No dropping coverage for seriously ill people. HIPAA does not allow insurers to drop people who have filed claims for serious illness. People with individual coverage and those in groups can’t be dropped if they have filed lots of claims. But the companies have found a way around this prohibition. If too many people in a group get sick, especially in a small group of people who have purchased the same individual policy, the company just closes off its “block of business” and sets off what’s known in the insurance biz as a death spiral. The company starts selling a new, perhaps similar product to healthy people, while sick people with the old coverage face higher and higher premiums, making the policy unaffordable. Eventually they drop the policy—which, of course, makes companies happy.
What to watch for: Lobbyists trying to sneak in provisions that would let insurers raise rates for sick people. Insurers have said publicly they would no longer charge sick people more money. Will that promise apply in these death spiral situations with policyholders already on the books, or will it apply only to people applying for new coverage? Look for companies to support language allowing flexible-benefit policies that effectively restrict what’s covered and discourage people with health problems from applying, because the policies won’t cover their conditions.
No gender discrimination. Charging women of child-bearing age more for coverage because women get pregnant “is horrific,” Kofman says. “It goes on all the time in most states because state law does not prohibit it.” Historically, companies have justified this policy because women file more claims—especially claims relating to pregnancy and childbirth, which can be expensive for insurers. Carriers have now said they will stop this practice.
What to watch for: Look for attempts made to restrict or eliminate pregnancy coverage from policies, especially in the individual or small group market. This has already been done in California. Policies sold to employers with fewer than fifteen workers are not protected by the Pregnancy Discrimination Act.
No annual or lifetime caps on coverage. That’s a critically important new protection, Kofman says. Individual market policies often cap the total amount an insurer will pay out during the life of the policy. That hurts people who need organ transplants or have other catastrophic medical expenses. One premature baby in the hospital for six months could cost over $500,000. In some states, you can also burn through a cap of $1 million pretty quickly if you have a major heart attack.
What to watch for: Again, look for lobbyists trying to limit lifetime and annual coverage. The lower the limits, the less protection people will have for truly expensive medical treatments. Flexibility will be a hard argument to counter, but reporters should dig beneath what the companies really mean by ‘more flexible policies.’ What will be excluded?
Extended coverage for young adults. The president wants companies to agree to cover young adults on their parents’ policies until they turn twenty-six. Some states have tried to extend coverage, with mixed results—especially when it’s up to employers to choose this option when they buy a policy for their workers. Insurers charge for it. While this solution makes it sound like more people can get coverage, there’s a hitch. Under IRS rules, these young folks must be listed as dependents on their parents’ tax returns. A ‘dependent child’ in the eyes of the IRS must be under age nineteen, or a full-time student until age twenty-four, and cannot provide more than half of their own support for the calendar year. Employers cannot provide tax-free benefits to adult children, so Kofman says tax rules may have to be changed to make this provision meaningful. Also, how many parents want to keep their twenty-five-year-old dependent on them rather than out on their own? So how much protection does this really offer?
Obama's plan should be more focused on the same type of plans held by members of the congress concerning health care. They take very good care of themselves. I am of the opinion that the American people are every bit as important as members of congress. Equality takes on a new meaning when it comes down to who is taking care of whom.
#1 Posted by Duane Allen, CJR on Wed 12 Aug 2009 at 11:22 AM
Obama's plan should be more focused on the same type of plans held by members of the congress concerning health care. They take very good care of themselves. I am of the opinion that the American people are every bit as important as members of congress. Equality takes on a new meaning when it comes down to who is taking care of whom.
#2 Posted by Duane Allen, CJR on Wed 12 Aug 2009 at 11:23 AM
Duane, you realize that the federal government contracts with hundreds of insurers, that they have a range of hundreds of plans for people at various income levels. Many STILL can't afford one.
I think that they pay 75% of the cost for full time employees--but that many Federal employees, even with those substantial subsidies, still can't afford one.
Thats the cost of health care. That's the dark side they want to hide as long as they can.
Look at it this way. If a Congressperson is paid say, $100k a year, and a mailman makes $40k and they are both offered a healthcare plan that costs 20k for a family, but the Federal government pays $15k that leaves $5000 that an employee must pay. That $5000 ends up being a huge bite for the postman, but not such a big bite for the congressman.
Now, suppose YOU, the outsider, are offered the opportunity to buy into "the same plan", at the same price, $20,000.
Its a bit like COBRA. The same plan, at the same price. But SO few of us turn out to be able to afford it!
Welcome to America.
Ouch. You forgot these politicians start out as lawyers. And you listened to that lawyer speak.
Dont forget, Catch 22, you're not a federal employee!
No, just buying into their system at their cost. If you have a big income, and perhaps some health problem, you would probably jump at the chance, because you need to be able to avoid individual premiums which are much higher than that, (and the plans have such high deductibles they don't pay much, so people with health problems soon find it doesn't work for them)
But, don't expect to walk away smiling. And many people wont be able to afford the cost in any possible way. (That's what they are waiting years for, BTW. And prices are going up, fast.)
See my point? Naive voters voted assuming that they would through some miracle, get a 75% subsidy which they almost certainly couldn't in actuality, get. That $15000 subsidy is the reason the postman can afford a health plan and you might not be able to, even if you are "offered" a group plan.
(If you are "offered" one at work, but can't afford it, you wont even get that. No public options for you. Thats a deal thats going to make a lot of people very angry. No wonder they want to put it off for years, perhaps decades.)
I hope that this helps make the problem a little clearer. Even if you are allowed into Tiffany's that doen't mean you can buy diamonds. Or even fake ones.
Consumer driven plans are a dead end in that its NOT a choice when you cant find a single affordable option that works to get you affordable, quality health care.
They are designed to conceal that unpleasantness. Nobody likes telling people stuff like that.
Its a trap.
#3 Posted by Charles, CJR on Sat 31 Oct 2009 at 05:13 PM