The annual caps loophole was added to Reid's manager's amendment--the merged health care bill--because CBO told him to do it, apparently. Ezra:

Hill sources explain that this was inserted because CBO said premiums would "go through the roof" if insurers couldn't cap benefits. The official quote from Jim Manley, Harry Reid's spokesperson, says much the same thing. "We are concerned that banning all annual limits, regardless of whether services are voluntary, could lead to higher premiums," he explained. "We continue to work with experts on how best to accomplish our goals of preventing insurance companies from imposing arbitrary coverage limits while providing the premium relief American families need and deserve.”

This, however, obscures the choice that's being made. The tradeoff here is slightly higher premiums for everyone versus total financial ruin for the people who absolutely need help the most. Politically, choosing "everyone" rather than "people with cancer" makes sense, because the first group has more votes than the second. But on a policy level, it's nuts. Health-care insurance literally exists to protect us from the worst-case scenarios. This provision says that the Senate bill will protect everyone but the truly worst-case scenarios. If you assume that people support the basic concept of health-care insurance, then they don't, or shouldn't, support this.

Digby follows up on that whole "through the roof" idea of premium increases:

Here's a study done by Price Waterhouse on the impact of the lifetime caps:

The findings are based on public data, surveys of major insurers, and PwC actuarial modeling. Key findings from the report include:

  • Approximately 55% of individuals with employer provided health insurance are subject to lifetime limits; the most common of which are $1 million and $2 million.
  • It is estimated that approximately 20,000 to 25,000 people have exceeded limits with their current health insurance plans.
  • Premiums would increase by less than one-half of one percent if limits were increased to $10 million.
  • Removing limits would reduce Medicaid costs by $1 billion per year.

I wonder if anyone's told the CBO to add that extra billion a year back into the plan's costs? [emphasis mine]

Because, as she says, when people get really sick and lose their insurance, they end up on Medicaid. As she also points out, one of the key promises President Obama laid out, and the Democratic Congress agreed to, was that no one in America would ever go broke again because they got sick. That's a promise they need to keep.

Originally posted to Daily Kos on Fri Dec 11, 2009 at 01:36 PM PST.

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