Last Thursday, in an attempt to counter the health reform misinformation being propagated by President Obama’s ideological opponents, presidential adviser David Axelrod sent a “Dear Friend” e-mail to scads of people, informing them about eight ways reform provides security to people with and without health coverage; eight common myths about reform; and eight reasons we need health reform now. After receiving the Axelrod letter, someone told me it was “something that made sense about the health care reform discussion.” But another person, whose specialty is health care communications, offered a different take. The e-mail is puzzling, he told me. Some of it doesn’t make sense. So I decided to give it a careful read.
Eight ways reform provides security and stability. These are the same consumer protections the president announced earlier. They include ending discrimination for preexisting health conditions; ending gender discrimination; ensuring carriers don’t drop coverage for the seriously ill; and guaranteeing insurance renewal. As we noted last week, these protections are important—but there’s much more to the story than the White House told. Axelrod’s e-mail didn’t discuss the loopholes in some of these protections—loopholes the public should know about, lest they be surprised when their coverage isn’t what they expected.
Take the one about requiring insurers to cover everybody, no matter how sick they are. But will insurers still be allowed to charge older people more money? That’s the case in Massachusetts, where older people are having a hard time affording coverage. As Maine’s superintendent of insurance, Mila Kofman, told Campaign Desk, “As long as they can rate people up for age, that’s a proxy for health rating.” So what will really change for the carriers?
Or consider another protection—barring insurers from dropping coverage for seriously ill people. Federal law already prevents this, but companies have found a way around it by closing off so-called “blocks of business” which include a lot of sick, expensive policyholders. Insurers direct new, healthy policyholders to other coverage, and leave the sick people behind in what’s called a “death spiral.” Eventually these people will drop their coverage because it becomes unaffordable—which is exactly what companies want them to do. So the presidential promise of protection is meaningless unless companies are also prohibited from engaging in these practices. The White House hasn’t said where it stands on that one.
The president has said that insurance companies must guarantee to renew all policies—but, again, federal law already says all health insurance is guaranteed renewable. The crucial question here is whether companies will be allowed to rescind policies for fraud and misrepresentation, using tactics that hurt consumers—like paying bonuses to company employees if they find any shred of evidence that the policyholder forgot about some long-ago minor illness and “lied” on the application. If insurers insist on such a provision, who will the White House side with?
Eight common myths about health insurance reform. Here’s where Axelrod’s e-mail really got confusing. It was hard to tell whether the myth was the solution or the solution the myth. “Reform will stop ‘rationing’ not increase it,” the e-mail says. That seems like the solution to the “common myth” that a government takeover will lead to rationing. Reform, Axelrod explains, will forbid many forms of rationing now used by insurance companies.
That may happen, or it may not, depending on how forceful the White House will be when push comes to shove in the back rooms of Congress. But there’s a good chance people who don’t qualify for subsidies or can’t afford mandated insurance even with those subsidies will still find that care is rationed, because they have no money to pay for it. No longer is anyone talking about a truly universal health care system that would guarantee care for everyone. The current bills envision that some people will always be excluded. Congress is still trying to decide which ones.