Why Reform Health Care?
Health care reform is needed for four reasons. First, rising health care costs will outstrip Medicare and Medicaid payments and devastate the federal budget, in our lifetimes. The U.S. health care system contributes $2.5 trillion, or nearly 18%, to GDP, the highest percentage in the developed world. It is also twice as much per person as any other developed country.Second, health care reform is needed because, despite this cost, the quality of care is the worst in the developed world. Chronic diseases cause 70% of all U.S. deaths. Heart disease, diabetes, arthritis, and cancer affect 10% of all Americans.
Third, health care reform is needed because 25% of Americans have little or no health insurance to cover their costs. Half of all bankruptcies result from medical costs, even though 75% of the filers were insured. Over 101,000 Americans die each year because they didn't have insurance.
Fourth, health care reform is needed to stem the economic costs of fraud. Between 3-10% ($60-$200 billion) is lost to fraud. If those same percentages are applied to the $436 billion Medicare program, the cost of Medicare fraud is $14-$30 billion.
However, is an expansion of health insurance the answer? Nearly 100,000 patients die because of rushed procedures - often attributed to current for-profit health insurance rules.Health care reform is needed, but how to enact that reform is highly controversial.
Senate Health Care Reform Bill
The Senate version is $871 billion over 10 years. It will reduce the budget deficit by $132 billion over the next ten years. It provides health insurance to 31 million additional people by offering subsidies for those who can't afford premiums.The Senate Bill creates an exchange that allows people and small businesses to shop for insurance plans. It fines companies that don't provide insurance, but provides a tax break for small businesses that can't afford it. For more, see Senate Health Care Reform Bill.
House Health Care Reform Bill
The House Healthcare Reform Bill would cost $894 billion over 10 years. It would reduce the deficit by $104 billion, and save $460 billion over 10 years by levying a surtax on high income earners. Like Obama's Health Care Proposal, the House health care reform bill would provide a government-run health insurance program. It would also offer direct subsidies to uninsured people to help them buy insurance through exchanges. For more, see House Health Care Reform Bill.Obama's Health Care Proposal
The Health Care for America Plan is like Medicare for everyone who doesn't already have health insurance. It would have lowered health care costs by 1.5% per year, since the federal government can bargain for lower prices and reduce inefficiencies, according to the Council of Economic Advisors. Lower health care costs translate to $2,600 more per family in 2020 and $10,000 by 2030. It would have reduced the deficit by 3% of GDP by and 6% by 2040. This would have lowered unemployment .25% per year, creating 500,000 jobs.Expanding health care insurance would have reduced visits to the emergency room by the uninsured. This will save $100 billion, or .6% of GDP, per year. Government-sponsored health insurance would remove this burden from small businesses, allowing them to be more competitive and attract higher-skilled workers. For more detail, see Obama's Health Care Proposal.
Health Care Reform and Illegal Immigrants
All reform bills preclude illegal immigrants from getting government funds to pay for health care insurance. However, none require people to prove citizenship before getting health care services. The bills do not provide for enforcement.Impact of Health Care Reform on the Economy
Without health care reform, government spending on Medicare and Medicaid is unsustainable. These costs will rise from 6% (current) to 15% of GDP by 2040. That's because Medicare payroll taxes and premiums cover only 57% of current benefits. The remaining 43% is financed from general revenues. Because of rising health care costs, general revenues would have to pay for 62% of Medicare costs by 2030.The Senate Health Care Reform Bill is the most likely one to pass. It would lower Federal spending by .7%, thereby reducing the federal budget deficit by $132 billion.
