Health Care Reform Update

In a speech on Wednesday night to both the Senate and House of Representatives, President Barack Obama addressed the current state of health care reform, and the bill that could very well become the President’s defining piece of legislation.

“I am not the first President to take up this cause, but I am determined to be the last” he said to a rousing applause and a standing ovation.

Obama laid out the main goals of the health care reform bill, as well as debunked some of the myths, rumors, and misrepresentations of the bill that have been circulating for the past several months. The main goals of the legislation are to increase stability and security of the coverage to those who are already indured, to provide those without health insurance coverage, and to help slow the rising costs of health care.

For those who are currently covered, nothing in the plan will force them to change their health insurance provider, or change their current health care plan. What will change is that it will be illegal for health insurance companies to deny coverage to individuals with a preexisting condition. It will also be illegal for health insurance companies to drop coverage for people when they get sick, as well as outlaw caps that are placed on coverage for a year or lifetime term. A cap will be placed, however, on the out-of-pocket expenses incurred on the behalf of the patient. As Obama puts it, “No one should go broke because they get sick”.

The second piece of the plan is to provide insurance to those who do not currently have any insurance. This is where the public option comes in to play. For a large group to seek health insurance, they have more leverage in a market when shopping for plans. It is for this reason that large companies are able to get insurance for their employees at lower rates, and the same economics can be applied to a public option.

For those who can’t afford the public option, tax credits will be available. The President also emphasized the fact that no one will be forced to take the public option – it is simply available for those who choose it.

The third aspect of the bill is to help slow the growth of health care costs. In order to make this a possibility, it will be required of all people to carry health insurance. The reason for this is that when someone gets sick and they do not have health insurance, their medical costs are paid for by those who do have insurance. In other words, the cost of the uninsured is currently built in to the costs for those with insurance. This is a vicious cycle, and it can be stopped by making everyone carry some insurance.

In order to ensure that all Americans have coverage, all employers that can afford to do so will be made to provide health insurance to their employees, or at least help them with the cost. This is more applicable to large businesses that are currently not providing their employees with coverage. Small businesses that cannot afford to provide coverage to their employees will be exempt from this law. This represents roughly 95% of all small business that will be exempt.

Circulating rumors were also addressed by President Obama, most notably the rumor that Medicare spending would be changed and benefits would be lost. This, the President said, is untrue. Not a dollar, he said, would come out of the money that is set aside for the Medicare program.

To see the full speech with a transcript, click here.

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