Today via Hot Air and Keith Hennessey there is some interesting insight on Obamacare. As a former Bush economic adviser I was interested to see Keith Hennesseys’ take on this issue. As I read through Mr. Hennesseys’ response I couldn’t help going back to the original email, there was just some things about it that really bothered me.
From: President Barack Obama [mailto:firstname.lastname@example.org]
Sent: Wednesday, July 29, 2009 12:57 PM
To: John Doe
Subject: What health insurance reform means for you
If you’re like most Americans, there’s nothing more important to you about health care than peace of mind.
Given the status quo, that’s understandable. The current system often denies insurance due to pre-existing conditions, charges steep out-of-pocket fees – and sometimes isn’t there at all if you become seriously ill.
It’s time to fix our unsustainable insurance system and create a new foundation for health care security. That means guaranteeing your health care security and stability with eight basic consumer protections:
- No discrimination for pre-existing conditions
- No exorbitant out-of-pocket expenses, deductibles or co-pays
- No cost-sharing for preventive care
- No dropping of coverage if you become seriously ill
- No gender discrimination
- No annual or lifetime caps on coverage
- Extended coverage for young adults
- Guaranteed insurance renewal so long as premiums are paid
Over the next month there is going to be an avalanche of misinformation and scare tactics from those seeking to perpetuate the status quo. But we know the cost of doing nothing is too high. Health care costs will double over the next decade, millions more will become uninsured, and state and local governments will go bankrupt.
It’s time to act and reform health insurance, drive down costs and guarantee the health care security and stability of every American family. You can help by putting these core principles of reform in the hands of your friends, your family, and the rest of your social network.
Let’s fact-check these claims:
The current system often denies insurance due to pre-existing conditions
No discrimination for pre-existing conditions
The first statement is deceptive and is inherently incorrect. While I’m not saying that coverage cannot be delayed, coverage cannot be denied. Obama seems to have forgotten about the protections available under HIPAA. If you are entering into a group insurance policy and have not had a lapse of coverage of more than 63 days, you cannot be denied coverage due to a pre-existing condition. Period. If you have had more than 63 days lapse in coverage, the most a group policy can do is deny coverage for a period of 12-18 months (12 months for standard enrollment or 18 months for late enrollment). In addition, a pre-existing condition would only apply if you’ve been treated for an ailment in the last 6 months. Pregnancy cannot be considered a pre-existing condition. You also cannot be charged more money for your plan if you have an pre-existing condition. You will pay the same amount as anyone else on your group plan with similar conditions (ie, age, etc.) Medicare and Medicaid do not deny anyone for pre-existing conditons.
In fact, HIPAA goes so far as to say that if you or your dependent(s) are in the hospital at the time you become eligible – this cannot be treated as a pre-existing condition.
HIPAA also protects individuals who are otherwise unable to get group health insurance. The law guarantees access to individual insurance policies and state high-risk pools for eligible individuals. The opportunity to buy an individual policy is the same whether a person quits a job, was fired, or was laid off.
Yes, States are REQUIRED BY LAW to have medical plans available to persons that have been denied immediate coverage due pre-existing conditions. The rates are affordable and include additional discounts for persons with limited income.
Discrimination. Under HIPAA, you and your family members cannot be denied eligibility or benefits based on certain “health factors” when enrolling in a health plan. In addition, you may not be charged more than similarly situated individuals based on any health factors.
charges steep out-of-pocket fees
No exorbitant out-of-pocket expenses, deductibles or co-pays
For those of us that remember the insurance plans available prior to HMO’s and PPO’s when you had to pay up front and then were reimbursed for 80% of your ‘covered’ costs and there was no such thing as prescription coverage – this is a ridiculous statement.
and sometimes isn’t there at all if you become seriously ill
No dropping of coverage if you become seriously ill
Under HIPAA a health insurer may “nonrenew or discontinue” coverage if the plan sponsor or insured individual, as applicable, “performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of coverage.” So, as long as you don’t lie or commit fraud you cannot be dropped from your coverage – seriously ill or not. Now, this law would not preclude your insurance carrier for looking for a reason if you were to become seriously ill. So, don’t give them a reason.
If for some reason your insurer did nonrenew or discontinue your coverage you would still be eligible for your State mandated coverage.
No cost-sharing for preventive care
Why? It’s my job to make sure that I take care of myself, not the government or the insurance companies. Also, most basic preventative care is already covered by insurance carriers.
No gender discrimination
Gender discrimination is already illegal.
No annual or lifetime caps on coverage
The amount of insurance coverage that you choose to obtain is your choice. Insurance providers should be required to offer “cap insurance” for an additional fee that would offer no annual or lifetime caps on coverage. Insurance companies are a business and have a right to limit their services, let’s face it they use the money that we pay to pay for our services. A series of catastrophic illness could bankrupt an insurance company. So, give us the choice and give the insurance companies a mechanism to offset those costs if they were to occur.
This could be accomplished by an Amendment to the current HIPAA law.
Extended coverage for young adults
I agree. It’s been established that a good portion of the uninsured in this Country are young people that think they’re indestructable. Most parents that cover their children on their policies would be more than happy to continue to cover them for an extended period. There is no reason that the age limits currently in place cannot be extended to 30 (when we all seem to realize our mortality) to allow children to continue to be covered under their parents insurance policies. It does not cost the insurance providers any additional money to insure a dependent one day after they turn 21 (or the age outlined in the policy).
This could be accomplished by an Amendment to the current HIPAA law.
Guaranteed insurance renewal so long as premiums are paid
Again, this is alread part of our current HIPAA law as long as there was no fraud or intentional misrepresentation of material fact under the terms of coverage.
Health care costs will double over the next decade, millions more will become uninsured, and state and local governments will go bankrupt.
Using scare tactics much here Obama? We have no idea what will happen over the next decade except that Obamacare will cost us over a trillion dollars and not have much of an impact other than raising our taxes and deficit while limiting our level of care. This much we know. As far as state and local governments going backrupt, the costs of Obamacare, Medicaid and Medicare costs that are shared by the state and local governments will have an impact. They will not go bankrupt – we will pay more taxes.
Bottom Line – The key points of both this email and Obamas’ stump speeches over the last month are either already covered under HIPAA law or can be accomplished by an Amendment to this existing law.
The only new legislation that is required to reform the healthcare or insurance industry – is tort reform. We all know it and the politicians know it. In fact truly impactful legislation could be written in a matter of moments with four simple words – YOU LOSE, YOU PAY. Done. See how easy it was to reform healthcare!