affordable Care Act - - can you provide a link to that?
Is it on the Washington Post website? Has it been published in pamphet form - - like Thomas Paine's Common Sense ?

The Lopate Show responds:
The summary is included as an afterword in the paperback edition of his book, The Healing of America.

Nov. 19 2010 02:13 PM
CF Vargas from Fort Lee, NJ

Excellent segment, rather short though. I wonder if TR Reid thinks undocumented workers should be part of the ideal "Universal Coverage" some Americans like myself would hope "Obama Care" evolves into... If the estimates of about twelve million undocumented people living in this country are correct, and a percentage of them use Emergency Rooms as primary means of obtaining Health Care, wouldn't it be as important for them to be able to buy insurance as everybody else, and wouldn't it have the same long-term cost-cutting effect that Universal Care aims to provide for the entire US population?

Nov. 19 2010 02:11 PM
Mr. Bad from NYC

LOL @ T.R.

Yes, but a massive expansion to Medicaid to grab those uninsured but nobody takes Medicaid and the few who do will soon stop when inundated with patients ... Then the criminals step in to fill the gap with corporate "clinics" . Meanwhile the middle class pays WAY MORE for WAY LESS and bankrupts themselves with additional premium payments, co-pays and sky high deductibles equal to or lesser than the value of their policy if they have a chronic condition as opposed to a "one off" major surgery resolvable over a few visits. ALL THIS in a country where type 2 diabetes is set to explode as the number one health problem in the next 20 years. Do the math - this was nothing, NOTHING but a song and dance supposed to burnish Obama's image as song of god - but even a dumb sucker American has his animal cunning and we know when we're being led to slaughter, it's been a long time coming!

Nov. 19 2010 02:08 PM
barrie from nyc

Does Mr. Reid have any advice about the fact that many doctors in NYC will not take insurance of any kind, including Medicare? If one is not on Medicare, one still can file those doctor's bills as claims with a health plan provider and get some partial reimbursement. But if one is on Medicare, Medicare will not reimburse at all for doctors who have opted out -- MANY doctors in NYC have opted out.

Other commenters made excellent points -- for example, building enforced poverty into the system is "insane."

Nov. 19 2010 02:07 PM
Mr. Bad from NYC

LOL @ T.R.

Yes, but a massive expansion to Medicaid to grab those uninsured but nobody takes Medicaid and the few who do will soon stop when inundated with patients ... Then the criminals step in to fill the gap with corporate "clinics" . Meanwhile the middle class pays WAY MORE for WAY LESS and bankrupts themselves with additional premium payments, co-pays and sky high deductibles erqual to or lesser than the value of their policy if they have a chronic condition as opposed to a "one off" major surgery resolvable over a few visits. ALL THIS in a country where type 2 diabetes is set to explode as the number one health problem in the next 20 years. Do the math - this was nothing, NOTHING but a song and dance supposed to burnish Obama's image as sond of god - but even a dumb sucker american has his animal cunning and we know when we're being led to slaughter, it's been a long time coming!

Nov. 19 2010 02:07 PM
joseph from manhattan

This topic should have at least 1/2 hour in discussions and explanations but still I want to thank you for bring Mr. Reid in, and no wonder the Republicans want to cut the Federal funding for NPR as a dumb Nation is easy to control.

Nov. 19 2010 02:03 PM
amalgam from Manhattan by day, NJ by night

Georgina (caller) - It's not necessarily true that the new healthcare plans will ALWAYS be more expensive when there is a range of options available.

Moreover, she is talking about money that she SEES coming out of pocket going towards healthcare, as opposed to all the HIDDEN COSTS that everyone is paying for uninsured people using the emergency room, rising healthcare costs because of a more unhealthy society, etc.

These are things that she is paying right now without identifying them as costs based on our current healthcare system that ostracizes, or at least makes it difficult for, the uninsured.

Why isn't she talking about the current embedded costs?

Nov. 19 2010 02:01 PM

Our health insurance was raised not just by double digits -- it was raised from $20,000 to $30,000 a year with a letter blaming it on Obama. They sent the letter just before the recent elections. I think this is out and out fraud. I wish this would be investigated. The insurance industry is literally getting away with murder (by neglect and false advertising). Our new plan (because we couldn't afford $30,000 a year) tried to say that we couldn't get pre-existing conditions covered in New York. Good to know that there is legislation on our side, but given what our broker is saying there may be some loopholes to this law.

Nov. 19 2010 02:01 PM
Stephanie from Colorado

I just did a quick calculation and my husband and I currently pay 14% of our gross income on health care. And it is considered 'good' insurance.

Nov. 19 2010 02:00 PM
Mike

Why was this only 15 minutes... Sheez... we spend hours on some play and something like this which is important for people gets only 15 minutes

Nov. 19 2010 01:58 PM
joseph alfredo from Manhattan

It is quite a shame that the so call "the richest Nation on earth" doesn't provide health care for all it's own citizens. The problem is that we have politicians that are working for corporations and not for the people, so in this case corporations will always win as politicians are the ones that set the laws of the land.

Nov. 19 2010 01:57 PM
Carolyn from Bronx

With regards to Georgina's comments - as I'm to understand it, Insurance in NY will cover you with a pre-existing condition, BUT they will not pay on that condition for 12 months of premiums.

Nov. 19 2010 01:57 PM
petrov from Queens

Thank you for bringing Mr Reid to your show.
You are giving us an accurate view of how US medical compares to other nations. We are behind in quality and accessibility only J Boehner is misinforming the public about "our" health insurance and health care system being best in the world ...Mr Reid explaines it well. What will NY public radio do to inform the public more about health care reform and the situation where people likely may be left out of minimum care. people who cannot afford health care are dying in the US where in other developed nations people would have a chance to get care. We are still far from an accessible insurance.

Nov. 19 2010 01:57 PM
Melinda from Peekskill, NY

New York State does allow insurance companies to deny people care if they have pre-existing conditions. I had to go for a year without migraine medication using the Freelancers Insurance. The woman who called in is "dead" wrong.

Nov. 19 2010 01:55 PM
jawbone from Parsippany

Some Dem rep said recently:

We had an FDR moment, but we got a Hoover solution.

Or words close to that.

Nov. 19 2010 01:55 PM
Carolyn from Bronx

With regards to Georgina's comments - as I'm to understand it, Insurance in NY will cover you with a pre-existing condition, BUT they will not pay on that condition for 12 months of premiums.

Nov. 19 2010 01:55 PM
jawbone from Parsippany

Obama's plan will mandate that people purchase something called "health insurance"; however, it may be so costly to get effective insurance that many will some kind of junk insurance just to keep the IRS off their backs.

It will not mean the get health CARE. They may have a physical, be told they have some serious problem, but then be unable to afford co-pays and deductibles.

Medicare for All Improved -- it's what this nation needs.

Nov. 19 2010 01:54 PM
Doug

Why haven't Democrats paid TR Reid to go on every TV show in US on this? We already have Death Panels. How many sick people die or go untreated every day because insurance companies refuse to pay. I've seen that many times.

Nov. 19 2010 01:54 PM
Joan from Manhattan

I was one of those peopel who was in an accident and became disabled. So I payed my $850 insurance premium (I am self-employed) each month until impoverished. Once my assets, including retirement savings, is below $13K, I am eligible for Medicaid, as long as I don't work. Building impoverishment into the system is insane.

Nov. 19 2010 01:54 PM
Carol

My employer, during our open enrollment seminar, said that the double-digit increase in our health care premiums was due to Obama care. I think this is false. But is there any increase in premiums this year (due maybe to covering older dependent children)?

Nov. 19 2010 01:52 PM
Henry from Manhattan

It is not called “Obama Care.”

It’s called the Affordable Care Act.

Nov. 19 2010 01:51 PM
jawbone from Parsippany

And Joe Lieberman refused to back the Medicare buy-in option, since he thought the liberals liked it too much.

Obama's plan, based on Heritage Foundation writings, Romney Care in MA, and his own conservative leanings, is basically a reform plan to protect private insurers and their profits by mandating they get new customers.

Bad plan, bad future outcomes.

Medicare for All Improved, coverage from dollar one including vision, dental, and prescriptions -- all while saving so much money for us. Corporate health care profiteering must stop.

Nov. 19 2010 01:51 PM
Robert from If the Republicans succeed in overturning the healkthcazre r

If the Republicans succeed in overturning the healthcare reform act, what will happen to the act's elimination of the Medicare Part D "doughnut hole"?

Nov. 19 2010 01:50 PM
Fred from Ridgewood

How will this effect my NYC DOE insurance

Nov. 19 2010 01:48 PM
Roger

What is more cost effective? Multiple payers or single payer. Mr. Reid once said that Japan has hundreds of payers and places like Germany and Swizterland have more than one payer.

Nov. 19 2010 01:48 PM
Ken from Upper West Side

FYI, the CLASS Act is a little-known provision of the new law that provides a modest, publicly funded long-term care benefit. It's in there thanks to the late Sen. Edward Kennedy.

Nov. 19 2010 01:47 PM
jawbone from Parsippany

What I've been reading is that the insurance companies are working the refs, state regulators especially but Obama officials as well, to try to make the regulations as business and profit for the big insurers friendly as possible.

Since so much will be done at the state, or possibly regional level, won't the last election have profound effects on how any "exchanges" are set up? On how beneficial they are to the people who need health CARE?

Nov. 19 2010 01:46 PM
Fred

How will this effect my NYC DOE insurance?

Nov. 19 2010 01:45 PM
Rob from Brooklyn

So when specifically will we see prices drop?

Nov. 19 2010 01:45 PM
Philior from Brooklyn

Dear Leonard,

You let your guest trick us into believing that people buy insurance when they get cancer, in which case it could definitely go bankrupt.
This is not how it works in reality. But he justifies the mandatory insurance on this false premise.

Nov. 19 2010 01:43 PM
Aaron from Astoria

Considering what I'm hearing, it is MADDENING that the benefits of this bill have not been better publicized. How is this possible, and can that be changed?

Nov. 19 2010 01:41 PM
EVC from Brooklyn

what is the name of the new internet healthcare exchange mr reid mentions? and when does it go into effect?

Nov. 19 2010 01:38 PM
Mr. Bad from NYC

What a joke, just a plan to put further in debt the impecunious "middle class" - these insurance exchanges will simply proffer inferior quality insurance at the same or higher cost - get ready for huge co-payments and insane deductibles - I've heard what they're planning, check into a Health care company conference call before you shoot your mouth off you dumb journalist. ONLY cost control can save us and ONLY universal payer can force it - this obamacare was a giant fraud and we will watch it destroy lives in the future.

Nov. 19 2010 01:36 PM
Ken

Ask him about the CLASS Act. Does it need Congressional funding and if so is the GOP gunning for it?

Nov. 19 2010 01:36 PM
Pat Reed from Saratoga Springs, NY

Healthcare is a human right.
Improved & Expanded Medicare for All, HR676 is the only plan that will SAVE billions $ by reducing duplication, waste,
for profit diversion of the healthcare $.
Choice of your own provider and hospital is protected. Everyone is in, No-one left out. Quality of care is improved.
Our nations leading economists have demonstatred that the free market system
does NOT work in controlling healrthcare costs.
Lets do the right job for the American people.

Nov. 19 2010 01:10 PM
barbara kaplowitz

The profitable health insurance companies in New York that offer group health (2 - 50) are announcing that they are raising their premiums 26% to 45% and blaming the new health bill. Formerly outrageous premiums $2300/month for a family will be going up January 1, 2011. The insurance companies were profitable before and are now going to be more profitable on the backs of New Yorkers. Can't anyone stop the insanity?

Nov. 19 2010 12:37 PM
Sophia from Yonkers, NY

I'm a student of Christian Science and I don't intend to hire a medical doctor. Does the Health Care Bill infinge upon my religious freedom?

Nov. 19 2010 12:02 PM
John P. MacKenzie from Long Island City

Tom, i didn't notice mention of Medicare Advantage in your book, but i did hear you in an interview say this was one feature that favored some people, including yourself, over others. We needed much more clarity during the "debates" in Congress. Please supply some in your interview today. Greetings.

John P MacKenzie

Nov. 19 2010 06:58 AM

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