Wednesday, September 16, 2009

America’s Health Future Act; Don't Drink The Kool-Aid

Senator Baucus has released his long awaited Health Care legislation.The full text of the America’s Health Future Act is available here

Let me call your attention to just one aspect of the proposed bill from Senator Baucus's press release.

Americans who like their health insurance and want to keep it can do so.

Unfortunately you will not be able to keep your own health insurance if you like it. You see with this bill existing health insurance will be grandfathered. That means the insurance companies will not have any new customers in those plans after 1/1/2013. How many companies would stick with a product when by law they could not offer the product to new customers? Would you? If I told a customer this at best I would be guilty of an error of ommision--the failure to mention a material fact--and at worst I would be lying. The only plans insurers can sell after 1/1/2013 are those whose rates and benefits conform with an as yet uncreated health exchange whose edicts on rate setting will be enforcable or the grandfathered plans that have no growth prospects. But have no fear the government will be using the internet to make it easier for you to buy coverage they have defined through their newly created exchange.If you like and find it and the 1-800-medicare a bastion of information staffed by knowledgable call center personell who are unfailingly polite and extrardinarily helpful you are in luck.They should have trotted out the Guinness Guys for the Press conference. Brilliant! Politicans who missed the hundreds of thousands of Americans protesting on 912 in DC must think the average American has stupid painted across their forehead. Read for yourself from the press release.
Individual Market Reforms – The Mark would require insurance companies to issue coverage to all individuals regardless of health status; insurers would no longer be allowed to limit coverage based on pre-existing conditions. Limited variation in premium rates would be permitted for tobacco use, age, and family composition. Variation in rating would be allowed between geographic areas, but would not differ within a geographic area.

Small Group Market Reforms – Rating rules for the individual market would also apply to the small group market, as defined by states. This would include groups of one to 50 employees, but could include companies with up to 100 employees, depending on current state law.

Health Insurance Exchanges – The Mark would make purchasing health insurance coverage easier and more understandable by using the Internet to present consumers with available plans. The Mark would create state-based web portals, or “exchanges” that would direct consumers purchasing plans on the individual market to every health coverage option available in their zip code. The exchanges would offer standardized health insurance enrollment applications, a standard format companies would use to present their insurance plans, and standardized marketing materials. The exchanges would have a call center for customer support. The exchanges would also enable users to determine whether they are eligible for health care affordability tax credits or public programs and would enable consumers without access to the Internet to enroll through the mail or in person in a variety of locations.

Small Group Purchasing Through SHOP Exchanges − Under the Chairman’s Mark, small businesses would have access to state-based Small Business Health Options Program (SHOP) exchanges. These exchanges – like the individual market exchanges – would be web portals that make comparing and purchasing health care coverage easier for small businesses.

Transitioning to a Reformed Insurance Market – Once the insurance market reforms take effect, people who want to keep the insurance they have today can do so. Plans would be allowed to continue to offer the coverage they offer today and this coverage would be grandfathered. These grandfathered plans would only be available to those people who are enrolled today or, in the case of a small employer, to new employees and their dependents. People who qualify for the health care affordability tax credits in the reformed market would not be able to use the credits to purchase grandfathered plans. Tax credits would be offered only to purchase plans created in the reformed market that meet the new benefit standards.


Transitioning for Rating Requirements − Federal rating rules for the individual market (other than for grandfathered plans) would take effect by January 1, 2013. Federal rating rules for the small group market would be phased in over a period of up to five years, as determined by each state, with approval from the Secretary of HHS

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