Health Insurance Reform Explained: Small Business Video Tutorial

Health Insurance Reform explained in a way that small business owners can understand. If you pay for health coverage for employees and are one of the 80% of businesses in the US who have fewer than 10 employees, this video was made for you. The Kaiser Family Foundation has distilled down the basics of the complex law – which ran over 1000 pages in tiny print, so that we can understand how to use the provisions of that law to help us cover our employees.


Let’s face it folks, the new health care reform law is complex, it runs about a thousand pages, even in tiny print, so it’s no surprise that very few Americans have actually read it. But it’s about to affect all of us, and many have been wondering what it will mean for our health, our wallets, and our country.

Let’s say we take all three hundred ten million Americans and squish us down to just twenty five people. Yep, each of these folks would represent about twelve million of us, and this is pretty much what we’d look like.

Polls show about three out of ten of us say health care reform will make us better off. A similar number say worse off. And a similar number again say it won’t make much difference at all. Some of us don’t know what to think. I guess you could say we’re kind of split on this one.

But, no matter where you stand on the issue, it’s likely you’re thinking, “Hello, I got some basic questions still unanswered here,” and you deserve real answers, not the partisan rhetoric and spin we’ve been flooded with.

So let’s break down what the reform law does and doesn’t do and what it will cost. If you want to read the whole law, go ahead. But watching this video is the next best thing.

Ready to jump in? Let’s begin with the problems in our current healthcare system. Problem number one is what problem number one usually is – money.

Most people agree that health insurance policies are too expensive. For a family, the average premium is almost $14,000 a year and growing. Premiums have doubled over the last 9 years, ballooning way faster than inflation. Plus our population is aging, meaning more people with more health problems. So, health care costs to the fastest growing part of the federal budget.

The second problem is that the system is full of holes. Like the fact that people buying insurance on their own can be turned down for having a pre-existing health condition. Small businesses may be charged extra if some of the workers are sick, making insurance unaffordable. And some insurance policies have a lifetime limit on benefits. After that, you’re out of luck. That means, some of the people least likely to have coverage are the ones who need it most. Nice, huh?

High cost and holes in the system mean more than one in seven of us have no health insurance to protect us at all. Many more struggle to pay their bills and can only afford bare minimum policies that may not cover much.

High cost to households, strain on the federal budget, and people with no protection, it’s easy to see why many people were looking for something different. So, here’s what the health reform law plans to do in its first phase between now and 2014.

To start dealing with cost, insurers will be limited in how they spend our premium dollars. If they use too much for administrative costs or profits they’ll be forced to give some of it back through rebates. This won’t stop premium increases but it may help some. Some services will become free, and all new private insurance policies, and in Medicare, preventative care, like screenings, and vaccinations.

People on Medicare, because they’re over sixty five or disabled, forget more help with their drug cost. Young people can save money and stay insured by remaining on their parents’ policies up to age twenty six. And some small businesses would get tax breaks to help them pay for health insurance for their workers.

And the holes? Well some will be closed starting now to lifetime limits on health coverage will be gone, whether you buy insurance on your own, or get it from your employer. And it will be illegal to turn kids down, for having a preexisting health condition like asthma or diabetes.

While some adults who buy insurance on their own, will still be getting rejected between now and 2014, those who do, can enter something called a high risk pool, run by the government. No, it’s more like a policy, that covers the sickest uninsured people, meaning it’s riskier for insurance companies. That’s why the government will chip in some money, to bring down the cost.

Some say these high risk pools will help a lot of people. Others say the pools will still be too expensive and may not have enough government money to stay in business until they’re replaced by something better, in phase two. On New Years Day 2014, some big changes kick in.

First, let’s look at how the law makes health care more affordable. Medicaid will be expanded to cover all low income individuals and families in every state. And, depending on what you make, if you lose your job or your employer doesn’t provide decent coverage, you may get a health insurance tax credit.

And while most of us will continue to get health insurance at work, just like now, if you don’t have that option you’ll be able to buy coverage in what’s called an exchange. You’ll be hearing a lot about them, so let’s stop and look athow they work.

An exchange is like a virtual insurance megamall. Based on where you live, you’ll get an easy to understand menu of options to compare plans in plain English, and the exchange makes sure insurance companies compete fairly under strict rules. The idea is that by giving consumers good information, a fair playing field, and access to lots of choices, competition among insurers will keep rates competitive. Now, on to plugging the holes.

In 2014, insurers will no longer be able to turn people down or charge them more if they’re sick. You might say, “Hold on a minute, if I can’t be turned down or charged more, why not just wait until I get sick or injured to buy insurance at all?” Not so fast, buddy. See, with few exceptions, people will be required to have insurance or pay a special tax. Same with larger businesses, who will pay fines if they don’t insure their workers.

Of course, nobody likes being told they have to buy anything, but without this rule, experts say you can’t require that everyone be eligible for coverage. Imagine telling home insurers they have to cover people whose houses are already on fire! So, the government will provide credits, expanded programs and new rules.

They say that by 2019, 32 million of us who don’t have health insurance will have it. Some of those who will still be uninsured: undocumented immigrants who aren’t eligible for coverage under the law. No surprise!

All this is gonna cost money, 938 billion dollars over the next ten years, according to the congressional budget office, the impartial referee when congress debates these kinds of things. It’s a lot of money, sure, but if you look at it another way, it’s two percent of our federal budget, and three percent of what we’ll be spending on healthcare overall.

Now, the president and Congress insisted these new costs will be paid for, so they don’t push the budget deficit up any further. That means money will come out of someone’s pocket. That’s where the tough politics come in. A lot of savings will come from health care providers, and insurers in the Medicare program.

The fees the government pays hospitals under Medicare won’t be allowed to rise as fast as they have been. And insurance companies that provide services to people on Medicare will be paid less. Medicare will also create a bunch of experiments around the country to test different ways of paying doctors, hospitals, and other providers to make the health care system more efficient and improve the quality of care.

With luck some of these experiments will work, then be adopted by the private sector. This will help lower costs for employers and families at least two. Plus, a new federal advisory board will make recommendations about other ways to deal with increases in health care costs. Some taxes will go up too people with high earnings would pay higher Medicare taxes.

There’ll be new taxes on insurers and businesses who offer high-end benefit plans, and on companies that make medical devices and drugs and, oh, anyone who visits a tanning salon now has to pay a new tax too. With these new cost cutting measures, and new taxes, the Congressional Budget Office says the whole package will actually reduce the federal deficit over the next ten years.

Of course, the total federal deficit is expected to run into the trillions, so the health reform law isn’t going to solve that problem.

Well, that’s the reform law. Do you love it? Hate it? Still don’t know? Either way, there’s still a lot of work ahead. You’ll be hearing lots of different things about this law.

Some people support reform, and if anything want to expand it and increase government oversight of insurers in the health care industry. Others oppose it and think it creates too big a role for the government.

Some states have even gone to court claiming the requirement that everyone buy insurance is unconstitutional. Politicians and pundits will be talking to you as if you’ve got no idea what’s in that thousand page law. But by watching this, you’re on your way to getting informed. And you can make sure your friends and family are, too, just by passing this little video around.

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