So, Have You Heard About the Healthcare Bill?

If you’re an American and haven’t been hiding in the woods, away from all forms of media for the past few years (which seems like a better idea every day, to tell the truth), you’ve probably heard about this push to pass a health care bill to expand coverage here in the good old USA.  Just in case you were crushed under a rock for the past week or so, here’s the latest updates: a reconciliation bill was passed in the House on Sunday, the Senate passed their reconciliation bill today, and as of this writing, the House needs to pass the Senate bill (with its changed language) before it can be signed into law.  Barring something major happening to derail it, it looks as if the bill will be signed into law before this weekend is out.

Obviously, with such big changes being enacted that will affect health care, the economy, and OUR pocketbooks, lots of people have been throwing out their opinions about the whole situation.  Financial Samurai, for example, is in favor of the bill (or at least, the concept of expanding health care), Darwin of Darwin’s Finance opposes it, Kevin of 20s Money maintains that it will be much more expensive than currently expected, and Evan of My Journey to Millions asks if the bill is even constitutional (more on that below, as well as filling the airwaves over the next few months), just for a few examples.  With so much information flying around, I thought I should give the bill a peek under the hood, as well.

What’s In This Thing

If there’s one thing I think I can say for certain about this bill, it’s that most of the people currently commenting on it (myself included), most of the people who will be affected (that would be just about everyone in America), and even most of the Congresspersons and Senators who voted on this bill, haven’t actually read it.  That’s the problem with trying to discuss a 2,409 page bill; unless you have superhuman reading speed (side note: Worst. Superpower. Ever.), you’re just not going to make it through the whole thing.  Luckily, there are diligent groups with teams of readers to do just this sort of thing.  Here’s a summary from Health Insurance Providers that sums up the major aspects of this bill and when they go into effect:

There’s plenty of other sources out there for further review and consideration of this bill; here’s an article from Consumerism Commentary about how the changes included in this law will affect your pocketbook.  If you want to know a bit more about ten changes that are coming this year, here’s a detailed list from Alternet (a left-leaning website); if you’re wondering why anyone could be so cynical about this bill, Investor’s Business Daily has a list of ‘tough’ new rules that will apply, particularly to physicians and business owners.  (Of course, as is often the case in our sharply divided political world, many of the same points are included on each list; what the Left considers a victory, the Right considers a travesty.)

How Will This Affect ME?

Ah, the big question, how will this affect you?  The truth is, there’s no way to know with absolute certainty what will happen (which is why predicting the future is always such a crap shoot), but we can make some educated guesses.  Here’s a few possibilities:

  • A young person who don’t want health insurance: Given the fairly low proposed penalties for not having health insurance (starting at $95 in 2014 and rising to $625 (capped at 2.5% of your Adjusted Gross Income) by 2016), there’s a good chance that many of the youngest, fittest people will choose to continue foregoing insurance and just pay the fines.  In other words, this won’t affect you much at all.  (We’ll see how this can cause trouble in just a moment.)
  • A person with ‘pre-existing conditions’: Good news for you; as of 2014, you’ll have to be issued health insurance, regardless of your current state of health.  Bonus: you can’t even be charged more because of your health status, so no* worries that you’ll be bankrupted by hospital bills. (*Asterisk added because you’ll still need to pay the ‘regular’ insurance rates, which brings us to…)
  • Someone young and healthy, who wants health insurance ‘Just in Case’: Well, here’s the thing: health insurance companies can no longer lock out those who are bad risks (our ‘pre-existing condition’ friend up there), nor charge him or her higher premiums to reflect the greater risk that they will need medical care in the future.  Add in the people like our first example who decides to skip insurance coverage to save money (at least, until they get really sick and fall into category two, then get insurance since they can no longer be denied), and the level of risk in the insurance pool is going to be much higher, with rates that reflect that.  Bottom Line: higher rates than we see now for the young and healthy, the older and sicker, basically everyone.
  • Someone getting insurance through their employer: This is possibly the toughest case.  In theory, little may change; with your employer footing much of the bill and agreements with the insurance company regarding coverage for employees, there may not be much of a noticeable change on your end.  On the other hand, with higher levels of risk from individual insurance policy holders and the need for more income to level things out, health care costs could rise for you and your employer.  Add in fairly mild penalties for not providing coverage to employees, and there’s a good chance that some firms will drop health care coverage to save money.  (Which drops you into the category right above this one.)

Again, I remind you, this is just an educated guess on my part; with human nature being what it is, unforeseen events could make the results much better, or even worse.  Of course, we are getting a bit ahead of ourselves here; the bill still has one or two legislative hurdles to jump (and that’s assuming everything comes together), and even then, there are obstacles to clear…

What’s This About Unconstitutionality?

The next battlefield, assuming that all the needed votes are in favor and the bill is signed by Obama (which, if you remember the old School House Rock song, will make our sad little bill friend into a law), then there is the almost certainly going to be someone who takes the case to court on Constitutional grounds.  The main argument, as illustrated in this Cato Institute piece, is that punishing someone for something they did NOT do (in this case, those people who do not buy health insurance) is unprecedented in American history, and may be stretching Congressional law making power too far.

I’ll be completely honest with you: I’m no legal scholar, and while the argument made above sounds reasonable, I have no idea if it will pass the constitutionality test.  If it comes to that, and I think it will, we’ll just need to wait for the court’s decision, and go from there. (Of course, if the court rules that fining someone for not having health insurance is unconstitutional, and this bill is still passed with only those parts excised, the problems illustrated in the examples could end up being far worse.)

My Opinion

Now, finally, it’s time to share my opinion on this bill.  After much thought, I have to say, I’m not in favor.  Don’t get me wrong, I agree with FS on the importance of helping expand coverage so more people are protected.  I just see too many ways that this bill could have the opposite effect, causing insurance rates to shoot up drastically, leading employers to drop coverage, and causing the young and health, the ones most needed to stay in the system to keep it solvent, to leave and fend for themselves, continuing the cycle of rising rates and coverage being dropped.  (I don’t see this as plot to drive insurance companies out of business and leave the government to institute truly socialized medicine, as some have claimed; but it does seem to be a pretty serious flaw in the system.)

All of that being said, though, I’m going to try to hope for the best.  The advantage of being a pessimist is that you’re always either right, or pleasantly surprised; here’s hoping I get pleasantly surprised in this case.  To end on a lighter, more upbeat note, here’s a story about people celebrating the passage of the health care bill like it was Christmas; with any luck, we might all look back and celebrate one day.

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