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What happens before 2014?

A lot of people have been asking what the Senate bill does immediately. To put it another way, in 2010 and 2012, when Republicans are saying that reform has done nothing despite the fact that it hasn't yet gone into effect, what will Democrats be able to brag about? Here's the list:

1) Eliminating lifetime limits, and cap annual limits, on health-care benefits. In other words, if you get an aggressive cancer and your treatment costs an extraordinary amount, your insurer can't suddenly remind you that subparagraph 15 limited your yearly expenses to $30,000, and they're not responsible for anything above that.

2) No more rescissions.

3) Some interim help for people who have preexisting conditions, though the bill does not instantly ban discrimination on preexisting conditions.

4) Requiring insurers to cover preventive care and immunizations.

5) Allowing young adults to stay on their parent's insurance plan until age 26.

6) Developing uniform coverage documents so people can compare different insurance policies in an apples-to-apples fashion.

7) Forcing insurers to spend 80 percent of all premium dollars on medical care (75 percent in the individual market), thus capping the money that can go toward administration, profits, etc.

8) Creating an appeals process and consumer advocate for insurance customers.

9) Developing a temporary re-insurance program to help early retirees (folks over 55) afford coverage.

10) Creating an internet portal to help people shop for and compare coverage.

11) Miscellaneous administrative simplification stuff.

12) Banning discrimination based on salary (i.e., where a company that's not self-insured makes only some full-time workers eligible for coverage.

Given that we're all going to die when the earth consumes itself in 2012, the effectiveness of these policies takes on a new level of importance.

By Ezra Klein  |  November 19, 2009; 1:05 PM ET
 
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Comments

It seems like some of these reforms are similar to things that happened in the 90s- stuff that conservatives railed against, saying it would destroy the economy, is just taken for granted now but makes so much sense we can't imagine why it wasn't always like that. For example, as expensive as it is, we know that if we lose a job we can continue insurance benefits through COBRA. If a family member needs care, we know that FMLA allows at least unpaid leave. Things that are still minimal benefits and should be greatly improved, but that before Clinton didn't even provide the minimal protection people have today.

Posted by: _SP_ | November 19, 2009 1:11 PM | Report abuse


I'm not so cynical as to think it was done this way by design, but I do note that a lot of the things in effect by 2012 will lend themselves nicely to positive political ads and articles; case studies about sick people getting coverage who didn't have it before, lifting of lifetime caps allowing some people to get expensive procedures they wouldn't have been able to get, and so on.

Posted by: ThomasEN | November 19, 2009 1:19 PM | Report abuse

It seems to me that the democrats would have been awfully well served to just pass this bill by itself and let the republicans fight against it because they are in the pocket of insurance companies. Instead they are putting together this horrid bill that is going to cause a ton of unintended consequences

Posted by: spotatl | November 19, 2009 1:20 PM | Report abuse

Ezra -

You forgot to list the prescription drug discounts and the small closing of the Medicare Part D donut hole for seniors. Both the House and Senate bills do this.

Posted by: GhaleonEB | November 19, 2009 1:26 PM | Report abuse

Will the banning lifetime and annual caps be for all insurance policies, including ones you get through your employer?
I do miss the plain language bill of the finance committee, where I could figure these things out myself.

Posted by: thescuspeaks | November 19, 2009 1:27 PM | Report abuse

What qualifies as "preventative care" under these bills? Will a chronic condition's maintenance, like a Diabetic's testing supplies and insulin, be covered under that rubric, or is it limited to primary care checkups and such?

Posted by: stackunderflow | November 19, 2009 1:33 PM | Report abuse

So, how do these wonderful things that go into effect immediately lower per unit costs? Oh, that's right, they don't. :-/

Posted by: novalfter | November 19, 2009 1:39 PM | Report abuse

What's the supposed excuse for avoiding immediate implementation of point 3) halting the preexisting condition misery? That's one of the cruelest practices of the industry and it seems like the Dems are walking away from some great populist value by not making this immediately effective.

Posted by: JonathanTE | November 19, 2009 1:40 PM | Report abuse

Ezra- You forgot to mention that Dems can also take credit for increasing insurance rates. Because nearly every single one of the items listed above will increase the price of insurance.

No recissions - the cost of additional expenses will be spread across all the insured

No lifetime limits - the cost of coverage above current limits will be spread across everyone.

Keep children up to 26 on parents policies. Increases the price of family policies for everyone

Forced spending of 80% of premiums. Easiest way to make sure you make a reasonable return is to raise premiums.

And so on....

Insurance premiums have gone up by about 8% per year for 2007-2009. Wait until the annual increases are 10-12% with all these requirements and it will be interesting to see how popular they are....

Posted by: MBP2 | November 19, 2009 1:48 PM | Report abuse

I LOVE THIS, TALKING POINTS!!

ok here goes and i'll just touch on some:

1-lifetime caps--very good except ERISA isn't applicable so 50% of the US, SORRY you get nothing.

2-no more recisions--very good! shouldn't have ever been allowed keep it up!

4-preventative care--well that's nice but many states already require that but how much will it cost the government to do it???

5--allowing children to stay on plan until 26. that's nice with the whole "no jobs for anyone" going on. Some states like NJ and NY already have allowances to purchase coverage for "overage dependents" but if they're getting it free here whoo hoo! (oh wait, its not free, other costs will go up)

6--uniform coverage documents--that's very good and very important. Good luck getting a SPD to 4 pages though at font of 12. somethings going to be have to be left out and someone's not going to be happy.

7--MLR's at 80% for group and 75% for individual. That's nice but my state already has 80% across the board so insurers here can profit a little more. Not a good thing for us in NJ. Major giveaway to insurers here. So much for all the tough talk in the press about the anti-trust exemption etc.

8--appeals process-- that's nice but most states already have that requirement but government is real good at duplication of duties. How much is THIS going to cost to duplicate that effort??

9--temp reinsurance for 55+-- this is actually very good and very needed.

10-creating internet portal. Ya how's that going to work for the poor who don't have internet access?? is it going to work as good as recovery.gov?

Ezra,

Dems had better hope that the world ends in 2012 because their political world sure seems to.

How come you don't list the new taxes in another post. Oh, I bet that's going to come later. I'll wait.

Posted by: visionbrkr | November 19, 2009 2:00 PM | Report abuse

_MP_

COBRA was actually 1986. Maybe you're thinking of HIPAA? And studies (by ceridian, a leading COBRA administrator) show that only 12% of people take COBRA because of cost. Even with the subsidy (which goes away for many starting December 1st and hasn't been talked about) they only increased it to 17%. Again, another reason we need to address cost which this bill does not do.

Posted by: visionbrkr | November 19, 2009 2:05 PM | Report abuse

#7) Forcing insurers to spend 80 percent of all premium dollars on medical care (75 percent in the individual market), thus capping the money that can go toward administration, profits, et


This loss ratio regulation was previous going to be 85%, which itself was a rather easy, low amount, once insurers have little need to spend so much time and money dropping sick policy holders (see #2).

Setting it back to 80%, which is *only about where it has been lately*, isn't a reform, really. Although setting the individual market ratio up to 75% will be some improvement for the individual market.

The reasonable, easy-on-the-insurers ratios should be set for 2011 onward to be 88% and 82% respectively. And even those are relatively low numbers. (Also note that such regulation of loss ratios is a kind of blunt instrument, which needs refinement, due to the possibility of dis-incenting occasional innovations that would actually costs and thus profits as a percentage, etc. I've discussed this on my blog in more detail.)

Posted by: HalHorvath | November 19, 2009 2:37 PM | Report abuse

Rep. John Conyers (D-MI) in Huffington Post:
"I'm getting tired of saving Obama's can in the White House," said Conyers. "I mean, he only won by five votes in the House, and this bill wasn't anything to write home about. The public option is only available, which is the only way you manage cost and get some competition to 1,300 other health insurance companies, the only way he could have got that through is that progressives held their nose and voted for it anyway."

Asked if the president had shown enough leadership in the health care debate, Conyers facetiously wondered why Press would ask the question.

"Of course not, of course not," he said. "You know, holding hands out and beer on Friday nights in the White House and bowing down to every nutty right-wing proposal about health care, and saying on occasion that public options aren't all that important is doing a disservice to the Barack Obama that I first met who was an ardent single-payer enthusiast himself."

...."That is essentially what Rahm Emanuel has said: Just give us anything and we will declare victory," said Conyers.

Posted by: obrier2 | November 19, 2009 3:00 PM | Report abuse

I know this may be a stupid question.... but when these and other changes kick in do they effect existent insurance policies or just new ones? If someone (me) has already signed a contract for a policy with recission provisions, caps etc. is my policy changed? I haven't heard an answer to this.

Posted by: crieser | November 19, 2009 3:16 PM | Report abuse

Weak tea.

Posted by: janinsanfran | November 19, 2009 3:54 PM | Report abuse

So, in the short term, insurers are forced to be "nicer" to their insureds. However, won't that also mean that, in the same short term, premiums will increase (to cover the increased cost/risk associated with the reform)? After all, there won't be a mandate yet to help insurers afford the cost of reforms....

Nice.

Posted by: WEW72 | November 19, 2009 4:01 PM | Report abuse

crieser,

most times it kicks in right away as of the date set forth in the legislation (ie x amount of days after enactment).

Oh and BTW, no one buys a policy WITH recision provisions. YOu may be subject to pre-existing conditions but that's only dependent on your circumstance which is case by case and state by state.


WEW72,

who knows. Maybe insurers will get a bailout too! Oh wait that's what their reserves are for that people scream about.

Posted by: visionbrkr | November 19, 2009 4:18 PM | Report abuse

Dessert before dinner.

Posted by: tl_houston | November 19, 2009 5:16 PM | Report abuse

All of these regulations simply raise costs for everyone.

I'm sure that voters will be quite happy about the law of unintended consequences.

Posted by: RandomWalk1 | November 19, 2009 6:20 PM | Report abuse

That was my reaction too RandomWalk1 -- insurance premiums in the individual and small business market will increase rapidly over the next 3 years as the companies have to bear more risk without any reduction in the actual cost of services.

And since the mandate for individual coverage won't go into effect until 2014 now, new policies will include a larger percentage of sicker folks with no increase in the volume of younger, healther subscribers.

I am 100% in favor of Universal Healthcare. I also know a doomed business model when I see one.

Posted by: Athena_news | November 19, 2009 8:09 PM | Report abuse

"9) Developing a temporary re-insurance program to help early retirees (folks over 55) afford coverage."

I don't understand this one; what about all the over 55s who are are not employed, living off savings while they wait to age into Medicare? Those folks will not qualify for any sort of subsidy because they have savings...but they need health care. Right now they are draining their personal retirement savings to pay for health insurance.

Posted by: Athena_news | November 19, 2009 8:12 PM | Report abuse

visionbrkr #1 point bears emphasizing. The Secretary is required to respect ERISA except as specifically authorized in the bill. That means a lot of this doesn't apply to most people.

Posted by: bmull | November 19, 2009 8:27 PM | Report abuse

Let me get this straight...

Democrats are going to brag to voters about things that seem certain to raise their insurance premiums?

Do they have a death wish?

Posted by: ContrarianLibertarian | November 20, 2009 10:08 AM | Report abuse

@Athena_news: I am 100% in favor of Universal Healthcare. I also know a doomed business model when I see one.


Why in the world aren't we talking about finding every way we can to (genuinely) reduce healthcare costs so that we really could achieve the goal of universal healthcare?

Singapore's done a great job reining in costs -- and achieving universal coverage as a result of the tame costs -- by mixing MSAs (for routine expenditures) with a tax-funded catastrophic insurance.

I imagine that such a plan would get a lot more broad support here, on both sides of the aisle.

Posted by: ContrarianLibertarian | November 20, 2009 10:23 AM | Report abuse

1. Singapore's total population is one-half the size of greater Los Angeles. And the top 10% of earners make more than 36 times the lowest 10% (that doesn't include people with no income at all).

2. Singapore's MSA system is radically different from anything that would be palatable in the US: 40% of wages are deducted by the governnent to redistribute to various programs, including about 7% to individual MSAs -- it's an enforced saving, not the "self responsibility" model advocated here.

3. Most importantly though, health costs in Singapore are not controlled by "consumer driven" plans, they are directly controlled by the government. Government activities include price caps on public hospitals (which account for 80% of care) as well as budgetary controls, restriction on of unproven technology, and restrictions on the number of physicians in "overserved" areas or specialities.

IOW, the success of the health care system in Singapore appears to be due to the greater involvement of government in the entire system rather than less.

Posted by: Athena_news | November 20, 2009 11:58 AM | Report abuse

1) I'm not sure I see the relevance of this demographic data. Are you saying we also shouldn't look to Massachusetts for guidance?

2) Well, I'm just one guy, but I don't have a problem with using "forced saving" in this vein to fund MSAs. It seems clear enough that we're heading in that direction one way or another.

3) A fair enough point (but, then, what universal healthcare system in the world doesn't involve price controls?). Medisave wasn't initially constructed using price controls. They adopted them later when the cost containment they experienced didn't meet expectations. But, for me, the key element of this paradigm is moral hazard -- people have a direct incentive to spend as little on healthcare as they can...which encourages, among other things, a healthier lifestyle.

"IOW, the success of the health care system in Singapore appears to be due to the greater involvement of government in the entire system rather than less."

Yes and no. It is a greater involvement of government -- but in a way that empowers individual consumers for the bulk of their healthcare transactions.

It's about like the idea of private savings accounts in Social Security. The government would still facilitate all of that and collect the taxes that fund the accounts, but everybody would still have their own individual account, with a range of investment options, etc.

Is that "more government involvement" or "less"? Well, compared to what SS is now, it's less. But in terms of healthcare, it would be more.

But that shouldn't, on its own, shy us away from examining it. It seems pretty obvious to me that we shouldn't be following the leads of Canada or Massachusetts -- not because they have more government than our status quo, but because their particular models have been no less problematic than our own status quo.

Posted by: ContrarianLibertarian | November 20, 2009 1:22 PM | Report abuse

contrarianlibertarian,


isn't the forced savings that you support (as do I because I have an HSA) similar to a forced savings plan for retirement called Social Security. Are those that are against HSA's also against Social Security???

Posted by: visionbrkr | November 20, 2009 2:01 PM | Report abuse

I don't understand how people can talk about health care reform without including so many of the reasons why we spend so much on health care each year. It's like their answer is to just stop spending, not address the actual costs or reasons for spending.

First, remove FFS and other reasons physicians order more things. That MUST include effective malpractice reform. Obama said everyone has to be at the bargaining table and willing to make sacrifices. Why does that not include trial lawyers? They are the only ones not giving up ANY of their piece of the pie. The CBO even admits tort reform could yield over $50 billion dollars a year savings.

Second, patient behavior has to be close to 50% of the reason we spend so much with poorer outcomes. Compare us to other countries that spend less with healthier people. But consider these things:

We are most (or at least #2) obese nation. Obesity carries costly morbidity (hypertension, diabetes, heart disease, peripheral vascular disease, cancer, etc.) that are expensive to treat over and over and over, yet the "cure" lies more in the possession of the patient than the health care system.

Same goes with alcohol, tobacco, cocain and heroin which the WHO said in 2008 that we lead in consumption globally. These wreak havoc on the body - increasing spending and decreasing positive outcomes.

Compare patient non-compliance rates. How often do other countries not follow advice or fail to show up for follow-ups to check their BP meds effectiveness?

Violent crimes rates, child abuse and domestic violence rates, risky behavior rates, auto accident rates, etc.

Posted by: Jodigirl | November 20, 2009 9:49 PM | Report abuse

What about ethnic diversity? Do other countries treat this many different ethnicities with this many different genetic and cultural behaviors, leading to more complicated treatment approaches?

Do other countries hospitals have to employ multiple language interpreters?

What about unions. Do other countries deal with unreasonable demands of unions, forcing them to also continue to employ bad staff?

In other countries, how much do their citizens go into personal debt for a career in health care (including nurses, techs, etc.)?

But, what are we going to do, mandate better behavior?

This bill doesn't seem to have addressed a HUGE cost in health care - the cost of drugs. Look at your next hospital bill and notice what a high percentage comes from iv drugs and other drugs. Actually, you don't have to wait for that, even your outpatient drugs from your primary care doctor should help you see how inflated drug prices likely are. Yet, they got MORE freedom to charge whatever they want. It seems the only thing they gave up was not raising some Medicare drugs over the next 10 years to the tune of $80 billion (that's essentially $8 billion a year savings??). How is $8 billion a year savings over 10 years such a score, but $50+ in tort reform that doesn't max out in 10 years not worth including? PLUS, the drug companies are free to gouge Americans in the drugs they did not promise to keep from a price increase.

Posted by: Jodigirl | November 20, 2009 9:50 PM | Report abuse

jodigirl,


sorry we're not second. In obesity we're practically number 1 and 2. see below:

http://www.nationmaster.com/graph/hea_obe-health-obesity


notice all the developed countries everyone wants us to copy our systems from. Well if we copied their BEHAVIOR and level of obesity I'm thinking we'd be at or near their level of health statistics. Sure we need to get everyone covered and sure we need to get cost down but you're right. no one talks about this even though everyone sees it. Walk into a mall and you'll see it. Walk down the street and you'll see it. Its sad.

Posted by: visionbrkr | November 21, 2009 12:32 AM | Report abuse

Thanks for the link visionbrkr!

Amazing. US 30.2%, and climbing. It looks like some of the years they have the statistics reported from are very old, though.

According to that resource, Germany's obese population is less than HALF of ours, no wonder they spend less and have healthier people, DUH!!! And Japan's 3.2% and Swiss 7.7% obesity. No wonder they spend less with healthier people!!

That resource also says we have highest gun homicide rates, and highest rate of rape, and TOTAL crimes number ONE is US with UK being next by almost HALF. And we are SECOND behind Mexico in child maltreatment deaths - WOW, AWFUL!! I have to stop looking at that site.

Yet, some of the statistics do not even have the US on them, which I don't get.

Their tobacco statistics do not jive with an article from abc about the World Health Organization saying we lead the world in consumption of tobacco, alcohol, cocain and heroin. Here's a link to that:

http://www.cbsnews.com/stories/2008/07/01/health/webmd/main4222322.shtml

These highlight just a few of the differences in population and culture that affect both spending, overall health, and longevity.

Posted by: Jodigirl | November 21, 2009 2:25 PM | Report abuse

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