Winners & Losers of Health Care Reform

March 23, 2010

Who wins and who loses with the new health care reform bill just signed into law by President Obama?  Low income people who don’t have health insurance are the biggest winners.  Young people and couples making more than $200,000 a year are among the losers.  CBS MoneyWatch takes a look at five groups that will bear the greatest cost of change.  Here’s a sampling:

Loser:

Generation Y

In many ways, the health care legislation – like insurance in general – transfers wealth from the haves to the have-nots. The rich pay more to subsidize the poor, and the young and healthy pay more to offset the costs of the old and sick. On balance, most of the 19 million uninsured Americans between the ages of 18 and 34 will be forced to buy coverage – and those policies will be more expensive than the major-medical coverage they might have chosen otherwise.

For some young people – if you are a struggling playwright, for instance – there could be good news here: Because young people tend to work in entry-level jobs with low wages, many will fall within 400 percent of the poverty line and qualify for some government subsidies. However, the subsidies are unlikely to take the full sting out of the higher premiums: The most generous grants will be reserved for poor families, not single adults, and those who opt not to buy coverage will face penalties of $695 a year under the bill.

Proponents of the bill argue that young people can console themselves by thinking of the lower costs they will pay when they get older. “It is important to keep perspective,” says Volsky. “They will pay less 10, 20, 30 years down the road when they really become sick.”

Winner:

Cancer Patients and Others with Chronic Conditions

A tragedy of our current health care system is that those who need coverage most are denied it most often, says Linda Blumberg, a health economist and senior fellow at the Urban Institute, a policy think tank. Insurance companies can refuse to pay for care related to pre-existing conditions and hike coverage for certain illnesses, so if you have chronic, ongoing conditions or diseases you are forced to either pay out of pocket or shoulder ever-increasing premiums. The new law would prevent insurance companies from denying coverage or raising rates based on illness.

There is hope that helping the sick will eventually have an upside for healthy taxpayers as well, says Igor Volsky, a health care researcher and blogger for the left-leaning Center for American Progress Action Fund. Affordable insurance coverage should encourage the chronically ill to receive treatment earlier, when it is less expensive, rather than wait until high-priced emergency room care is required. A reduction in such emergency care should pay broader dividends, since its cost is typically passed on to the insured, in the form of higher hospital bills, and to taxpayers, in the form of federal subsidies for unreimbursed care.

Click here to read more from CBS MoneyWatch.com