President Obama's Health Care Plan: Soup to Nuts

Ram Emanuel Combine. So we're glad to have you here. Molly. I think I could take down but you could. He's a bulldog. Yeah, but I've seen you. Have you seen her leg wrestle? No, but startling. I've been behind me in front of her sights. Sure, I'm not a pleasant day. Yeah, I have to chuck it, which is why we're scared of Molly. But we're glad she's here, right Maum, I hope, So I hope you're glad I'm here. We're also glad you're here because, like the Necronomicon podcast, we intend to

use you as a shield. Just to get that out of the way, let's talk about healthcare form. All right. I want to also say that we are not going to be discussing any of the politics in this one. This is part two, you lie. Except for that part. Um, We're not going to be discussing any of the politics. What we're gonna do is simply present, uh, the proposals that are in play right now. And then Part three is going to be criticisms, pros cons maybe other ideas

for fixing the health care system. And then part four is what I'm excited about, myths and truths. Yes, yeah, we're going to be talking about just outright lies, things that are kind of on the fence, and things that actually are true but are discussing. Um, so let's talk about Obama's proposal. Is it even Obama's proposal? You know, Obama has made this a priority in his presidency, but big time, but he has not come down from on high with a massive plan for us all to reactive.

You know who did do that? The Clintons. The Clintons did, that's right, and Moses Moses. Uh, that was on the third tablet right yea, Um there tablet was dropped. Yeah, the Clintons actually wrote legislation and we're peddling it around Capitol Hill in the nineties and it didn't work. That that plan didn't work, So clearly Obama learned from his predecessors, right, right, So Obama has laid out eight principles. This is what

he did early on. I think this has gotten lost in all the hubbu but he came out with a principles UM and then left it to Congress as five companies from Congress to create plans. And then in the week we're recording this, he came out and made this mega speech that's come up with you know, all this attention.

So now the week we're recording this, Obama has come back out with the speech and made it made it look like it's a little bit more of his plan, tried to wrestle control away from you know, the media spin. He's saying what he wants in a plan, what he doesn't want, what he's open to compromise about. UM. But let's start in campaign mode. He was he's definitely back from vacation. Yeah, yeah, So should we talk about his

A proposals. Let's let's say, I mean, what we're talking about A thousand pages pages are so of legislation right now, right, we got we got two bills on the table from four committees. And when he says there are four committees who have come up with bills, one of the bills is a try committee bill, so that's where that comes from. Three committees came up with one bill um from the House HR three two zero zero, and then the Senate

has a bill. I have to point this out. I'm sorry, Molly didn't even look at her notes to writt along that bill number. I'm just gonna excuse myself to dream about HR three two zero zero. I bet you do. At this point she didn't look at her notes again. And you know what I have anxiety dreams about is the upcoming Senate Finance Committee bills. So by the time people hear this, that bill might become might be out. It's the trifecta. It's the one everyone's waiting for because

it's a bipartisan committee. Um being the Senate Finance Committee, they have to say how they're going to pay for it, which the other bills were not as on the hook for. So you know that's the one everyone's waiting on. Beta breath. Yeah. Actually, I saw today breaking news was that the chairman of that commit. The Democrat Max Bacchus basically said, we're pushing through with this very soon, and it doesn't matter if

I have Republican sport or not. We're gonna push it through and we'll have it for a review by the twenty one September. So wow, that's the latest word. Yeah, I have dreams about Max. Now do you really that's nice? So um, anyway, that's a personal note. So Obama says, here the here are the eight things that he saw that he wanted in the plan. Okay, he wanted to assure affordable, quality health coverage for all Americans. You guys want to I'll do one, yeah, yeah, I'll go next.

He wants to remove obstacles to coverage for people with pre existing conditions. He wants to invest in prevention and wellness. He wants to maintain coverage in the event of job loss or change. He wants to kill your grandparents. Oh, I'm sorry. Now. He wants to improve quality care and patient safety. Right uh? And uh, let's see. He wants to guarantee choice of doctors and coverage plans, right yes, and safeguard families from bankruptcies related to health expenses. I

think that's seven. He wants to the final one he wants to shrink long term cost increases in healthcare for businesses and the government. So those are pretty um broad principles. I think you'd be hard pressed to find someone who would disagree with these principles just it's got and theory. But then the Congress had the hard job of making

them into bills. So we have that thousand pages of legislation as it stands right now, not including the Senate Finance committment, without the Senate Finance correct in Brail, which was she taught herself, had translated and then read in. So so let's talk about how Congress did take these eight principles and turn them into healthcare. As you were saying, um, let's start with individuals. One of the big things is that everyone, Both of both of the proposals that are

out right now say that everyone has to have health insurance. Yeah, it's an individual mandate, and you know it's it's sort of borrowing an idea from car insurance. If we've all got to carry car insurance, then you know, what's what's health insurance in addition to that? Right, So if you don't have health insurance. You don't have to stormtroopers aren't going to come to your house and beat your kids

in front of you. But the tax man, well right, yeah, because I think the Senate bill says you pay seven fifty dollars a year in tax penalties for not having insurance. And then the house plan is I think up to two point five percent of your adjusted income. Yeah, but no more than the lowest price plan. Right, Like, they're not going to charge you more than you would have to pay your health insurance, right, I mean, if you if you can pay the premium and taxes, essentially you

could just pay the premium. Well that's the way I took it is we're going to get some money, so you might as well, hint, hint, to go spending on healthcare ether than funding the I R S. Right, But now most people already have health insurance. The majority people get it from their employers, and so that's pretty easy to to meet that requirement, right, But we don't want the employer to just chicken out, So employers have a mandate as well, exactly. So now we have to mandates

employer and individual. And I heard actually the Senate Finance is not going to have an employee an employer mandate, and that's why businesses are probably gonna be a little more favorable that I said. You know, that's one of the theories that that's what killed Clinton's bills. You know, it's a job killer, right, So um, but that that sounds kind of political. So let's just back off and say you're an employer, you're in an individual, You've got

this mandate. What if you can't afford it? Well, there's subsidies. Yes, Well, not only subsidies. I mean, if you are going to mandate that everybody has to have health insurance, you have to make exemptions for certain people. Um, but you also we already have Medicaid Medicare, so that covers automatically a

certain percentage of Americans. But they're also expanding Medicaid, right, I think two power Yeah, that is the current Senate plan would be a hundred about the federal power level, and the House would do a hundred of the federal powery level. Right. And they're also planning on kind of cleaning house in those two systems, right and making them more efficient and cheaper. Yes, hopefully. Yeah, Well we'll get to that when we start talking about how this is

going to be paid for? UM. But let's talk about subsidies for individuals. UM. Let's say that, Oh, I don't know, I make three hundred and fifty percent income above the federal poverty level. Right, Well, I know they're to dream. Will will I be eligible for subsidies? Yes? Yes, Okay, So I think it goes from Uh, let's say if we're going with a hundred and fifty percent above poverty level. Uh. From that to poverty level you're covered by medicaid. From

a hundred up to what is it? Uh, you're eligible for subsidies on a sliding scale only. Right. What they do is, obviously, if you make a little bit more money, if you're closer to that level of the federal poverty level, you will pay a greater amount of the premium than if you were just making a hundred five of the

federal pobby level. So in the House Committee, for example, you get your subsidy, but you will pay Let's say you were at three fifty, You're gonna people still paying your income toward the thing, and but then you also get a subsidy to cover the rest of the premium. Kind Of like when I go to my shrink and I say, dude, I make a year and he doesn't

charge me as much as the physician. It comesn't after me. Yeah, that's actually a really good point, Chuck, that there's a lot of um, a lot of key points in these proposals are already in effect in some ways either um de facto like your your shrink charging you on a sliding scale, or you know, um mandates about everyone having to have insurance like that the Massachusetts experiment. Right, So this is kind of taking a lot of maybe good ideas and putting them together, a good ideas being a

very political way to put it. Right, what's the Massachusetts experiment where everyone has to have insurance? I don't think I knew that? Yeah, wow, Yes, And you know, that's probably a good thing for you guys to discuss in the next podcast, because I mean, is the Massachusetts a success in terms of its health insurance? So, um, where is everybody going to get this insurance? There's an insurance marketplace that's being set up, right, Yeah, this is sort

of the new big thing. Um. So the insurance marketplace is sort of this attempt to have the general public get their insurance the same way that Congress people do, right, because essentially, when you become elected to Congress, you are presented with five plans. Are not not five, that's not I mean it's not a specific number. But basically you're offered all these plans that tell you exactly how much it's going to cost and what benefits are provided. And

it's very easy to use. Yeah, I think plain language is one of the provisions in at least the House Bill Transparency Plan language. Yeah, like you have to say this is what's covered, and this is what's not covered, and this is what you get for what you pay for. Right. Like,

plain language is a really big part of this. So if you're trying to fulfill your individual mandate, you will look at all these plans and say, well, I want this one because I know it costs this much and I know that this, this, and this and is covered.

And in both of these bills, every plan that's in that marketplace will will have a certain set of minimum benefits that it wills that have to be in there, and then there will be plans that are better than that in terms of maybe you want you know, spaw days covered or something like that you can pay to get that extra. But let's say you just want to be able to go get you know, a mammogram under

your health insurance plan. That's probably closer to what's going to be considered an essential benefit that has to be in the plan, right and it gets will get into this obviously latter two. But that's getting a little political

as well, with what can be covered and what's not right. Right, But let's just for the time being called the minimum benefits, because what we're what these proposals give the government license to do, is to define what these minimum standards of health insurance are, and eventually all health insurance plans, if you are have an existing one, it will I have about five years to meet these requirements as well, right, but it won't change it first. Right now, they have

about a five year window grandfathered in for several years. Right. And you staid in your article how healthcare reform works that, um, these basic requirements will keep the marketplace from becoming like a dumping ground for shoddy policies, right right, You know, we don't want anyone in the marketplace who already maybe doesn't have a job or can't afford regular insurance to just be stuck with sort of um crappy coverage. I mean, the whole point of this plan, whether you have insurance

or you don't have insurance. And Obama's point of view is to strength and health insurance for everyone. Right, So obviously, if you don't have a plan already, you're gonna want sort of that basic care. But you also want to make sure that the people who already have insurance are being protected in the same way, right, right, right? Do you know what insurance everyone should have? What motion picture health and welfare? Is it good? It's like it's better

than the army. Did you get Spada? You get massage, spa days, you get like Manny Petties paid for it. Actually, because this is the first I've ever heard of spot date, I think there's a sushi clause. You know, in Germany, spots are included universal health care. That's wonderful. Um, small businesses, you were saying that that businesses are going to have a mandate to provide health insurance. Uh, they're also going to be allowed to, um, go to this insurance marketplace

to select as well. Right, employers are going to be subject to a payer play requirement where if you don't provide health insurance for your employees. You're gonna have to pay into a fund for all your employees who don't have health insurance. Now, this would probably be a job killer if it were to be applied to small businesses. So small businesses will be exempt from this requirement, right.

I think Obama said small businesses in the US will be exempted his recent speech, right, So, um, and and the Senate and the House to find small businesses differently in their current plan. They might look at how many employees you have. They might look at your you know, income per year. I think if you make more than two dollars a year, you wouldn't be considered a small

business under this exemption. Um. But you know, that's that's probably gonna be one of the things that's ironed out and re examine pretty closely in the reconciliation of these two bills. But um, they would also be eligible to enter this marketplace and provide insurance to their employees with

the help of subsidies. Okay, And like people, those employers that decide I'm not doing this, they are going to have to pay, and that money will be contributed to the insurance marketplace, right right, So either way, it's provide, like you said, pay your play. Um. So in this marketplace, let's all pretend that we're in there right now. Okay, closure, closure, This is nice. Do you see all these little logos, like there's Etna's logo, there's Snoopy, say hi to Snoopy.

Um do you see this one? What is that? Like a screaming eagle with a bandaged head with the us of a that is new or it would be if this thing gets past. That's the public option, right, yes, the public option has in one of the more controversial parts of all these bills. Correct, yes, okay, so it's controversial. What's what's what does it entail? What's going on here?

So the point of having this marketplace is one way that Obama thinks we can keep our insurance companies honest and competitive, because if you're competing against people, then you will provide good service for good value. Makes sense? Makes sense? Now, Obama thinks that one way to ensure that this happens is to also introduce this public health insurance option. Um. So that it's a government run option that will have

lower rates probably. Um Now, obviously right there, you're going to have some contention about what the rate should be because kind of private ensure compete with UM. You know, a public ensure will have sort of the government um stamp of approval that might make it impervious to any sort of attack or disaster. UM. But the thinking is is that, you know, similar to the way we provide Medicare and Medicaid for certain people, that we would have this option for people to UM get health insurance at

a pretty pretty affordable cost set by the government. But we don't know what cost that would be yet, So you really can't get into an argument about whether insurers could compete. Are the financials not really set on this yet. No, And you know, if you've been following the news, this is probably the thing you see that, oh it's been dropped. Oh it hasn't been dropped. We might have a co

op instead. UM. It's really something to watch. That was something that in the speech Obama said he was willing to negotiate on, so it's still to come. He has said so far though, that it wouldn't be just another Medicare. We wouldn't just have Medicare rates which are about lower than most insurance rates, because that isn't fair to private insurers. It would have to be UM similar to private insurance likely, and it would also UM have to fund itself through premiums.

It would be self sustaining because I mean, if you've got federal or injections of federal cash, you're not really competing with anything, right, Yeah, And I think Obama said that he wouldn't back anything to added to the deficit. Is that correct? So that's the public option. Everybody back

away slowly. Well, you know one thing that might be interesting to talk about is we always hear Obamas saying that if you like your health insurance, you can keep it, right right, If you like your health insurance, you can keep it. The thing is it is Clinton saying no, if you like your health insurance, you can keep it there much better. But the thing is, let's think about the people who don't like their health insurance and might be thinking, oh, man, a public option sounds pretty good.

That's an excellent point because you never hear that mentioned. Um, you know, you can't really opt out of your employer based health insurance because you don't like it and just get into a cheaper public option. You can't. Why not? Because because you have the option through work so you're

immediately discounted. Because yes, but if right now the insurance marketplace will only be open to those people who don't have insurance through their employer at first, but I mean, I don't if we're still five years away from a marketplace. I think we'd be at least five years after that away from allowing everyone in. So right now, you have to stick with your employer based health insurance unless your employer drops. You know, that's something that people are saying.

You know, if there's some cheap plan and employers figure it's cheaper just to pay the fee than to cover their employees, that could happen. But um, the thinking is is that if if everyone has to know sort of what their insurance cost versus what it costs in the marketplace, then that competitive spirit might keep insurance fair and honest. This canna get really tricky, so well, let's talk about Let's talk some more about how insurance companies are going

to be effected. Just in addition to this possible competition from a public option, there are some mandates in this legislation, for example, that says you can't discriminate based on pre

existing conditions any longer. Obama likes to use that. Um. The example of that woman who's denied that what wasn't she was going to have a mastectomy, and then they found out she didn't declare a case of acne from her childhood, and thus they postponed the treatment on her breast cancer grow right and and under under this proposal, there's no more pre existing condition to niles and right

or and it, and it doesn't cost you more. You can't be charged a higher premium because you have a pre existing because they're gonna do with that completely for people who have insurance and for people who are trying to get insurance, like that's going man under this plan. So if you smoke tin packs of cigarettes today and you walk in there with an oxygen tank, they have to cover you, Yeah, for the same amount of money. Yeah,

as far as I know about the country, that's awesome. UM. There's also a mandate that, um, there can no longer be caps on spending my insurance companies. And actually not only that, the the the it's back on the consumer. There's now a cap on how much a consumer can pay out a pocket every year for their own healthcare. Right because a lot of bankruptcies are driven by medical costs. We're thinking that you know, if if there's if you can't go broke because you're sick, then we will decrease

the number of bankruptcies. Damage right, the damage we might be doing to our economy that way interesting definitely. Um there then, so that's insurance companies. That's also again we're just kind of hitting the high points here. We're talking about, as Molly said, sixteen hundred pages of legislation as the stands now. UM, So let's talk about UM Medicaid and Medicare. Chuck mentioned this earlier about UM kind of cutting waste

in the Medicaid and Medicare system. Uh, and that actually, let's talk about how much is this going to cost? The OMB suggests it's going to be about a trillion dollars over ten years for these these proposals for Obama's plan. Obama is saying that two thirds of this can be paid for right off the bat, just by cutting waste with Medicare and Medicaid. What is he talking about, Well, there's an estimate that about of the services that are

performed medically in this country are unnecessary. And that's overall, that's not just Medicare, Medicaid adding a third limb, yeah, potentially, or getting rid of that third limb that you wanted to keep. Yeah, you know, either waste buddy, just blew my mind. But to get rid of those costs right away, um, and to also cut out some administrative costs all this paper shuffling that a lot of people do, could um,

could help as well. The big the big name you always hear in association to this is Medicare advantage, which is a private program within the public program, which you know, I don't know if that makes much sense, but it's probably indicative of power whole health insurance system works. Um. That's a hundand seventy billion a year that goes to insurance companies for the exact same service that's provided to people by the government. So they would cauld that and

shuffle them over to Medicare standard. No more advantage for you, right, right, because it pays four more than regular Medicare for the same exact same service. The people who would have just stayed with regular Medicare, we could have saved a hundred seventy billion year, right, But that's just that hundred seventy billion. He's saying you can save another six billion just from

cutting waste, right. Uh, And I think he's all so talking about bundling services that leads to bundling services, correct, And that's a big deal. It's started his testing ground for this because, as I said, this thirty percent waste is endemic in the system. It's not just Medicare. It's not just the government that can't run a program. It's

it's everyone who can't run a program. But they've done these studies, um where they compare areas that spend a lot of money on Medicare to just a little bit of money on Medicare, and the people who have less spent on them live longer and are healthier. The people who have more doctors visits, more time in the hospital are the ones that are more likely to die from the exact same ailement that these lower spending people had over here. So what can we do to emulate those

lower spending areas? Um, that's where we get this idea of bundling that Josh was talking about. So if a person goes into the hospital with a heart attack, instead of you know, this doctor seeing him, then this doctor see him, then this doctor see m and everyone charging separately for all their tests for service be for service. Then you know, you go into the hospital as a Medicare patient and you are in there for your heart attack, and all the treatment that you get relates to your

heart attack. Your doctors need to work together to figure out the best course of treatment. And so it's it's more a matter of how you kind of pay your cable bill if you have your cable, your internet in your phone altogether, Um, you just bundling. You just pay one bill to the hospital for all that as opposed to paying for your cardiogram and you know the m R I scan they decides you need it and blah

blah blah. That kind of makes sense well, but it also leads to another kind of um radical suggestion that's found in these proposals is establishing what kind of care you should follow when somebody comes into UH for a heart attack, right, because how do you know how much it should cost unless you know what procedures you have

to follow and how much those procedures should cost. So to do that, they're setting up a panel that reviews the effectiveness of methods of treatment and says this doesn't work, this is success rate, So we're gonna go with this one, right, Well, I don't think they're going to throw out this one. I mean they obviously they don't want treatments that don't work. But I think it's more And obviously I think we're going to talk about rational healthcare in the next podcast.

But this is where people start to this idea. But let's say that there are three treatments for a heart attack. This one works, the first one works of population, the second works for five percent of the population, and the other one also works for five percent of population. Rather than doing all three, do you have a greater chance of starting with this one? Right? And if that doesn't work, then go to one. It's the population, Yeah, be tearing

up sort of what works. But I think Obama has been very clear that if your doctor thinks that he wants to still go with number three that has the five percent effectiveness rate, he can do that. Okay, you should be on that panel. Are you on the pannel? Okay, guys, we already talked about some forms of paying for this by cutting waste and getting rid of Medicare plus advantage advantage, Um,

what are some other ideas for paying for this? Because you know, Obama said he wasn't gonna sign anything that edit is sent to the deficit. And you know, one complication with him just saying I'm going to eliminate fraud and waste is those aren't scoreable measures according to the Congressional Budget Office. You know, it's got to be something for them to say, yes, it provides you know, twenty

million dollars. It's gonna be something the federal government can kind of you know, point to as opposed to this nebulous cutting cost thing. Um. Obama has been pretty clear that he would like to tax people who make more than two dollars a year change their tax deductions, and that I believe is what the House Plan calls for. Um. There's also the idea that we would tax the employer plans that are currently on tax the employer tax um exemption to get rid of that all together. Yeah, they

wouldn't be exempt anymore. And there's the thinking, you know, this was something that Kine brought up in the presidential campaign that Obama poo pooed, which is why it may not come back right away. Um. You know, there's the idea of people shouldn't have to tax. Why is essentially free for them now. But I mean, on the one hand, it would be kind of an invisible tax because as we say, you already don't know how much your health

insurance costs um. But also if it's if it's not just this free perk that employers can hand out, they might be more likely to increase your wages, is one thought. I mean, right now, a lot of employers can say, this is your salary, but look at this great health care plan you don't have to pay for. Whereas when that becomes an actual cost to a person, then you would weigh that a little bit in more in relation to the money in your pocket, so we can all

look forward to raises it's cost. I mean, that's just one thought behind behind this idea. But other people are like, no, that's a tax. I don't want it. So then another proposal is to flip that tax and tax the insurance companies that offer the plans because they're obviously putting a pretty penny in their pocket for these tax accept plans, and then you know, still kind of rub some people a wrong ways. The proposal has been floated just to tax um the mega plans, the ones that to have

spa days. Yeah, kind of like there's the CEO of Golden Sax. He's a planet's forty dollars a year, You're kidding, And yeah, you always hear him brought up is like, you know, does he really need this tax free health insurance plans? Golman texts beating in here. We mentioned them all the time. They bear the brunt. Ye. So there's the thought that maybe we would at tax either people who have those kind of plans or the insurance companies

that offer those kinds of plans. Um. But you know, there's this Time magazine article that found that actually a lot of state employees have really good plans too. But I think that what people are trying to get at is that there's money in these employer tax exemptions that we're going to have to look at it. It is a possible source of funding. So that's the high points.

There's some other ones like oh, I don't know, um Medicaid paying for family planning services right at the donut hole, which we sever the provision where any child born in the United States is automatically covered if they don't have insurance. Stuff like that, Uh, we're not going to cover any of the raucousness surrounding those and this one. As a matter of fact, I think we've reached the end of this one. Guys, Um, Molly, thank you very much for

coming in. We'll see you in the next one, and you'll want to tune in for part three, especially if you wake up in the middle of the night with your keep clenched shouting you lie, you lie. That's going to be about midst truths and lies concerning healthcare reform and Obama's proposal, and they'll be criticism from the right and the left on the on the plane of that one. Right, Chuck, what about the center? The center is just staying mute

and yeah, okay, So stay tuned for that. That's part three in our special four part Healthcare Suite series, brought to you by how stuff works dot com. For more on this and thousands of other topics, is it how stuff works dot Com. Want more how stuff Works, check out our blogs on the house stuff Works to come home page, brought to you by the reinvented two thousand twelve camera. It's ready, are you