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A Consumer’s Guide to Health Care Reform

With the Democratic-controlled Congress working on a potentially sweeping health care overhaul, questions abound for consumers, including whether they might have to change their insurance or buy coverage if they don’t have it.

Here’s a guide to the top issues:

Q: I don’t have insurance. Will I have to buy it?

A. It’s certainly a possibility. Leading congressional Democrats are likely to propose such a requirement, called a mandate, in legislative proposals due out soon. The mandate, they say, would help restrain health care costs for everyone over time. Currently, people with health insurance are paying higher premiums to help cover the costs of the 46 million people who are uninsured. Such cost-shifting would decline if everyone were insured, advocates say.

If the government were to require individuals to buy insurance, it would provide subsidies to lower-income, and perhaps some middle-income, people to help them pay for it. President Barack Obama hasn’t endorsed an individual mandate, except for children, but he’s expected to back one if it emerges from Congress.

Many Republicans are strenuously opposed to such a requirement, which they argue is intrusive and would be difficult to enforce.

Q: I have had trouble getting insurance because of my medical problems. If I’m required to get insurance, where would I get it? And how could I afford it?

A: Democratic plans would create an exchange-a kind of clearinghouse–to help people and businesses find affordable insurance. The exchange would offer several private plans and perhaps a government-run option, referred to as “the public plan.” That plan’s premiums might be lower than those charged by private carriers.

The proposed public plan is one of the most controversial aspects of the health care debate. Backers say it would ensure stable, affordable coverage, while critics say it would hurt private insurers and eventually lead to government-run health care.

Speaking for many Democrats, Jacob Hacker, a political science professor at the University of California-Berkeley, says a public plan would provide “a source of coverage that is much more stable and predictable than private plans.”

Meanwhile, John Sheils of The Lewin Group predicted in a study that, depending on its design, the monthly premiums for a public plan could be $761 per family, compared to $970 charged by a private insurance plan. If the public plan were open to everyone, he said, many people would flock to it, resulting in a two-thirds reduction in the number of people with private coverage, which is currently about 170 million. Some proponents of the public plan have questioned his conclusion.

The public plan could be a tough sell politically. Sen. Charles Grassley, an Iowa Republican who is the ranking member of the Finance Committee, has said a public plan would “result in rationing of our health care to control costs.” Other Republicans are worried about the potential impact on employer-provided coverage and insurance companies. But Sen. Charles Schumer, D-N.Y., says the plan, if required to follow the same rules as private insurers, wouldn’t be a competitive threat.

Q: What about other sources of coverage?

A: It’s possible that health care legislation also could expand eligibility for existing government programs. Some Democrats are talking about letting people younger than 65 buy their way into Medicare, the federal program for the elderly. Others are discussing making people whose incomes go up to 150 percent of poverty, or about $33,000 a year for a family of four, eligible for Medicaid, the state-federal program for the poor. The federal government would likely pick up the states’ extra Medicaid costs, under this scenario.

Q: I’m happy with the insurance my employer provides me. Will I have to change it?

A: Obama and Democratic members of Congress have said repeatedly that people who are happy with their insurance won’t have to change it.

Q: I don’t pay taxes on my employer-provided health insurance now. Is that going to change?

A: It might for some people. Currently, workers don’t pay income or payroll taxes on the value of health benefits provided by their employers. That tax exclusion cost the Treasury about $226 billion in 2008 and some on Capitol Hill are considering using at least some of the money to help pay for an overhaul that could cost between $1 trillion and $1.5 trillion over the next decade.

The tax break probably won’t be eliminated-that would set off a firestorm and lead to a “large erosion in employer-sponsored insurance,” Massachusetts Institute of Technology economist Jonathan Gruber told Congress earlier this year.

But the tax break might be capped. Some on Capitol Hill are discussing taxing the health benefits of high-income people or imposing a tax on the most generous benefit plans, or a combination of the two.

Q: What about my other taxes? Will they go up to pay for an overhaul?

A: Other tax increases are under discussion. The administration has proposed limiting the value of itemized tax deductions for taxpayers who earn more than $250,000 a year, a step the administration estimates would raise $318 billion over the next decade. Opponents fear the proposal would hurt contributions to charitable organizations. Other options include higher federal excise taxes on beer, wine and distilled spirits as well as sugar-sweetened beverages.

Q: If an overhaul goes through, will employers have to kick in some money to help pay for it?

A. Key House and Senate Democrats have endorsed the idea of an “employer mandate,” which would require employers to either cover their workers or pay into a fund for the uninsured. That might be difficult to require during a recession. On the other hand, such a requirement would raise a lot of money to pay for a health care overhaul and could be delayed until the economy recovered.

Republicans and small businesses are especially worried about the possible burden of an employer requirement. The National Federation of Independent Business has estimated that an employer mandate would eliminate 1.6 million jobs over five years. Some small employers might receive federal subsidies to help cover the costs of providing insurance.

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The Health Law