Diagnosis on health care reform

Marketplace Staff Mar 26, 2010
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Diagnosis on health care reform

Marketplace Staff Mar 26, 2010
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TEXT OF INTERVIEW

Tess Vigeland: And that just about covers it, right? 2,400 pages of health care policy in, oh, a little over a half an hour? Hardly. There’s a lot to this bill that we haven’t covered.

So to help wrap things up we’ve brought back Marketplace’s Gregory Warner, who gave us that history lesson earlier. Gregory let’s start with the check at the end of this health care buffet, who’s picking up the tab?

Gregory Warner: So leaving aside the fees coughed up from the pharmaceutical industry, and the medical devices industry and the insurance industry, in terms of what average individuals are going to pay, there are two things. First, the payroll tax, and this is for families making more than $250,000 or individuals making more than $200,000. There’s going to be a 3.5 percent tax on honored income, basically income from investments and things like that. And that begins in 2012.

Second further down the line, in 2018, there’s going to be an excise tax and that’s a 40 percent tax on these Cadillac insurance plans, basically really good plans with lots of benefits. Last but not least, let me not forget the 10 percent tax on tanning salons.

Vigeland: Tanning salons. I don’t think we have those in southern California. All right, so take me forward five or 10 years. The mandate kicks in, 30 million more people have insurance, but there are still a lot of folks who are uninsured. What’s going to happen with them?

Warner: Right. So the largest group of uninsured is going to be illegal immigrants. And they’ll still go to emergency rooms and community clinics, same as they do now. The bill does provide for a lot more community clinics to be built. But there are also some other uninsured groups that I’ll just run down real quick. First, people who make too much for Medicaid, but too little to participate in federal mandate. And then also millions of people who do qualify for Medicaid, but won’t sign up because there’s still a lot of stigma around taking help from the government. And then young invincibles, you talked about earlier on the show, who might rather pay the fine than pay the premium.

Vigeland: And finally, Gregory, you know health care reform is going to make a big difference for folks who buy their insurance on this individual market. But what about all the folks who do get insurance through their work place? That’s about 60 percent of us, I think. What’s it going to mean for us and all those premiums that just keep going up and up?

Warner: Well, those premiums are still going to go up. The longer question, the bigger question though is how it affects us. And that depends on what happens with the exchanges. Worse case scenario: People don’t participate. States have been talking about barring it, people could just opt out, and the exchanges then become the refuge for low-income, high risk customers. That’s it. Best case scenario is the exchanges are really popular. Individuals get involved, small businesses get on board. And in this situation, large employers begin entering the exchanges in 2017. If your employer switches the exchanges, well the exchanges are going to offer very good care, maybe better than what some employers offer. And in this case, the pool of people participating in the exchanges would be huge. The economics of insurance says, the bigger the pool, the smaller the premiums.

Vigeland: All right, well I guess as always we’ll have to wait and see. Marketplace’s Gregory Warner, thanks so much for your help today.

Warner: Thanks, Tess.

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