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Attempting to Sort Out Complicated World of Reform

While details for the various reform proposals are emerging in Washington, for the most part, talk of comprehensive healthcare reform remains a nebulous cluster of buzzwords: “Universal health care”, “Public option”, “healthcare exchange”; what does it all mean? The questions still far outnumber the answers out there. At a recent Healthcare Committee Meeting of the Valley Industry and Commerce Association, business leaders, insurance professionals and experts in the healthcare industry tried to sort it all out, or at least attempted to begin to grasp what legislators in our capital are up to. To offer a pig picture perspective of what health reform might look like, Aaron Green, VICA’s Legislative Affairs Manager gave an overview of four plans floating around in Congress: a plan presented by the Senate Finance Committee; one by the Senate Committee on Health, Education, Labor and Pensions; a bipartisan health proposal presented by Democratic Senator Tom Daschle, and Republicans Bob Dole and Howard Baker; a health reform plan by the House Tri-Committee; and President Barack Obama’s proposal for comprehensive healthcare reform. Obama’s plan, he explained, is not so much a plan as it is a broad statement of principles all theory and no structure and there is not sufficient information so far to answer the questions: Who administers the plan? What’s the structure of the program? How will the mandate to purchase insurance be enforced? Will there be a mandate on employers? What will be the estimated cost? and other pertinent questions. “It tries to set the tone for discussion, versus actually making a substantive proposal,” he said. In very broad strokes, the plans all propose some form of healthcare exchange, he said. This would be a new type of healthcare marketplace where consumers can select from a menu of affordable, quality health care options, which would be structured at the state or regional level. This exchange would allow all healthcare insurers to bring their products into one single forum, and allow all individuals to purchase these plans without regard to who their employer is, where they live, and other factors that right now determine individuals eligibility for healthcare coverage, he said. Some plans propose to set up these exchanges on the state level, but most call for a public option, in other words, for the creation of a federal healthcare program where essentially the government will be entering into the healthcare insurance market. The other component of the vast majority of these plans is that they provide individuals in small businesses with vouchers or rebates if they are within a certain low income bracket (within 100-400 percent above the federal poverty level), Green explained. These proposals could also potentially reduce the number of factors private insurers could use to set prices for individuals so that things like age, sex and even those factors that are statistically proven to add impact on cost for the insured would no longer be considered. Impact on employers What this all means to businesses and individuals is not really clear yet. “How is this going to impact employers?” was the first question asked after Green finished the overview. In theory, employees could continue to purchase insurance through their employers if the insurance provided through their employers is competitive with that offered on the exchange. Right now it’s much more cost effective to purchase insurance through a group plan rather than an individual plan, but that could also change. These exchange systems could potentially lead to more individuals not participating in their group plans at their workplace, Green said. “Is this going to let small businesses off the hook when it comes to providing health care insurance for employees?” The answer to that is unclear at the time. “From what I can see, most of these plans would take the incentive for an employer to offer health insurance off the table and move everything into a government plan, which ever one it is,” said insurance broker Barbara Oberman, who was also attending the meeting. It’s been 15 years since the Clintons were unable to push through comprehensive healthcare reform, and the task now is even more monumental with healthcare costs unaffordable for many, hospitals overburdened with expenses that go uncompensated, and physicians facing insurmountable challenges with medical malpractice. Businesses and individuals are seeing increasingly large amounts of their money drained by the costs of health insurance and the number of uninsured remains frighteningly high. Ultimately, it is important for everyone to be paying attention to these issues however broad and monstrous they appear at first glance. VICA clearly understands this. In order to fully dissect the repercussions and true impact of these proposals, VICA’s Healthcare Committee is in the process of setting up a taskforce to look at these issues and develop principles for VICA to advocate upon. Staff Reporter Andrea Alegria can be reached at (818) 316-3123 or at aalegria@sfvbj.com .

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