Reform won't end cherry-picking by private insurers

All of the health care reform bills under consideration in Congress would prohibit insurance companies from refusing to cover people because of prior health problems. “Guaranteed issue” is the wonky name for this ban on discrimination because of pre-existing conditions. Unfortunately, various economists and health care experts told David Hilzenrath of the Washington Post that “simply banning medical discrimination would not necessarily remove it from the equation […].”

If insurers are prohibited from openly rejecting people with preexisting conditions, they could try to cherry-pick through more subtle means. For example, offering free health club memberships tends to attract people who can use the equipment, says Paul Precht, director of policy at the Medicare Rights Center.

Being uncooperative on insurance claims can chase away the chronically ill. For people who have few medical bills, it is less of a factor, said Karen Pollitz, research professor at the Georgetown University Health Policy Institute.

And to avoid patients with costly, complicated medical conditions, health plans could include in their networks relatively few doctors who specialize in treating those conditions, said Mark V. Pauly, professor of health-care management at the University of Pennsylvania’s Wharton School. […]

America’s Health Insurance Plans, a lobbying group for health insurers, has endorsed the idea of guaranteeing individuals access to coverage regardless of their medical history — if that guarantee is part of a larger plan to help the uninsured pay for coverage and bring everyone into the insurance market.

At a more nuts-and-bolts level, AHIP has been trying to shape the legislation in ways that could help insurers attract the healthy and avoid the sick, though it has given other reasons for advancing those positions. In a recent letter to Baucus, AHIP President Karen Ignagni said benefit packages “should give consumers flexible options to meet diverse needs.”

If the final health care reform bill has no public health insurance option, many chronically ill Americans are likely to be left outside the system as insurers find new ways of denying coverage or dropping policy-holders.

Even if the final bill includes a limited public option, cherry-picking by private insurers could set up the public plan for failure. President Obama has endorsed the idea of making the public option available only to people who are currently uninsured, meaning it will serve a disproportionate number of chronically ill people. That will drive up costs of operating the public plan.

I don’t have an answer for this problem, beyond feeling depressed that corporate groups like AHIP have so much sway with Congress. If Americans with prior health issues are still facing discrimination after Obama signs what he claims to be sweeping “health insurance reform,” the political backlash against Democrats could be severe.

UPDATE: MyDD user Bruce Webb wasn’t impressed by Hilzenrath’s article. I’ve posted his rebuttal after the jump.

Continue Reading...

No one could have seen this coming

I’m shocked, shocked to read that

Hospitals and insurance companies said Thursday that President Obama had substantially overstated their promise earlier this week to reduce the growth of health spending.

Mr. Obama invited health industry leaders to the White House on Monday to trumpet their cost-control commitments. But three days later, confusion swirled in Washington as the companies’ trade associations raced to tamp down angst among members around the country.

Jason Rosenbaum has more on the story at Health Care for America Now.

Looks like the White House was a bit too eager to herald a breakthrough with various interest groups that want to block serious health care reform.

I think David Sirota was on to something when he wrote on Monday,

Isn’t President Obama legitimizing voices that will use that added credibility later on to try to derail serious health care reform? Today’s press conference has the President of the United States effectively saying that the health insurance industry should have a major seat at the health-reform table – and that it should be trusted. But any serious health care reform will need to take on the health insurance industry in a way that will make that industry unhappy. When that eventually happens, won’t the previous efforts to legitimize the health insurance industry’s voice add credibility to its opposition to reform? […]

Obama’s political calculus throughout his life has been to avoid making enemies. He seems to believe that he can make lots of different interests happy – and on many issues, that’s certainly possible. But on some issues, like health care, it’s a binary fight: Either you appease the health industry and preserve the status quo they are making big bucks off of, or you take on the health industry and make real change. Touting the industry’s “voluntary” commitment to not rip off consumers seems more in the appeasing camp than in the “real change” camp.

Obama won’t be able to get the health care reform we need without making enemies among those who profit from the current system. When push comes to shove, he may need a dose of FDR’s “I Welcome Their Hatred” tonic.

Continue Reading...

Two ways of looking at today's health care reform news

The White House is making a huge deal out of a commitment to introduce cost-saving measures from “the presidents of Pharma, Advamed (device manufacturers), the American Medical Association (doctors), the American Hospital Association, America’s Health Insurance Plans, and SEIU’s Health Care project.”

The White House arranged an urgent Sunday-afternoon conference call with reporters to break the news, and President Obama went on tv on Monday to talk about it. (Click here for the transcript of Obama’s televised remarks.)

Unlike the 1970s, when stakeholders’ promises to hold down costs derailed legislative action on health care, Obama made clear today that the current agreement on savings is “complementary to and is going to be completely compatible with a strong, aggressive effort to move health care reform through here in Washington [….]”

It’s too early to know how significant today’s announcement will be, so I’m laying out the cases for optimism and pessimism after the jump.

Continue Reading...
View More...