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Article posted Jul 31 2009, 12:21 AM Category: Health Source: Fortune Magazine Print

5 Freedoms You'd Lose in Health Care Reform

by Shawn Tully

If you read the fine print in the Congressional plans, you'll find that a lot of cherished aspects of the current system would disappear.

In promoting his health-care agenda, President Obama has repeatedly reassured Americans that they can keep their existing health plans -- and that the benefits and access they prize will be enhanced through reform.

A close reading of the two main bills, one backed by Democrats in the House and the other issued by Sen. Edward Kennedy's Health committee, contradict the President's assurances. To be sure, it isn't easy to comb through their 2,000 pages of tortured legal language. But page by page, the bills reveal a web of restrictions, fines, and mandates that would radically change your health-care coverage.

If you prize choosing your own cardiologist or urologist under your company's Preferred Provider Organization plan (PPO), if your employer rewards your non-smoking, healthy lifestyle with reduced premiums, if you love the bargain Health Savings Account (HSA) that insures you just for the essentials, or if you simply take comfort in the freedom to spend your own money for a policy that covers the newest drugs and diagnostic tests -- you may be shocked to learn that you could lose all of those good things under the rules proposed in the two bills that herald a health-care revolution.

In short, the Obama platform would mandate extremely full, expensive, and highly subsidized coverage -- including a lot of benefits people would never pay for with their own money -- but deliver it through a highly restrictive, HMO-style plan that will determine what care and tests you can and can't have. It's a revolution, all right, but in the wrong direction.

Let's explore the five freedoms that Americans would lose under Obamacare:

1. Freedom to choose what's in your plan

The bills in both houses require that Americans purchase insurance through "qualified" plans offered by health-care "exchanges" that would be set up in each state. The rub is that the plans can't really compete based on what they offer. The reason: The federal government will impose a minimum list of benefits that each plan is required to offer.

Today, many states require these "standard benefits packages" -- and they're a major cause for the rise in health-care costs. Every group, from chiropractors to alcohol-abuse counselors, do lobbying to get included. Connecticut, for example, requires reimbursement for hair transplants, hearing aids, and in vitro fertilization.

The Senate bill would require coverage for prescription drugs, mental-health benefits, and substance-abuse services. It also requires policies to insure "children" until the age of 26. That's just the starting list. The bills would allow the Department of Health and Human Services to add to the list of required benefits, based on recommendations from a committee of experts. Americans, therefore, wouldn't even know what's in their plans and what they're required to pay for, directly or indirectly, until after the bills become law.

2. Freedom to be rewarded for healthy living, or pay your real costs

As with the previous example, the Obama plan enshrines into federal law one of the worst features of state legislation: community rating. Eleven states, ranging from New York to Oregon, have some form of community rating. In its purest form, community rating requires that all patients pay the same rates for their level of coverage regardless of their age or medical condition.

Americans with pre-existing conditions need subsidies under any plan, but community rating is a dubious way to bring fairness to health care. The reason is twofold: First, it forces young people, who typically have lower incomes than older workers, to pay far more than their actual cost, and gives older workers, who can afford to pay more, a big discount. The state laws gouging the young are a major reason so many of them have joined the ranks of uninsured.

Under the Senate plan, insurers would be barred from charging any more than twice as much for one patient vs. any other patient with the same coverage. So if a 20-year-old who costs just $800 a year to insure is forced to pay $2,500, a 62-year-old who costs $7,500 would pay no more than $5,000.

Second, the bills would ban insurers from charging differing premiums based on the health of their customers. Again, that's understandable for folks with diabetes or cancer. But the bills would bar rewarding people who pursue a healthy lifestyle of exercise or a cholesterol-conscious diet. That's hardly a formula for lower costs. It's as if car insurers had to charge the same rates to safe drivers as to chronic speeders with a history of accidents.

3. Freedom to choose high-deductible coverage

The bills threaten to eliminate the one part of the market truly driven by consumers spending their own money. That's what makes a market, and health care needs more of it, not less.

Hundreds of companies now offer Health Savings Accounts to about 5 million employees. Those workers deposit tax-free money in the accounts and get a matching contribution from their employer. They can use the funds to buy a high-deductible plan -- say for major medical costs over $12,000. Preventive care is reimbursed, but patients pay all other routine doctor visits and tests with their own money from the HSA account. As a result, HSA users are far more cost-conscious than customers who are reimbursed for the majority of their care.

The bills seriously endanger the trend toward consumer-driven care in general. By requiring minimum packages, they would prevent patients from choosing stripped-down plans that cover only major medical expenses. "The government could set extremely low deductibles that would eliminate HSAs," says John Goodman of the National Center for Policy Analysis, a free-market research group. "And they could do it after the bills are passed."

4. Freedom to keep your existing plan

This is the freedom that the President keeps emphasizing. Yet the bills appear to say otherwise. It's worth diving into the weeds -- the territory where most pundits and politicians don't seem to have ventured.

The legislation divides the insured into two main groups, and those two groups are treated differently with respect to their current plans. The first are employees covered by the Employee Retirement Security Act of 1974. ERISA regulates companies that are self-insured, meaning they pay claims out of their cash flow, and don't have real insurance. Those are the GEs and Time Warners and most other big companies.

The House bill states that employees covered by ERISA plans are "grandfathered." Under ERISA, the plans can do pretty much what they want -- they're exempt from standard packages and community rating and can reward employees for healthy lifestyles even in restrictive states.

But read on.

The bill gives ERISA employers a five-year grace period when they can keep offering plans free from the restrictions of the "qualified" policies offered on the exchanges. But after five years, they would have to offer only approved plans, with the myriad rules we've already discussed. So for Americans in large corporations, "keeping your own plan" has a strict deadline. In five years, like it or not, you'll get dumped into the exchange. As we'll see, it could happen a lot earlier.

The outlook is worse for the second group. It encompasses employees who aren't under ERISA but get actual insurance either on their own or through small businesses. After the legislation passes, all insurers that offer a wide range of plans to these employees will be forced to offer only "qualified" plans to new customers, via the exchanges.

The employees who got their coverage before the law goes into effect can keep their plans, but once again, there's a catch. If the plan changes in any way -- by altering co-pays, deductibles, or even switching coverage for this or that drug -- the employee must drop out and shop through the exchange. Since these plans generally change their policies every year, it's likely that millions of employees will lose their plans in 12 months.

5. Freedom to choose your doctors

The Senate bill requires that Americans buying through the exchanges -- and as we've seen, that will soon be most Americans -- must get their care through something called "medical home." Medical home is similar to an HMO. You're assigned a primary care doctor, and the doctor controls your access to specialists. The primary care physicians will decide which services, like MRIs and other diagnostic scans, are best for you, and will decide when you really need to see a cardiologists or orthopedists.

Under the proposals, the gatekeepers would theoretically guide patients to tests and treatments that have proved most cost-effective. The danger is that doctors will be financially rewarded for denying care, as were HMO physicians more than a decade ago. It was consumer outrage over despotic gatekeepers that made the HMOs so unpopular, and killed what was billed as the solution to America's health-care cost explosion.

The bills do not specifically rule out fee-for-service plans as options to be offered through the exchanges. But remember, those plans -- if they exist -- would be barred from charging sick or elderly patients more than young and healthy ones. So patients would be inclined to game the system, staying in the HMO while they're healthy and switching to fee-for-service when they become seriously ill. "That would kill fee-for-service in a hurry," says Goodman.

In reality, the flexible, employer-based plans that now dominate the landscape, and that Americans so cherish, could disappear far faster than the 5 year "grace period" that's barely being discussed.

Companies would have the option of paying an 8% payroll tax into a fund that pays for coverage for Americans who aren't covered by their employers. It won't happen right away -- large companies must wait a couple of years before they opt out. But it will happen, since it's likely that the tax will rise a lot more slowly than corporate health-care costs, especially since they'll be lobbying Washington to keep the tax under control in the righteous name of job creation.

The best solution is to move to a let-freedom-ring regime of high deductibles, no community rating, no standard benefits, and cross-state shopping for bargains (another market-based reform that's strictly taboo in the bills). I'll propose my own solution in another piece soon on For now, we suffer with a flawed health-care system, but we still have our Five Freedoms. Call them the Five Endangered Freedoms.

Copyrighted, Fortune. All rights reserved.

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Comments 1 - 10 of 10 Add Comment Page 1 of 1

Posted: Jul 31 2009, 3:44 AM

1746 "One person Freedom ends where another persons begins."

Or differently, if you believe that access to doctors and heathcare is a special reward for the right people (that can pay their way) then yes, by all means, cancel medicare and let people fight for themselves, in the process probably paying quite a bit more as there is a need of course for all parties involved to make a (healthy) profit.

If you believe that access to healthcare is a universal human right, then the Freedom analogy is utterly wrong.

But I doubt anybody who opposes "Socialized Medicine" (as it is practice in almost all Western Countries) will not be convinced by anything.

Posted: Jul 31 2009, 8:19 AM

71226 I agree...since when is being healthy a "right"? People should take care of the poor, not the government. Why, then, don't more people do it? Because WE all have to work more to either merely get by, or exist on an artificially high standard of living...oh, and greed and narcissism...

Posted: Jul 31 2009, 4:02 PM

99240 Consider the source of this article...Fortune Magazine...hardly the champion of the working middle class. It's the insurance companies who lose in health care reform, who the readers of fortune may just own stock in. This self serving propaganda is not targeted at the readers of this site.

here is a question for all you yanks...would you rather your taxes go to fighting wars in far off lands or to pay for the bypass surgery you are sure to need for sucking back all those mcdonalds burgers?

Posted: Jul 31 2009, 9:40 PM

76179 #2 claims: " the bills would ban insurers from charging differing premiums based on the health of their customers. "
- This is the whole point of insurance. To spread the risk. Yes, this means that the healthy pay as much as the ill - because we never know when we will join the ranks of the ill. Healthy lifestyle should be encouraged, yes, but it defeats the purpose of insurance to charge more to the sick or elderly.

#5 claims "primary care physicians will decide which services, like MRIs and other diagnostic scans, are best for you, and will decide when you really need to see a cardiologists or orthopedists"
- Excuse me, but isn't this exactly how most insurance currently works? All plans available to me require a referral from my primary care physician before I can have a specialist covered by insurance. So, no change here.

Posted: Aug 01 2009, 3:50 PM

206173 5 Freedoms You'd Lose in Health Care Reform
by Shawn Tully
editor-at-large (Fortune Magazine)

Fortune Magazine is published for the
Wall Street Elite.

The facts in this article sound like they came from
The Lewin Group!
All Main Stream Media get their talking points from
"the nonpartisan Lewin Group."

The Lewing Group is owned by Insurance Giant....
United Health Group!

CEO William W. McGuire removed in stock scandal
In 2006, the Securities and Exchange Commission, the Internal Revenue Service, and prosecutors in the U.S. attorney's office in New York began investigating the conduct of UnitedHealth Group's leadership for backdating stock options. Chairman and Chief Executive Officer of UnitedHealth Group was removed from office. The Washington Post said of McGuire, "his greed in amassing $1.1 billion in stock options plus a pension of $5.1 million a year is matched only by the revelation that the board member who chaired the compensation committee had conflicts of interest

Posted: Aug 01 2009, 4:11 PM

If you guys are not on the payroll you should consider applying to be. To those of you who mean well, all I can say is the government has never been out for your best interests and it did not all the sudden just start now. Obama is nothing more than a professional paid liar, please watch him proudly lie to your face in this video, pay close attention to the pride he takes in his lies:

Please understand he does not care about you or represent your interests, he is an establishment hack put in power by every powerful lobby there is, including the insurance lobbies who will benefit hugely off this new law (they just act like they're against it, you really think one of the most powerful lobbies in the entire country who put this guy into power is going to actually be against giving the government total control over the entire health industry? It is no different than the top bankers in the world like JP Morgan coming out and saying they were against setting up the privately owned federal reserve in 1913, they knew people would think if they are against it then it must be a good thing, meanwhile they were the ones who were going to own it, and sure enough it passed in the dead of night on Christmas break and they now own our nations printing press. If you are not aware of that then watch this movie:

Doctors and average citizens are the ones who are going to be screwed over the most by this farce they call reform, if they called it reform to steal from your pocket and put you in a jail cell would you still just go along with it because it's "change"? If Bush and Karl Rove came out against it would you go along with it because if he says it's bad it must be good? I would hope not, but realistically, if it was packaged sleekly enough with plenty of good public relations chances are you probably would! "It's the safest place in the world!! Where else are you going to have bars protecting you from crime at all times?? You even get all your meals for free!!!" Oh snaps sign me up, free "liberty boxes" for all Americans!!! It's our right!!! Wooohooo!!!!!

If you want to know what is actually in this bill I suggest you check out this persons analysis, he actually read the 1000+ page bill unlike "our" members of congress, it is an absolute nightmare and the rape of America's already dying carcass:

Posted: Sep 09 2009, 3:42 AM

20314 It would appear that this website and it's webmaster are simply Anti-government. Even if someone puts up a good argument against one of these articles, as all the previous posts have done, then the answer comes back that the posters must be "on the payroll" or "brainwashed by the lies"

Some of the articles are just ridiculous and when it is pointed out the faults of the articles, the poster is put down, rather than acknowledged and discuss the points raised.

Of course it's the insurance companies are driving the resistance to these changes. They don't want to be regulated on what services they provide, how much competition there is or how much they charge.

I thought this site was to promote personal thinking and to encourage people to see the truth though all the lies. This site is just anti government crud. If Obama said the sky was blue, this site **should** say "go outside and check for yourself" INSTEAD it just says that Obama is a liar and the sky is Pink.

Posted: Sep 09 2009, 4:31 AM

Sorry but that is not at all the case. If you allow the media to guide your thoughts and you entertain every illusion they put into your mind you are being victimized. If they say dogs are cats do we need to go out and prove that dogs are in fact dogs? No, you see, because they lie. They are outright lying to people and pushing fantasy the same as the previous administration, and yet people like yourself are suckered into it time and time again.

"Give them a chance" ... "they might be good" how many times do you have to be lied to in order to stop trusting them?

Do you realize Obama lied on every issue he campaigned on? He said he would not hire lobbyists, why don't you go look into who practically every major person in his administration is? It is all lobbyists, lawyers, and bankers, and that is a fact. You see, he LIED to you.

# Tom Daschle. Lobbyist for healthcare industry. Obama’s health care advisor.
# Eric Holder. Lobbyist at Covington & Burling. Now, Attorney General.
# Tom Vilsack. Lobbyist for National Educational Assn. Now, Agriculture Sectetary.
# Ron Klain. Lobbyist at O’Melveny & Myers. Now, chief of staff to V.P. Biden.
# Leon Panetta. Lobbyist for corporations. Now, Director of CIA.
# Patrick Gaspard. Chief lobbyist for SEIU. Transition deputy director of personnel.
# David Hayes. Lobbyist at Latham & Watkins. Now, deputy director of Interior.
# William Corr. Lobbyist for Tobacco-Free Kids. Now, deputy secretary of Health & Human Services.
# Mark Patterson. Lobbyist at Goldman Sachs. Now, chief of staff for Treasury Secretary.

He said he would not issue signing statements, proudly saying they were an unconstitutional breach of executive power, well he has already issued 7+ within only a few months of getting in office. Again, he LIED TO YOU. If you cannot register in your mind that you are being lied to and instead simply "go with it" because it "might be good" then you are being USED.

He campaigned as anti-war, within 3 days he bombed the sovereign country of Pakistan, something not even Bush was able to do.

He said he was against domestic spying, now he is for it, he's protected Bush et. al from prosecution for their crimes as well.

These are just a small fraction of the flat our LIES it has told people, there are too many for me to even list, any one individually is enough to withdraw your support, taken together the man is a con artist and a deceiver.

White House Presidential Aide to Bush:
The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."

You see, we are not here to simply study what they do. We are in the "reality based community." We are here to expose their totalitarian agenda and dictatorial actions, we don't want the people of the world, ourselves included, to be slaves to a tiny elite of control freak psychopaths.

You see, we want genuine freedom, not marketing slogans about how "free" we are. We want things to change for the better, not simply to "change." I realize these things might be foreign to you as you've never been in contact with them or understood them but that is the whole purpose of this site, to give people access to a wide variety of information so they can come to their own conclusions.

You think it's about "anti-government crud".

It's a good laugh but at the same time it is worthy of tears.

Posted: Sep 09 2009, 9:40 PM


Posted: Sep 09 2009, 9:48 PM

^ Complete and total lie.
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