Thursday, July 16, 2009

The Yes You Can Health Insurance Plan [UPDATED & BUMPED]

[Welcome LGF readers!]

[ed: Updated - individual medical plans outlawed - please scroll down]

Would you like to know what your new, change you can believe in health insurance will look like? Here are some tidbits from the House version translated for humans.

For starters, if you don’t have health insurance you will pay a tax.

If your coverage is not acceptable, you will pay a tax.

If your coverage does not meet federal guidelines at ANY TIME DURING THE YEAR you will pay a tax.

How much tax?

2.5% of your MAGI (modified adjusted gross income).

Sounds like a tax on the middle class to me.

So what are these federal guideline for coverage?

The policy must cover hospitalization, outpatient care including ER, doctors visits, medical supplies, prescription drugs, rehabilitative and “habilitative” services, mental health and substance abuse services, preventive services, including those services recommended with a grade of A or B by the Task Force on Clinical Preventive Services, maternity, wellborn care including health, vision and hearing including supplies until the child reaches age 21.

I have no idea what habilitative services are and I doubt anyone in Congress does either.

By requiring all policies to meet these standards, including the guaranteed issue mandate (explained later), the cost of health insurance will increase dramatically.

Maternity, especially without a pre-existing limitation, could easily add 30% or more to current premiums for some age groups. Mental health parity another 15% and covering all care on children to age 21 another 5 – 10%. That’s adding 50% in costs to current premiums.

So much for health insurance that is affordable.

But hey, this is Washington. They don’t know the meaning of the word affordable.

How about some of the other provisions in your new change you can believe in health insurance policy?

Your policy cannot discriminate because of pre-existing conditions, will be guaranteed to be issued and is guaranteed to be renewed as long as you pay the premiums. Your new policy cannot be rescinded except for incidences where you have committed fraud.

There are currently 4 states where carriers are not allowed to take into account your health history for rating purposes. Those states are NY, MA, ME and VT. Rates in those states are 2x to 3x higher than for comparable coverage in neighboring states where medical underwriting is allowed.

If this trend holds for the new policies, plus the requirements above for maternity, mental health parity and coverage on children to age 21, you could see an initial increase in premiums over current rates of 150% at a minimum.

That is change you can believe in.

Your premium can vary by age but in no event will you be charged more than twice the “normal” premium as defined by the Health Choices Commissioner.

Who is in charge of setting parameters for health insurance?

There will be a new level of bureaucracy termed the Health Benefits Advisory Committee consisting of no more than 26 members.

They will include 9 (who are not federal employees) appointed by the president, 9 (who are not federal employees) appointed by the Comptroller General plus some even number (not to exceed 8) who are federal employees.

But wait, there’s more!

The HBAC is presumably temporary and would only be in place to set the initial guidelines. The day to day grunt work would be handled by the Health Choices Administration.

There will also be a federal Health Insurance Omsbudsman who "shall, in a linguistically appropriate manner - receive complaints, grievances and requests."

I wonder who determines what is linguistically appropriate and what is not. What are the consequences for being linguistically inappropriate?

But I digress . . .

Good news for transparency advocates! The Health Choices Commissioner (or perhaps the Health Choices Administration) will require full transparency with regard to the cost of procedures and services.

Under your new change you can believe in health insurance policy you are free to find the lowest price for brain transplants.

And carriers will have mandated loss ratios for their business. Any carrier that has a better than required loss ratio will be required to rebate those extra earnings to the policyholders.

Nothing is said about what happens if the carrier has a worse than expected loss ratio.

All policies and marketing material must meet “plan language” standards as set by the HCA.

Plain language means anyone, including those with “limited English proficiency” who could be a prospective policyholder must be able to read and understand the material .

Too bad that requirement was not imposed on this 1018 page bill.

How are you liking this change you can believe in health insurance plan so far? Come on. You can tell me.

ADDENDUM [HGS]: As Bob says, "But wait, there's more!" According to financial journal Investors Business Daily, the House's reform bill would outlaw individual medical insurance (outside the as-yet-to-be defined 'Exchange" system):
If this bill flies, folks who already have individual coverage could keep it, but couldn't switch plans if (when) premiums increase. And folks coming off group plans would be barred from purchasing individual cover.
That's right: when individual health insurance is outlawed, only outlaws will have their own insurance.

MORE FROM BOB: From the House Ways and Means markup, page 17 & 18 . . .


(1) IN GENERAL.—Individual health insurance 2 coverage that is not grandfathered health insurance 3 coverage under subsection (a) may only be offered 4 on or after the first day of Y1 as an Exchange-participating health benefits plan.

6 (2) SEPARATE, EXCEPTED COVERAGE PERMMITTED.—Excepted benefits (as defined in section 8 2791(c) of the Public Health Service Act) are not 9 included within the definition of health insurance 10 coverage. Nothing in paragraph (1) shall prevent the 11 offering, other than through the Health Insurance 12 Exchange, of excepted benefits so long as it is of13 offered and priced separately from health insurance 14 coverage.

This is beginning to look like the No You Can't health insurance plan . . .
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