Health costs kick in before benefits

Nancy Marshall-Genzer Dec 24, 2009
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Health costs kick in before benefits

Nancy Marshall-Genzer Dec 24, 2009
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Stacey Vanek-Smith: In just a few minutes, the Senate will vote on the health care reform bill. If the $871-billion plan passes, lawmakers will have to reconcile it with the trillion-dollar bill that was passed by the House. The plans have some big differences, like how they would be paid for. The House bill would tax the wealthy. The Senate version would tax high-cost health care plans, known as Cadillac plans.

One thing the bills have in common? Their costs kick in before their benefits. Nancy Marshall Genzer reports.


Nancy Marshall Genzer: At this point, subsidies and consumer protections won’t kick in for several years. But consumers will want help right away.

Kaiser Family Foundation President Drew Altman says there’s an expectations gap.

DREW ALTMAN: People’s premiums are still going to go up and their out-of-pocket costs are going to go up, and they’re going to say we heard this big health-reform debate, and where’s all this help we were hearing about, and they could get frustrated.

Especially since the taxes and fees in both bills hit right away. The House would tax the wealthy. The Senate taxes so-called Cadillac insurance plans.

Leighton Ku teaches health policy at George Washington University. He says the fees come first because Congress wants to pay for the benefits before they kick in.

LEIGHTON KU: They certainly are concerned about trying to make sure that this will not cost the federal government any additional money in the first 10 or 20 years.

Ku says that’s impossible if the fees and benefits take effect at the same time.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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