Yamileth Medina

Health Insurance Plans To Cost More After Reform?



Posted: Tuesday, December 15, 2009

by Yamileth Medina
VitalOne Health

Supporters of healthcare reform have claimed that increasing Americans' access to health insurance plans will end up saving the nation money in the long run. Although they have acknowledged the need for nearly a trillion dollars in spending, most Democrats in Congress believe that it will result in savings due largely to an increase in preventative care that nips health problems in the bud, before they become more serious (and expensive). Initial estimates from the Congressional Budget Office appeared to bolster their surprising promises. However, those claims may have been too good to be true.

The Department of Health and Human Services recently released a report which states that when taking both public and private costs into account, the current healthcare reform proposals will cause spending on health insurance plans to rise over the next decade. Currently, medical spending makes up about 15% of the GDP: $2.5 trillion each year. Proponents of reform have promised that increased efficiency and the lack of a profit motive will drive health expenses down. HHS investigators compared that promise to Medicare, the government-sponsored health insurance coverage for those over the age of 65. Among this nation's health insurance plans, Medicare is the closest parallel to the proposed (but now on the back burner) public option. Although part of the cost of reform is set to be paid for through $493 billion in cuts and modifications to Medicare, the HHS has found that whenever Congress significantly reduces the program's funding in one year, at least a portion of it is usually restored in the next budget. Therefore, they advise that such cuts are unsustainable.

Actuaries working in the HSS further warned that as it currently stands, healthcare reform has the potential to endanger Medicare. According to their report, cuts in service are quite likely. Republicans have ran with the findings, stating that they bolster their claims of the Democrat-led reform of slashing Medicare funding, while raising the premiums of health insurance plans. An already politically risky plan has the potential to collapse for Democrats after the release of this report.

Another concern regarding governmental spending surrounds the proposed creation of the so-called Class Act. Such a program would provide long-term care health insurance plans for the disabled and others in need. The HSS found that the Class Act may be a financially ruinous "insurance death spiral" for the federal government: it will attract people in poorer health, and premiums will increase as the cycle repeats. This scenario may also be a concern for the guaranteed-issue health insurance plans mandated under reform, because the main legislation forbids health insurance companies from denying coverage to individuals with pre-existing conditions or over a certain age.

There is very little in the way of positive news for reform supporters in the report. It does fulfill the Democratic objective of reducing the uninsured population by 33 million. If the bill passes, 93% of the country's residents would be covered under various health insurance plans. Moreover, prominent Democrats such as Chris Dodd claim that reports have shown that the programs will stay solvent for at least 75 years.

Yamileth Medina is an up and coming expert on Health Insurance and Healthcare Reform. She aims to help people realize that they can find quality health insurance plans right now while waiting for a public option, if it ever gets passed. Yamileth lives in Miami, FL.
Yamileth Medina is an up and coming expert on Health Insurance and Healthcare Reform. She aims to help people realize that they can find quality health insurance plans right now. Yamileth lives in Miami, FL.. Yamileth enjoys listening to music, as well as spending time with family and friends. She lives in Miami, Florida.
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