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Report: in Senate plan, insufficient funding for those with preexisting conditions

By David S. Hilzenrath

If you have a preexisting medical condition, you could still have insurance problems under the health-care reform proposals taking shape in Congress.

It was already clear that, under the Senate bill, insurers would not be prohibited from using your health status against you until 2014. In the meantime, they could continue to deny you coverage or charge you higher premiums.

Now comes word that a program the Senate would create to provide relief until 2014 could run out of money as early as 2011.

That's the assessment of Richard S. Foster, chief actuary at the Centers for Medicare & Medicaid Services, in a Dec. 10 report.

The White House disagrees, but if Foster's analysis is correct, "Congress would either have to pony up more money ... or risk the wrath of those who signed up for the program only to have it pulled out from under them," said Timothy Stoltzfus Jost, a professor at Washington and Lee University who specializes in health-care law.

Recognizing that the legislation would leave people with preexisting conditions vulnerable for several years, until a new marketplace for insurance is up and running, authors of the Senate bill included the stopgap program to provide relief until 2014, as advocated by the White House.

Called a "high-risk pool," it would be a special health plan just for people with preexisting conditions, who are costlier to insure.

A plan just for sick people could require extraordinarily high premiums. However, to make it more affordable, the bill would set aside $5 billion for federal subsidies.

According to Foster, that's not enough.

"By 2011 and 2012 the initial $5 billion in Federal funding for this program would be exhausted, resulting in substantial premium increases to sustain the program; we anticipate such increases would limit further participation," he wrote.

On Saturday, White House spokesman Reid Cherlin rejected that conclusion. "We disagree with their analysis on this point, and we're confident that the high-risk pool will be sufficiently funded," he said in a statement.

The bill says that if the $5 billion proves inadequate, the secretary of Health and Human Services "shall make such adjustments as are necessary to eliminate such deficit." Could that include freezing enrollment? The bill doesn't say.

In a November interview about the high-risk pool, White House spokeswoman Linda Douglass said Americans who are victims of insurance discrimination today "will have immediate protections under this bill."

Also in November, a senior administration official said the high-risk pool would help people "most abused by the current system."

Even if Congress increased funding for the high-risk pool, some people with preexisting conditions could continue to go without care or incur crushing expenses. To qualify for the pool, people would have to be uninsured for six months.

We asked the White House what would happen to people who face major medical expenses during that period. Cherlin's statement Saturday did not address that issue.

By David S. Hilzenrath  |  December 13, 2009; 7:00 AM ET
Categories:  Health Reform , Senate  
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Comments

In the interest of full disclosure, it would be good to know a bit more about Richard Foster. He seems to be a shill for the health care industry. All of his analysis seems slanted toward stopping health care reform as favored by the insurance industry and their Repubican surrogates. His analysis may just represent his view of the world but given the public nature of his reporting we should know more about him. Where did he come from? Who appointed him? What is his background before his current position? Has he published before taking his current position, if so what?

Posted by: cdierd1944 | December 13, 2009 8:14 AM | Report abuse

cdierd1944: I'm sure you've researched all your allegations and you're not just engaged in knee-jerk liberalism. Because after all, anyone who doesn't toe the White House line is a shill for industry and a general Bad Hat. But in case you haven't: http://tinyurl.com/ybkh22t

The fifth one down (or this link to get it directly: http://tinyurl.com/yb8aya9 )should be lots of fun for you to read.

Posted by: Jacknut | December 13, 2009 8:53 AM | Report abuse

If you have a preexisting medical condition why would your elected representatives say you can be discriminated against until 2014. Well there are millions of reasons why, and each reason is a dollar bill in the pocket of said "elected representative".

Posted by: tony12 | December 13, 2009 9:00 AM | Report abuse

Yeah, given how desperate insurance industry and republicans are to kill health care reform the column author may well be industry shill.

Posted by: orange3 | December 13, 2009 9:06 AM | Report abuse

***...a senior administration official said the high-risk pool would help people "most abused by the current system." ***

Abused? They're not "abused". Yes, it's sad, but the insurance companies were not responsible for their plight.

I've bought my own insurance for several years (on less than $30k income). It can be done. These unfortunate people either couldn't afford it or gambled they wouldn't get sick.

This is one of the things that makes the current "reform" so unpopular. Here we are, as Americans, willing to help people like this. But we don't take kindly to being portrayed as heartless and stingy. We pay a great deal toward medical care for the needy already.

Posted by: jeannebee | December 13, 2009 9:10 AM | Report abuse

It'll never pass. There was an article in yesterday's NYT that
$300M is being spent on lobbyists to prevent the health care plan from passing. America is doomed.

Posted by: blakesouthwood | December 13, 2009 9:58 AM | Report abuse

jeannebee, pay attention. You clearly have no idea what this article is even about. This is about people who cannot even get insurance, no matter what they are able to pay, because of pre existing conditions. Its very nice that you have been able to buy your own insurance. Yeah for you. My husband literally cannot buy insurance because he has a pre existing condition. The companies just say 'no thanks, and good luck' even though we can pay hundreds of dollars a month. I hope this clears it up for you.

If this article is true, this is crap. One of the things that made me support health care reform was the promise that they would eliminate the 'pre existing conditions' clauses because my family needs health care. I guess just one more way the insurance companies win and the tax payers foot the bill to enable them to make billions.

I am a liberal, but thanks a lot Obama.

Posted by: 3cats1 | December 13, 2009 9:58 AM | Report abuse

In this economy people are losing jobs and have no money to pay for health insurance. People have pre-existing conditons, both Republicans and Democrats and can't buy health insurance at any price. I have read so much nonsense from people about what this health care bill would do or not do to our eocnomy, insurance companies, the Democractic chances for reelction, the Republican chances for finishing Obama's presidency.. Dear God, how about the people? Isn't time that we forget the partisan stuff and actually look at why we are in such terrible debt? It has to do with health care or rather the lack of it. States can't afford the cost, elderly can't afford the cost so guess what we need to change our attitudes and realize the state of this crisis. Forget the politics and think about real people. If none of you have a relative that has not lost a job and their health care, bully for you!! In the real world people are in trouble and need some help. They are not slackers who do not want to work, some people live in places where they cannot even get a job as a janitor, because there are no jobs!! What is government for?

Posted by: Thinking4 | December 13, 2009 10:26 AM | Report abuse

Doctors I've spoken with, both specialists and primary care physicians, strongly opposed the original House Health Care Reform plan, and don't like what is shaping up now much better. As long as the health insurance companies can buy so many of our elected officials we are likely to get very expensive sleight-of-hand for reform, with all kinds of loopholes, which will provide benefit mainly to health insurance companies and leave many Americans little if any better off than before. I hope I'm being too pessimistic about this but after decades of watching the Washington money waltz I've become cynical.

Posted by: meand2 | December 13, 2009 10:27 AM | Report abuse

Posted by: greg_brockway | December 13, 2009 10:35 AM | Report abuse

The devil is in the details!!!!! The more you know, the less you'll like it! It's no wonder the politicians are trying to push this through ASAP. Remember this next November!

Posted by: Jimbo77 | December 13, 2009 10:44 AM | Report abuse

Creating a high-risk pool only results in adverse selection, i.e., insuring only those people who absolutely need health insurance coverage for their medical issues. Insurance companies impose enrollment requirements of 65-75% of eligible employees to prevent this from happening in employee sponsored group health insurance.

Unlike group health insurance, most individual health insurance companies will not cover people with preexisting conditions, even at a higher premium rate. If you were born with Type I diabetes, have asthma, injured your back, or have any other health issues, even if they are well-controlled or resolved, you can be denied individual health insurance coverage. This has led some states to set up last-resort pools, which are largely limited in scope, with higher premiums and administrative costs. It's basically a lose-lose scenario for the person seeking reasonable health insurance coverage.

Posted by: tonid@hers.com | December 13, 2009 11:11 AM | Report abuse

I am a liberal, but thanks a lot Obama.

---------------

Between the war-scheming and the health care-scheming and the budgetary-scheming, it's rather apparent Obama is kook owned and operated.

But those of us paying attention knew that from the get-go...

Posted by: thegreatpotatospamof2003 | December 13, 2009 11:13 AM | Report abuse

Real health care reform just ain't gonna happen. The industry lobbyists and the unified Republicans fronting for them are just too powerful for the weak Obama response. Obama does not have the stuff for the hardball politics that are needed to beat down and overcome the opposition. The Republicans have unified and will win this fight.

Posted by: kamdog | December 13, 2009 11:15 AM | Report abuse

the countries that have successfully covered all citizens fall into 2 categories - single payer and those that charge for coverage based on based only on the coverage package while simultaneously requiring all citizens to purchase (with financial assistance, if required) one of many coverage packages.

we need not reinvent the wheel. we need only to choose one of the above options if we are to provide for all citizens.

Posted by: boblesch | December 13, 2009 11:33 AM | Report abuse

OIf Congress were to write a one line bill saying that private Insurance must absorb pre-exsisting Conditions from CEO bonuses, the World would be a better place.

NO NO NO this groups of rats wants power and a bigger government costing the people their homes.

Raises for Federal employees when all should be making $800.00 per week for public service, (including the House, the Congress and Obama, Czrs and Cabinet,) makes more sense in a broke econonmy.


The thinking of the founders called for level with the people, no cut corner cheats in a square deal, and moral compass.

http://www.masonicinfo.com/famous2.htm#O

Now the Independent Party is seeking Candidtes with such thinking on their resumes.

Posted by: dottydo | December 13, 2009 1:04 PM | Report abuse

Individuals with pre-existing conditions inherently cost and the only way for there to be affordable coverage is to integrate them into the overall health system: i.e. some variation of the healthy pay for the sick (e.g. single payer, group plan, etc.).

Alternatively, as long as individuals with pre-existing conditions separated (e.g. individual coverage, high-risk pools), "affordable coverage" will remain a contradiction in terms.

Posted by: UnPatriotic | December 13, 2009 1:09 PM | Report abuse

Jimbo: "Remember this next November!:

I sure will Jimbo and I'll vote against every republicon.

THEY are the problem.

Posted by: rcubedkc | December 13, 2009 1:17 PM | Report abuse

It'll never pass. There was an article in yesterday's NYT that
$300M is being spent on lobbyists to prevent the health care plan from passing. America is doomed.
Posted by: blakesouthwood
...................................
Missed the New York Times article that financial institutions spent twice as much for the reform legislation that did not bring back Glass Steagall, and allows the major banks to continue to use government insured deposits to buy Wall Steet paper.

Posted by: bsallamack | December 13, 2009 2:16 PM | Report abuse

he countries that have successfully covered all citizens fall into 2 categories - single payer and those that charge for coverage based on based only on the coverage package while simultaneously requiring all citizens to purchase (with financial assistance, if required) one of many coverage packag

Posted by: boblesch | December 13, 2009 11:33 AM

================================

Broadly speaking, the successful systems integrate those with pre-existing conditions and those without. By comparison, the current U.S. mechanism, by and large, separates the two: e.g. individual coverage, high-risk pools, etc.

Those with pre-existing conditions will always cost more--it just a question of who will pay. As long as we have a system that relies on charging people individually, rather than as a group, affordable coverage will never be a reality.

Posted by: UnPatriotic | December 13, 2009 3:15 PM | Report abuse

Take expensive prescriptions like some of the statin drugs and try to buy insurance.

It's nothing to do with your "health", it's everything to do with how much of your premium is going to their bottom line.

Think about it. What does Americans' healthcare have to do with these no good money grubbing insurance firms?

Posted by: dlkimura | December 13, 2009 3:57 PM | Report abuse

meand2 states that "Doctors I've spoken with, both specialists and primary care physicians, strongly opposed the original House Health Care Reform plan, and don't like what is shaping up now much better."

Almost 2/3 of America's physicians support a public option, and 58% support opening Medicare to those 55 years of age. See http://www.rwjf.org/healthreform/product.jsp?id=48408. The Robert Wood Johnson Foundation is one of the leaders in health care policy research.

The question is why would the Senate allow discrimination based on pre-existing condition for the next 4 years?

Posted by: Garak | December 13, 2009 4:09 PM | Report abuse

If we are a really democratic country, President Obama needs to sign an executive order to outlaw denying or making it unaffordable for those with pre-existing conditions in January 2010. At the same time, he needs to also outlaw profits in health insurance industry like many European countries, Japan, Taiwan and South Korea all do.

Posted by: dummy4peace | December 13, 2009 4:16 PM | Report abuse

"To qualify for the pool, people would have to be uninsured for six months." This is incredible, but typical from Senators and those in the White House who seem to be utterly subservient to the private health insurance companies. They seem so clueless or indifferent as to not realize many people could go bankrupt in six months without health insurance or die, as about forty-five thousand a year do, without health care coverage.

First a single payer system was not even considered. Universal health care coverage was not considered. The public option is being dropped from the Senate bill. Neither bill in either house provides affordable health care for middle persons ineligible for subsidies. Now there may be loopholes in the Senate bill in the ban against discrimination based upon preexisting conditions.

This is becoming a health care fraud bill. Those who continue to refer to health care "reform" are living in an alternative or fantasy universe.

Posted by: Aprogressiveindependent | December 13, 2009 4:47 PM | Report abuse

Richard Foster , the chief actuary at HHS/CMS, appears to be the only honest public servant involved in the health care reform debate. He is speaking the truth to power (something that can be very hazardous to one's health) and has incurred the wrath of both Republicans and Democrats. Truth be told, this entire reform effort has nothing to do with health care reform; it is cover for the government to acquire more control over its citizens. Sincere people on both sides of the issue need to realize this and regain control of the agenda by voting against all incumbents in 2010, regardless of party affiliation.

Posted by: johnplover1 | December 13, 2009 5:26 PM | Report abuse

If there is no such thing as pre-existing condition exclusion, who would pay insurance while they're healthy? I wouldn't. I'd buy it the day I was diagnosed with something I needed someone else to pay for. The only way to ensure that everyone is buying into the system when they are healthy is to force them to buy in. The most logical method of doing that would be to use tax dollars. And yes, you get in trouble if you don't pay your taxes. The elected representatives keep trying to dance around the "public option" or "Medicare for All" but really that's the only thing that can insure everyone. We're already paying for indigent care in our taxes. Time to pay for middle class care with our own tax dollars. Don't think we have the money? Well I think we have money for healthcare for all, but not money enough for two wars.

Posted by: member8 | December 13, 2009 6:20 PM | Report abuse

I am sitting in bed taking a brief break from a work-at-home job, making a living while suffering those preexisting conditions that has kept me from getting health insurance for years. Denied, denied, denied. I would pay more if they'd just let me! But I'm high risk -- with *asthma*, you know, and *gasp* had an ulcer in 1999 -- obviously I will never be allowed insurance with such a dire condition in my sordid past!

It is terribly discouraging. Let me pay a higher premium, just let me have insurance!!!

Guess I'd better get back to work -- this is making me feel sick. :/

Posted by: Hypatia3 | December 13, 2009 7:04 PM | Report abuse

Inusurance covering people with pre-existing conditions is like insuring a car that has already been wrecked then paying for the repairs.

Why don't we just call it what it is: WELFARE or SOCIALISM Why do people with pre-exisiting conditions think someone else should pay for their problems? Sorry if that sounds heartless, but somebody else's problems are not everybody elses. Sometimes you have to play the hand you're dealt without cheating the other players.

Posted by: charlietuna666 | December 13, 2009 8:00 PM | Report abuse

This bill has more problems than pre-existing conditions shortfall. Senator Lieberman today told Reid he can't be counted on for several reasons. Also, Sen. Ben Nelson is very questionable due to the abortion issue. Any measures to appease these two senators would alienate several other democrats.

Maybe the will of the people will prevail, as it should. Maybe there's a few strings loosening on Obama's puppets.

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Posted by: huangzhixian165 | December 13, 2009 8:32 PM | Report abuse

Every condition is pre-existing, this is just sematic games the companies use to screw people. Who do they think they are kidding? Some really stupid and easily bribed politicians perhaps, but that's all. Everyone else knows the companies are total dirtbags out for profit.

Posted by: Nymous | December 13, 2009 10:03 PM | Report abuse

The taxpayer should not have to pay for someone's addictions.
shuttdlrl

Posted by: shuttdlrl | December 13, 2009 10:24 PM | Report abuse

I think there needs to be a better understanding of "preexisting condition" and how the insurance companies use it to their advantage. I am self employed and suffer from depression but control it with 50 milligrams of a generic medication that costs about $20 a month. Because of my "preexisting condition," only one company decided to insure me (I'm a Connecticut resident.) I'm charged extravagant rates and I have no alternative.

Posted by: TonyPio | December 13, 2009 10:36 PM | Report abuse

What recently became a quarter measure (meaning that the reform bill will account for 25% of actual reform) has now become a joke. Given that we have one of the weakest US Senates in history, health care was bound to follow suit. You would think that all government officials would take 45,000 US deaths seriously. Looks like Lieberman and the Republicans enjoy handing out death certificates.

Posted by: politicalpinball | December 14, 2009 11:42 AM | Report abuse

Inusurance covering people with pre-existing conditions is like insuring a car that has already been wrecked then paying for the repairs.

Why don't we just call it what it is: WELFARE or SOCIALISM Why do people with pre-exisiting conditions think someone else should pay for their problems? Sorry if that sounds heartless, but somebody else's problems are not everybody elses. Sometimes you have to play the hand you're dealt without cheating the other players.
*********************************************
Hmmmmm....a child who is born having type I diabetes, Down's Syndrome, or asthma are just doomed from the start, I suppose.

Let me get this straight. charlietuna666 believes that anyone who develops allergies, has cancer, or a back injury should just chalk it up to sheer dumb luck and go off in a corner to lick their wounds?

Too bad misanthropy can't be categorized as a preexisting condition. He just might need a heart transplant.

Posted by: tonid@hers.com | December 14, 2009 12:52 PM | Report abuse

It would help to have some sort of cost gradient for people with pre-existing conditions rather then treating them all the same. The more expensive the condition the higher the premium. This would cause the 'relatively healthier' people to join the plan and subsidize the 'relatively unhealthier.' It might be too much to ask for still healthy individuals to subsidize everyone as their demand for really expensive health care is lower and people in good health are less willing to pay an inflated price for future health. This is just economics so stop with the morality already, we have a good idea of how people behave and lecturing them without changing incentives only works on some people. So we don't want to charge healthy individuals for the full bill as we don't want already healthy people to opt out of health insurance and become unhealthy. This means it sucks to be unhealthy but these people should carry a lot of their own burden or the problem will get worse. I like the pre-existing condition exchange better then a full public option as we do have health inequalities and it is not fair to charge everyone the same premium for what is often incremental behavioral choices (such as getting ginormously heavy). Most people do not have gland problems so extreme to explain the sheer amount of obesity in this country.

Bad health choices are not to be encouraged but health amnesty would encourage them, without a change in culture. The main thing is to get some relief to people who are totally shut out of the system and not to enforce cost equality between the healthiest and unhealthiest. As health is often a product of a lifestyle choice it should also have a lifestyle benefits. There should be reductions in premiums for good behavior such as joining a gym (for weight or other issues) and things such as 'quitting smoking' or 'eating healthy' or other behavior even tailored to the specific health problem, especially if there is measurable gain in health over time. If they can start to work these people into better health it might draw down the costs for everybody, but just insuring them without demanding changes to unhealthy behavior will definitely bankrupt the system. Good health is expensive, there really isn't a way around that.

Posted by: persimonix1 | December 14, 2009 9:47 PM | Report abuse

This is in response to Charlietuna666:

"Inusurance covering people with pre-existing conditions is like insuring a car that has already been wrecked then paying for the repairs.

Why don't we just call it what it is: WELFARE or SOCIALISM Why do people with pre-exisiting conditions think someone else should pay for their problems? Sorry if that sounds heartless, but somebody else's problems are not everybody elses. Sometimes you have to play the hand you're dealt without cheating the other players.

Posted by: charlietuna666 | December 13, 2009 8:00 PM | Report abuse "

I would not jump that far that fast. I am 41 yr old male that was thought to be in perfect health for most of my life. I was recently diagnosed with liver and spleen problems. I had health insurance thru my employer (as a truck driver) but was unable to "LEGALLY" keep my insurance after my cobra ran out. I have been denied not only health insurance but also life insurance for the past few years. What is going on with me is NOT likely to kill me; However, it is just a red flag in the paperwork. I earn about 30k a year (for a family of 3) now and do NOT go to doctors anymore simply because I can not afford to go and I am unable to get any type of insurance (including medicaid). I am NOT looking for a hand out, the fact is that there is nothing the doctors can do for my liver or spleen at this time, other than pain medication that I refuse to take because of the fear it would only do more damage.

I know people that are being denied health insurance for such things as ulcers or asthma. Anything that can be considered preexisting. The insurance companies are even literally canceling people that get sick! Your analogy is like saying it is okay to raise your auto insurance by thousands of percent after your in an accident. Like paying 1,200 a year for insurance prior to an accident and then being forced to pay 20,000 a year after an accident. That is NOT the definition of insurance. health insurance companies have done this, and so have car insurance companies (though for car insurance it is not as obvious and/or wide spread).

My point is that almost everyone will have some sort of illness that can be used as a preexisting condition at some time in their life, leaving the idea that ONLY the healthy and mainly young will ever have health insurance. Current laws do NOT bar insurance companies from canceling your policy when you become sick and a financial burden to your insurance carrier.

There needs to be some sort of commitment on the parties of both the insured and the carrier when it comes to insurance. Insured need to keep their policies in place and the carrier needs to stop canceling the insured purely based on pattern of illnesses or preexisting conditions.

What people do not seem to get is that many people use the ER for things that can be taken care of early by a simple visit to the doctors office for a lot less.

Posted by: robert_flint_mi | December 20, 2009 10:14 AM | Report abuse

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