Why reform is desperately needed and the benefits to a majority of Americans

[ProSense]

Krugman:

As it happens, Reuters published an investigative report this week that powerfully illustrates the vileness of our current system. The report concerns the insurer Fortis, now part of Assurant Health, which turns out to have had a systematic policy of revoking its clients’ policies when they got sick. In particular, according to the Reuters report, it targeted every single policyholder who contracted H.I.V., looking for any excuse, no matter how flimsy, for cancellation. In the case that brought all this to light, Assurant Health used an obviously misdated handwritten note by a nurse, who wrote “2001” instead of “2002,” to claim that the infection was a pre-existing condition that the client had failed to declare, and revoked his policy.

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But this is much more than a law enforcement issue. For one thing, it’s an example those who castigate President Obama for “demonizing” insurance companies should consider. The truth, widely documented, is that behavior like Assurant Health’s is widespread for a simple reason: it pays. A House committee estimated that Assurant made $150 million in profits between 2003 and 2007 by canceling coverage of people who thought they had insurance, a sum that dwarfs the fine the court imposed in this particular case. It’s not demonizing insurers to describe what they actually do.

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And one more thing: employment-based health insurance, which is already regulated in a way that mostly prevents this kind of abuse, is unraveling. Less than half of workers at small businesses were covered last year, down from 58 percent a decade ago. This means that in the absence of reform, an ever-growing number of Americans will be at the mercy of the likes of Assurant Health.

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But shouldn’t we be focused on controlling costs rather than extending coverage? Actually, the proposed reform does more to control health care costs than any previous legislation, paying for expanded coverage by reducing the rate at which Medicare costs will grow, substantially improving Medicare’s long-run financing along the way. And this combination of broader coverage and cost control is no accident: It has long been clear to health-policy experts that these concerns go hand in hand. The United States is the only advanced nation without universal health care, and it also has by far the world’s highest health care costs.

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Got that: "Assurant made $150 million in profits between 2003 and 2007 by canceling coverage of people who thought they had insurance."

Reform:

ENDS RESCISSIONS—Bans insurance companies from dropping people from coverage when they get sick. Effective 6 months after enactment.

PDF

Subsidies:

About 70 percent of individuals will be eligible for subsidies, including about 30 percent who will be eligible for Medicaid.

About 70 percent of families will be eligible for subsidies, including about 30 percent who will be eligible for Medicaid.



The Kaiser calculator has been updated to include the reconciliation bill.

Another important note from Krugman: "the proposed reform does more to control health care costs than any previous legislation"

[ProSense]

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