HR3962: Duty or Charity - Covering Congenital or Developmental Deformities

HR 3962 assures that children with congenital or developmental deformities be covered under group health plans. But children born to a "covered" parent already have these benefits. The question is - who will benefit from this rule change?

It is quite popular for those who would like to adopt children to go abroad to do so. Many choose to adopt a child with special needs, such as a cleft palate, who would be less likely to be adopted by a local couple. These children may require one or several surgeries as they grow. No doubt, this is a noble and charitable deed. This is not an unknown risk, the parents had full disclosure of the condition when they adopted the child. Often employer health plans willingly choose to extend coverage for such conditions under their plan in these circumstances. Understanding that such generous coverage necessitates higher premiums to pay for it, the question is should an employer-provided health plan be forced to participate in the employee's charity? Health plans do not typically cover adoption as part of their reproductive health options coverage. Parents pay tens of thousands of dollars of their own savings to adopt. Is it unreasonable for them to bear the full
expense of their decisions, rather than mandate it be cost-shifted to their employers, particularly in these difficult economic times?

This does not need to preclude parents from adopting a child with congenital or developmental deformities. Today, many developing countries have first-world internationally accredited hospitals where these children can have the necessary procedures at a tiny fraction of what it would cost for the same care here. It may be easier for the child and parents, given the staff speak the child's native language, as well as English.

HR 3962: Extension of Coverage vs. States Rights

HR 3962, Sec. 105 allows parents to keep their adult children under 27 years of age, who may or may not be in school or working, and are not enrolled in a health plan, enrolled under their parent's health plan. [Of course, the parent and the parent’s employer will pay the added premium for keeping the additional family member on the plan.] At present, state laws have varying ages and conditions under which children may be kept on their parent’s plan. This bill, however, nationalizes those requirements. It is interesting that Congress can nationalize administrative rules previously under the prerogative of the states to increase insurance coverage for Americans; however, Congress is unwilling to use the same logic to open up competition with a national health insurance market, a move that would significantly lower rates in many markets. If the idea is to get more people covered, wouldn’t making cheaper insurance coverage available to more people, more places be a good start?

A.M Best: BESTWIRE: Under Proposed Reforms, Little Rate Regulation, New Customers May Mean Health for Insurers

This is an article from A.M. Best's BESTWIRE. "Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. Policyholders and depositors refer to Best's ratings and analysis as a means of assessing the financial strength and creditworthiness of risk-bearing entities and investment vehicles."

Baucus Bill Part III: Will it really be cheaper?

The CBO believes that employer provided plans will be “more expensive that the low-cost plans available in the exchanges, because healthcare services in those exchange plans would be more tightly managed.” [September CBO letter, page 4]

Administrative costs for all health plans, both for-profit and nonprofit, have averaged about 11% of premiums. The BCBS family of companies average about 10%. In fact, Highmark BCBS, a nonprofit insurer, in PA specifically states that their goal is for 90% of premiums to go toward paying medical expenses (aka medical-loss ratio) for enrollees. To more tightly manage the plan requires higher administrative costs, not less. And what does more “tightly managed” mean to the doctor and patient? You can bet there will be stricter standards for ordering tests/procedures, more “red-tape” and more non-certifications of coverage. There is simply no other way to make up for the added administrative costs, pay claims and still be competitive with the private sector marketplace, let alone be more affordable for individuals or small businesses.

Key Issues Not Addressed by the Baucus Bill: Part II

Continuing our look at the Baucus Bill based on the CBO Analyses of September 22 and October 7, 2009...

• The fees and taxes this bill imposes on insurers, medical device makers, clinical laboratories and drugmakers will be considered a “pass-through;” that is - passed through to consumers! It seems the CBO recognizes this on page 2 of the September letter which states those fees “will ultimately raise insurance premiums by a corresponding amount.” This is a tax on every person. It further raises medical costs. It’s counterproductive.
  
• The CBO admits on page 3-4 that comparing costs of coverage to the present system is difficult “for many reasons, including the extent of the coverage…;the rates and methods used to pay providers…; the quantity and intensity of services used; the insurer’s administrative costs; state regulations of the insurance market; employment status and employers’ decisions about offering coverage and the underlying health of the enrollee pool.” It seems that these are huge gaps in analysis that simply cannot be overlooked if this report is to be taken seriously.

Key Issues Not Addressed by the Baucus Bill: Part I

Let’s take a closer look at what wasn’t included in the bill. Since there is no actual written version of the bill, we will look at the CBO Analyses of September 22, 2009 and October 7, 2009:

• The CBO bases its analyses on the low-cost “silver” plans which will be offered in the exchanges. It is reasonable to think if there are silver plans, there are also gold plans. It begs the question, what package of benefits will be covered under either plan? Apparently the bill does not enumerate them. Federal subsidies are tied to the premiums on the ‘silver’ plans. Unlike the Medicare program which covers 80% of approved charges, the Baucus silver plans will only cover 70% of those charges, with the rest still owed by the patient. It seems there will still be a need for supplemental plans to cover the difference, as with Medicare. This appears an incomplete solution. For those with incomes under 200% of the federal poverty level [$23,600(projected for 2016)] there would be a sliding scale to assist in payment. However, for individuals making $14,700 annually (pre-tax), the premiums plus cost-sharing payments the patient is expected to pay would equal $1,200. This burden still seems quite high for our poorest people. It seems likely they will forgo coverage to save what little they have.
• Premiums are still allowed to vary by age. This is problematic because it fails to address the 13% of those aged 55-64 who are uninsured. Because of their age, these people are the most likely to have accumulated chronic conditions and need insurance coverage to optimally manage their care.

Senate Finance Committe Approves Baucus Bill

What exactly was voted on yesterday? The Senate Finance Committee refused to post a copy of the proposed bill online for Americans to read. It appears that the reason why may more likely be found in the CBO's October 7, 2009 letter to the Chairman of the Senate Finance Committee, Sen. Max Baucas, page 8 which states that "The Chairman's mark, as amended, has not yet been converted into legislative language. The review of such language could lead to significant changes in the estimates of the proposals effects on the federal budget and insurance coverage."

The CBO goes on in that letter to state (page 9) that "Federal spending that would be funded by future appropriations is not reflected in these estimates. For example, implementation costs for operations of the Internal Revenue Service and the Centers for Medicare & Medicaid Services are not included." Any business must count the costs to implement an idea before it can determine whether or not there will be a positive return on the investment. How is government any different?

It seems the rules of order are now disregarded in the Senate, committees are now passing what is at best the notion of a bill/plan as opposed to a definitive plan. How can such a bill/plan be responsibly administered? A health plan requires a written contract to administer it. Apparently, Americans are now discovering not only is Congress too lazy to read the bills presented for a vote, Congress is now too lazy to even write the bills it passes! Are notions of legislation all we need now? Are we now making it all up, after the fact? This is a travesty of democracy. Americans work hard, pay their taxes and deserve far better treatment than this from their elected officials.