Tuesday, August 18, 2009

Insurance Protections

I was sent a copy of a letter from David Axelrod, Senior Adviser to the President, with a list of things that the Administration hopes to include in the health care reform legislation to deal with nasty practices of some insurance companies. While some of these protections exist in some states to some extent, it would be great, as I have mentioned earlier, if these regulatory requirements could be extended nationwide. I haven't heard much objection to them, even from people in the insurance industry, so I am hopeful they will survive the legislative process.

The one thing I do not see here and have not seen elsewhere is a prohibition against balance billing, e.g., when a doctor charges you the difference between what an insurer covers and what he or she wants to charge. This is not legal in Massachusetts, but is common practice in states like New York. Has anyone out there heard of interest in changing this on the national level?

Here's the list:
  1. Ends Discrimination for Pre-Existing Conditions: Insurance companies will be prohibited from refusing you coverage because of your medical history.
  2. Ends Exorbitant Out-of-Pocket Expenses, Deductibles or Co-Pays: Insurance companies will have to abide by yearly caps on how much they can charge for out-of-pocket expenses.
  3. Ends Cost-Sharing for Preventive Care: Insurance companies must fully cover, without charge, regular checkups and tests that help you prevent illness, such as mammograms or eye and foot exams for diabetics.
  4. Ends Dropping of Coverage for Seriously Ill: Insurance companies will be prohibited from dropping or watering down insurance coverage for those who become seriously ill.
  5. Ends Gender Discrimination: Insurance companies will be prohibited from charging you more because of your gender.
  6. Ends Annual or Lifetime Caps on Coverage: Insurance companies will be prevented from placing annual or lifetime caps on the coverage you receive.
  7. Extends Coverage for Young Adults: Children would continue to be eligible for family coverage through the age of 26.
  8. Guarantees Insurance Renewal: Insurance companies will be required to renew any policy as long as the policyholder pays their premium in full. Insurance companies won't be allowed to refuse renewal because someone became sick.
Learn more and get details: http://www.WhiteHouse.gov/health-insurance-consumer-protections/.


Luis said...

A prohibition against balance billing is a terrible idea. That is what makes Medicare such a bad deal for doctors as it is. I do see the potential for abuse of balance billing, but I don't think the payer should be able to unilaterally set the price. That gets abused too, whether the payer is private or governmental. In the latter case, price-setting gets turned into a political football. Not a good idea.

DrG said...

I agree that probiting balance billing is wrong. A patient should be able to decide if the benefit is worth the fee and pay it or go to someone else. The government should not have the right to determine the worth of my (or your) knowledge or talent.
If insurance companies are to financially survive and not discriminate based on age or medical history and not cap lifetime coverage, it will be necessary for fees to increase.

Anonymous said...

So if the insurance companies are not objecting to these provisions, how do they plan to offset the higher costs it will inflict on them? I see no alternative to starkly higher premiums - which will nail to the wall those of us in the private insurance market with no employer to protect us. It never occurred to me before that "health reform" would leave me WORSE off.

nonlocal MD

Regular Guy said...

I now evaluate any proposal against the "Quality, Cost, Access - Pick 2" statement that has been made on this blog and others. So, when I look at the proposals above I see the emphasis on Access. That means either Quality or Cost will suffer. I'm guessing that insurance companies will just factor in the 8 requirements above into their premium pricing and we will see rates rise. I'm no fan of these "nasty practices" so I would rather see rates rise than see the most vulnerable suffer.

Anonymous said...

Dear nonlocal,

If, as you suggest, there are costs associated with these kind of rules, those costs exist whether insurance is provided by private firms or the government, and so they will either be paid for by subscribers or taxpayers. For example, since Medicare essentially has these rules today, the costs are being paid directly by Medicare subscribers and/or indirectly in the federal Medicare taxes or other taxes that are taken out of our paychecks each week.

Regular Guy advocates for including the costs in premiums. Others may suggest differently.

A letter to the editor in today's NYTimes from Richard Centner suggests a hybrid: "We could address pre-existing conditions with an assigned risk fund. Insurers would contribute to a fund subsidized by the federal government. When those with pre-existing conditions apply for insurance, they would pay the normal premium and the assigned risk fund would pay the difference."

Regular Guy said...

I like the idea of the special fund. It seems that would prevent an insurance company from being at a pricing disadvantage due to higher numbers of people with pre-existing conditions. I wasn't advocating for higher premiums necessarily - just recognizing that insurance companies will pass along any additional mandated costs to their customers (like most businesses would). I really enjoy your blog as it seems to be a sane way of discussing this challenging issue.

Anonymous said...

Thanks for the clarification, RG. I read too quickly.

Anonymous said...

Well, the entire argument about health reform is becoming circular. The higher costs of which we speak would be ameliorated by true health care (e.g. delivery) reform, rather than the insurance "reform" we are discussing currently.
In the absence of reform in the system of health care delivery, then of course you are correct - changing the rules for payment for care will be paid for out of the insureds' skins either by taxes or premiums. This is why I completely disagree with the way the administration and Congress are going about solving this issue. I have zero confidence that costs of the system will be addressed at some future time - the whole issue is already radioactive and no one will touch it after this bruising battle. It is too bad, because I think reform of the system of health care delivery first would have made much of the brouhaha about insurance reform irrelevant.....but I repeat myself.


Bernard said...

If we don't change our current system then rates would rise to cover the inability to do balance billing. But if more people (including healthier people) had health insurance I believe the profits of insurance companies could rise while premiums stabilize or even fall.

On a different note, how can we best inform others about the potential benefits of an improved healthcare system? I'm afraid that these are getting lost in the news coverage of the various protests, many of which seem to be based on misinformation. Paul, blogging only goes so far. Have you suggestions for other ways to get my opinion out there?

Anonymous said...

Dear nl,

I am afraid you are correct. See for example, my post of a couple of days ago about our local scene -- http://runningahospital.blogspot.com/2009/08/meanwhile-back-here-in-boston.html.


I just don't know. The legislative arena is not the best place to solve the issues raised by nl and others. Why? Because it is viewed as a zero sum game. See here: http://runningahospital.blogspot.com/2008/09/too-cynical.html. In contrast, as Steve Spear and others have noted (http://runningahospital.blogspot.com/2008/12/spear-right-on-target.html) there are many efficiencies that could be garnered in the health care system if the expertise we already have were applied.

Disability Insurance Quote said...

You bring up some great points here. I think that health care reform has advantages and disadvantages that are yet to be determined. Additionally, I think it is important for people feel the assurance that they are covered if they become sick or injured. You should be able to protect yourself and your ability to earn your income with or without the help or hindrance of health care reform depending on your view of the situation.

Jerry said...

A prohibition against balance billing is a terrible idea.

If a provider objects to the payor's rates, then the provider shouldn't take the payor's business. Just don't see the patients if you don't like the payment. Say "no" to the sale.

I think that providers who want to engage in balance billing are just trying to have it both ways, which is another way of describing unethical, greedy behavior.

A patient should be able to decide if the benefit is worth the fee and pay it or go to someone else.

That statement assumes logical consumer behavior. I don't think people buy health care the way they buy cars. I don't think they even buy cars that way.

I now evaluate any proposal against the "Quality, Cost, Access - Pick 2" statement that has been made on this blog and others.

I think that's a phony construct. Why just two out of three - because somebody says that's how it is? Why can't quality and cost and access all be essential parts of the equation? Is there some law of physics that prohibits it? I don't think so.

I think reform of the system of health care delivery first would have made much of the brouhaha about insurance reform irrelevant

Physician, heal thyself.