Hysteria—Heath Care & Insurance

Republicans in the US House of Representatives, in their “new” Pledge to America, claim to offer “a plan to repeal and replace the government takeover of health care.”

Of course, the law to which they refer is the Patient Protection and Affordable Health Care Act (Public Law 111-148) of March 23, 2010. However, the law does not takeover health care in our country. Instead, it regulates the medical insurance industry. All of us know this, but still we insist—apparently—on hyperbole and misinformation. We have placed ourselves down on an altar of hysteria rather than fact.

Common Sense Solutions?

Congressional Coverage

One oft-repeated challenge to Congress is that, if the new law is so good, why don't they include themselves in it? They will be: by 2014, when the law is fully implemented, Congressmen and their staffs can only select plans through the Exchange or as otherwise established by the law instead of the Federal Employees Health Benefits Program.

The House Republicans pledge themselves to replacing the Patient Protection and Affordable Health Care Act with common sense solutions focused on lowering costs and protecting American jobs. Do they start by addressing the problems and ills of the medical insurance industry and how it has hurt their constituents and fellow citizens?

Nope.

Real [Liability] Reform

Yes, they begin their discussion of the health care issue by focusing on medical liability reform. In other words, if someone is harmed by a doctor, hospital, or clinic and a jury—a jury that might include you, if you’re not the injured party—finds the medical provider at fault…the House Republicans believe it is more important to protect the provider than to protect you.

The General Accounting Office and the New England Journal of Medicine, among others, have published reports concerning malpractice expenses. More importantly, many US states, among them California and Texas, have passed insurance reform legislation to better control direct and indirect costs associated with medical malpractice claims.

If Republicans are serious about their support of the Tenth Amendment, however, they will refrain from passing national medical malpractice, or tort, reform. After all, if they don’t, they will prevent the states from handling the matter. But, I don’t think they have introduced their right hand to their other right hand. Consider their pledge to…

Ignore State Lines

Yes, that’s exactly what they plan to do by allowing insurance providers to sell policies across state lines. Sounds good, yes? Is insurance offered in your state too expensive? Imagine your relief if you’re able to purchase a much less expensive policy that is offered in another state. Let’s assume that state insurance regulations will not go away if insurers can offer policies across state lines—by the way, that is a classically false assumption. What would happen?

What if the Acme Mining & Mineral Company [hopefully, a fictitious company] imposed on its employees—miners—cheaper insurance written in another state. A state, for example, that has no mining and, therefore, no mining accidents or incidences of black lung disease. Policies written in each state must conform to the law of that state. However, policies sold in one state could be sold in another state without regard for the statutory differences between them. Let’s move on.

Health Savings Accounts

Under certain conditions, you can contribute up to $5,950 per year into a Health Savings Account. Funds in a HSA are tax-deferred; withdrawals to pay for qualified medical expenses are not taxed at all. Currently, such funds can be used to purchase over-the-counter drugs as well as to pay for prescribed drugs, medical procedures, and hospital costs as well as dental and vision costs. Republicans point out that the new law removes the ability to use HSA funds to buy over-the-counter drugs. The opportunity to participate in a HSA is not eliminated, though.

Most of the rest of this document contains unsubstantiated claims concerning the Patient Protection and Affordable Health Care Act. Claims, for instance, such as:

• Millions of seniors will be forced off of their current Medicare coverage.

What this doesn’t say is that many insurers are dropping, or are expected to drop, Medicare Advantage plans they offer. Instead, seniors will move to Medicare Supplement plans. Medicare Advantage combines Medicare Part A and Part B, includes a prescription benefit, and costs seniors an additional premium over that for Medicare Part B. Medicare Advantage pays providers or hospitals a set monthly rate rather than the traditional fee-for-service model. Costs have rapidly expanded; the Administration plans cuts to the program to control expenditures. Seniors won’t lose coverage they have under traditional Medicare Parts A and B. Instead, insurance companies will not receive the additional $1,000 they get, on average, for each Medicare Advantage enrollee. And, the new law requires that at least $0.85 of each dollar received from Medicare be spent on benefits, not overhead or profit.

• The Obama administration admits that people won’t be able to keep their current policies.

Really? Which policies are affected?

• The current law is inadequate to ensure that taxpayer funds are not used to pay for abortions.

Technically, that’s true, but only if the abortion is performed to save the life of the mother or in the case of pregnancies resulting from rape or incest. So, if you are pregnant and your pregnancy will probably kill you, and if you cannot afford the procedure, the House Republicans want you to die. Talk about Death Panels…

Still, the current law requires that, except for these circumstances, abortions, if included in a policy, will be paid for by the purchaser’s premium.

New Law; New Protections

In June of 2010, individuals who could not previously afford or obtain medical insurance due to pre-existing conditions were eligible to join a temporary high-risk pool in their state. These pools will go away in 2014 with the implementation of the health care exchange.

This month, certain provisions of the Patient Protection and Affordable Health Care Act became effective:

• Dependents (children) will be permitted to remain on their parents’ insurance plan until their 26th birthday—regulations implemented under the Act include dependents who no longer live with their parents, are not a dependent on a parent’s tax return, are no longer a student, or are married.
• Insurers cannot exclude pre-existing medical conditions (except in grandfathered individual health insurance plans) for children under the age of 19.
• Insurers cannot charge co-payments or deductibles for Level A or Level B preventive care and medical screenings on all new insurance plans.
• Individuals affected by the Medicare Part D coverage gap will receive a $250 rebate; 50% of the gap will be eliminated in 2011. The gap will be eliminated by 2020.
• Insurers’ abilities to enforce annual spending caps will be restricted and completely prohibited by 2014.
• Insurers cannot drop policyholders when they get sick.
• Insurers must reveal details about administrative and executive expenditures.
  Insurers must implement an appeals process for coverage determination and claims on all new plans.
• Indoor tanning services are subject to a 10% service tax.
• Enhanced methods of fraud detection are implemented.
• Medicare is expanded to small, rural hospitals and facilities.
• Non-profit Blue Cross insurers must maintain a loss ratio (money spent on procedures over money incoming) of 85% or higher to take advantage of IRS tax benefits.
• Companies that provide early retiree benefits for individuals aged 55 – 64 are eligible to participate in a temporary program to reduce premium costs.
• A new Web site by the Secretary of Health and Human Services provides consumer insurance information for individuals and small businesses in all states.
• A temporary credit program is established to encourage private investment in new therapies for disease treatment and prevention.

What do I think?

I think the new law is incomplete. I hoped for, at least, a public option plan to choose. If that caused insurance companies to go out of business, that would be okay by me. Before the law was enacted, I would have had to pay up to $1,400 per month for coverage that I couldn’t use for at least 12 months. (I’m a diabetic.) With the new law and the high-risk pool plan in the Commonwealth, I would pay up to $616 a month plus a $2,500 deductible. It’s still very expensive, considering everything. But, it’s a lot less expensive than $1,400 per month.