Months ago Obama and White House spokespeople gave up calling this effort "healthcare" reform, and adopted the narrower "insurance" reform. Unfortunately, most of the rest of us didn't follow suit, and have been doggedly sticking with healthcare reform. Because as long as the public option lived, there was a sliver of a chance that this effort could end up eventually actually bring systemic reform--that it could really change access to healthcare for millions more Americans.
Don't get me wrong here, insurance reform is critical. What insurance companies have gotten away with all these years is abominable, there has to be an end to gender discrimination, age discrimination, rescissions, denial of coverage and claims based on pre-existing conditions--all of it. Many are arguing that these reforms alone are enough to pass this bill. But that depends on whether the reforms included will actually get that job done. And there's real reason to doubt that.
Over the next few days I'll be taking a closer look at these reforms and problems in the rest of the bill. Let's start here, with how the insurance industry might use one means of cherry-picking patients.
A few months ago, WaPo published a critical story on the myriad of ways insurance companies will still be able to discriminate.
If insurers are prohibited from openly rejecting people with preexisting conditions, they could try to cherry-pick through more subtle means. For example, offering free health club memberships tends to attract people who can use the equipment, says Paul Precht, director of policy at the Medicare Rights Center.
Being uncooperative on insurance claims can chase away the chronically ill. For people who have few medical bills, it is less of a factor, said Karen Pollitz, research professor at the Georgetown University Health Policy Institute.
And to avoid patients with costly, complicated medical conditions, health plans could include in their networks relatively few doctors who specialize in treating those conditions, said Mark V. Pauly, professor of health-care management at the University of Pennsylvania's Wharton School.
By itself, a ban on discrimination would not eliminate the economic pressure to discriminate.
"It would probably increase the incentive for cherry-picking," Pauly said. "I'm strongly motivated to try to avoid you if I'm not allowed to charge you extra."
This bill maintains the for-profit insurance industry, massively subsidizes it, in fact. Insurers are still going to be out to maximize profits, and there are real limits to what lawmakers can do to prevent that. Sure they can say, as they do in Sec. 1301(b), that insurers have to provide a minimum set of essential benefits, and those benefits are good in terms of basic, preventative care.
The bill also says, in Sec. 2705:
(a) In General- A group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan or coverage based on any of the following health status-related factors in relation to the individual or a dependent of the individual:
and goes on to list key health-status factors that they can't make eligibility rules against it.
But it doesn't require that plans must have, for example, specialized providers in network. So say a company doesn't want to deal with people with kidney disease. An easy way to do that is to not have any nephrologists in the network. That will discourage people with kidney disease from signing up. The process will play out for any number of chronic illnesses, and while insurers will be required to provide coverage through co-pays out of network, they can make that process a tremendous hassle for patients, leaving them no choice but to deal with the hassles or try to find a new plan.
What's to prevent an insurance company from making the process extremely difficult for people with chronic illnesses? Maybe competition within the exchange marketplace. But we loop back to the issue of profits and what insurers will do to try to keep only their healthiest patients. There's very little incentive for an insurer to decide to be a good community player and create a place for "high-risk" patients and for people with chronic illnesses, just like now. The public option would have ended up being the default insurer for these people, which many pointed out as a weakness in the public option.
It was actually a weakness in the legislation, one that continues to allow insurance companies to find ways to avoid covering the people who need coverage the most, a weakness that is still in this bill. Could it be overcome with robust rule-making for the law by HHS? Only if a regulatory framework to enforce it is also included in the bill, and as of now, it's not.
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