They add more insight to answering the question, “Does the House Plan Outlaw Private Insurance?”. They provide two different takes on the wording of Section 102 (which we covered yesterday), but they come to one simple conclusion.
Furthermore, all these new regs would not apply just to individual insurance plans, but to all insurance plans. So the House bill will also drive up the cost of your existing employer coverage. Until, of course, it becomes too expensive and they just dump you into the government plan.
So IBD is wrong: individual health insurance will not be outlawed. But it will be effectively regulated out of existence… which is effectively the same thing.
We begin today with Division A, Subtitle C, Section 121 which lays the groundwork for essential benefits packages, and defines the choices of coverage. Section 122 defines the essential benefits package.
In this division, the term “essential benefits package” means health benefits coverage, consistent with standards adopted under section 124 to ensure the provision of quality health care and financial security, that—
(1) provides payment for the items and services described in subsection (b) in accordance with generally accepted standards of medical or other appropriate clinical or professional practice;
(2) limits cost-sharing for such covered health care items and services in accordance with such benefit standards, consistent with subsection (c);
(3) does not impose any annual or lifetime limit on the coverage of covered health care items and services;
(4) complies with section 115(a) (relating to network adequacy); and
(5) is equivalent, as certified by Office of the Actuary of the Centers for Medicare & Medicaid Services, to the average prevailing employer-sponsored coverage.
The basic definition of the essential services sounds nice on first read, but after reading it a second time I have a couple questions.
No annual or lifetime limits sound awesome, but how many private or employer-based insurance companies will survive if they cannot impose any annual or lifetime limits on coverage?
How will the government control the costs of the government controlled plans if there are no limits? Think about it for a moment.
More than 1.4 million people in the United States were diagnosed with cancer in 2008. According to U.S. News and World Report, the cost of treating people with cancer varies greatly depending on the cancer, with annual costs ranging from $39,891 for someone with lung cancer down to $18,261 for someone with prostate cancer. These estimates do not take into account newer, more expensive medications so for the sake of argument I will use an average of $29,076 for this example. With each type of cancer there are numerous possibilities for life expectancy, which depends not only on the type of cancer, but how soon it was diagnosed, the success of treatment, and whether or not the cancer returns. The average annual cost of treating everyone newly diagnosed with cancer (remember this is only for the 1.4 million that were diagnosed in one year) is $40,706,400,000. $40.7 billion.
Parkinson’s disease affects more than 500,000 people in the United States with an average of 50,000 new cases each year. There is no cure for Parkinson’s. According to medicinenet.com, the annual cost to the nation for treating Parkison’s is $6 billion.
According to AVERT, there are more than a million people living with HIV in the United States. The average lifetime cost of treatment (in 2006) for someone living with HIV was $618,900. So, to cover just one million people for their expected lifetime, the cost of that care will be close to $618,900,000,000. That’s $618.9 billion. According to the same reports, the average person lives 24 years after being diagnosed with HIV, which brings the average yearly cost of treating everyone in the United States living with HIV to $25,574,380,165. Yes, $25.5 billion.
The current population of the United States is just over 304 million. The annual cost of treating just the 2.9 million of us who are diagnosed with cancer, Parkinson’s, or HIV is $72.2 billion.
Remember, that’s an annual cost, not the lifetime cost. $72.2 billion to treat 0.9% of the population. I wonder how high the annual costs will be when we include the other 99.1% of the population and heart disease, stroke, and the other leading causes of death in the United States?
Section 122 continues by defining the essential services to be offered, the minimum services to be covered, and the requirements relating to cost-sharing and minimum actuarial value.
Section 123 defines the Health Benefits Advisory Committee which will consist of the Surgeon General, 9 non-Federal employee members appointed by the President, and 9 non-Federal employee members who are appointed by the Comptroller General of the United States, similar to the manner in which the Comptroller General appoints members to the Medicare Payment Advisory Commission.
The Health Benefits Advisory Committee will decide what benefits and treatment options are included in each plan. If Medicare is broken and we’re trying to fix it, why are we allowing the same crony to appoint people the same way as the system that is known to be broken? That just doesn’t make any sense does it?
As we read even further, into Section 131, we find that not only will the advisory committee set the benefits and treatment options, but the “Commissioner” will decide which review process to use while considering appeals. Nice independent review there huh?
The next several sections cover everything from benefit plans not covered through the “exchange”, timely payment of claims, the governance of the program by the Commissioner, his/her duties, and the creation of the Qualified Health Benefits Plan “Ombudsman”. The Ombudsman will receive complaints, grievances, and requests submitted by individuals, provide assistance to those items, and submit annual reports to Congress and the Commissioner. It sounds like just another layer of bureaucracy to me.
Later tonight we will will continue with SubTitle F of Division A. Make sure you’re ready…