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Liz Pulliam Weston

The Basics

It's not health care reform unless . . .

Don't get distracted by the histrionics on TV or the near riots at town hall meetings. For Main Street America, only 3 things matter.

By Liz Pulliam Weston
MSN Money

Lawmakers and pundits want to make the health care fight all about politics.

But their red faces and finger-pointing can't obscure the fact that our health insurance system is simply broken. People are going broke and/or dying prematurely.

This isn't about politics. This is about lives.

Right now, big chunks of the U.S. population lack adequate coverage, and many more are just pink slips away from life-altering medical bills. Consider:

  • Nearly 40% of Americans between 18 and 64 had no insurance or had coverage so paltry they were exposed to catastrophic expenses, according to a 2007 survey by Consumer Reports.

  • About 62% percent of all bankruptcies filed in 2007 were linked to medical expenses, according to a recent study by Harvard researchers. The vast majority of people who went bankrupt had health insurance when their illnesses or injuries occurred.

  • Meanwhile, the cost of coverage continues to spiral, with no end in sight. Premiums for employer-provided health insurance have more than doubled in the past decade, to $12,680 annually for family coverage (employees on average pay $3,354 of the bill, with the employer covering the rest), according to the Kaiser Family Foundation. The Commonwealth Fund predicts that, without containment, the cost will double again by 2020. High cost was the reason cited by half the small businesses that have dropped coverage in recent years.

  • And it's not just about money. If you're uninsured, you're at least 1.2 times more likely to die than if you had coverage. The mortality rate rises to 1.5 times for babies, as I wrote in "A survival guide for the uninsured."

As the debate over reform has become increasingly bitter -- and occasionally bizarre, as evidenced by the citizen who told Rep. Bob Inglis, R-S.C., to "keep your government hands off my Medicare" -- it would be easy for lawmakers to lose sight of just how much financial risk the average person faces if nothing changes or if reform favors corporate interests over our own.

Any changes that would truly matter would have to come through in three areas: availability, affordability and reliability.

Here's what needs to happen, no matter whose plan is eventually adopted. If you don't see these three fundamental changes, "reform" is unlikely to do you and your family much good.

Coverage has to be available for all

Even if you have good coverage now, you could easily lose it if you're under 65 and not covered by Medicare. If your coverage is through your company, your employer could simply decide to stop providing this benefit, as many small businesses already have, or you could lose your job and your insurance along with it. (You're supposed to be able to buy continuing coverage under federal COBRA laws, but that's too expensive for many families, as I'll explain in the next section.)

Buying coverage on your own can be tough. Insurers typically won't cover people with serious existing health problems, and even minor illnesses or conditions can drive up the cost. If you're healthy, you're not out of the woods: You may pay more if your parents or other close relatives had health issues.

Video: Health insurers set up shop at malls

You don't have much choice when it comes to private coverage either. Most states' markets are dominated by one or two insurers. There's little of the competition that might induce an insurer to extend coverage to riskier applicants or keep down costs.

True reform would allow you to get guaranteed coverage if you lost your job, quit to start a business or decided to retire early.

Some say the best way to ensure access is to provide a public or nonprofit option that could compete with private insurers.

Insurers hate that idea, and to avoid it they promise they'll start covering everyone if everyone is required to buy insurance from them. But that approach has its own hazards.

Continued: Coverage must be affordable

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