Why Reform Matters If Your Insurance Is Fine

healthcare

As the health care reform debate goes on, a number of new questions and jargon are arising. ABC News answers some of your most pressing questions about health care reform.

Why is President Obama talking reform?

The average family of four with health insurance had medical costs of $16,771 in 2009, according to the Milliman Medical Index, a report produced by the Milliman consulting firm.

Watch "ABC News Primetime: Questions for the President -- Prescription for America," Wednesday, June 24, at 10 p.m. ET

While 59 percent of that tab is picked up by the employer, that left $4,004 in premiums and $2,820 in out-of-pocket costs that comes out of a family's budget.

The authors of the MMI note that this is the third straight year that employees' out-of-pocket costs have increased in percent by double digits. Since the index began in 2005, the total health costs of an average family of four have increased by more than $1,000 per year, each year.

Additionally, a cause of concern for many is the fact that 46 million Americans do not have health insurance.

Some critics have noted that the number of uninsured may be misleading. Keith Hennessey, who served as a senior White House economic adviser to President George W. Bush, broke down the number of uninsured Americans.

Hennessey noted that many counted among the 46 million could get insurance through available government programs, while others would likely not be considered worthy of taxpayer support and may simply choose not to get health insurance.

It should also be noted that many who report bankruptcy from medical conditions had health insurance when they were first diagnosed.

Health Care Questions

I have health insurance through work and I am happy with it. Why should I care about reform?

Regardless of where you get your insurance, health reform will affect how much you pay in taxes and how much you pay in premiums.

For starters, one proposed method to raise revenue to pay for health reform is a tax on employer-provided health benefits. Because employers and employees do not have to pay taxes on employee health benefits, it has encouraged their growth.

So, a tax increase might raise your tax bill if you currently have health insurance through work.

It's unclear how likely this reform is. In the recent presidential campaign, John McCain supported taxing health benefits, while Obama opposed it. Additionally, the recent ABC News poll on health reform found that 70 percent of Americans oppose a tax on health benefits, even those above $17,000.

The premiums you pay for insurance will likely change through reform, although it's not entirely clear whether they will increase or decrease.

The hope is that reform will force insurers to lower their rates to compete with a government plan. Premiums might also go down as everyone is required to get insurance and people who are insured no longer sees their premiums paying for hidden costs.

What are the "hidden costs" being paid for by health insurance premiums?

A number of hidden costs can drive up the premiums a family pays for insurance. Those hidden costs arise from health care that isn't paid for by the person using it.

For example, emergency rooms are required to treat anyone who comes through their door, regardless of ability to pay. When a person who is uninsured is treated and cannot pay for the services, the costs are passed on to other patients at the hospital.

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