As Congress tries to hammer out a compromise to overhaul the nation’s health-care system, Nancy-Ann DeParle, the director of the White House Office of Health Reform, sat down with Consumer Reports Health’s Nancy Metcalf, who brought questions from our readers about how reform would affect people in their situations.
For the next four days, we’ll post video segments from the interview, which took place Oct. 24 at the Old Executive Office Building next to the White House.
Today we raise two common concerns about health reform that are almost at odds with one another. On the one hand people want relief from rising health-care costs. But on the other hand, some people are afraid that cost-saving measures will deny them the medicines and treatments their doctors say they need.
So, we asked the health-reform czar, is it really possible to cut health-care costs without cutting health-care benefits?
DeParle said one important source of savings will be cuts in administrative costs that would come as the uninsured and others could, for the first time, purchase health insurance directly through an exchange. The exchange would function something like an insurance store. People who either couldn’t get or couldn¹t afford insurance offered by an employer could buy it directly from an insurer through this exchange, with sliding-scale subsidies based on their income to make it affordable.
By pooling together people who are in the individual and small-group market today we can reduce high administrative costs, DeParle said. “You can get reductions of 5 to 10 percent in administrative costs, which will translate into big reductions for consumers and their premiums,” she said.
Another cost saver, according to DeParle: “I think every one of us who has been to the doctor for some sort of diagnosis, and then gone to the hospital or to another doctor, [has] noticed how you have the same test over and over again. That’s just inefficiency. We will simplify and streamline those things to get some of the inefficiencies out of the system.”
Another question we’ve heard from consumers is whether reform will make health insurance premiums less expensive. Most of the reform proposals include subsidies to help people buy health coverage, but is this going to make insurance truly affordable? The Urban Institute, an economic think tank, estimates that a middle-aged couple with an income of around $60,000 could spend more than $15,000 a year on health care--even with subsidies.
DeParle said: “Today a lot of people can’t get anything. If they’ve had any sort of illness in the past or any family history, they may not be able to buy any insurance at all. If they are able to buy it, often, it costs an arm and a leg. So, there will be a limit on what the insurance company can charge you out-of-pocket, and there will be no annual, lifetime caps so they don’t get hit up with huge costs if they get sick. I believe it will be much better than the current system.”
Be sure to check back tomorrow for “Doing away with bad insurance,” the next segment in this four-part series on health-care reform.
--David Butler, communications director, Consumers Union’s Washington, D.C., office
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