Heath Scare! Tricks or Treats?

Well we are all bombarded now with the messages and images of the Great Health Care Debate of Late (’09 just didn’t rhyme). In this tug-o-war we have the Republicans trying to preserve the profits of their corporate base and the Democratic President and his Congressional support trying to bring government to the rescue again. We in the middle, the general public, the small business owners and even corporations unrelated to the health care industry, are the targets of the differing messages and then we have the “Blue Dog” Democratic Caucus running interference.

Before going into the hyperbole and claims of the ads and talking points of the pundits, I would first like to go through the existing legislation as it exists today and highlight the portions of the bill that I have comment or concerns on. The full text of the bill can be found at this link: http://thomas.loc.gov/cgi-bin/query/F?c111:1:./temp/~c111GZYY54:e21369:

NOTE – It does take me some time to read and re-read the bill to gain a clear understanding of what is being stated. If I have anything wrong or have misinterpreted something within this Bill, please bring it to my attention.

So let’s begin:

SEC. 100. PURPOSE; TABLE OF CONTENTS OF DIVISION; GENERAL DEFINITIONS.

(a) Purpose-

(1) IN GENERAL- The purpose of this division is to provide affordable, quality health care for all Americans and reduce the growth in health care spending.

(2) BUILDING ON CURRENT SYSTEM- This division achieves this purpose by building on what works in today's health care system, while repairing the aspects that are broken.

(3) INSURANCE REFORMS- This division--

(A) enacts strong insurance market reforms;

(B) creates a new Health Insurance Exchange, with a public health insurance option alongside private plans;

(C) includes sliding scale affordability credits; and

(D) initiates shared responsibility among workers, employers, and the government;

so that all Americans have coverage of essential health benefits.

(4) HEALTH DELIVERY REFORM- This division institutes health delivery system reforms both to increase quality and to reduce growth in health spending so that health care becomes more affordable for businesses, families, and government.

(b) Table of Contents of Division- The table of contents of this division is as follows:

Sec. 100. Purpose; table of contents of division; general definitions.

As stated in my blog “My Political Views” section, I have a great desire to see the intent and design of laws adhered to and weighed just as heavily, without contradiction, in comparison to the letter of the laws. I hope this SEC. 100. will be protected in this manner.

OK, let’s move on to:

SEC. 102. PROTECTING THE CHOICE TO KEEP CURRENT COVERAGE.

(a)

(3) RESTRICTIONS ON PREMIUM INCREASES- The issuer cannot vary the percentage increase in the premium for a risk group of enrollees in specific grandfathered health insurance coverage without changing the premium for all enrollees in the same risk group at the same rate, as specified by the Commissioner.

Basically this protects those enrolled in a current health care policy from having their benefits taken or changed by this current legislation. I highlight this section, because I worry that current insurers may attempt to “parse verbiage” to price out existing policy holders while still adhering to law? This goes to an overall concern of mine that private corporations may attempt to use a public option to push those who are sick or suffering from chronic health problems into the Public Option, thus enabling them to offer the lowest price point exclusively for healthy people, while the sick and suffering are forced into the Public Option, which will inherently increase its price point, creating a further drag on the economy.

To counterpoint my own concern and add to the dialog, I believe that the only real antidote to this potential malady would be for the public option to cover the preventative care and other cost prohibitive services and treatments current private policy options generally disallow to fight the affects of these people with such illnesses. However that will mean more upfront costs while striving to achieve a lower cost in the future and hopefully achieving a public with a higher measurement of health, and, in turn productivity. I think I could go back and forth on this almost in perpetuity.

In this same section:

(b) Grace Period for Current Employment-based Health Plans-

This is where it gets thick…

(1) GRACE PERIOD-

(A) IN GENERAL- The Commissioner shall establish a grace period whereby, for plan years beginning after the end of the 5-year period beginning with Y1, an employment-based health plan in operation as of the day before the first day of Y1 must meet the same requirements as apply to a qualified health benefits plan under section 101, including the essential benefit package requirement under section 121.

Five years for a current insurer to get their employer based policies compliant with the standards and requirements of the sections describing “qualified health benefits”? Longer than a presidential term but shorter than a Senators term, however, most likely overlapping them all depending upon when this might be passed. That is enough time for the Corporations of Big Health to gather their resources to attempt political upheaval and change instead of implementing the required changed to their companies and products. We’ll hear of nightmare stories of how the new system is a failure, while those companies have not even made any changes yet, while crying wolf. You will know this to be true if they are successful in their attempt and the law is revoked or scuttled before the 5 year grace period or if they are unsuccessful and they all race to be granted extensions of the grace period toward the end of the 5 year time table. All moves that will cost consumers and taxpayers alike.

They should change the grace period to a more reasonable 2-3 years to avoid the probable pratfalls of a dishonest dance of corporate manipulation.

Now in the course of this entire subsection it refers to 2 other Acts:

Section 3001(a)(1)(B)(ii)(IV) of division B of the American Recovery and Reinvestment Act of 2009 (Public Law 111-5)

Section 733(c) of the Employee Retirement Income Security Act of 1974 including paragraph (3)(A)

These are exceptions to the grace period. If the existing employer based coverage consists only of these requirement stated within these sections of these other Acts, then those policies will receive no grace period, and would have to be changed to become compliant or the employer or policy holders can go to the Public Option.

To my estimation, it seems that there is already a set minimal coverage requirement set by these preexisting laws and that if your employer based policy is set at only those minimums, there is no grace period, the products must change before Year 1 of the enactment of this Act. If your current employer based policy exceeds these already set minimums but does not meet the required minimum coverage requirements set by this Act, those insurers have a 5 year grace period to make the necessary changes to become compliant with this Act. If your current employer based policy already exceeds the minimum requirements of coverage defined by this Act, then there is no needed change to your existing policy.

There is a similar subsection about individual plans under this “Grandfather Clause”.

Next:

SEC. 111. PROHIBITING PRE-EXISTING CONDITION EXCLUSIONS.

A qualified health benefits plan may not impose any pre-existing condition exclusion (as defined in section 2701(b)(1)(A) of the Public Health Service Act) or otherwise impose any limit or condition on the coverage under the plan with respect to an individual or dependent based on any health status-related factors (as defined in section 2791(d)(9) of the Public Health Service Act) in relation to the individual or dependent.

Good! Unless this section 2701(b)(1)(A) and section 2791(d)(9) of the Public Health Service Act somehow becomes some kind of loophole in this prohibition of pre-existing conditions clause…

SEC. 114. NONDISCRIMINATION IN BENEFITS; PARITY IN MENTAL HEALTH AND SUBSTANCE ABUSE DISORDER BENEFITS.

(a) Nondiscrimination in Benefits- A qualified health benefits plan shall comply with standards established by the Commissioner to prohibit discrimination in health benefits or benefit structures for qualifying health benefits plans, building from sections 702 of Employee Retirement Income Security Act of 1974, 2702 of the Public Health Service Act, and section 9802 of the Internal Revenue Code of 1986.

(b) Parity in Mental Health and Substance Abuse Disorder Benefits- To the extent such provisions are not superceded by or inconsistent with subtitle C, the provisions of section 2705 (other than subsections (a)(1), (a)(2), and (c)) of section 2705 of the Public Health Service Act shall apply to a qualified health benefits plan, regardless of whether it is offered in the individual or group market, in the same manner as such provisions apply to health insurance coverage offered in the large group market.

I am highlighting this section, not so much because of what it seems to say about nondiscrimination and parity in mental health and substance abuse disorder, but to note the fact that, again, these prior Acts are continually cited and used to give substance to this Act. They have been referenced at least a half dozen times to this point in the Bill. On one hand I am concerned about what they may mean for this Act, but on the other hand, I’m afraid if I pry those open it may lead me tumbling down the rabbit hole of eternal legislative darkness and confusion. I think I now know what may have been in the back of Barack Obama’s head when he was referencing the Matrix’s “Red Pill \ Blue Pill” choice, while making an analogy to the nation during his press conference on Health Care Reform.

I also underlined a word in this section that seems to have been misspelled or be a typo. Or, actually, MS Word caught the potential error, and I’ll never admit to how many of my spelling and grammatical gaffs it catches and correct for me!

SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.

(a) In General- A qualified health benefits plan shall meet a medical loss ratio as defined by the Commissioner. For any plan year in which the qualified health benefits plan does not meet such medical loss ratio, QHBP offering entity shall provide in a manner specified by the Commissioner for rebates to enrollees of payment sufficient to meet such loss ratio.

(b) Building on Interim Rules- In implementing subsection (a), the Commissioner shall build on the definition and methodology developed by the Secretary of Health and Human Services under the amendments made by section 161 for determining how to calculate the medical loss ratio. Such methodology shall be set at the highest level medical loss ratio possible that is designed to ensure adequate participation by QHBP offering entities, competition in the health insurance market in and out of the Health Insurance Exchange, and value for consumers so that their premiums are used for services.

If I am reading this section correctly, then this is basically putting a cap on the profits of insurers by establishing a cost ratio that must be kept and if the cost ratio is exceeded then there must be some measure of recourse by rebate and premium lowering to wring out those excesses.

On one hand I am all for this. While it is disturbing that it is so necessary that our government interfere with and involve themselves with such intimate aspects of our private market, it is the abuses of the major players of those private markets that have deemed it necessary, and if anyone wants to rail against this or wail about the woes of government intervention, your voices are better pointed toward the abusers that have destabilized our nation and economy than those who are, with good intentions, trying to fix these inequities.

Our health and very lives should NEVER be the leverage for corporate extortion to feed their systems never ending greed.

One the other hand, what concerns me is that so many of the actual details of this Act, including this cost ratio, is to be set by the future Commissioner, instead of by this Act alone. This will inevitably mean that any and all measures of equality, affordability and access to health care will wane and wax in proportion to the political tides.

Slowly we begin the process of revealing the Bill. Throughout this Bill, there are references to terms and items that are not explained until later into the Bill. The following section proves to be a perfect example of this:

SEC. 121. COVERAGE OF ESSENTIAL BENEFITS PACKAGE.

(a) In General- A qualified health benefits plan shall provide coverage that at least meets the benefit standards adopted under section 124 for the essential benefits package described in section 122 for the plan year involved.

(b) Choice of Coverage-

(1) NON-EXCHANGE-PARTICIPATING HEALTH BENEFITS PLANS- In the case of a qualified health benefits plan that is not an Exchange-participating health benefits plan, such plan may offer such coverage in addition to the essential benefits package as the QHBP offering entity may specify.

(2) EXCHANGE-PARTICIPATING HEALTH BENEFITS PLANS- In the case of an Exchange-participating health benefits plan, such plan is required under section 203 to provide specified levels of benefits and, in the case of a plan offering a premium-plus level of benefits, provide additional benefits.

(3) CONTINUATION OF OFFERING OF SEPARATE EXCEPTED BENEFITS COVERAGE- Nothing in this division shall be construed as affecting the offering of health benefits in the form of excepted benefits (described in section 102(b)(1)(B)(ii)) if such benefits are offered under a separate policy, contract, or certificate of insurance.

(c) No Restrictions on Coverage Unrelated to Clinical Appropriateness- A qualified health benefits plan may not impose any restriction (other than cost-sharing) unrelated to clinical appropriateness on the coverage of the health care items and services.

To understand what the term “EXCHANGE” actually means as it pertains to this Bill, you have to peek down to Title II of the Bill. To give you that preview, The “EXCHANGE” is what has been mentioned in the press and the media as “The Gateway”. This is where private insurers can offer policies that adhere to the requirements of coverage and service stated within the Bill can be offered to both employers and individuals, along with the Public Option, as government approved and sponsored health care policies that can be purchased. However, not only does the offered policy have to be approved but so do the individuals and employers that may want to purchase health care plan policies from this Exchange. These limitations will be explained later in Title II of Bill 3200. I kind of think that Title II should have been Title I.

This particular section explains that there will be private options that are part of the Exchange as they adhere to the minimum requirements of coverage, service, accessibility and costs of the Exchange, there will be private policy options that only adhere to the minimums of the essential benefits package or may offer coverage beyond that and that there can be offered separate policy of additional benefits coverage that can be added to the coverage of another or existing policy as long it is offered as a separate policy.

The last paragraph seems to say that insurers can no longer deny any treatment except to adjust the cost sharing or co-pay of any treatment and except for cases of “clinical appropriateness”.

Unless there is a provision later in this Bill that deals with what “clinical appropriateness” is and who can deem it so or not, then I have a problem with this. The biggest problem in our current health care system is that the big insurers and HMO’s purchase Dr.’s and put them on their payroll for the express purpose of putting forth compromised and illegitimate medical arguments (crafted with all due and unnecessary medical lingo possible to appear legitimate and confuse the watchdogs as much as possible) to excuse insurers from having to pay some of the heft that comes with certain procedures and treatments.

Now we come to a big reveal:

SEC. 122. ESSENTIAL BENEFITS PACKAGE DEFINED.

(a) In General- In this division, the term `essential benefits package' means health benefits coverage, consistent with standards adopted under section 124 to ensure the provision of quality health care and financial security, that--

(1) provides payment for the items and services described in subsection (b) in accordance with generally accepted standards of medical or other appropriate clinical or professional practice;

(2) limits cost-sharing for such covered health care items and services in accordance with such benefit standards, consistent with subsection (c);

(3) does not impose any annual or lifetime limit on the coverage of covered health care items and services;

(4) complies with section 115(a) (relating to network adequacy); and

(5) is equivalent, as certified by Office of the Actuary of the Centers for Medicare & Medicaid Services, to the average prevailing employer-sponsored coverage.

(b) Minimum Services To Be Covered- The items and services described in this subsection are the following:

(1) Hospitalization.

(2) Outpatient hospital and outpatient clinic services, including emergency department services.

(3) Professional services of physicians and other health professionals.

(4) Such services, equipment, and supplies incident to the services of a physician's or a health professional's delivery of care in institutional settings, physician offices, patients' homes or place of residence, or other settings, as appropriate.

(5) Prescription drugs.

(6) Rehabilitative and habilitative services.

(7) Mental health and substance use disorder services.

(8) Preventive services, including those services recommended with a grade of A or B by the Task Force on Clinical Preventive Services and those vaccines recommended for use by the Director of the Centers for Disease Control and Prevention.

(9) Maternity care.

(10) Well baby and well child care and oral health, vision, and hearing services, equipment, and supplies at least for children under 21 years of age.

(c) Requirements Relating to Cost-sharing and Minimum Actuarial Value-

(1) NO COST-SHARING FOR PREVENTIVE SERVICES- There shall be no cost-sharing under the essential benefits package for preventive items and services (as specified under the benefit standards), including well baby and well child care.

(2) ANNUAL LIMITATION-

(A) ANNUAL LIMITATION- The cost-sharing incurred under the essential benefits package with respect to an individual (or family) for a year does not exceed the applicable level specified in subparagraph (B).

(B) APPLICABLE LEVEL- The applicable level specified in this subparagraph for Y1 is $5,000 for an individual and $10,000 for a family. Such levels shall be increased (rounded to the nearest $100) for each subsequent year by the annual percentage increase in the Consumer Price Index (United States city average) applicable to such year.

(C) USE OF COPAYMENTS- In establishing cost-sharing levels for basic, enhanced, and premium plans under this subsection, the Secretary shall, to the maximum extent possible, use only copayments and not coinsurance.

(3) MINIMUM ACTUARIAL VALUE-

(A) IN GENERAL- The cost-sharing under the essential benefits package shall be designed to provide a level of coverage that is designed to provide benefits that are actuarially equivalent to approximately 70 percent of the full actuarial value of the benefits provided under the reference benefits package described in subparagraph (B).

(B) REFERENCE BENEFITS PACKAGE DESCRIBED- The reference benefits package described in this subparagraph is the essential benefits package if there were no cost-sharing imposed.

I have no problems with Section 122 (a) or (b) and (c) (1) I applaud, however I have some concerns with (c) (2) (B) where they put in place a system for price increases but not price decreases. I could see where another boom and bust market cycle could price out certain Americans out of a policy, which is not offered through the Exchange (including the Public Option), that a consumer prefers to have. However, due to the fact that it is stated that the Public Option would include a price scale dependant upon an individuals or employers resources and ability to pay, it still beats being completely left out in the cold.

I also like (c) (2) (c) and (3) where it states that these policies may not share any more than 30% of the costs with the policy holder(s) and that the use of copayments, not coinsurance will be used to determine the value of cost sharing. That seems fair.

The next two sections deal with the formation of a Health Benefits Advisory Committee and a Process for Adoption of Recommendations, so I’ll skip those and move to:

Subtitle D--Additional Consumer Protections

Now overall, I do have a concern right off, where Americans at the lower levels of our economy may be targeted for and fall victim to unscrupulous companies and unethical policies, unless the Commissioner and the governing committee takes proactive steps, instead of sitting back waiting for consumer complaints, or, at least, there is some easily accessible and no cost way to make said complaints.

Then again, there is a series of subtitles and sections dedicated to defining the governance, duties and responsibilities of the Commissioner and other posts and positions created by this Act.

So I’ll skip to what just may be the biggest weakness and largest loophole of this Bill:

Subtitle F--Relation to Other Requirements; Miscellaneous

SEC. 151. RELATION TO OTHER REQUIREMENTS.

(a) Coverage Not Offered Through Exchange-

(1) IN GENERAL- In the case of health insurance coverage not offered through the Health Insurance Exchange (whether or not offered in connection with an employment-based health plan), and in the case of employment-based health plans, the requirements of this title do not supercede any requirements applicable under titles XXII and XXVII of the Public Health Service Act, parts 6 and 7 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, or State law, except insofar as such requirements prevent the application of a requirement of this division, as determined by the Commissioner.

(2) CONSTRUCTION- Nothing in paragraph (1) shall be construed as affecting the application of section 514 of the Employee Retirement Income Security Act of 1974.

(b) Coverage Offered Through Exchange-

(1) IN GENERAL- In the case of health insurance coverage offered through the Health Insurance Exchange--

(A) the requirements of this title do not supercede any requirements (including requirements relating to genetic information nondiscrimination and mental health) applicable under title XXVII of the Public Health Service Act or under State law, except insofar as such requirements prevent the application of a requirement of this division, as determined by the Commissioner; and

(B) individual rights and remedies under State laws shall apply.

(2) CONSTRUCTION- In the case of coverage described in paragraph (1), nothing in such paragraph shall be construed as preventing the application of rights and remedies under State laws with respect to any requirement referred to in paragraph (1)(A).

OK let me get this straight. This Bill that may become an Act and Federal Law can NOT supercede (I’m not convinced that MS Word is actually correct about this word or not, which is why I highlighted it and let it stand…I’ll check on it later) even STATE LAW? I thought Federal Law always superceded State Law! So if State law can trump this Act, then how much of this Act could be scuttled and rendered null and void?

Let me provide a perfect example of what I am talking about with this next portion just 2 sections later:

SEC. 153. WHISTLEBLOWER PROTECTION.

(a) Retaliation Prohibited- No employer may discharge any employee or otherwise discriminate against any employee with respect to his compensation, terms, conditions, or other privileges of employment because the employee (or any person acting pursuant to a request of the employee)--

(1) provided, caused to be provided, or is about to provide or cause to be provided to the employer, the Federal Government, or the attorney general of a State information relating to any violation of, or any act or omission the employee reasonably believes to be a violation of any provision of this Act or any order, rule, or regulation promulgated under this Act;

(2) testified or is about to testify in a proceeding concerning such violation;

(3) assisted or participated or is about to assist or participate in such a proceeding; or

(4) objected to, or refused to participate in, any activity, policy, practice, or assigned task that the employee (or other such person) reasonably believed to be in violation of any provision of this Act or any order, rule, or regulation promulgated under this Act.

(b) Enforcement Action- An employee covered by this section who alleges discrimination by an employer in violation of subsection (a) may bring an action governed by the rules, procedures, legal burdens of proof, and remedies set forth in section 40(b) of the Consumer Product Safety Act (15 U.S.C. 2087(b)).

(c) Employer Defined- As used in this section, the term `employer' means any person (including one or more individuals, partnerships, associations, corporations, trusts, professional membership organization including a certification, disciplinary, or other professional body, unincorporated organizations, nongovernmental organizations, or trustees) engaged in profit or nonprofit business or industry whose activities are governed by this Act, and any agent, contractor, subcontractor, grantee, or consultant of such person.

(d) Rule of Construction- The rule of construction set forth in section 20109(h) of title 49, United States Code, shall also apply to this section.

Here in Colorado, all employment is “at will” employment, which basically means that an employer may terminate any employee for any reason at any time. If this means that the laws providing employers relief from recourse stemming from the firing of employees (except those circumstance provided for by law in regards to discrimination and sexual harassment), wouldn’t those laws supercede this Act and render those protections void?

How much of this bill could be invalidated by existing or new State Laws that may be enacted in the future to beg off the requirements of this Bill? It would, in some ways, make it easier for Big Health to gut this potential Act and it certainly can’t make anyone in need of this important piece of legislative reform living in, oh let’s say, Texas, feel hopeful. I hope I am missing something here.

This leads us to the next portion:

Subtitle G--Early Investments

SEC. 161. ENSURING VALUE AND LOWER PREMIUMS.

(a) Group Health Insurance Coverage- Title XXVII of the Public Health Service Act is amended by inserting after section 2713 the following new section:

Now this is interesting. This possible Act, which can not supercede the previous Acts it references and any applicable State Laws, is now amending one of those Acts, and another one mentioned later in this Subtitle. Basically these amendments deal with the addition of certain aspects of this Act in regards to the medical cost ratio and insurer rescissions of insurance policies. Afterward it amends another previous Act in regards to Administrative Simplification and Standardize Electronic Administrative Transactions.

Now get this, in Section 164, defining a Reinsurance Program for Retirees, it states that any appropriations from the Retiree Reserve Trust Fund “…shall not be taken into account for purposes of any budget enforcement procedures including allocations under section 302(a) and (b) of the Balanced Budget and Emergency Deficit Control Act…”. I didn’t realize they even had to mention that Act anymore. It seemed that it was pretty well understood that the only reason why Congress applauded then President Clinton after signing that Act into law was to simultaneously crumple and wad up that bill before tossing it over their collective shoulders, discarding it.

What I don’t get is why they wouldn’t just make this Act supercede these previous Acts and State Laws instead of wording this Bill to awkwardly be subservient to those previous laws while simultaneously adding to and changing those laws. This reeks of being a loophole landmine to me. Maybe one of you out there can point out the logic of going about reform this way to me and explain the benefits or necessities of this seemingly odd tactic.

Outside of that overall concern, the only other things I would like to point out in these sections would be:

SEC. 1173A. STANDARDIZE ELECTRONIC ADMINISTRATIVE TRANSACTIONS.

`(a) Standards for Financial and Administrative Transactions-

(2) GOALS FOR FINANCIAL AND ADMINISTRATIVE TRANSACTIONS- The goals for standards under paragraph (1) are that such standards shall--

(A) be unique with no conflicting or redundant standards;

`(B) be authoritative, permitting no additions or constraints for electronic transactions, including companion guides;

`(C) be comprehensive, efficient and robust, requiring minimal augmentation by paper transactions or clarification by further communications;

The HIPAA Laws were supposed to tackle some of the problem with insurers using non-standard number systems so that claims would get the first round of instant denials the industry so desperately seeks by instituting (among other things) a claim numbering system that was spelled out very clearly, so that both traditional and electronic processing of claims by the billing professionals of health care providers could avoid the instant denials and get quickly to the payment or justified (at least supposed justified) denials of claims. Instead, insurers quickly did silly things like add another numerical or alpha character to those numbers, creating the instant denials they had enjoyed before. If things like these are not enforced, then costs will not come down as much as they should. People have no idea how many infantile and illegal games Big Health companies play to protect their coffers, hoping to pad their profits, or at least gamble those monies on the stock market to make money with that money for as long as possible, before they have to pay it out. This is a measurable amount of the exploded cost of health care that we, the consumers and taxpayers, invariably pay for.

`(D) enable the real-time (or near real-time) determination of an individual's financial responsibility at the point of service and, to the extent possible, prior to service, including whether the individual is eligible for a specific service with a specific physician at a specific facility, which may include utilization of a machine-readable health plan beneficiary identification card;

Could this be another point of entry for Identity Theft or some new like crime? I am concerned about how much personal information may be linked to these cards and how they might be exploited by the criminal element, private corporations or even the government. We are definitely entering the boundary waters of technology that can cut costs and improve efficiencies but also lead to abuse and misuse. Although there are several parts of this sections that does address the governing of the abuse and misuse of this data, it still comes down to enforcement. I sincerely hope this will not be another toothless piece of legislature when all is said and done.

OK so now we get to The Exchange:

TITLE II--HEALTH INSURANCE EXCHANGE AND RELATED PROVISIONS

Subtitle A--Health Insurance Exchange

SEC. 201. ESTABLISHMENT OF HEALTH INSURANCE EXCHANGE; OUTLINE OF DUTIES; DEFINITIONS.

(a) Establishment- There is established within the Health Choices Administration and under the direction of the Commissioner a Health Insurance Exchange in order to facilitate access of individuals and employers, through a transparent process, to a variety of choices of affordable, quality health insurance coverage, including a public health insurance option.

Basically this is the gateway for employers and individuals to purchase a health benefit plan that is qualified by the government and participates in this market or Exchange, including the Public Option. But we are all not automatically eligible for the Exchange…

SEC. 202. EXCHANGE-ELIGIBLE INDIVIDUALS AND EMPLOYERS.

(a) Access to Coverage- In accordance with this section, all individuals are eligible to obtain coverage through enrollment in an Exchange-participating health benefits plan offered through the Health Insurance Exchange unless such individuals are enrolled in another qualified health benefits plan or other acceptable coverage.

This section begins with talking about individual eligibility but we will soon see that employers will also have to be deemed eligible by the Commissioner into order to purchase from the Exchange as seen here:

(b) Definitions- In this division:

(1) EXCHANGE-ELIGIBLE INDIVIDUAL- The term `Exchange-eligible individual' means an individual who is eligible under this section to be enrolled through the Health Insurance Exchange in an Exchange-participating health benefits plan and, with respect to family coverage, includes dependents of such individual.

(2) EXCHANGE-ELIGIBLE EMPLOYER- The term `Exchange-eligible employer' means an employer that is eligible under this section to enroll through the Health Insurance Exchange employees of the employer (and their dependents) in Exchange-eligible health benefits plans.

So what makes an individual or employer eligible? I’ll try to parse through and make that as succinct as possible by paraphrasing the next sections dealing with that. I would copy and paste them and then comment, like I have been, except there is so much text and I am already concerned about the length of this post.

A qualifying individual is describes as someone who is does not have coverage either for themselves or from an employer or they are self employed without acceptable coverage.

Employers are defined as anyone who is self employed and has at least one employee, then there are different levels of employers by size, measured primarily by the number of employees that employer has.

Those with acceptable coverage are excluded from being able to purchase health options from the Exchange. Acceptable coverage is defined as:

(2) ACCEPTABLE COVERAGE- For purposes of this division, the term `acceptable coverage' means any of the following:

(A) QUALIFIED HEALTH BENEFITS PLAN COVERAGE- Coverage under a qualified health benefits plan.

(B) GRANDFATHERED HEALTH INSURANCE COVERAGE; COVERAGE UNDER CURRENT GROUP HEALTH PLAN- Coverage under a grandfathered health insurance coverage (as defined in subsection (a) of section 102) or under a current group health plan (described in subsection (b) of such section).

(C) MEDICARE- Coverage under part A of title XVIII of the Social Security Act.

(D) MEDICAID- Coverage for medical assistance under title XIX of the Social Security Act, excluding such coverage that is only available because of the application of subsection (u), (z), or (aa) of section 1902 of such Act.

(E) MEMBERS OF THE ARMED FORCES AND DEPENDENTS (INCLUDING TRICARE)- Coverage under chapter 55 of title 10, United States Code, including similar coverage furnished under section 1781 of title 38 of such Code.

(F) VA- Coverage under the veteran's health care program under chapter 17 of title 38, United States Code, but only if the coverage for the individual involved is determined by the Commissioner in coordination with the Secretary of Treasury to be not less than a level specified by the Commissioner and Secretary of Veteran's Affairs, in coordination with the Secretary of Treasury, based on the individual's priority for services as provided under section 1705(a) of such title.

(G) OTHER COVERAGE- Such other health benefits coverage, such as a State health benefits risk pool, as the Commissioner, in coordination with the Secretary of the Treasury, recognizes for purposes of this paragraph.

The Commissioner shall make determinations under this paragraph in coordination with the Secretary of the Treasury.

There are also exceptions that may be applicable to certain individuals mentioned later.

The next section deals with the requirements that must be met by insurers before the Commissioner can enter into a contract for that insurer to offer a policy on the Exchange. More or less, it states that the insurer must already offer a qualified basic package lever plan. If they offer a Basic Plan then they can offer an Enhanced Plan, and if they offer an Enhanced Plan, then they can offer a Premium Plan and if they offer a Premium Plan then they can offer a Premium-Plus Plan. In short, a provider can not just offer a deluxe plan or suite of deluxe plans. They must offer first a basic plan before they can offer any plans that would include more coverage and services at greater premiums.

Those plan levels are defined by the following:

(c) Specification of Benefit Levels for Plans-

(1) IN GENERAL- The Commissioner shall establish the following standards consistent with this subsection and title I:

(A) BASIC, ENHANCED, AND PREMIUM PLANS- Standards for 3 levels of Exchange-participating health benefits plans: basic, enhanced, and premium (in this division referred to as a `basic plan', `enhanced plan', and `premium plan', respectively).

(B) PREMIUM-PLUS PLAN BENEFITS- Standards for additional benefits that may be offered, consistent with this subsection and subtitle C of title I, under a premium plan (such a plan with additional benefits referred to in this division as a `premium-plus plan').

(2) BASIC PLAN-

(A) IN GENERAL- A basic plan shall offer the essential benefits package required under title I for a qualified health benefits plan.

(B) TIERED COST-SHARING FOR AFFORDABLE CREDIT ELIGIBLE INDIVIDUALS- In the case of an affordable credit eligible individual (as defined in section 242(a)(1)) enrolled in an Exchange-participating health benefits plan, the benefits under a basic plan are modified to provide for the reduced cost-sharing for the income tier applicable to the individual under section 244(c).

(3) ENHANCED PLAN- A enhanced plan shall offer, in addition to the level of benefits under the basic plan, a lower level of cost-sharing as provided under title I consistent with section 123(b)(5)(A).

(4) PREMIUM PLAN- A premium plan shall offer, in addition to the level of benefits under the basic plan, a lower level of cost-sharing as provided under title I consistent with section 123(b)(5)(B).

(5) PREMIUM-PLUS PLAN- A premium-plus plan is a premium plan that also provides additional benefits, such as adult oral health and vision care, approved by the Commissioner. The portion of the premium that is attributable to such additional benefits shall be separately specified.

(6) RANGE OF PERMISSIBLE VARIATION IN COST-SHARING- The Commissioner shall establish a permissible range of variation of cost-sharing for each basic, enhanced, and premium plan, except with respect to any benefit for which there is no cost-sharing permitted under the essential benefits package. Such variation shall permit a variation of not more than plus (or minus) 10 percent in cost-sharing with respect to each benefit category specified under section 122.

This sets the standard for the basic plan and then establishes a curve that adjusts valued services and cost sharing for every tier of plan thereafter. Of course, the real specifics are not established here. It seems as those specifics would only be established by the future Commissioner. At least those details are not spelled out as of yet.

The next section deals with the contracts of offering health benefits through the Exchange. The only thing that worries me a bit is this portion:

(3) FAR NOT APPLICABLE- The provisions of the Federal Acquisition Regulation shall not apply to contracts between the Commissioner and QHBP offering entities for the offering of Exchange-participating health benefits plans under this title.

I do not know what is in this FAR Act, so I am not sure if I should be concerned or not. Was this the device used by the Bush Administration for awarding no-bid bottomless contracts to their business cronies or is this an Act that ensures the fair and just process of appropriately weighing the costs to benefits ratio of offerings by private enterprise?

The next section deals with Outreach and Enrollment. Basically how the government might get the word our about the Exchange and helping people navigate the Exchange and educating the public on such items as eligibility, the offered health benefit options, coverage and costs involved and so on.

The next section has a portion that does concern me. That section is:

SEC. 206. OTHER FUNCTIONS.

And within Other Functions is this line:

(b) Coordination of Risk Pooling- The Commissioner shall establish a mechanism whereby there is an adjustment made of the premium amounts payable among QHBP offering entities offering Exchange-participating health benefits plans of premiums collected for such plans that takes into account (in a manner specified by the Commissioner) the differences in the risk characteristics of individuals and employers enrolled under the different Exchange-participating health benefits plans offered by such entities so as to minimize the impact of adverse selection of enrollees among the plans offered by such entities.

I hope that this is not yet another way for the poor and credit challenged among us to be singled out and penalized yet again.

The next section establishes a Health Insurance Exchange Trust Fund, the fund which will pay for the Exchange and the bodies that govern it.

The next section is kind of interesting, especially for those who have expressed a desire to succeed from health care (who will remain nameless in the Lone Star State):

SEC. 208. OPTIONAL OPERATION OF STATE-BASED HEALTH INSURANCE EXCHANGES.

(a) In General- If--

(1) a State (or group of States, subject to the approval of the Commissioner) applies to the Commissioner for approval of a State-based Health Insurance Exchange to operate in the State (or group of States); and

(2) the Commissioner approves such State-based Health Insurance Exchange,

That’s right! If you’re a rickety type champion of states rights (at least so far as it suites you), then you can applaud this section of the Bill that would allow for your state, as a single state or within a larger group of states, to form and govern their own Health Insurance Exchange!

However…:

(b) Requirements for Approval- The Commissioner may not approve a State-based Health Insurance Exchange under this section unless the following requirements are met:

(1) The State-based Health Insurance Exchange must demonstrate the capacity to and provide assurances satisfactory to the Commissioner that the State-based Health Insurance Exchange will carry out the functions specified for the Health Insurance Exchange in the State (or States) involved, including--

(A) negotiating and contracting with QHBP offering entities for the offering of Exchange-participating health benefits plan, which satisfy the standards and requirements of this title and title I;

(B) enrolling Exchange-eligible individuals and employers in such State in such plans;

(C) the establishment of sufficient local offices to meet the needs of Exchange-eligible individuals and employers;

(D) administering affordability credits under subtitle B using the same methodologies (and at least the same income verification methods) as would otherwise apply under such subtitle and at a cost to the Federal Government which does exceed the cost to the Federal Government if this section did not apply; and

(E) enforcement activities consistent with federal requirements.

(2) There is no more than one Health Insurance Exchange operating with respect to any one State.

(3) The State provides assurances satisfactory to the Commissioner that approval of such an Exchange will not result in any net increase in expenditures to the Federal Government.

(4) The State provides for reporting of such information as the Commissioner determines and assurances satisfactory to the Commissioner that it will vigorously enforce violations of applicable requirements.

(5) Such other requirements as the Commissioner may specify.

And…:

(2) TERMINATION; HEALTH INSURANCE EXCHANGE RESUMPTION OF FUNCTIONS- The Commissioner may terminate the approval (for some or all functions) of a State-based Health Insurance Exchange under this section if the Commissioner determines that such Exchange no longer meets the requirements of subsection (b) or is no longer capable of carrying out such functions in accordance with the requirements of this subtitle. In lieu of terminating such approval, the Commissioner may temporarily assume some or all functions of the State-based Health Insurance Exchange until such time as the Commissioner determines the State-based Health Insurance Exchange meets such requirements of subsection (b) and is capable of carrying out such functions in accordance with the requirements of this subtitle.

As well as…:

(d) Retention of Authority-

(1) AUTHORITY RETAINED- Enforcement authorities of the Commissioner shall be retained by the Commissioner.

(2) DISCRETION TO RETAIN ADDITIONAL AUTHORITY- The Commissioner may specify functions of the Health Insurance Exchange that--

(A) may not be performed by a State-based Health Insurance Exchange under this section; or

(B) may be performed by the Commissioner and by such a State-based Health Insurance Exchange.

In other words, those States have to play by the same rules of the game that is set forth for the Federal Exchange and can not usurp the authority of the Commissioner.

Now we get to the really exciting or really scary (depending upon who you like to let do the thinking for you) portion of the Bill:

Subtitle B--Public Health Insurance Option

This is also (thank God!) the final chapter of this Bill.

Again, I am only going to highlight portions of note or concern, leaving all those portions that, in my view, at well within the bounds of common sense or of little impact to we, the people, as individuals and small business owners.

Except to note the line of intention for this subsection:

SEC. 221. ESTABLISHMENT AND ADMINISTRATION OF A PUBLIC HEALTH INSURANCE OPTION AS AN EXCHANGE-QUALIFIED HEALTH BENEFITS PLAN.

(a) Establishment- For years beginning with Y1, the Secretary of Health and Human Services (in this subtitle referred to as the `Secretary') shall provide for the offering of an Exchange-participating health benefits plan (in this division referred to as the `public health insurance option') that ensures choice, competition, and stability of affordable, high quality coverage throughout the United States in accordance with this subtitle. In designing the option, the Secretary's primary responsibility is to create a low-cost plan without comprimising quality or access to care.

And yes, this time, I definitely found a spelling error!

Basically this section leans on the Social Security Act and Medicaid to provide the framework for this Public Option and also gives it the same tier of coverage policy options as the private offerings through the Exchange.

The next section, which is about premiums and financing, includes start up funding for the Public Option shown here:

(2) START-UP FUNDING-

(A) IN GENERAL- In order to provide for the establishment of the public health insurance option there is hereby appropriated to the Secretary, out of any funds in the Treasury not otherwise appropriated, $2,000,000,000. In order to provide for initial claims reserves before the collection of premiums, there is hereby appropriated to the Secretary, out of any funds in the Treasury not otherwise appropriated, such sums as necessary to cover 90 days worth of claims reserves based on projected enrollment.

(B) AMORTIZATION OF START-UP FUNDING- The Secretary shall provide for the repayment of the startup funding provided under subparagraph (A) to the Treasury in an amortized manner over the 10-year period beginning with Y1.

(C) LIMITATION ON FUNDING- Nothing in this section shall be construed as authorizing any additional appropriations to the Account, other than such amounts as are otherwise provided with respect to other Exchange-participating health benefits plans.

I personally believe that the start up fund should come from the Federal Reserve as punishment and penalty for failing to adequately protect the nation from this last market bust we find ourselves still in, without payback. There has to be some accountability from some agency or party concerning this, and why not use that penalty to benefit those hit hardest by that failure?

The next section is about payment and rates, which, by and large will be set by the Secretary so long as they are within the bounds and limitations of this Act and other applicable titles and sections of prior Acts.

The next sections are about providers and payments to providers and a provider network much of which is again using Medicare to propel its formation and function and also has incentive payment of an extra 5% for the first 3 years plus modernization of payment system reform then rules for provider participation and then a brief section on fraud and abuse provisions that leans on the False Claims Act for substance. All things well and good and fairly intelligent to my eye.

Now the final subtitle:

Subtitle C--Individual Affordability Credits

Basically these sections deal with instituting credits available through the Health Insurance Exchange, identifies what individuals qualify:

SEC. 242. AFFORDABLE CREDIT ELIGIBLE INDIVIDUAL.

(a) Definition-

(1) IN GENERAL- For purposes of this division, the term `affordable credit eligible individual' means, subject to subsection (b), an individual who is lawfully present in a State in the United States (other than as a nonimmigrant described in a subparagraph (excluding subparagraphs (K), (T), (U), and (V)) of section 101(a)(15) of the Immigration and Nationality Act)--

(A) who is enrolled under an Exchange-participating health benefits plan and is not enrolled under such plan as an employee (or dependent of an employee) through an employer qualified health benefits plan that meets the requirements of section 312;

(B) with family income below 400 percent of the Federal poverty level for a family of the size involved; and

(C) who is not a Medicaid eligible individual, other than an individual described in section 202(d)(3) or an individual during a transition period under section 202(d)(4)(B)(ii).

…and how much that credit would be worth:

SEC. 243. AFFORDABLE PREMIUM CREDIT.

(a) In General- The affordability premium credit under this section for an affordable credit eligible individual enrolled in an Exchange-participating health benefits plan is in an amount equal to the amount (if any) by which the premium for the plan (or, if less, the reference premium amount specified in subsection (c)), exceeds the affordable premium amount specified in subsection (b) for the individual.

(b) Affordable Premium Amount-

(1) IN GENERAL- The affordable premium amount specified in this subsection for an individual for monthly premium in a plan year shall be equal to 1/12 of the product of--

(A) the premium percentage limit specified in paragraph (2) for the individual based upon the individual's family income for the plan year; and

(B) the individual's family income for such plan year.

(2) PREMIUM PERCENTAGE LIMITS BASED ON TABLE- The Commissioner shall establish premium percentage limits so that for individuals whose family income is within an income tier specified in the table in subsection (d) such percentage limits shall increase, on a sliding scale in a linear manner, from the initial premium percentage to the final premium percentage specified in such table for such income tier.

Well that is it for now. One of the perils of breaking down legislation before it becomes signed into law is that there are constant changes. Even in the 3 days it took me to write this, there were several sections that seemed to have changed, including a huge section dealing with tax evasion prevention, which no longer seems to be there or just isn’t accessible right now.

I wanted to give people a snap shot of what is actually being debated right now and to, hopefully ease the affects of the hyperbole being bantered back and forth through the airwaves. Other than those portions I highlighted or noted, there is no boogeyman hidden within the texts of this document. There is nothing to suggest that there might be some great calamity with its enactment, at least so far as it exists today.

I myself had a certain amount of trepidation, stemming from the speaking points of the political pundits on talk shows in the weeks ramping up to this. My fear was that there was going to be some kind of mandate requiring everyone to now carry health insurance and that there would be no public option. Much like the extortionist set of laws that require individuals to carry insurance on our personal properties while the government offers no such, not for profit public option for those choices. If there isn’t a better example of corporate invasion and corrupting of government concerns, I don’t know what is.

So for all those out there screaming that this Act would destroy our current health care system (to which I would ask, how can you destroy an already dysfunctional system?) or cause our premiums, co-pays and other costs to skyrocket, are, in no other uncertain terms, lying. It is almost the exact same thing as looking at a skeleton and then commenting upon the deformity or beauty of the body because of the nature of its skin…a skin that isn’t there.

There really isn’t any meat and particular figures in this Bill and it doesn’t look like there is going to be. All of the substance will come from the Secretary, the Commissioner or other governing bodies or entities that will be bound by the framework set down in this Bill.

However, this Bill, as I just stated, not finished and enacted into law yet. I have signed up for certain updates which I hope will keep me sufficiently apprised of any new developments with this Bill and overall effort.

In fact, I just received an update where the Congress is getting bipartisan support for a suggestion to tax the “Rolls Royce” of insurance policies to help pay for portions of this Bill.

I will be keeping on top of this and you all can check back here for any new updates. Please take me to task on anything you think I have misinterpreted and help inform myself and the other readers of this blog. I promise your comments will not go unanswered!