Tuesday, May 10, 2011

Health Insurance Games

Seems HHS Secretary Sebelius has a "joystick" she can use to play God with the health insurance rules under Obamacrap. By moving her joystick ever so slightly she can cause small business group health insurance premiums to skyrocket.

Now isn't that special?

Bob Graboyes, Senior Healthcare Advisor at NFIB gave us a heads up on his post which is excerpted below.

Secretary of the U.S. Department of Health and Human Services a joystick – the Essential Health Benefits package – with the potential to rocket small-business health insurance premiums skyward. EHB is the menu of goods and services that must be covered under all exchange-purchased insurance plans and non-grandfathered small-group and individual insurance plans. By vesting one set of hands with control over EHB, small business faces permanent administrative uncertainty. At the same time, the brunt of EHB appears largely to bypass big business, unions, and governments.

So use the rules in a discretionary fashion to punish small business while allowing big companies, unions and government to skate.

Sounds political to me.

Beginning in 2014, PPACA (§1302) makes EHB a mandatory feature of most insurance plans purchased by America’s 6 million small businesses and 21 million self-employed individuals. Exceptions initially include businesses with more than 100 employees and those with grandfathered policies. The EHB requirements apply to policies purchased both in exchanges and in non-exchange small-group or individual markets.

So not only small business health plans can be impacted, but individual health insurance plans as well.


Unlike most state benefit and provider mandates, designing and altering the EHB package will require no legislative action. PPACA specifies simply that the Secretary of HHS “shall define the essential health benefits” after commissioning some data collection from the Labor Department.

Even more amazing, is this power is wielded by someone who is not an elected official but rather is appointed by the president. Even if the current president and HHS Secretary are on the streets in 2013 who is to say the next HHS Secretary will be any more reasonable?

What are “benefits typically covered?” Suppose 1/3 of the employers surveyed offer “Cadillac” coverage (high-end), while 1/3 offer what we can call “Corolla” coverage (middle-of-the-road), and 1/3 offer “Kia” coverage (bare-bones, but decent). Does the Secretary decide that since 2/3 of employers offer Corolla coverage or better, then that should define the EHB? Businesses with Cadillac or Corolla plans will be relatively unaffected. Only those companies with the Kia policies will see their premiums rise, and it’s likely that these will include many small businesses and perhaps especially start-ups. In other words, those hardest hit will be the incubators of America’s job growth.

Very arbitrary and subjective application of the law. This is frightening.
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