The adequacy of insurance coverage is under threat

Obamacare’s Other Success, Under Threat

By Editorial Board
Bloomberg View, July 20, 2016

Obamacare has made great strides toward its signature goal: to reduce the number of Americans without health insurance. Unfortunately, another important goal — ensuring that everyone’s insurance policy provides adequate coverage — remains under siege in the courts and Congress.

Before the Affordable Care Act, private health insurers were free to exclude coverage for all sorts of care.

Moreover, if anyone’s medical expenses grew too high, insurers could cut them off. A serious or complicated illness or injury could leave people essentially uninsured.

Obamacare changed things by establishing 10 categories of benefits that most insurance plans must cover — including hospitalization, prescription drugs, laboratory services and mental health care — and prohibiting annual or lifetime limits on those benefits.

This month, however, a federal appeals court ruled that people can buy plans with far more limited coverage. Yet those who buy such plans risk being surprised twice — first when they’re saddled with the tax penalty for not carrying adequate insurance, and then when they need care and find their coverage doesn’t go as far as they thought.

Republicans in Congress have likewise targeted Obamacare’s minimum coverage requirements, arguing that consumers, not the government, should determine what services they want insurers to provide.

http://www.bloomberg.com/view/articles/2016-07-20/obamacare-s-other-success-under-threat

***

Comment:

By Don McCanne, M.D.

The majority of Americans believe that everyone should have the health care that they need when they need it, and that we need a financing system that will pay for it. Others believe that they should take care of their own health care needs and not be required to pay into a risk pool that covers the health care of others. So should the health insurance system provide comprehensive coverage for all, or should it allow individuals to purchase coverage for only those benefits they perceive they might need?

“As a man, why should I have to pay for maternity benefits I’ll never use?” “As a woman, why should I have to pay for treatment of prostate cancer – a disease that I’ll never have?” “I take good care of myself; why should I have to pay for care of disorders of others due to their smoking, illicit drug use, reckless driving, sexual promiscuity or whatever?” “I’m healthy so why can’t I wait until I will likely need health care instead of wasting money on insurance now?”

“I want to take care of myself by buying only the insurance I need now, and everyone else can buy whatever they feel they need.” But what about that unexpected disorder that racks up medical bills of $350,000? “Well, I didn’t mean that. Nobody can pay those bills, so the government should pay it instead.”

So we’re divided between “we’re all in this together” and “I’ll take care of myself, and you’re on your own.” But medical care doesn’t work that way. The twenty percent of people who use eighty percent of health care are reliant on pooled funds to pay for their health care. Most of the eighty percent who are relatively healthy will someday shift into the high health care needs group and likewise also be dependent on pooled funds.

Although the Affordable Care Act was a step forward in pooling health care risk, there is a campaign to move us in the other direction. An effort to shut down inadequate plans was reversed by the Supreme Court, even though those plans will unfairly shift costs to others when they do not adequately cover expensive diseases and injuries. Also many politicians want to ensure that people will be able to “buy only the insurance they need” through gimmicks such as private insurance exchanges offering the choice of low benefit plans, purchases out of state to avoid regulatory oversight of insurers, reliance on health savings accounts — usually underfunded, etc.

As a group, those individuals who want to take care of themselves include many individuals who will have high medical expenses. Whatever way they set funds aside – spartan insurance plans, health savings accounts, personal savings – collectively they will not have enough funds set aside to pay for the expensive care some members of their group will need. Besides, they have fragmented much of their funds such that only a limited amount would be available for others, largely through catastrophic plans that have intolerably high deductibles. Whereas those of us who support universal pooling of risk would cover our costs equitably, those who are on their own will dump costs onto the rest of us through taxes we pay for public programs or through higher medical bills due to shifting to us the costs of care provided to those who do not pay their bills.

When people sign up for Medicare, they do not ask for only the Medicare that they need. They expect that they will get essentially the same Medicare that everyone else has (though some may receive similar benefits through the private Medicare Advantage plans). It should be that way not for just Medicare beneficiaries, but for everyone. We should improve Medicare and then make it universal. That will satisfy the majority of us who believe that we are all in this together, and for those who want to be on their own, they will accept the benefits of a Medicare for all program just as they now accept Medicare in their retirement years. Also, they will have paid in their equitable share, based on ability, just like the rest of us.