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Myth vs. Fact
On March 23, 2010, President Obama signed comprehensive health reform, the Patient Protection and Affordable Care Act, into law. The following are answers to some of the questions that have been voiced regarding this health care reform legislation:

  1. Is Congress proposing socialized medicine? I heard this new legislation is a government take over of healthcare, is that true?

  2. Does the bill outlaw private insurance?

  3. If health care reform is so good, why are politicians exempting themselves from it?

  4. Will healthcare reform hurt small businesses?

  5. Didn't Congress move too fast? Why did Obama push healthcare through before everyone had time to read through and discuss it?

  6. Why shouldn’t we allow each state to decide how to reform healthcare?

  7. Will healthcare reform put government between me and my doctor?

  8. I’m on Medicare, will healthcare reform hurt me? How will healthcare reform affect Medicare?

  9. Does the legislation eliminate the Medicare Advantage Program?

  10. How will we afford healthcare? In this economy, won't it be too expensive?

  11. Will the 'Health Choices Commissioner' decide health benefits for us?

  12. Will all non-US citizens, illegal or not, be provided with free health care services?

  13. Aren't those of us with health insurance already paying enough?

  14. Utah's Attorney General has filed a lawsuit claiming federal health reform is unconstitutional. Is he correct?


Is Congress proposing socialized medicine? I heard that these proposals will cause a government take over of healthcare, is that true?

The Patient Protection and Affordable Care Act is not attempting to create a Canadian or British style health care system. The new legislation builds on current employer-based insurance while ensuring affordable, quality insurance for those who lack it.  Over 160 million Americans will have private health insurance coverage.  Seniors will continue getting coverage through Medicare.   Thus, the Patient Protection and Affordable Care Act builds on the strengths of American health care, offering solutions that respect American values, choice and competition while bringing stability and security to our families and small businesses. 

Does the bill outlaw private insurance?
Absolutely not.  The legislation relies heavily on the continuation of private health insurance plans.  What the law does is ensure that if you fall ill or have an accident, your premiums won’t go up just because you’ve been sick or had another birthday.  In addition, you won’t be denied coverage because of a cancer you had five years ago. After 2014, private health plans that engage in these egregious practices—such as denying someone for pre-existing conditions or charging people more based on gender or health status—cannot continue to be sold to new enrollees.  Private plans that meet the rules not only can be sold, but will continue to be the main way people obtain health insurance coverage.  

If health care reform is so good, why are politicians exempting themselves from it?
They aren’t. Under the new law, members of Congress and their staff must enroll in the new insurance exchanges. Those are the exact same exchanges through which millions of other individuals will be buying their coverage.  The first bill didn't originally read that way but the Republicans introduced amendments that would require members of the House and Senate and their staff to enroll in the exchanges and to voluntarily relinquish the coverage they get from the Federal Employees Health Benefits Plan.  The Democrats agreed.  Most Americans who already have insurance won’t have to make that switch.  They get to keep their present employer-sponsored insurance, if that is what they prefer.

Will healthcare reform hurt small businesses?|
No. Utah small business owners have spoken in unambiguous terms about the need for comprehensive health reforms, and helping small businesses is at the center of the Patient Protection and Affordable Care Act.  Small businesses who offer their employees health insurance will get help covering that expense, so they can invest thier savings back into growing their businesses. 
Starting in 2010, small businesses can receive up to a 35% tax credit to help offset the costs of providing health insurance to their employees.  To qualify, the small business must have no more than 25 full-time equivalent employees, annual average wages of less than $50,000, and cover at least 50% of their employees’ premiums.  Starting in 2014, the tax credit increases to up to 50%.  Calculate your tax credit here.

In addition, the legislation includes the following reforms to especially help small businesses:
1. Insurance reforms will do away with built-in disadvantages faced by small groups and individuals;
2. Health insurance exchange will be created to increase the purchasing power of small business and spread risk more broadly, providing additional premium stability and predictably and giving small businesses the same competitive advantages of large businesses. This will allow employers and employees to shop and compare plans in a marketplace;
3. Cost containment strategies to slow the growth of health care costs.

Didn't Congress move too fast? Why did Obama push healthcare through before everyone had time to read through and discuss it?
Congress spent over a year debating, negotiating and compromising on health care reform.  That is an unprecedented amount of time spent focused on just one issue.  However, there was an urgency to pass health reforms this year so that small businesses and individuals wouldn’t continue to face financial catastrophe related to health care costs.  In 2009, 88% of small businesses in Utah did not offer health insurance because they can’t afford to, while 79% of those who did offer it said they really struggled to do so. It is clear that as the foundation of our economy, small businesses cannot lead the way to economic recovery without receiving lasting relief from health care costs. 

Why shouldn’t we allow each state to decide how to reform healthcare?  Health reform is designed to be a partnership between the state and federal governments, as it should be.  The federal legislation provides an overall framework, but the reforms rely heavily on innovative state strategies to be successful.  States do not exist in a vacuum. Having consistent laws and rules across the country is essential to creating a system that works for all Americans. However, states also have unique characteristics and strengths and weaknesses that must be accounted for as well.  Major roles for each state include:

  • Create an exchange for individuals and small businesses (Utah is already underway with the 2nd exchange in the country)  (State exchange planning grants available in 2010)
  • Through the exchange, provide oversight of health plans with regard to the new insurance market regulations, consumer protections, rate reviews, solvency, reserve fund requirements, and administer the new premium tax credits.
  • Enroll newly eligible Medicaid beneficiaries into the Medicaid program no later than January 2014 (states have the option to expand enrollment beginning in 2011), coordinate enrollment with the new Exchanges, and implement other specified changes to the Medicaid program.  (The Medicaid expansion is paid for in full by the federal government)
  • Establish an office of health insurance consumer assistance or an ombudsman program to serve as an advocate for people with private coverage in the individual and small group markets. (Grants available beginning fiscal year 2010)
  • Permit states to create a Basic Health Plan for uninsured individuals with incomes between 133% and 200% FPL in lieu of these individuals receiving premium subsidies to purchase coverage in the Exchanges. (Effective January 1, 2014)
  • Permit states to obtain a five-year waiver of certain new health insurance requirements if the state can demonstrate that it provides health coverage to all residents that is at least as comprehensive as the coverage required under an Exchange plan and that the state plan does not increase the federal budget deficit. (Effective January 1, 2017)
  • Develop demonstration projects to develop, implement, and evaluate alternatives to current tort litigations.  (Federal grants to states available in 2011)
  • Pursue stronger cost-containment and transparency measures (Like what Utah is already doing with the all-payer database)

Will healthcare reform put government between me and my doctor?
Private health insurance already comes between you and your doctor. And because each company sets its own rules, it’s hard to imagine a system with more bureaucrats. Insurers can decide which doctors you can see, which hospitals you can visit, and what drugs you can take, and still be covered. They refuse to pay your physician for answering your phone call or email. And they jack up your rates, or those of your employer, if you’re unwise enough to get sick. The Patient Protection and Affordable Care Act changes the rules under which insurers operate to make sure health care decisions ARE made by you and your health care provider, based on what’s best for your health, instead of dictated by what the insurance company decides.  You’ll have stability and security knowing you’ll be able to count on your coverage when you need it most.  For example, preventative care will be fully covered and there will no longer be annual or lifetime benefit limits.

I’m on Medicare, will healthcare reform hurt me? How will healthcare reform affect Medicare?
The Patient Protection and Affordable Care Act does not cut guaranteed Medicare services.  In fact, it makes some exciting improvements. They include:  

  • Completely closing the Medicare prescription drug "donut hole" by 2020. Starting this year, seniors who hit the donut hole by 2010 will receive a $250 rebate. 
  • Beginning in 2011, seniors in the gap will receive a 50% discount on brand name drugs.
  • The reform eliminates cost-sharing for preventive care services and pays for an annual wellness visit between you and your doctor. 
  • The law provides new funding for research into treatments for the chronic diseases that affect so many elderly Americans.
  • And, importantly, the law has provisions to cut waste and end overpayments to insurance companies to strengthen the long-term financial health of Medicare. 

Does the legislation eliminate the Medicare Advantage Program? 
This is absolutely false! The new health reform law simply changes the way insurance companies that offer Medicare Advantage plans are reimbursed by the government.  Currently, Medicare Advantage plans are overpaid by 14¢ verses what traditional Medicare costs.  This translates into tens of billions of dollars added in costs for Medicare every year.  The legislation brings the Medicare advantage payments closer in line to what traditional Medicare spends to provide medical care.     
Some Medicare Advantage plans do use that subsidy to offer extra benefits like eyeglasses and gym memberships.  As the subsidies are scaled back, some of those extra benefits may go away, but no guaranteed Medicare benefits will be cut.  In addition, the new law requires that Medicare Advantage plans spend at least 85% of premiums on actual benefits vs. admin/profit/marketing, ensuring your tax dollars are spent more efficiently.     

Seniors will still have lots of benefit choices.  Medicare Advantage plans with excellent track records will receive up to a 5% bonus payment.  Some plans in rural and suburban areas will also still receive a subsidy. 

How will we afford healthcare? In this economy, won't it be too expensive?
The economy remains fragile, and getting health care to millions will have a price tag. But we pay a price for doing nothing as well. The question is: which price is higher? We currently spend more than $2 trillion dollars a year on health care. The Patient Protection and Affordable Care Act will make a short-term investment of roughly $100 billion a year to lower costs and provide coverage to almost all the uninsured. This is absolutely necessary in order to get control of the real cost drivers like "fee for service" payment systems that encourage more "treatments" but discourage prevention. Only with reform will small businesses and families begin to see stability in their premium costs.  The new legislation will create true competition to get better prices out of insurance companies. It will provide safer care so we don't spend billions extra to treat preventable mistakes like hospital acquired infections.

Will the 'Health Choices Commissioner' decide health benefits for us?
Not at all! The legislation states the duties of the Health Choices Commissioner are to review and approve health plans.  Basically commissioners will regulate insurers and hold them to some new higher standards.  For example, health insurance plans can no longer be "junk insurance”; they can't exclude people with pre-existing conditions; and they have to provide a way for you to fight for your benefits if the insurance company denies your claim. Does that mean someone is deciding your benefits? No. Does it mean that there's a minimum standard beneath which insurance companies cannot go? Yes.

Will all non-US citizens, illegal or not, be provided with free health care services? No. Undocumented immigrants will not be eligible for the premium subsidies that will help millions of Americans purchase insurance at affordable rates.  Here is the exact bill language: “No Federal Payments for Individuals Not Lawfully Present.—Nothing in this subtitle or the amendments made by this subtitle allows Federal payments, credits, or cost-sharing reductions for individuals who are not lawfully present in the United States.”

Aren’t those of us with health insurance already paying enough? Right now, in Utah, 17% of our premiums goes to pay for the cost of uncompensated care.  That means when someone who is insured ends up in the emergency room and doesn’t pay the bill, that cost is shifted onto those of us with insurance.  According to one national study, covering the costs that the uninsured couldn’t pay added $1,000 to a family policy and $370 to an individual policy in 2008.  Health reform will minimize this cost shift by expanding coverage and expecting people to take personal responsibility for carrying their own health insurance.   

Middle-income Americans are especially being squeezed by the high cost of health insurance. If their employer doesn’t offer insurance or help pay a percentage, the costs can be extraordinarily burdensome.  Reform gives middle-income Americans with no employer insurance or very expensive employer insurance access to new premium tax credits and put quality coverage in their reach.    

Utah’s Attorney General has filed a lawsuit claiming federal health reform is unconstitutional.  Is he correct? No.