Medicare Took One Year; Overhaul to Take Nearly 10
July 20, 2009 - 6:15 PMPresident Lyndon Johnson signed the Medicare law on July 30, 1965, and 11 months later seniors were receiving coverage. But if President Barack Obama gets to sign a health care overhaul this fall, the uninsured won't be covered until 2013 - after the next presidential election.
In fact, a timeline of the 1,000-page health care bill crafted by House Democrats shows it would take the better part of a decade - from 2010-2018 - to get all the components of the far-reaching proposal up and running. The moving parts include a national insurance marketplace overseen by a brand new federal bureaucracy - the Health Choices Administration.
Medicare was big. This could be bigger. If a bill passes, Americans probably will be discovering - and debating - its effects for years.
"It touches every part of the health care system," said Dan Mendelson, a health care consultant who served in Bill Clinton's administration during the second term. "We are only just beginning to explore and understand what the effects would be on premiums, providers and the evolution of health care technology."
The plan is "at least as far-reaching" as what former President Clinton and first lady Hillary Rodham Clinton attempted in the 1990s, says Mendelson, now president of Avalere Health.
Did anybody think it was going to be simple?
The House bill isn't close to becoming law. The Senate has its own ideas. But the House proposal represents the most comprehensive effort by lawmakers to meet Obama's twin goals of guaranteeing coverage to all Americans and slowing the pace of rising medical costs.
It advances the first goal slowly, and independent analysts doubt it will meet the second.
First comes the pain. In 2011, the government would start collecting higher taxes on upper-income people to pay for the overhaul. The uninsured would have to wait until 2013 before they started receiving the benefits - after the 2010 and 2012 elections.
Collecting the taxes up front - and paying for the benefits later - would help to keep costs manageable over the 10-year window Congress uses for budget estimates. Still, it's not yet adding up. The Congressional Budget Office says the plan would increase the government's deficit by about $240 billion over that period. Long-range forecasts could turn out worse.
One thing isn't in dispute - the role of the federal government would increase each year.
"Having accepted a government bailout of the financial system, and with the government having a big part in running GM, it is just a very different attitude now in terms of the government," said Gail Wilensky, who ran Medicare for President George H.W. Bush "We're seeing that in this package."
The timeline, prepared by Democratic staff members, reflects the proposed expansion of government responsibilities. Here's a look at how some of the parts would unfold:
The government sets up a Health Benefits Advisory Committee led by the surgeon general to recommend a basic benefits package. Community health centers serving low-income people get a funding boost. Insurance companies are barred from engaging in "rescissions" - the cancellation of existing policies. A campaign is launched to reduce health care paperwork. Doctors serving Medicare patients are spared a 20 percent cut in fees.
The benefits committee unveils a recommended package for adoption by the Health and Human Services Department. HHS sets rules requiring insurance companies to spend a minimum percentage of premiums on medical costs. Medicare recipients get relief from the 'doughnut hole' coverage gap in their prescription benefits.
Tax hikes on upper-income earners take effect.
In the presidential election year, low-income seniors get additional financial assistance with their Medicare prescription plans.
The year of heavy lifting and major coverage changes. Insurance companies are barred from discriminating against people with health problems. The government opens the health insurance exchange - a new purchasing pool - to individuals and businesses with fewer than 10 workers. A government-sponsored plan is among the options available through the exchange, with premiums estimated 10 percent lower than private coverage. All plans in the exchange offer at least the basic benefits package. Individuals and families making up to four times the federal poverty level get subsidies to help pay for insurance. Individuals are required to get coverage - and employers to offer it - or face financial penalties. Businesses with payrolls under $250,000 are exempt from the mandate. Medicaid eligibility is expanded.
The health insurance exchange is expanded to include companies with up to 20 employees and people who can't afford premiums under their employer's plan.
The government decides whether to open the health insurance exchange - and the government-sponsored plan - to all employers.
Employers who continue to provide coverage outside the exchange must offer at least the same basic benefits available through the government-regulated purchasing pool.
Obama, if re-elected to a second term, would have left office in January, 2017.
AP Special Correspondent David Espo contributed to this report.
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