Monday, March 29, 2010

What's In the Health Care Bill: Title I, Subtitle A. Immediate Improvements in Health Care Coverage for All Americans

This is part of a series in which I'm reading the health care bill, because I really don't know what to think of it without doing so. The introduction to the series is here. Title I, Subtitles B and C are here and here, respectively. The bill itself, as passed, is here.

Section 1001: Amendments to the Public Health Service Act.

Section 2711 [of the Public Health Service Act, that is -- the numbering confused me, too]. No lifetime or annual limits.
A group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish --
(1) lifetime limits on the dollar value of benefits for any participant or beneficiary; or
(2) unreasonable annual limits (within the meaning of section 223 of the Internal Revenue Code of 1986) on the dollar value of benefits for any participant or beneficiary.
This bit's kind of a big deal, since the abolition of annual and lifetime limits on coverage was an important aim of this legislation, in the administration's book. The tradeoff here is between the financial ruin of people with cancer (who will run up against the lifetime limits and have to pay for their own treatment) and slightly higher deductibles for everyone else -- and since the point of health insurance is to protect you from the financially ruinous aspects of illness, it's pretty clear what should be happening here.

But instead of abolishing annual limits, they seem to have abolished "unreasonable" annual limits, without defining what "unreasonable" means in this context. Section 223 of the Internal Revenue Code of 1986 is of no help -- it's about deductibles, which as far as I can tell are an unrelated issue.

EDIT: I misread this section of the Internal Revenue Code. Section 223(c) establishes a tax deduction for contributions to health savings accounts, which are only available to individuals who participate in "high-deductible insurance plans," which are defined as insurance plans that have deductibles greater than $1000 for individuals/$2000 for families, and have total out-of-pocket expenses less than $5,000 for individuals/$10,000 for families. I imagine that the idea of this reference is that if an annual limit makes a plan fail to meet this requirement, it's unreasonable.

It seems like any annual limit on coverage would at least have the potential to make people exceed this out-of-pocket limit, so I don't see how a reasonable out-of-pocket limit is possible. But it seems like if that were true, they wouldn't have specifically banned "unreasonable" ones.

Other people who have followed this better than I have are confused about this as well:
According to a CCH tax analyst, this means that "A plan can put in place annual limits so long as they do not circumvent the deductible and out-of-pocket expenses limitations in Code Sec. 223."
Consumer Reports also claims that the fact that saying they can't put limits on "dollar value" is a "loophole that would let insurers limit certain types of care, such as physical rehabilitation sessions or mental-health counseling." I take it what they mean is that if they phrase it in terms of the number of sessions covered, rather than the maximum number of dollars covered, it's legal.

Subsection (b) goes on to say that if a plan isn't required to provide essential health benefits, it can then go ahead and apply annual or lifetime limits on specific benefits -- I'm not sure yet who is required to provide essential health benefits, but my guess is that it's going to be a requirement for participation in the exchanges (the only reference here is to the definition of essential benefits). More on that when I get there.

Section 2712. Prohibition on rescissions.

They can't rescind your coverage unless you're fraudulent. They can only cancel your insurance if they tell you about it (that wasn't already in the law?), and only as permitted under section 2702(c) (which doesn't exist, as far as I can tell -- section 2702 is inserted by this bill, and doesn't have a subsection (c)) or under section 2742(b)*, which allows termination if you lie to them, don't pay your premiums, they stop offering coverage, or you move away from their area.

EDIT: 2702(c) does exist. It's an amended version of what's currently 2711(c), which section 1001 of this bill moves to section 2731, then edited and moved by section 1562(c)(8). You can find the current text of section 2711 here (note that subsections a, b, e and f are being cut completely). You can find amended versions of subsections (c) and (d) here. It allows them to not provide you coverage if they can't do so and still meet their existing obligations -- but if they do so, they have to do so uniformly, and can't offer coverage in that market for 180 days afterwards.

Section 2713. Coverage of preventive health services.

Health insurance providers have to cover vaccines and some other preventive care (stuff that's recommended by the United States Preventive Services Task Force) -- they get at least a year, and maybe more, to start providing coverage after recommendations are issued.

Section 2714. Extension of dependent coverage.

Extends dependent coverage to age 26 (but, interestingly, only if you're not married -- I suppose there's something to be said about how this reflects the problematic belief that marriage is a defining feature of adulthood) -- the Secretary of HHS decides who gets covered, but it specifies that children of dependents don't count (I suppose this is to make sure we're not creating incentives for people starting families to remain unmarried -- your parents' coverage won't cover your kids).

Section 2715. Development and utilization of uniform explanation of coverage documents and standardized definitions.

Pretty much what it sounds like. The Secretary of HHS develops the standards, in consultation with the people you'd expect (with a surprising specification that this include advocates for consumers with limited English ability) within 12 months -- insurers have to start providing this information within 24 months, both before and after you sign up. They allow that they provide them in electronic form (I'm not sure if this just means they have to publish it online, or whether "providing them in electronic form" means they have to make sure you can access them, and provide hard copy otherwise).

Section 2716. Prohibition of discrimination based on salary.

Employers/group health plans can't provide different coverage to higher-earning employees. It specifically says, though, that they can make higher-earning employees pay more for the same coverage -- my guess is that they could also price plans in ways that create de facto salary discrimination, by pricing them out of low-earning people's ability to contribute (since this isn't an "eligibility rule," it's not prohibited.

Section 2717. Ensuring the quality of care.

The Secretary of HHS will develop guidelines for reporting on the implementation of practices like"quality reporting, effective case management, care coordination, chronic disease management, and medication and care compliance initiatives... patient-centered education and counseling, comprehensive discharge planning, and post discharge reinforcement... best clinical practices, evidence based medicine, and health information technology... wellness and health promotion activities [examples given include smoking cessation, weight management, stress management, etc.]." Health insurance providers have to report on how their benefit structures encourage these sorts of practices every year, and make those reports available to enrollees; the Secretary will also make them available online.

The Secretary of HHS will also write "regulations that provide criteria for determining whether a reimbursement structure" meets the requirements shown above. The GAO will report to the House and Senate committees on the impact of this on quality and cost of health care.

This section strikes me as the creation of meaningless reporting procedures that will lead to exactly nothing.

Section 2718. Bringing down the cost of health care coverage.

Health insurance companies have to submit a report to HHS each year detailing how they spent their premium revenue. If they spend more than specific percentages (20% for group plans, 25% for individual plans) on non-claims costs other than "activities that improve health care quality," they have to reimburse customers (this bit expires in 2013, presumably because something else will go into effect then). States can lower the 20% and 25% levels, but (for individual plans) not if the Secretary of HHS thinks it'll destabilize the health insurance market in the state.

This section also strikes me as bullshit. You can cover all kinds of bureaucratic hogwash under "activities that improve health care quality" (although it does say the Secretary of HHS and the National Association of Insurance Commissioners will establish uniform definitions, I don't have much faith in this process), so my guess is that mostly the only things that will go under the "other costs" heading are the legal department and high-level executive compensation. 20-25% for those sorts of costs sounds preposterously high -- even if you include a whole host of other stuff, the idea that only three quarters of your health insurance premiums are spend on anything that could reasonably be classified as health care is fucking sad.

Also, the worry that states will destabilize the health insurance market is telling. I thought the point was to destabilize the health insurance market, because the health insurance market is a racket.

Section 2719. Appeals process.

Insurance companies have to provide an internal appeals process, and an external review process that meets the standards set by the National Association of Insurance Commissioners; they have to tell consumers about these processes.

Section 1002. Health insurance consumer information.

The Secretary of HHS will provide grants for states to create health insurance consumer assistance and/or ombudsman programs. These programs help you with the appeals process, track the problems consumers have and report this data to HHS, educate you about your rights, help you enroll, and help you with health-insurance-related tax issues.

This program gets $30 million in its first year (FY 2010, by Sec. 1004 below). To me, that indicates that this provision is a joke -- that's ten cents per American in its first year of operation. Assuming all of it went to workers making minimum wage who were actually directly helping people, and assuming funding increases about as fast as the minimum wage, you're entitled to about one hour of ombudsman time in your entire life. Given that those assumptions are preposterously generous, you're probably allocated more like fifteen minutes. Again, that's not per year -- it's per lifetime.

Section 1003. Ensuring that consumers get value for their dollars.

Health insurance issuers have to publish justifications of "unreasonable" premium increases before they go into effect. There's no word on what "unreasonable" means, so this seems pretty toothless. States report to the Secretary of HHS about patterns in premium increases, and may recommend that issuers be excluded from their health insurance exchanges because they keep hiking premiums. HHS gets $250 million to spend on grants for this purpose, which I take it is supposed to last until 2014. Grants to states have to be between $1 million and $5 million per year per state, if they have a qualifying program (so giving New York as much money per person as Alaska is out of the question).

Section 1004. Effective dates.

Everything in this subtitle goes into effect in six months, except sections 1002 and 1003, which go into effect beginning in fiscal year 2010.

*I can't find anywhere where the Public Health Service Act's sections are numbered starting with "27," the way they reference them here. If anyone can explain the difference between this citation and the actual section number, I'm interested.

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