Health care was one of the chief issues in the 2008 Presidential election. McCain and Obama, as well as their competitors in the primaries, each detailed proposals for improving the current health care system in the United States. While a number of ideas for full-scale reform were on the table, the biggest controversy stemmed from the notion of universal health care, proposed by all three of the major Democratic competitors. Detractors have argued that universal health care will create a nationalized system with long lines for poor quality services, as well as a significant cost to taxpayers.
Now that Obama has won the election, universal health care may be on the horizon. It is therefore important to understand what Obama’s health care plan is, and what it is not. I am intimately familiar with the Federal Employee Health Benefits (FEHB) plan, on which the new public plan will be based. My father is retired on disability from the Department of Defense and was able to carry his FEHB through into retirement. I was on his plan until I turned 19.
The Public Plan
If you are currently uninsured or underinsured, you will have the option to buy into the public plan. Modeled after the current FEHB, which provides insurance for federal workers including members of Congress, the public plan is not a centralized, government-controlled plan. Instead, it is a network of choices that are offered at lower cost due to the number of people enrolled.
The plan rotates on the concept of shared risk. You may already know that buying into group insurance is cheaper than buying individual insurance. This is because in any group of people, a certain number will become catastrophically ill. The more people in the group, however, the further those costs are spread. For example, if one person requires $1 million in care, his individual insurance would have to absorb all $1 million. If one million people are in the plan, however, that person’s costs could be covered by a single dollar from each person. This shared risk allows each member of the group to pay a lower premium.
Just like federal employees already do, you will be able to choose from a wide variety of health care plans that meet your individual needs. HMOs, PPOs, fee for service plans and other options will all be available through insurance companies with whom you are already familiar. You can choose a plan with higher deductibles and co-pays but lower premiums, or a higher cost plan with lower per-incident fees. You can visit any doctor you like, including specialists. The specifics will vary according to the plan you choose, but you will not be denied insurance, face higher premiums or be dropped from your plan due to pre-existing conditions or job changes.
The new public plan is expected to be affordable for most Americans due to the above-mentioned shared risk. However, if you are unable to afford coverage, you may be eligible for a tax credit to offset your costs. A similar tax credit will also be available to small businesses to help cover their costs of providing health coverage.
FEHB in Action
To illustrate, here is a real-life example of the FEHB in action. My father enrolled in the program while he was working, and selected the high benefit plan through GEHA (Government Employees Hospital Association)/PPO-USA. He later developed several chronic illnesses including hepatitis C, diabetes and COPD. His premiums could not increase, nor could he be dropped from the plan, despite these chronic and expensive conditions. All of his doctor visits were covered according to the details of his plan.
My mother, covered on my father’s insurance, also developed a series of chronic illnesses. Hers were not clear-cut, demonstrating a wide range of unusual symptoms that required repeated visits to specialists and a great deal of expensive testing. Her doctor visits and tests were also covered by the plan, and she could not be dropped or charged additional premiums.
Both of my parents had to retire on disability. As a retiring federal employee, Dad was able to keep their insurance. They moved from Florida to Louisiana and sought treatment for their illnesses. Thanks to the FEHB, doctors were able to aggressively treat their diseases, as there was no concern that a specific procedure might not be covered.
Their plan’s prescription drug benefits proved invaluable, as Mom was prescribed over a dozen medications per day, including several new and expensive drugs. Specialty medications are covered at a slightly higher co-pay.
Premiums and plan specifics change annually (Dad’s premium increased by four cents per month from 2008-2009), but the basic coverage remains the same. Despite his chronic illnesses, Dad is still eligible to change plans during the annual open season or whenever he experiences a life change (birth of a child, marriage or divorce, etc.). If he changes plans, he will pay the standard premium for the new plan and receive full benefits. He is not limited by his illnesses or retiree status.
Mental Health Care
The Obama plan supports mental health parity. This means that mental health conditions will be treated equally to physical illnesses. You will be able to get the mental health care that you need according to your provider’s recommendations. Of course, the precise benefits and out of pocket expenses will vary according to the plan that you select.
Keeping Your Insurance
If you already have insurance, you will be able to keep it unchanged. However, your premiums are likely to decrease. Under the Obama plan, employers will be reimbursed by the government for a portion of the catastrophic costs incurred by employees who become seriously ill or injured. That reimbursement must be used by the employer to offset workers’ insurance premiums. This helps to avoid a small group of employees being required to bear this burden.
