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Health-care reform in practice

A reader sends his take on the health-care reform battle to Josh Marshall:

If I feel abandoned, it's not by Obama and the Democratic party, it's by those on the left advocating to kill the bill.

I am unemployed and have a pre-existing condition that requires daily medicines, quarterly doctors visits and an annual test. I am on COBRA, which runs out mid-2010, when I will have to find new health insurance. I will need to purchase some kind of health insurance, assuming I can find provider who will insure me

I don't pretend to understand all the intricacies of the health care reform bill, but I do read a lot. From what I can glean, if the bill passed, I would be able to find health insurance because I could not to be turned down due to my pre-existing condition. And based on my income at the moment, my premiums would be subsidized.

I think some on the left would say that they just want to remove the individual mandate. But if they do that, then the healthy will leave the plan, and the average premiums will be the average premiums for unlucky people, like this reader, and those premiums will quickly become unaffordable.

By Ezra Klein  |  December 18, 2009; 10:21 AM ET
 
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Comments

Many leftists believe that this reader would be granted coverage, but nothing would stop the insurance company from denying their claims.

Does the bill contain measures to prevent that?

Posted by: tyronen | December 18, 2009 10:43 AM | Report abuse

Just a quick question on this email. If this reader didn't have a gap in coverage and bought coverage immediately after COBRA ran out, would it still be considered a pre-existing condition? I thought there had to be a gap in coverage for them to exclude on this basis.

Posted by: consid24 | December 18, 2009 10:44 AM | Report abuse

And, if that happens, it will prove, once and for all that private insurance does not work, giving single payer/public option a better chance. At least, that is what those advocating removing the mandate are thinking.

Posted by: donhalljobs | December 18, 2009 10:45 AM | Report abuse

Of course passing this bill won't help this guy anyway since in won't be in effect by mid 2010. But good job pretending it will to score rhetorical points!

Posted by: endaround | December 18, 2009 10:45 AM | Report abuse

Ezra,

Could you please do a post on when the various provisions of the Senate bill as currently known (since the actual draft bill isn't currently issued) actually would kick in? Part of the problem for me is that this thing is designed to be phased in and I have lost track of which provisions begin when. Thanks.

Posted by: hbplan | December 18, 2009 10:46 AM | Report abuse

Exactly.
Where is this reader going to go for insurance now? The bill sets some rules on the insurance companies and helps him with premiums. I'm in the same boat health-wise, but have pretty good municipally-paid insurance. I'm lucky. But health care like education, clean water, fire and crime prevention, should not be left to fate. Not in THIS country.
Listening to Arianna, Dr. Dean, Ed-these are all well-heeled, well-insured Liberals who are risking sounding like those 'limousine liberals' of the '60s and '70s who only wanted to stomp their feet and get what they want, losing sight of the people they supposedly say NEED help.
I think they need to direct their considerable intelligence, heart and clout to their REAL next raison d'etre...
Reform ALL INSURANCE Cos. If you are not paid or owned by one of them, WHO actually LIKES their insurance company!? Go get 'em.

Posted by: dcunning1 | December 18, 2009 10:48 AM | Report abuse

Hey, could you respond to my concern?

If you have a policy paying 60% of costs, plus a low 'out-of-pocket max', and free preventative care, then...

What happens to the folks who occasionally go to a doc and get a test run? (Most of us.)

I suspect that their 'insurance' will not feel like the insurance as we normally think about it. They'll be paying a huge % of costs when the get that $3,000 MRI once every three years, right? It will feel, to most people, that they pay $4,000 per head, per year to recieve $1,000 in benefits. And, they'll be right -- at least, I fear.

I want to see this bill passed, but I'm really starting to worry that the Senate has made it into a political nightmare for the dems. They've embraced all the worst stereo-types about dems in their modifications of the house bill. Seemingly, trying to reinforce how awful government designed-things are.

And, we're supposed to all migrate to this system? Hell, no!

All to protect pharma, ins companies, device makers, and others extorting us via health care. Where's their give? Don't give me the part D bs, either.

It's a simple matter of numbers, if a plan pays only 60%, and there are all sorts of 'but you don't pay for this, this and this...' Then, you are paying far more than 40% for basics, right?

Posted by: rat-raceparent | December 18, 2009 10:54 AM | Report abuse

we finally elect a reasonable, intelligent president who was willing and determined to take on this nightmare....and this is what happens.
just like some on the left scoffed that obama won the nobel peace prize, now howard dean says he wont vigorously campaign for his reelection???
why??? we finally get a president willing to take on the hardest things, make carefully thought out decisions, win the approval of people in other countries....and it still isnt good enough for some of his supporters.
i guess some of them really thought that he was a messiah.
he is a pragmatic, compassionate man who would do more if he could, but he knows what he is capable of accomplishing.
he is a realist, unlike many of his past supporters.
for some people, nothing is ever enough.
there is always something in the universe that is not to their liking.
you would think that grown-ups would understand that.

if people on the left help to derail this accomplishment, they will take us all down with them.
we could have change that we could believe in....change that is actually possible in the "real world."
stop dreaming. dont shut this window in time for health care reform, or you will destroy more than the bill.
then we will really see change. and it wont be the kind we are hoping for.

Posted by: jkaren | December 18, 2009 10:55 AM | Report abuse

Insurance companies are not people. I think much of the (misguided) kill-the-bill fervor on the left stems from a tendency to anthropomorphize these entities.

When we say, "Insurance companies are evil," we're making a different claim than when we say, "Hitler is evil." The actions of giant corporations are not the product of the volitions of a single agent; they are the sum of lots of these, each of which may or may not be evil on its own, but each of which is a response to a set of incentives (the CEO wants to please the stockholders, the guy in the cubicle wants to make a check and send his kids to college).

That the sum of all these individual actions is a force of evil in society, then, is the result of the incentive structure under which the giant entity operates. Change the incentives (regulate: pass laws that prohibit discrimination against pre-existing conditions, etc.), and the behavior of the company will change. It may become less evil.

It would have been hard to make Hitler stop being evil, because he was a rotten person. Insurance companies are not people. They can't be inherently evil; they can only be as evil as the regulatory environment in which they operate allows them to be.

When we complain that the bill will be a giant give-away to evil insurance companies, I think part of our angst comes from thinking of the companies as inherently evil agents. I'd be angry if you passed a law forcing me to buy lemonade from Hitler's lemonade stand, because he'd continue to be evil after the law is passed. But if this law is passed, the companies from which we'll be forced to buy insurance will at least be much less evil, given what's already in the bill. And we can still improve the thing to make them behave even better. Let's not let a misdirected resentment of non-people stand in the way of that.

Posted by: knacheme | December 18, 2009 10:59 AM | Report abuse

i seriously wonder, progressives who want to kill this bill....
if this all falls apart, what do you think is going to happen?
do you actually think that will create circumstances that are amenable to even greater change?
progressives will be at each other's throats. rockefeller, wyden, kerry....people who have been trying for reform for a long time will be angered and demoralized....the republicans will be vastly overjoyed and empowered. it will be their field day.
our fine and brave president, who was willing to take this on, knowing the challenges and risks...will be weakened and so will all of his future legislation.....the left will be fragmented and bitter.....and the clout and attentiveness and effort and time frame for all of this will be so over.
whatever good could have come from this bill for people who need it....they can sit and wait for decades, if they can last that long.
and who will be the reasonable, steady leader for the left....howard dean?
if some people think that passing this bill is a nightmare, just imagine the scenario if it doesnt pass.
what a big christmas present with a giant bow on the top for the republicans and their minions.
it is my humble opinion that democrats should be very afraid for the consequences if this hard-won bill doesnt pass.
and first, to all of the people who would have benefited from it.
merry christmas.

Posted by: jkaren | December 18, 2009 11:11 AM | Report abuse

A couple questions, Ezra:

1. Will the protections against things like rescission and denials against pre-existing conditions go into effect with the passage of the bill, or do they only come on-line when the exchanges are set up?

2. If rescission and denials for pre-existing conditions are outlawed before the exchanges go into effect, what is to prevent insurers from circumventing restrictions by simply pricing people out of the market until 2014?

Posted by: JPRS | December 18, 2009 11:21 AM | Report abuse

FYI,

If anyone commenting on the blog can answer the two questions that I just raised, I'd be curious to hear what the answer is.

Posted by: JPRS | December 18, 2009 11:22 AM | Report abuse

Once that person has exhausted COBRA coverage, every state has a plan available for him through HIPAA without regard to health status. Either the insurers in the state have to offer a standardized plan with limits on what they can charge, or there is a high-risk pool.

http://www.nahu.org/consumer/healthcare/topic.cfm?catID=190

Posted by: ab13 | December 18, 2009 11:28 AM | Report abuse

JPRS, rescissions are ended immediately, and people who have a hard time getting insurance are also helped immediately, until the pre-existing ban kicks in, and I can't claim to be sure when exactly that is. See this list:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=433x11487

Posted by: Chris_O | December 18, 2009 11:37 AM | Report abuse

Chris_O,

Thanks! The devil is in the details, of course, but #2 sounds like it would be a potential remedy for the pre-existing condition issue.

Posted by: JPRS | December 18, 2009 11:45 AM | Report abuse

JPRS, do you think that a person should be able to apply for life insurance immediately after being diagnosed with terminal cancer, without telling the insurer about the diagnosis? Do you think one should be able to get homeowners insurance while your house is on fire, and not tell the insurer about the fire? Because the health equivalent of those two examples are exactly what most rescissions consist of. What do you know about rescission that you haven't seen on TV?

Posted by: ab13 | December 18, 2009 11:51 AM | Report abuse

Ezra, why does the far left want to remove the individual mandate? What is the logic?

Posted by: ideallydc | December 18, 2009 11:52 AM | Report abuse

The letter from AK has shown in several blogs as moving testimony to the fierce urgency of now on the Senate bill. As several posters have asked, the case for AK needing this bill will be helped by some explanation on how the current bill helps in what looks like a dire, short-term situation--benefits run out in 2010.

Some explain that states already have provisions for the end of COBRA benefits, which would assist AK. AK doesn't know all the "intricacies of the bill" nor do I. Best as I can figure out the Senate bill the ban on denial for pre-existing conditions doesn't start until 2014. Same for the subsidies. What provisions in the bill help out AK if passed now?

Beyond helping AK and others in similar tough spots, politics enter into the equation as well. If AK assumes that he or she will get insurance before then, and if AK is not alone, there's considerable risk of disappointment translating into voter apathy or Republican voting.

Posted by: undisclosedangler | December 18, 2009 11:54 AM | Report abuse

Ezra,
You seem to be on a campaign against the party's "left" and in favor of the White House's position. Why else would you give such space to a very particular concern.

If you were so concerned about this gentlemen why not have the White House and Senators arguing from day one that Medicare buy-in fro m day one would be the solution? I realize this sounds to you like pie in the sky at the moment, but you don't seem to have much of an imagination about how the awful situation we are in was formed by a series of decisions that were 75% the responsibility of the White House.

A "populist" upswell in favor of a Medicare option was avoided at all costs.

Are you afraid of "populism" too? Or are you a self-appointed or other-appointed co-manager of the public image of the current Administration?

To make health reform hinge now on the immediate concerns of one gentleman, who has a similar though not the same plight to me, personally, is an act of tendentious journalism, IMO.

Posted by: michaelterra | December 18, 2009 11:58 AM | Report abuse

Ezra,

Stop trying to intimidate or demonize the left, and start answering questions about the new bill (sans gvmt option).

We've been told for over a year by people like you that a gvmt option was required to make any plan meaningful and sustainable, and now suddenly we're being told the opposite.

So how about the basic numbers on the new plan without the guilt trip?

- Will this new plan add to the deficit or not?

- How high will co-insurance and deductibles be allowed to go?

- Will I pay the same premium whether I am 20 or 55, or healthy or sick?

- How much will insurance cost for a single person? For a family with an average number of children?

- How many people will die before certain provisions will kick in?

P.S. Some of your posts yesterday were more helpful, but more are needed to give a complete picture of what we're being asked to support. I, for one, want details, not someone telling me what to blindly support or not. That's why I am no longer a Republican.

Posted by: Lomillialor | December 18, 2009 11:59 AM | Report abuse

ab13, you're talking about moral hazard - which is something we weigh all the time. Taxpayers picked up the tab for the banking crisis, even though they weren't responsible, because of a calculation that the consequences of not helping would be a far greater evil.

And so it is with health insurance. We pool resources for the benefit of a larger good. I'm not persuaded that someone who can't afford insurance should be punished with refusal to allow them into the pool when a health emergency emerges.

Posted by: uberblonde1 | December 18, 2009 12:04 PM | Report abuse

uberblonde1, that's not the issue. The issue is should someone be able to defraud an insurer. Without the power to rescind a policy there is nothing to keep every single applicant from lying about their health history. If the insurer cannot rescind coverage why would anyone answer the health questions truthfully? Should the insurer not be allowed to accurately asses risk?

Posted by: ab13 | December 18, 2009 12:08 PM | Report abuse

ab13,

I disagree with you that life insurance and home insurance are equivalent to health insurance.

No nation that I know guarantees life insurance or home insurance as part of the social safety net. They treat health care differently, because the health of a population has broader consequences for the population and society at large.

You talk about strawmen and false analogies, well you've just provided a couple textbook examples.

What's more there's an underlying issue of economic value (and a moral question). We are already paying a lot more for health care in this country than other nations for a quality of care that is, in some cases, worse than elsewhere. All of the available evidence suggests that we have the ability to provide universal coverage for a fraction of the cost that we care currently paying for insuring just a part of our population.

If you have a universal health care system issues like rescission and denials for pre-existing conditions become moot. Everyone pays into the system and receives benefits. Currently we have a system where people may pay into the system and receive absolutely no benefit.

The condition where you can have rescission in a health care system is a creation of the private insurance industry. Same story with denials for pre-existing conditions. I understand the market incentives for the private actors, but the fact that those incentives exist for private actors -- and the fact that other nations have found workarounds that address these issues for a lower overall cost -- should be instructive.

Additionally, as you probably well know, in some cases of rescission, insurers are finding reasons to deny coverage renege on their agreements (e.g. denying life saving treatments because they find someone didn't disclose a condition that is complete unrelated to the primary issue).

Posted by: JPRS | December 18, 2009 12:48 PM | Report abuse

"You talk about strawmen and false analogies, well you've just provided a couple textbook examples."

No, those are perfect analogies. An insurance company cannot function if it cannot assess risk before issuing coverage. This is true of any type of insurance. You may disagree with me on the proper role and scope of private health insurance in the US, but the reality is for at least the next few years most people will continue to get their health insurance from private companies, and those companies need to be able to assess risk. Completely eliminating rescission would allow people to defraud an insurer.

"If you have a universal health care system issues like rescission and denials for pre-existing conditions become moot."

And if I had wheels I'd be a bicycle. We're talking about what we have now and what we'll have for the next 4 years. You asked if rescission would be eliminated immediately since the rest of the bill doesn't start until 2014. From now until then we have the primarily private system that is already in place. Getting rid of rescission could make it nearly impossible for that system to function, and will only drive insurance premiums even higher.

"Currently we have a system where people may pay into the system and receive absolutely no benefit."

Because they lied to defraud the insurance company. And no, they don't really pay into the system, because when your coverage is rescinded you get all of your premiums back. You still haven't answered the question of whether you think people should be able to lie on an insurance application to defraud an insurer. Do you think they should be able to or not?

"The condition where you can have rescission in a health care system is a creation of the private insurance industry."

No, it is a necessary component of insurance. You're entering into a contract, and one side is withholding information.

"in some cases of rescission, insurers are finding reasons to deny coverage renege on their agreements"

Sure, a small number of cherry-picked cases that are useful for rallying the troops to demonize health insurers but have little overall relevance. I've never denied some companies have acted in bad faith or that some practices shouldn't be changed. But those are a tiny minority of rescissions, and most companies do nothing of the sort.

Posted by: ab13 | December 18, 2009 2:13 PM | Report abuse

ab13,

From the perspective of an insurer, yes, health insurance, life insurance, and home owner's insurance all function in similar ways.

However, the health care sector is prior to the insurance sector; it can function independently of private insurers. From a consumer's perspective there is no reason that you couldn't have a direct payment model; or a system of public insurance; or a system of co-operatives; or a system that's akin to public utilities; and on and on.

From a consumers perspective too; and from the perspective of social good and an efficient market economy; all of these approaches might even provide a better value than a system of private insurance.

In a private insurer's perfect world, their entire business model would be based on selling a product to people who they knew in advance would never need their product.

They would be so incredibly efficient at cherry-picking their customers that they would never have to pay for any services. They would be so adept at marketing their worthless product that they could convince people who didn't need their product to buy their product.

From a market perspective, that would represent a success story.

From a societal perspective it would represent a complete failure, because that business model would do nothing to improve public health; and it would represent a net drain on economic resources. It would have no more social value than a casino -- except perhaps even less, in that it served as a source of stress and anxiety, rather than a source of entertainment and release.

In reference to your question, do people commit fraud against insurance companies? Sure. Do insurance companies use the cover of purchased law and their economic leverage to effectively rob their customers? Sure they do.

Could we eliminate both those problems altogether by eliminating private insurers?

Yes, we sure could.

Posted by: JPRS | December 18, 2009 4:50 PM | Report abuse

How do they "rob" their customers by rescinding coverage? The customer gets their money back. And your claim of "purchased" law is ridiculous. Health insurers are subject to vast array of onerous regulations, most of which are very customer-friendly (and thus insurer-unfriendly).

There are plenty of examples around the world of health care systems that use a significant private component, the idea that our problems are caused by the existence of private insurers is just silly.

"In a private insurer's perfect world, their entire business model would be based on selling a product to people who they knew in advance would never need their product. They would be so incredibly efficient at cherry-picking their customers that they would never have to pay for any services."

And that is ludicrous. In the private insurer's perfect world we would be able to assess the risk of our customers and charge a commensurate premium. Insurers are not hoping to take in premiums and never pay out a single dollar claims. We price to the required return on capital needed to stay in business.

Posted by: ab13 | December 18, 2009 5:32 PM | Report abuse

ab13,

In both the House and Senate bills, rescission is allowed for fraud. Senate bill Sec. 2712, House bill Sec. 162.

People reading your comments might be misled.

Posted by: sd15 | December 18, 2009 9:12 PM | Report abuse

This person has a legal issue, and should talk to a DOL counselor to make sure their rights are protected. See eg http://www.dol.gov/ebsa/FAQs/faq_consumer_hipaa.html

You must continue your COBRA to exhaustion -- hopefully you are getting the COBRA subsidy. If you do, then you have 63 days to obtain other coverage, and an insurer MUST cover you without preexisting condition exclusions. You should shop for the best policy you can afford BEFORE your COBRA expires. YOu should consult with a health insurance broker or call your insurer. Don't just read the paper to find out your rights.

You may be eligible for Medicare or MEdicaid (based on disability or income relatively) and your children may be eligible for CHIP. THere are also state health insurance programs for the unemployed.

So, the law already allows you to find new coverage without preexisting condition exclusions, IF YOU UNDERSTAND THE RULES. YOur premiums would not be subsidized until 2013 under this bill, and there is no guarantee that your coverage would be affordable under this bill -- it really does nothing for you.

Why do people dabble in healht reform but not tell people what their rights are under current law????

Posted by: kaylamom1 | December 18, 2009 11:58 PM | Report abuse

By the way, the law that grants these rights, HIPAA, was passed in 1996 after Clintoncare fell apart. If Obama care falls apart, I expect similar incremental health reform chagnes to be passed, which would be less disruptive than the current bill and potentially help more people.

Posted by: kaylamom1 | December 19, 2009 12:01 AM | Report abuse

For those asking about timetables for recision and other reforms, go to these websites for implementation timelines. House Education and Labor COmmittee, and Senate Majority leaders' health page. Both have detailed timelines.

Posted by: kaylamom1 | December 19, 2009 12:03 AM | Report abuse

This whole process has just made me really cynical about the Democratic Party though. For MANY people, healthcare was the premier reason to vote Democrat. For over a decade the amorphous goal of "universal healthcare" has been the main domestic project of the Democratic Party. And, most depressingly, this was supposed to be the LOW-HANGING FRUIT. It was -- and is -- the "easy" policy. Healthcare is nothing compared to climate change, immigration, labor policy, etc...

So while I'm glad we're moving forward, this whole process has been exhausting and depressing. Far too many Democratic politicians have been willing to sacrifice concrete gains for symbolic side-points. This is true for both conservatives (abortion) and liberals (redeeming the notion of government programs). But most people -- including most Democratic voters -- don't really care about this stuff.

They want results, and to the extent that those results are made secondary to these other issues, the party just looks incompetent.

Posted by: NS12345 | December 19, 2009 10:25 PM | Report abuse

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