President Obama's Health Care Plan: Soup to Nuts


Announcer

Welcome to Stuff You Should Know from howstuffworks.com.

Josh Clark

Hey and welcome to the podcast. I'm Josh Clark. With me as always is Charles W. Chuck Bryant.

Chuck Bryant

The doctor.

Josh Clark

And with Charles W. Chuck Bryant is Molly Edmonds of Stuff Mom Never Told You fame, one of our sister podcasts. And Molly has also been doing more research into healthcare reform that me, Chuck and Rahm Emanuel combined. So we're glad to have you here, Molly.

Molly Edmonds

That's all right. I think I can Rohm down.

Josh Clark

I'll bet you could.

Chuck Bryant

He's a bulldog.

Josh Clark

Yeah, but -

Molly Edmonds

I'm pretty feisty.

Chuck Bryant

I've seen you -

Josh Clark

Have you seen her leg wrestle?

Chuck Bryant

No, but I've -

Josh Clark

It's startling.

Chuck Bryant

I've been behind the - in front of her sights; not a pleasant thing.

Josh Clark

Yeah, I have too Chuck. It isn't which is why we're scared of Molly, but we're glad she's here, right Mol?

Molly Edmonds

I hope so. I hope you're glad I'm here.

Josh Clark

We're also glad you're here because, much like the Necronomicon podcast, we intend to use you as a shield just to get that out of the way. Let's talk about healthcare reform, all right?

Molly Edmonds

Okay.

Josh Clark

I wanna also say that we are not going to be discussing any of the politics in this one. This is part two.

Chuck Bryant

You lie.

Josh Clark

Except for that part, we're not going to be discussing any of the politics. What we're gonna do is simply present the proposals that are in play right now. And then part three is going to be criticisms, pros, cons, maybe other ideas for fixing the healthcare system.

Chuck Bryant

And then part four is what I'm excited about.

Josh Clark

Oh yeah?

Chuck Bryant

Myths and truths.

Josh Clark

Yeah, we're going to be talking about just outright lies, things that are kind of on the fence and things that actually are true, but are disgusting. So let's talk about Obama's proposal. Is it even Obama's proposal?

Molly Edmonds

Obama has made this a priority in his presidency.

Chuck Bryant

Big time.

Molly Edmonds

Big time, but he has not come down from on high with a massive plan for us all to react to.

Chuck Bryant

But you know who did do that?

Molly Edmonds

The Clintons.

Josh Clark

The Clintons did. That's right and -

Chuck Bryant

I thought you were gonna say Moses. Moses - that was on the third tablet, I think.

Josh Clark

The healthcare tablet was dropped. Yeah, the Clintons actually wrote legislation and were peddling it around Capitol Hill in the '90s and it didn't work. That plan didn't work. So clearly, Obama learned from his predecessors, right?

Molly Edmonds

Right, so Obama has laid out eight principles. This is what he did early on. I think this has gotten lost in all the hubbub, but he came out with eight principles and then left it to Congress, asked five committees from Congress to create plans and then in the week we were recording this, he came out and made this mega speech that's come up with all this attention. So now the week we're recording this, Obama's come back out with a speech and made it look like it's a little bit more of his plan, tried to wrestle control away from the media spin. He's saying what he wants in a plan, what he doesn't want and he's open to compromise about it. So let's start -

Chuck Bryant

Basically, he's in campaign mode.

Molly Edmonds

He was.

Josh Clark

But he's definitely back from vacation.

Chuck Bryant

Yeah.

Molly Edmonds

So should we talk about his eight proposals?

Josh Clark

Well, let's - we're talking about 1,000 pages or so of legislation right now, right that we know of?

Molly Edmonds

Well, we've got two bills on the table from four committees. Now, when he says there are four committees who have come up with bills, one of the bills is a tri-committee bill, so that's where that comes from. So three committees came up with one bill from the house: HR3200 and then the senate has a bill -

Josh Clark

I have to point this out. I'm sorry. Molly didn't even look at her notes to rattle off that bill number.

Chuck Bryant

I'm just gonna excuse myself.

Josh Clark

Let's just sit here quietly. Take over.

Molly Edmonds

I dream about HR3200.

Chuck Bryant

I bet you do at this point.

Josh Clark

She didn't look at her notes again.

Molly Edmonds

And you know what I have anxiety dreams about is the upcoming senate finance committee bill. So by the time people hear this, that bill might be out. It's the trifecta. It's the one everyone's waiting for because it's a bipartisan committee. Being the senate finance committee, they have to say how they're gonna pay for it, which the other bills were not as on the hook for. So that's the one everyone's waiting on baited breath for.

Chuck Bryant

Yeah. Actually, I saw today breaking news was that the chairman of that committee, Democrat Max Baucus said, "We're pushing through with this very soon and it doesn't matter if I have Republican support or not. We're gonna push it through and we'll have it up for review by the 21st of September." So that's the latest word.Josh Clark:

Wow

Molly EdmondsI have dreams about Max now.

Chuck Bryant

Do you really?

Molly Edmonds

Yeah.

Chuck Bryant

That's nice.

Molly Edmonds

So anyway, that's a personal note.

Chuck Bryant

Right.

Molly Edmonds

So Obama says - here are the eight things that he saw that he wanted in the plan. He wanted to assure affordable, quality health coverage for all Americans. Do you guys wanna go in a circle; we'll all do one?

Chuck Bryant

Yeah, yeah. I'll go next. He wants to remove obstacles to coverage for people with preexisting conditions.

Josh Clark

He wants to invest in prevention and wellness.

Molly Edmonds

He wants to maintain coverage in the event of job loss or change.

Chuck Bryant

He wants to kill your grandparents. Oh wait. Sorry. He wants to improve quality care and patient safety.

Josh Clark

Right. And let's see. He wants to guarantee choice of doctors and coverage plans, right?

Chuck Bryant

Yes.

Molly Edmonds

And safeguard families from bankruptcies related to health expenses.

Josh Clark

How many is that?

Chuck Bryant

I think that's seven. He wants to - the final one. He wants to shrink long term cost increases in healthcare for businesses and the government.

Molly Edmonds

So those are pretty broad principles. I think -

Molly Edmonds

I think you'd be hard pressed to find someone who would disagree with these principles just not in theory, but then the congress had the hard job of making them into bills.

Molly Edmonds

So let's look at the bills.

Josh Clark

Now we have that thousand pages of legislation as it stands right now, not including the senate finance committee's bill.

Molly Edmonds

I think about 1600 pages.

Josh Clark

Wow, without the senate finance committee's bill?

Chuck Bryant

And you've read it all, correct?

Molly Edmonds

Yeah.

Chuck Bryant

In brail, which was - she taught herself brail just to read it.

Josh Clark

I'm so impressed. So let's talk about how Congress did take these eight principles and turn them into healthcare as you were saying. Let's start with individuals. One of the big things is that everyone - both of the proposals that are out right now say that everyone has to have health insurance.

Molly Edmonds

Yeah. It's an individual mandate and it's sort of borrowing an idea from car insurance. If we've all gotta carry car insurance, then what's health insurance in addition to that?

Josh Clark

Right. So if you don't have health insurance, you don't have to. Storm troopers aren't gonna come to your house and beat your kids in front of you.

Molly Edmonds

But the tax man will.

Chuck Bryant

Right.

Josh Clark

Yeah, because I think the senate bill says you pay $750 a year in tax penalties for not having insurance. And then the house plan is I think up to 2.5 percent of your adjusted income, but no more than the lowest priced plan. They're not gonna charge you more than you would have to pay in health insurance.

Molly Edmonds

Right. If you can pay the premium and taxes, essentially, you could just pay the premium.

Chuck Bryant

Well, that's the way I took it is we're gonna get some money, so you might as well, hint, hint, go spend it on healthcare rather than funding the IRS.

Molly Edmonds

Yeah, but now most people already have health insurance. The majority of people get it from their employers. And so that's pretty easy to meet that requirement, right? But we don't want the employers to just chicken out so employers have a mandate as well. So now we have two mandates: employer and individual.

Chuck Bryant

And I heard actually the senate finance is not going to have an employer mandate and that's why businesses are probably going to be a little more favorable for that one.

Molly Edmonds

Yeah, they say that's one of the theories that that's what killed Clinton's bills. It's a job killer, but that sounds kinda political so let's just back off and say you're an employer, you're an individual; you've got this mandate, what if you can't afford it?

Josh Clark

Well, there's subsidies. Well, not only subsidies; if you are going to mandate that everybody has to have health insurance, you have to make exemptions for certain people, but you also - we already have Medicaid and Medicare. So that covers automatically, a certain percentage of Americans, but they're also expanding Medicaid, right? I think to 150 percent above poverty level.

Molly Edmonds

Yeah, that is the current senate plan would be 150 percent above the federal poverty level and the house would do 133 percent of the federal poverty level.

Chuck Bryant

Right. And they're also planning on kinda cleaning house in those two systems, right? And making them more efficient and cheaper?

Josh Clark

Yes.

Chuck Bryant

Hopefully.

Josh Clark

Well, we'll get to that when we start talking about how this is gonna be paid for.

Chuck Bryant

Okay.

Josh Clark

But let's talk about subsidies for individuals. Let's say that - oh, I don't know - I make 350 percent income above the federal poverty level.

Chuck Bryant

God, that'd be great.

Josh Clark

I know; dare to dream. Will I be eligible for subsidies?

Molly Edmonds

Yes.

Josh Clark

Yes? Okay, so I think it goes from - let's say if we're going with 150 percent above poverty level, from that to poverty level, you're covered by Medicaid. From 150 percent up to 400, you're eligible for subsides on a sliding scale, Molly?

Molly Edmonds

Right. What they do is obviously, if you make a little bit more money, if you're closer to that 400 percent level of the federal poverty level, you will pay a greater amount of the premium than if you were just making 150 percent of the federal poverty level. So in the house committee for example, you get your subsidy, but you will pay - let's say you were at 350. You're gonna still be paying nine to ten percent of your income toward the thing, but then you'll also get a subsidy to cover the rest of the premium.

Josh Clark

Okay, got you.

Chuck Bryant

Oh, that makes sense. It's kinda like when I go to my shrink and I say, "Dude, I make $20,000 a year" and he doesn't charge me as much as the physician that comes in after me.

Josh Clark

Yeah, that's actually a really good point, Chuck that there's a lot of key point s in these proposals, are already in effect in some ways either defacto like your shrink charging you on a sliding scale or mandates about everyone having to have insurance like the Massachusetts experiment, right?

Molly Edmonds

Um-hum.

Josh Clark

So this is kinda taking a lot of maybe good ideas and putting them together; good ideas being a very political way to put it, right?

Molly Edmonds

Right.

Chuck Bryant

What was the Massachusetts experiment?

Josh Clark

Where everyone has to have insurance.

Chuck Bryant

I don't think I knew that.

Josh Clark

Yeah.

Chuck Bryant

Wow.

Molly Edmonds

Yeah. And that's probably a good thing for you guys to discuss in the next podcast because it is - Massachusetts is a success in terms of health insurance.

Josh Clark

So where is everybody gonna get this insurance? There's an insurance marketplace that's being set up, right?

Molly Edmonds

Yeah, this is sort of the new big thing. So the insurance marketplace is sort of this attempt to have the general public get their insurance the same way that Congress people do because essentially, when you become elected to Congress, you are presented with five plans. Not five; it's not a specific number, but basically, you're offered all these plans that tell you exactly how much it's gonna cost and what benefits are provided. And it's very easy to use.

Josh Clark

Yeah, I think plain language is one of the provisions in at least the house bill.

Chuck Bryant

Transparency plain language.

Josh Clark

Yeah, you have to say this is what's covered and this is what's not covered and this is what you get for what you pay for, right?

Molly Edmonds

Um-hum.

Josh Clark

Plain language is a really big part of this.

Chuck Bryant

Right.

Molly Edmonds

So if you're trying to fulfill your individual mandate, you will look at all these plans and say, "I want this one because I know it costs this much and I know that this, this and this is covered." And in both of these bills, every plan that's in the marketplace will have a certain set of minimum benefits that it will cover.

Chuck Bryant

Right. Things that have to be covered, correct?

Molly Edmonds

Things that have to be in there. And then there will be plans that are better than that in terms of maybe you want spa days covered or something like that. You can pay to get that extra, but let's say you just wanna be able to go get a mammogram under your health insurance plan, that's probably closer to what's gonna be considered an essential benefit that has to be in the plan.

Chuck Bryant

Right. And it gets - we'll get into this obviously later too, but that's getting a little political as well with what can be covered and what's not, right?

Molly Edmonds

Right, but let's just, for the time being, call them minimum benefits because what we're - what these proposals give the government license to do is to define what these minimum standards of health insurance are. And eventually, all health insurance plans - if you already have an existing one, it will probably have about five years to meet these requirements as well.

Chuck Bryant

Right, but it won't change it first, right?

Molly Edmonds

No, they have about a five-year window.

Josh Clark

They'll be grandfathered in for several years, right?

Molly Edmonds

Um-hum.

Josh Clark

And you said in your article how healthcare reform works that these basic requirements will keep the marketplace from becoming like a dumping ground for shotty policies, right?

Molly Edmonds

Right. We don't want anyone in the marketplace who already maybe doesn't have a job or can't afford regular insurance to just be stuck with sort of -

Chuck Bryant

Crappy coverage?

Molly Edmonds

Yeah.

Josh Clark

That's one way to put it.

Chuck Bryant

Yeah.

Molly Edmonds

The whole point of this plan, whether you have insurance or you don't have insurance, in Obama's point of view, is to strengthen health insurance for everyone. So obviously, if you don't have a plan already, you're gonna want sort of that basic care, but you also want to make sure that the people who already have insurance are being protected in the same way.

Chuck Bryant

Right. Do you know what insurance everyone should have?

Josh Clark

What?

Chuck Bryant

Motion picture health and welfare.

Josh Clark

Is it good?

Chuck Bryant

Dude, it's like - it's better than the Army.

Josh Clark

Do you get spa days?

Chuck Bryant

You get massage, spa days; you get mani-pedis paid for.

Josh Clark

That's ridiculous. This is the first I've ever heard of spa days.

Chuck Bryant

I think there's a sushi clause in motion picture health and welfare.

Molly Edmonds

In Germany, spa days are included.

Chuck Bryant

Really?

Molly Edmonds

Yeah, universal healthcare.

Chuck Bryant

Man, that's wonderful.

Josh Clark

Small businesses - you were saying that businesses are going to have a mandate to provide health insurance. They're also going to be allowed to go to this insurance marketplace to select as well?

Molly Edmonds

Right. Employers are gonna be subject to a pay or play requirement where if you don't provide health insurance for your employees, you're gonna have to pay into a fund for all your employees who don't have health insurance. Now, this would probably be a job killer if it were to be applied to small businesses, so small businesses will be exempt from this requirement.

Josh Clark

Right. I think Obama said like 95 percent of small businesses in the US will be exempt in his recent speech.

Molly Edmonds

Right. So - and the senate and the house define small businesses differently in their current plan. They might look at how many employees you have; they might look at your income per year. I think if you make more than $250,000 a year, you wouldn't be considered a small business under this exemption, but that's probably gonna be one of the things that's ironed out and reexamined pretty closely in the reconciliation of these two bills, but they would also be eligible to enter this marketplace and provide insurance to their employees with the help of subsidies.

Chuck Bryant

Oh, okay.

Josh Clark

And like people, those employers that decide, "I'm not doing this," they are going to have to pay and that money will be contributed to the insurance marketplace, right?

Molly Edmonds

Right.

Josh Clark

So either way, it's provide - well, like you said, pay or play.

Molly Edmonds

Yeah.

Josh Clark

So in this marketplace - let's all pretend that we're in there right now. Guys, close your eyes.

Chuck Bryant

This is nice.

Josh Clark

Do you see all these little logos? There's Etna's logo. There's Snoopy. Say hi to Snoopy.

Chuck Bryant

Hi, Snoopy.

Josh Clark

Do you see this one? What is that, like a screaming eagle with a bandaged head?

Chuck Bryant

That is the US of A.

Josh Clark

That is new, or it would be if this thing gets passed. That's the public option, right?

Chuck Bryant

Yep. The public option has been one of the more controversial parts of all these bills, correct?

Molly Edmonds

Yes.

Chuck Bryant

Okay, so it's controversial. What's - what does it entail? What's going on here?

Molly Edmonds

So the point of having this marketplace is one way that Obama thinks we can keep our insurance companies honest and competitive because if you're competing against people, then you will provide good service for a good value.

Chuck Bryant

Makes sense.

Molly Edmonds

Makes sense. Now, Obama thinks that one way to ensure that this happens is to also introduce this public health insurance option so that it's a government run option that will have lower rates, probably. Now obviously, right there you're gonna have some contention about what the rates should be because can a private insurer compete with a public insurer?Will it have sort of the government stamp of approval that might make it impervious to any sort of attack or disaster? But the thinking is that similar to the way we provide Medicare and Medicaid for certain people, that we would have this option for people to get health insurance at a pretty affordable cost set by the government, but we don't know what cost that would be yet. So you really can't get into an argument about whether insurers could compete.

Chuck Bryant

Are the financials not really set on this yet?

Molly Edmonds

No and if you've been following the news, this is probably the thing you see that "Oh, it's been dropped; oh it hasn't been dropped. We might have a co-op instead." It's really something to watch. That was something in the speech Obama said he was willing to negotiate on. So it's still to come. He has said so far though that it wouldn't be just another Medicare.We wouldn't just have Medicare rates, which are about 30 percent lower than most insurance rates because that isn't fair to private insurers. It would have to be similar to private insurance likely and it would also have to fund itself through premiums. It would be self-sustaining.

Josh Clark

Yeah, because if you got injections of federal cash, you're not relay competing with anything.

Chuck Bryant

Yeah, and I think Obama said that he wouldn't back anything that added to the deficit. Is that correct?

Molly Edmonds

Yes.

Josh Clark

Right. So that's the public option. Everybody back away slowly.

Molly Edmonds

Well, one thing that might be interesting to talk about is we always hear Obama saying that if you like your health insurance, you can keep it, right?

Josh Clark

Right.

Chuck Bryant

If you like your health insurance, you can keep it.

Molly Edmonds

The thing is -

Josh Clark

That's terrible.

Chuck Bryant

That was awful.

Josh Clark

Do it as Clinton saying it.

Chuck Bryant

No.

Josh Clark

Come on; do it.

Chuck Bryant

If you like your health insurance, you can keep it.

Josh Clark

There, much better.

Molly Edmonds

But the thing is let's think about the people who don't like their health insurance and might be thinking, "Oh man, a public option sounds pretty good."

Chuck Bryant

That's an excellent point because you never hear that mentioned.

Molly Edmonds

You can't really opt out of your employer based health insurance because you don't like it and just get into a cheaper public option.

Chuck Bryant

You can't?

Molly Edmonds

No.

Chuck Bryant

Why not?

Molly Edmonds

Because -

Chuck Bryant

Because you have the option through work, so you're immediately discounted?

Molly Edmonds

Yes. Right now the insurance marketplace will only be open to those people who don't have insurance through their employer.

Josh Clark

At first.

Molly Edmonds

At first, but I don't - if we were still five years away from a marketplace, I think it would be at least five years after that away from allowing everyone in. So right now you have to stick with your employer based health insurance unless your employer drops you. Now, that's something that people are saying if there's some cheap plan and employers figure it's cheaper just to pay the fee than to cover their employees, that could happen, but the thinking is that if everyone has to know sort of what their insurance costs versus what it costs in the marketplace, then that competitive spirit might keep insurance fair and honest.

Chuck Bryant

This can get really tricky.

Josh Clark

So - well, let's talk about - let's talk some more about how insurance companies are gonna be affected just in addition to this possible competition from a public option. There are some mandates in this legislation for example, that says you can't discriminate based on preexisting conditions any longer. Obama likes to use the example of that woman who was denied that - what was it?

Molly Edmonds

She was gonna have a double mastectomy and then they found out she didn't declare a case of acne from her childhood. And thus, they postponed the treatment and her breast cancer grew.

Josh Clark

Right. And under this proposal there's no more preexisting condition denial.

Molly Edmonds

Right. Or it doesn't cost you more. You can't be charged a higher premium because you have a preexisting condition.

Josh Clark

They're gonna do away with that completely?

Chuck Bryant

Yeah.

Molly Edmonds

For people who have insurance and for people who are trying to get insurance.

Chuck Bryant

Like that's going, man under this plan. So if you smoke ten packs of cigarettes a day and you walk in there with an oxygen tank, they have to cover you?

Josh Clark

Yeah.

Chuck Bryant

For the same amount of money?

Josh Clark

Yeah, as far as I know.

Chuck Bryant

[Inaudible]

Josh Clark

Yeah, I know.

Chuck Bryant

That's awesome.

Josh Clark

But there's also a mandate that there can no longer be caps on spending by insurance companies and actually, not only that, the - its back on the consumer. There's now a cap on how much a consumer can pay out of pocket every year for their own healthcare, right.

Molly Edmonds

Right, because a lot of bankruptcies are driven by medical costs.

Josh Clark

I know.

Molly Edmonds

We're thinking that if there's - if you can't grow broke because you're sick, then we will decrease the number of bankruptcies and the damage -

Chuck Bryant

And improve the overall economy.

Molly Edmonds

Right. The damage we might be doing to our economy that way.

Chuck Bryant

Interesting.

Josh Clark

Definitely. So that's insurance companies; that's also again, we're just kind of hitting the high points here. We're talking about, as Molly said, 1600 pages of legislation as it stands now.

Chuck Bryant

It's dense.

Josh Clark

So let's talk about Medicaid and Medicare. Chuck mentioned this earlier about kind of cutting waste in the Medicaid and Medicare system and that actually - let's talk about how much this is gonna cost. The OMB suggests it's gonna be about $1 trillion over ten years for these proposals, for Obama's plan. Obama's saying that two-thirds of this can be paid for right off the bat just by cutting waste with Medicare and Medicaid. What is he talking about?

Molly Edmonds

Well, there's an estimate that about 30 percent of the services that are performed medically in this country are unnecessary. And that's overall. That's not just Medicare and Medicaid.

Josh Clark

Like adding a third limb?

Molly Edmonds

Yeah.

Chuck Bryant

Yeah, potentially or getting rid of that third limb that you wanted to keep?

Josh Clark

Yeah.

Chuck Bryant

You know?

Josh Clark

Yeah, either way.

Chuck Bryant

It goes both ways, buddy.

Molly Edmonds

But -

Josh Clark

You just blew my mind.

Molly Edmonds

But to get rid of those costs right away and to also cut out some administrative costs, all this paper shuffling that a lot of people do could help us. Well, the big name you always hear in association to this is Medicare Advantage, which is a private program within the public program, which I don't know if that makes much sense, but it's probably indicative of how our whole health insurance system works. That's $170 billion a year that goes to insurance companies for the exact same service that's provided to people by the government.

Chuck Bryant

So they would haul that and shuffle them over to Medicare standard?

Molly Edmonds

Um-hum.

Chuck Bryant

No more advantage for you?

Molly Edmonds

Right.

Josh Clark

Right because it pays 14 percent more than regular Medicare for the same service.

Molly Edmonds

Exact same service. The people who would have just stayed with regular Medicare, they could have saved $170 billion a year.

Josh Clark

Right, but that's just that $170 billion. He's saying you can save another $600 billion just from cutting waste, right?

Molly Edmonds

Um-hum.

Josh Clark

And I think he's also talking about bundling services that leads to bundling services, correct?

Chuck Bryant

Yeah, that's a big deal.

Molly Edmonds

It's sort of his testing ground for this because as I said, this 30 percent waste is endemic in the system. It's not just Medicare. It's not just the government that can't run a program. It's everyone who can't run a program, but they've done these studies where they compare areas that spend a lot of money on Medicare to just a little bit of money on Medicare and the people who have less spent on them, live longer and are healthier.The people who have more doctors' visits, more time in the hospital are the ones that are more likely to die from the exact same ailment that these lower spending people had over here. So what can we do to emulate those lower spending areas? That's where we get this idea of bundling that Josh was talking about. So if a person goes into a hospital with a heart attack instead of this doctor seeing him, then this doctor seeing him, then this doctor seeing him and everyone charging separately for all their tests -

Chuck Bryant

Fee for service.

Molly Edmonds

Fee for service. Then you go into the hospital as a Medicare patient and you are in there for your heart attack and all the treatment that you get relates to your heart attack, your doctors need to work together to figure out the best course of treatment. And so it's more a matter of how you kinda pay your cable bill if you have your cable, your internet and your phone all together. You just pay -

Chuck Bryant

Bundling.

Molly Edmonds

Bundling. You just pay one bill to the hospital for all that as opposed to paying for your cardiogram and the MRI scan they decided you needed and blah, blah, blah.

Chuck Bryant

Right. That kinda makes sense.

Josh Clark

Well, but it also leads to another kind of radical suggestion that's found in these proposals is establishing what kind of care you should follow when somebody comes in for a heart attack.

Josh Clark

Right because how do you know how much it should cost unless you know what procedures you have to follow and how much those procedures should cost? So to do that, they're setting up a panel that reviews the effectiveness of methods of treatments and says, "This doesn't work. This has a 98 percent success rate, so we're gonna go with this one."

Molly Edmonds

Well, I don't think they're gonna throw out this one. Obviously, they don't want treatments that don't work, but I think it's more - and obviously, I think we're intending to talk about rationed healthcare in the next podcast, but this is where people start to get this idea. But let's say that there are three treatments for a heart attack. This one works. The first one works for 90 percent of the population. The second one works for five percent of the population and the other one also works for five percent of the population. Rather than doing all three, do you have a greater chance of starting with this one and if that doesn't work, then go to one that fits the five percent of the population.

Chuck Bryant

So we're kind of prioritizing more than standardizing?

Molly Edmonds

Yeah, be tiering up sort of what works, but I think Obama's been very clear that if your doctor thinks that he wants to still go with No. 3 that has the five percent effectiveness rate, he can do that.

Chuck Bryant

Okay, you should be on that panel. Are you on that panel?

Josh Clark

Okay, guys we already talked about some forms of paying for this by cutting waste and getting rid of Medicare Plus?

Molly Edmonds

Advantage.

Josh Clark

Advantage. What are some other ideas for paying for this because Obama said he wasn't gonna sign anything that added a cent to the deficit?

Molly Edmonds

And one complication with him just saying, "I'm gonna eliminate fraud and waste" is those aren't scorable measures according to congressional budget office. It's gotta be something for them to say, "Yes, it provides $20 million." It's gotta be something the federal government can kind of point to as opposed to this nebulous cutting cost thing. Obama's been pretty clear that he would like to tax people who make more than $250,000 a year, change their tax deductions. And that I believe is what the house plan calls for. There's also the idea that we would tax the employer plans that are currently untaxed, the employer tax exemption.

Chuck Bryant

Oh, change - get rid of that all together?

Molly Edmonds

Yeah, they wouldn't be exempt anymore and there's the thinking - this was something McCain brought up in the presidential campaign that Obama pooh-poohed which is why it may not come back right away. There's the idea people shouldn't have to tax what is essentially free for them now, but on the one hand, it would be kind of an invisible tax because that's what we say you already don't know how much your health insurance costs.But also, if it's not just this free perk that employers can hand out, they might be more likely to increase your wages is one thought. Right now a lot of employers can say, "This is your salary, but look at this great healthcare plan you don't have to pay for" whereas when that becomes an actual cost to a person, then you would weigh that a little bit more in relation to the money in your pocket.

Chuck Bryant

Sure. So we can all look forward to raises; is that what you're saying?

Molly Edmonds

It's possible. That's just one thought behind this idea, but other people are like, "No, that's a tax. I don't want it." So then another proposal is to flip that tax and tax the insurance companies that offer the plans because they're obviously putting a pretty penny in their pocket for these tax exempt plans. And then that still kinda rubs some people the wrong way, so the proposal's been floated just to tax the mega plans, the ones that do have spa days.

Josh Clark

The Cadillac plans?

Molly Edmonds

Yeah, the Cadillac. There's a CEO of Goldman and Sachs. He has a plan that's $40,000 a year.

Chuck Bryant

You're kidding?

Molly Edmonds

And yeah, you always hear him brought up as like, "Does he really need this tax free $40,000 health insurance plan?"

Chuck Bryant

Goldman Sachs takes a beating in here.

Josh Clark

They do.

Chuck Bryant

We mention them all the time. They bear the brunt.

Molly Edmonds

So there's the thought that maybe we would tax either the people who have those kind of plans or the insurance companies that offer those kinds of plans, but there's this Time Magazine article that found that actually a lot of state employees have really good plans too. But -

Chuck Bryant

I saw that.

Molly Edmonds

- I think that what people are trying to get at is that there's money in these employer tax exemptions that we're gonna have to look at. It is a possible source of funding.

Chuck Bryant

Wow.

Josh Clark

So that's the high points. There's some other ones like - I don't know - Medicaid paying for family planning services.

Chuck Bryant

Getting rid of the donut whole, which we cover. It's big though.

Josh Clark

Sure. The provision where any child born in the United States is automatically covered if they don't have insurance; stuff like that. We're not gonna cover any of the rockessness surrounding those in this one. As a matter of fact, I think we've reached the end of this one, guys.

Chuck Bryant

I think so.

Josh Clark

Molly, thank you very much for coming in.

Molly Edmonds

My pleasure.

Josh Clark

We'll see you in the next one. And you'll wanna tune in for part three, especially if you wake up in the middle of the night with your teeth clenched shouting, "You lie. You lie." That's going to be about myths, truths and lies concerning healthcare reform and Obama's proposal. And there'll be criticism from the right and the left on the plane of that one, right Chuck?

Chuck Bryant

What about the center?

Josh Clark

And the center's just kind of staying mute.

Chuck Bryant

And gooey?

Josh Clark

Yeah.

Chuck Bryant

Okay.

Josh Clark

So stay tuned for that. That's part three in our special four-part healthcare suite series brought to you by howstuffworks.com.

Announcer

For more on this and thousands of other topics visit howstuffworks.com. Want more How Stuff Works? Check out our blogs on the howstuffworks.com homepage.