Last Wednesday, The Washington Post told us the obvious: that “the fight over health-care legislation is saturating the summer airwaves, with groups on all sides of the debate pouring tens of millions of dollars into advertising campaigns designed to push the cause of reform forward, slow it down or stop it in its tracks.” It’s easy to be tempted to write the “fight on the airwaves” story and call it a day. We have a better idea: explain to all those perplexed people what the consumer protections President Obama promised will mean for them and for reform.
After all, these protections get to the heart of what the president has told us this effort was all about. He said it was about health insurance reform a few weeks ago in his TV address, and repeated that term again five times in his radio address this Saturday. Is he no longer calling for health care reform? And what the heck does ‘insurance reform’ mean for most average folks?
To help journalists and the public understand all this, I contacted Mila Kofman, the insurance superintendent for the state of Maine, who knows insurance regulation as well as anyone. A few takeaways: while some of Obama’s eight protections may be a real benefit to policyholders, others already exist, and reporters need to keep a careful eye on what happens to all of them as Congress and the special interests start fiddling with legislative language. Herewith is my consumer protection primer:
No discrimination for preexisting conditions. That’s a good thing, and insurers have agreed to eliminate health status as a factor for granting coverage in the individual market if every American is required to carry insurance one way or another. Right now, a few states restrict preexisting conditions clauses; the Health Insurance Portability and Accountability Act (HIPAA), passed in 1996, gives people the right to buy a policy in the individual market without regard to health problems if they do so within sixty-three days of losing coverage and if they have used up all their COBRA benefits. HIPAA, though, didn’t say anything about premiums, and so insurers in most states charge higher rates to discourage people with preexisting medical needs from signing up.
What to watch for: Lobbyists inserting language that limits insurers’ risks, like the restrictions in the HIPAA law that still make it difficult for sick people to obtain coverage. President Obama has been silent on the question of age rating, which serves as a proxy for using health as a factor in charging higher rates. Older people are likely to present more health risks and cost the insurers money. “As long as they can rate people up for age, that’s a proxy for health rating,” Kofman says.
No exorbitant out-of-pocket expenses, deductibles, or co-pays. Sounds reasonable. Insurance companies sell policies with protections for catastrophic expenses, called maximum out-of-pocket limits. However, some policies in the individual market don’t offer this protection, so requiring all policies to provide this is a step forward.
What to watch for: Lobbyists trying to water down the cap on individual expenses. The key here is what kind of services count toward the cap—deductibles, coinsurance, copays, drug expenses, medical care, and services that are not covered by insurance? In some current policies, visits to out-of-network specialists don’t count. Maximum out-of-pocket protection can still leave people at risk for thousands of dollars of expenses each year.
No cost-sharing for preventive care. Also good protection. Some policies simply cover preventive care without making policyholders pay coinsurance or copayments. Other policies, especially in the individual market, claim to cover preventive care but only after the annual deductible has been met. In other words, it’s an illusory benefit—especially when the deductible is more than a few hundred dollars, as many of them are these days. Obviously, it’s better to have a policy cover the care outright with minimum out-of-pocket expense.
What to watch for: Lobbyists trying to make some preventive care subject to deductibles, and imposing some cost-sharing requirements, thus weakening the protection. Also look at what is considered preventive care. Legislative wheeling and dealing may try to limit coverage to services that don’t cost very much.