House’s Healthcare Bill Needs Improving Otherwise Democrats Will Be A Hurtin

[JimofPennsylvan]

Those House members on the Energy Committee deserve a prestigious good citizenship medal who were involved in those compromise efforts resulting in passage of the Healthcare bill out of their committee. They overcame one of the major logjams (the other logjam - how to pay for the legislation) in getting popular support for this legislation in their prohibition on the public insurance plan being able to pay providers Medicare rates but rather requiring the public plan to negotiate provider prices like all the private insurance companies. This is so critical because otherwise the public plan would have an unfair pricing advantage which would eventually essentially drive private plans out of the business and leave Americans with a single payer government system which would eventually turn into a system seen in all other countries which have such a system in the world a system which has frightening treatment limitations. To fully allay these single-payer fears of Americans more protection provisions in this area need to be added to this bill because in the future when many Americans are complaining to their representatives about their high health insurance premiums a representative(s) will be tempted to be their savior and quietly stick a one sentence provision in one of the many bills Congress passes every year to undo this protection, this is all it would take and things like this have happened before. These added protection provisions should mandate - first, if Congress later authorizes the public plan to get any type of deal on prices it pays providers, private insurers will get the same deal; second, if Congress later authorizes the public plan to get a any type of deal on prices providers or private insurance companies can bring a class action lawsuit and if they can show that to a significant degree the pricing deal pays providers below the providers costs all the pricing deal provisions are null and void and the public plan is required to negotiate prices like private plans and third, any Federal financial help to the public plan has to come in the form of affordability premium or cost sharing credits for individuals which will result in private plans getting the same financial help as the public plan.

Before listing critically needed changes for the House bill, it needs to be said that this bill contains an abundance of great ideas that should be enacted into law. A few of the many examples includes: banning private insurers for rejecting applicant’s for preexisting condition or charging them higher premiums when they enroll; banning insurance companies from just dropping enrollees when they get sick; providing tax credits for small business to help pay health insurance premium costs; pursuing in Medicare price bundling to lower costs, protecting Medicare Advantage enrollees by mandating their co-pays and co-insurance are no higher than regular Medicare enrollees; allowing Medicare “Part D” enrollees to change plans mid-year if their plan changes its drug formulary mid-year; etc..


One of the truly great initiatives of this house bill is that it mandates essential benefits and consumer protections that all health insurance plans must provide whether employer sponsored or individual, etc.. Once law and fully implemented America’s underinsurance problem should go away as well as the egregious unfairness to individuals often seen at the hands of insurance issuers in this nation. It does this by setting forth in the bill itself certain essential mandates on all insurance plans but also by creating this body called the Health Benefits Advisory Committee (HBAC) to make recommendations on what should be essential elements of health insurance plans and if the Secretary of HHS approves the recommendations they become legal mandates.

The problem with this legislative scheme is that many of these essential benefits and consumer protection provisions will be enormously expensive, insurance issuers don’t have yearly and lifetime coverage limits, limits on mental health and substance abuse coverage, no cost sharing for a lot of preventive care and “no” $5,000.00/$10,0000 (individual/family) yearly overall out of pocket limits because they are being extremely thrifty they do it because big dollars are involved in these issues. The bill should be changed to phase in many of these mandates over seven to ten years, otherwise, insurance plans created after the enactment of this reform law will be shockingly expensive. It is not sufficient the bill grandfathers many current plans from having to comply with these mandates for five years because the government with this postponement is just postponing the significant economic pain on a massive number of Americans and likely a dramatic dumping of employer sponsored health insurance until when this five year date arrives. Moreover, the bill makes the premium payers (mostly ordinary Americans in part) of these grandfathered plans financial hostages to the insurance issuers for five years because these payers will be stuck paying the yearly inordinately high insurance premium increases insurance companies will be able to get away with charging because these payers won’t be able to go out and comparison shop and get quotes from other insurance issuers for insurance because the bill prescribes new insurance plans can’t be grandfathered. In addition, the grandfather umbrella is limited in size, it applies to individuals and employer plans but not group plans that aren’t employer sponsored, moreover the bill does not set any type of time limits at all on the grandfathering of “individual” plans which has many consequences one of which is what is to stop many insurance companies from deciding these grandfathered plans are an administrative burden (essentially no changes permitted) and just dropping the plans. The bottom line here is that this grandfather protection has massive holes in it, after this bill is enacted into law a very large number of Americans are going to be seeing shocking increases in their health insurance premiums much sooner than five years from enactment. Further, a lengthy phase in time for these mandates will give Washington time before the mandates costs are fully felt throughout America to take another major legislative effort at health care reform really focusing on restraining costs which any reasonable person that is fairly knowledgeable on the subject knows can be done, one can’t expect it to be done now because the subject will trigger too much opposition from powerful groups and Washington is almost being overwhelmed with the current health care reform effort and the insurance reforms efforts involved in it.

This HBAC system as presently designed in the bill is a poor design because it doesn’t fully consider that this committee’s recommendations on benefit standards will potentially have a significant cost impact on insurance plans and therefore on ordinary Americans that pay for these plans and the system does not provide for the advocacy and representation for ordinary American this potential costs increasing process warrants. There needs to be Congressional review of sorts on all this committee’s recommendations so ordinary Americans’ interests are looked out for. Members of Congress because of their office have a unique duty to look out for the interests of ordinary Americans that live in their district and this advocacy has no substitute. In addition, this advisory committee will be highly political, eighteen of the potential twenty-seven members will be appointed by the President, this committee from a practical standpoint will largely be doing the will of the President. If Congress doesn’t put a check on this enormous power being given to the executive branch of government with this HBAC committee initiative it is failing in its duty to protect the American people. The bill should be changed to not only require the Secretary of HHS’s approval for HBAC recommendations for them to be adopted but also provide the added protection that within four months from the Secretary’s approval of a recommendation of the committee if the Congress, that is “both chambers”, veto a recommendation it doesn’t get adopted. The bill should not be changed to require both chambers of Congress to approve a recommendation for it to be put into effect because Congress is too political a rule making body, merits of issues too often don’t drive the process, and Congress has too many other responsibilities it always needs to address the nation can’t rely on Congress to find the time to see that the right outcome occurs on these issues year in and year out.

The bill needs to be changed in many ways on the HBAC initiative. The terms of the members of HBAC should be four instead of three years which the bill presently calls for this will make the committee less political; for three year terms many members will know the sitting president will decide their fate on reappointment so they will feel more pressure to do the president’s will as opposed to doing what they think is right. The bill should be changed to allow only yearly recommendations on benefit standards from the committee, changes should be a big deal an abundance of public scrutiny should levied on this process, it won’t be if you have this never ending circular process of recommendations and decisions on recommendation passing between the committee and the Secretary of HHS. Recommendations from the committee should not have to be accepted or rejected by the Secretary (or the Congress if the bill is changed) as a group, individual recommendation review should be acceptable, as the bill presently calls for this may well cause many good specific recommendations not to be implemented because there in a group with one or more bad recommendations. The bill calls for the Secretary to have the power that if within eighteen months from the bill’s enactment the Secretary hasn’t received recommendations on benefit standards from the committee the Secretary approves of the Secretary can set benefit standards as the Secretary so chooses; no person should have such unfettered power on such important matters as universal benefit standards the bill should be changed to give Congress (if both chambers concur) a veto over these benefit standards to be unilaterally promulgated by the Secretary.