Senate Health Care Bill & CBO Scoring

by Bruce Webb

The new Senate Health Care Bill (big PDF) and the CBO Score. The outlines were reported last night, an $894 billion bill offset with enough taxes and fees to produce a $127 billion ten year reduction in the projected deficit, plus another $650 reduction in the ten years after that. (Traditionally CBO limits itself to 10 year scores, but the Republicans asked for a longer time frame for the stimulus bill, goose and gander). Also widely reported, but not quite correctly was the news that the bill would extend coverage to 94% of all Americans, or alternately all American citizens. In fact once you include Medicare and exclude illegal immigrants the actual coverage for legal American residents rises to 98%.

Food Security in America: a comment on Hullabaloo

There is a lot of discussion in the blogosphere around this NYT article and the response to it from the right: Hunger in U.S. at a 14-Year High which includes this response from Robert Rectum, er Rector at Heritage

“Very few of these people are hungry,” said Robert Rector, an analyst at the conservative Heritage Foundation. “When they lose jobs, they constrain the kind of food they buy. That is regrettable, but it’s a far cry from a hunger crisis.”

Which prompted well deserved outrage. But I tried to frame it a little differently over at Digby with the following and thought I would share it here.

________________________________________________
There is a big difference between being hungry and being mal-nourished. Many third world people would likely shake their heads at the idea that anyone can starve in America, after all even the most meagre food stamp allocation would allow a family to buy enough corn meal and cooking oil to sustain life with maybe some potatoes and other root crops thrown in. Or alternately you could buy a fifty pound bag of rice. Or a bushel of oatmeal and some bacon trimmings. Whatever your heritage chances are that you have ancestors that lived day in and day out on that or less.

But we are not 21st century Sudan, 20th century China, 19th century Ireland, 17th century Scotland, there is no reason why Americans should not have access to balanced nutritional meals anymore than there is reason to deny them a change of clothes or a daily bath just because after all your great-great grandfather didn't have indoor plumbing.

I bring this up because it is a common rhetorical move from the right to argue that poor people in America are not really poor because they are fat, or have a TV, or a cell-phone. Or because in the end if they have a heart attack they will be admitted to the ER: "You can't be poor, look at how big your kids got eating government cheese".

I don't quite know how to counteract this move, there is nothing in the Declaration of Independence that promises 'life, liberty and the pursuit of a pizza and a side salad' but kids have a sense of injustice that goes beyond simple hunger pangs.

I wrote about this last Christmas Eve with a post called 'Why Does Santa Hate Poor Kids'
http://angrybear.blogspot.com/2008/12/why-does-santa-hate-poor-kids.html
Because most every year every kid in poverty learns a hard lesson, rich kids get lavish gifts from Santa and dollar bills from the Tooth Fairy and big Easter Baskets from the Easter Bunny, while poor kids get squat. Which is a pretty fine way to socialize kids into just accepting their proper role in society.

So I don't know how much actual biologic hunger there is in this country, but people and especially children deserve something better than simple subsistence, that you can live on rice and beans doesn't mean that you should when all around you are living in relative lavishness. Did Charlie of "Charlie and the Chocolate Factory" REALLY need that chocolate bar? Well yes he did and not just because his stomach was growling.

Thoughts on trying Terrorists in NYC

Article III Section 2 - Trial by Jury, Original Jurisdiction, Jury Trials

"The Trial of all Crimes, except in Cases of Impeachment, shall be by Jury; and such Trial shall be held in the State where the said Crimes shall have been committed; but when not committed within any State, the Trial shall be at such Place or Places as the Congress may by Law have directed."

Of course we have it from the highest authority that the Constitution is just a god damn piece of paper and where it isn't that Article II Section 2 obviously rules over all other Articles and that pesky Bill of Rights.

Trial by jury? In New York? Where do these anti-American terrorist lovers come up with crazy shit like that?

http://www.usconstitution.net/const.html#A3Sec2
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How do mature societies deal with this?
http://www.werenotafraid.com/about.html

"We are not afraid to ride public transportation.

We are not afraid to walk down a crowded street.

We are not afraid of each other.

We are not afraid to say that terrorism in any form is never the answer.

We’re not afraid is an outlet for the global community to speak out against the acts of terror that have struck London, Madrid, New York, Baghdad, Basra, Tikrit, Gaza, Tel-Aviv, Afghanistan, Bali, and against the atrocities occurring in cities around the world each and every day. It is a worldwide action for people not willing to be cowed by terrorism and fear mongering.

The historical response to these types of attacks has been a show of deadly force; we believe that there is a better way. We refuse to respond to aggression and hatred in kind. Instead, we who are not afraid will continue to live our lives the best way we know how. We will work, we will play, we will laugh, we will live. We will not waste one moment, nor sacrifice one bit of our freedom, because of fear.

We are not afraid."
___________________________________

Conservatives are fond of mocking people for adopting a "Pre-9/11 Mindset" as if not living in a state of constant fear and paranoia and xenophobia is somehow a bad thing. This doesn't mean not being vigilant, it means not dismissing written intelligence warnings titled "Bin Laden Determined to Strike Inside the United States".
http://www.americanprogress.org/issues/2004/04/b44925.html

Read the Bill! Part 3; and a possible reading error

by Bruce Webb

On July 28th I put up a post on what I considered to be the most important provision of the Tri-Committee Bill as introduced. The post was called Sec 116: Golden Bullet or Smoking Gun

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.

A Qualified Health Benefit Plan or QHBP is one that meets all the requirements outlined in the bill to be qualified for the Health Insurance Exchange itself scheduled to start on Jan. 1, 2013. Among those requirements is compliance with the detailed Acceptable Benefits Package whose fine points are to be established by the Health Benefits Advisory Committee who will be appointed after enactment of the bill. Premiums of a QHBP will be governed by requirements to meet a set Medical Loss Ratio whose set point will be established in accordance with principles set out in Sec 161.

All of this is clearly forward looking, a procedure is being set out that will govern insurance plans once the Exchange is established and three years are given to get the Health Choices Commissioner and the HBAC in place, for the MLR methodology to be established, for the final benefits package to be defined, to get all of that through the pubulication process, and to go through contract negotiations with the various insurance companies in time to meet the Jan 1, 2013 deadline. Altogether a pretty ambitious schedule, but one necessary to govern the Exchange going FORWARD.

On October 29th, a new and somewhat re-organized bill was introduced which included a whole new Title I called Immediate Reforms which were to go into effect right away on enactment of the bill. This included some truly new proposals including a new high risk pool to cover current uninsured between now and the start of the Exchange, plus a provision that allows family plans to cover children up to the age of 26. plus it moved some other protections on pre-existing conditions and prohibition of recessions forward. But it also did something curious, and ultimately inexplicable, it also moved the provisions of Sec 116 forward. In the new bill the equivalent language to Sec 116 is found in new Sec 102

SEC. 102. 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:
`SEC. 2714. ENSURING VALUE AND LOWER PREMIUMS.

`(a) In General- Each health insurance issuer that offers health insurance coverage in the small or large group market shall provide that for any plan year in which the coverage has a medical loss ratio below a level specified by the Secretary (but not less than 85 percent), the issuer shall provide in a manner specified by the Secretary for rebates to enrollees of the amount by which the issuer's medical loss ratio is less than the level so specified.
`(b) Implementation- The Secretary shall establish a uniform definition of medical loss ratio and methodology for determining how to calculate it based on the average medical loss ratio in a health insurance issuer's book of business for the small and large group market. Such methodology shall be designed to take into account the special circumstances of smaller plans, different types of plans, and newer plans. In determining the medical loss ratio, the Secretary shall exclude State taxes and licensing or regulatory fees. Such methodology shall be designed and exceptions shall be established to ensure adequate participation by health insurance issuers, competition in the health insurance market, and value for consumers so that their premiums are used for services.
`(c) Sunset- Subsections (a) and (b) shall not apply to health insurance coverage on and after the first date that health insurance coverage is offered through the Health Insurance Exchange.'.
(b) Individual Health Insurance Coverage- Such title is further amended by inserting after section 2753 the following new section:
`SEC. 2754. ENSURING VALUE AND LOWER PREMIUMS.

`The provisions of section 2714 shall apply to health insurance coverage offered in the individual market in the same manner as such provisions apply to health insurance coverage offered in the small or large group market except to the extent the Secretary determines that the application of such section may destabilize the existing individual market.'.
(c) Immediate Implementation- The amendments made by this section shall apply in the group and individual market for plan years beginning on or after January 1, 2010, or as soon as practicable after such date.

Okay the language is a little more bureaucratic and comes in the form of inserting new language into an existing title the Public Health Service Act but otherwise it is all the same thing, just old wine in new bottles. Right? Oh, oh, maybe not.

Yesterday on the assumption that it was the same thing I put up a post at Angry Bear STILL the Most Important Sentence in the House HC Bill citing only the (a) section. Commenter Gerald Weinand who took my advice to closely read the bill added this

Bruce:
Subsection (c) reads:
‘(c) Sunset- Subsections (a) and (b) shall not apply to health insurance coverage on and after the first date that health insurance coverage is offered through the Health Insurance Exchange.’.

I read through Title III. A. Sec. 304 and didn't see any refernce there to MLR's at all. Is the 85% established for policies offered through the exchange?

Well I was thrown for a loop. Instead of the orderly process set out in Sec 116 to establish rules for an Exchange that would start three years out via a scheduled process overseen by people to be appointed we have new rules that are subject to "Immediate Implementation" and which SUNSET on the day the Exchange opens. Moreover you can search through the bill as Gerald did and as I belatedly did and not find any specific mechanism to govern profits AFTER establishment of the Exchange.

I am not sure what to say, I only had this pointed out to me late last night, but my current thinking is that someone, somehow just screwed up. In their zeal to get certain protections in place right away they swept Sec 116 which clearly is focused on a FUTURE Exchange and tried to enforce its requirements on the current market. Which leads to some curious problems of language. What does ''adequate participation' mean in reference to an existing market? What about ensuring 'competition'? This language which makes perfect sense in the context of a competitive future exchange is pretty odd when applied to a market that already exists. Plus how do you immediately implement a methodology that has yet to be developed? How do you apply a process that mandates rebates on plans that are already in place based on MLRs that are on average about four points under the minimum set out in the legislation? Does every company in America expected to rebate 5% of its current premiums?

Well I got more questions than answers. But one partial solution is to get everyone on one page. Up to now people have been forced to rely on the original Tri-Committee Bill as introduced, only after Oct 29th did we have access to the bill as brought to the floor of the House, which induced some people, okay me, to read it too quickly. Well we now have some breathing room to examine the House Bill as passed with Amendments, Previously I had been linking to and using PDF versions which were pretty clumsy to navigate. The following link is to the bill as passed and engrossed, and should I think be the starting point for future discussion. ttp://thomas.loc.gov/cgi-bin/query/D?c111:2:./temp/~c1113ofzd6::
If that link is unstable you can Google it or use this pdf version:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h3962eh.txt.pdf

Abortion Coverage and Health Care Reform: an e-mail exchange

The following is the last (for now) stage of an e-mail exchange with my reply leading off. I deleted names not because any of the views expressed are in any way embarrassing but because I didn't get permission. Hopefully none of them will get too mad at me. But I thought my reply addressed a larger issue and I wanted to save it.
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Me to (Man 1) I think you are missing the larger point. The argument for including abortion as a covered service is not at basis an economic one but instead stems from two deeper philosophic disputes: the separation of Church and State and the nature of a patriarchal society. I mean where do you stop? There are religious arguments against circumcism. And Christian Scientists have a valid argument that they shouldn't have to pay for the medical health care of others, particularly as their own practices are excluded. That is to the degree that objections to abortion are authentically based on religion enforcing those beliefs is a violation of the establishment clause.

But I don't believe these objections are actually religiously based, or rather that those religious objections are ultimately not based on any devotion to the principle of sanctity of life. For example immediately after Moses delivered the Ten Commandments to the Chosen including "Thou shalt not kill" his Lieutenant and Successor Joshua led his people into the Promised Land and exterminated nearly all its inhabitants excepting the one city whose people they saved to be hewers of wood and drawers of water, i.e. slaves. (I strongly suspect that the original Hebrew carried the meaning 'murder' and not 'kill'-in ancient law as today two very different concepts) So if the fundamental objection is not religious as such, or if the religious objection itself derives from some source other than the sanctity of life then from where does it derive?

Well the answer is pretty clear, from the same motive that would have women wear burqas or have widows perform purdah (religious suicide after a husband's death) or condemning women to death for BEING raped or having eunuchs as harem guards or in milder form strictly imposing the principle of chaperonage. That is whether you look at this from the biological or anthropological or sociological or historical perspective it is blindingly obvious that men are fundamentally driven by a desire to control the sexuality of "their" women whether that be consort or dependent. Thus the danger of birth control and abortion is that one of "your" women may be having sex with someone else without your knowledge and perhaps worse enjoying it more, and that you will never know. That this cross-cultural imperative has ended up embedded into those cultures religious practices is perfectly natural but let us not fool ourselves into thinking that its origins are spiritually based in some concept of the sanctity of life. Scratch the surface of anyone of 'God's children' and you can see the jealous baboon hidden inside. These guys are just defending the pack against outsiders who want access to the females. Pandering to this desire is just government enforcement of the basest kind of patriarchy.

Sure we could and probably should set up an alternative form of financing for abortion but ultimately being only a little bit of a slave is like only being a little bit pregnant, the question is whether women should be autonomous or not. Me I am a sucker for freedom and equality.

On Nov 8, 2009, at 9:03 AM, Man 1 wrote:

i am hoping i understand this: without being robbed by the insurance companies, most women would have enough money to pay for their own abortion if they needed one. at least that's close to the point i am trying to make. i fail to understand how that would "hold another person and their right to freedom of choice captive to religious, moral, and political motivations." rather the opposite. it seems to me that (Man X) is the one trying to hold others captive to HIS religious, moral, and political motivations. It seems to be impossible to convince people who think they don't have religious views that that IS a religious view.

if you (he) are seriously saying that not only does a woman have a right to an abortion (i agree) but she has a right to a government paid abortion, i hope you can see why you drive "conservatives" crazy.

On Nov 8, 2009, at 4:40 AM, Woman 1 wrote:

I assume that within less than ten years, an abortion case will go to
the Supreme Court, challenging that portion of the law. As the
non-profit or reduced profit players in health care see their fat
profits dry up, the case might even be brought by, or supported by
them.

Either way, general prosperity will expand when the punitive burden of
health coverage is lifted. There may not be money available for a
particular woman, but the numbers of women having the means will rise.

(Woman 1)~off to read the news this morning~

On Sat, Nov 7, 2009 at 9:42 PM, (Man 2) > wrote:
(Man 1):

Save how for an abortion? With a declining income that has been undermined
for the last 30 years with increased expenses, lower paying jobs, denial of
equality, and a lack of opportunity. I find it reprehensible a political
party would hold another person and their right to freedom of choice captive
to religious, moral, and political motivations.

We will fund healthcare for cancer caused by smoking, we will fund
healthcare for those who over eat and suffer from diabetes, we will fund
healthcare for those who choose to use their heads as a battering ram on the
highways of America from riding motorcycles, we will fund healthcare for
those who abuse themselves from over dosing on drugs and alcohol; but god
forbid, a teen or the lady driving Reagan's Pink Cadillac gets pregnant and
it is then we choose to become self-righteous

HR676: Political Fool's Gold

In discussions around the blogosphere about HR3962, the House Health Care Bill, some individuals suggest that at 1990 pages it was simply bloated and used the 30 page HR676 (Single Payer) as a clean, easy, effective alternative. Which led me to wonder "How the Hell can you reform the entire U.S. Code as it relates to health care in 30 pages?" So I read the bill and found out that it is a mirage. HR676 is so far from a political starter as to be literally laughable. To see why I offer some language and interpretation.
______________________
One of the most fervent promoters of HR676 is Physicians for a National Health Program (PNHP) and who naturally have a web page with all kinds of resources for defenders, including of course a link to the full text of the bill. So as a public service I suggest people wanting to push back on my analysis start there: http://www.pnhp.org/publications/united_states_national_health_care_act_hr_676.php

What I propose is a section by section analysis of the bill in real terms at each point asking the question "How do you sell this?" I don't think you can, once you get beyond the aspiration of Universal Single Payer, one which I share fully, there really is nothing here. So---
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORTTITLE.—This Act may be cited as the ‘‘United States National Health Care Act or the Expanded and Improved Medicare for All Act’’.
(b) TABLEOFCONTENTS.—The table of contents of this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Definitions and terms
TITLE I—ELIGIBILITY AND BENEFITS
Sec. 101. Eligibility and registration.
Sec. 102. Benefits and portability.
Sec. 103. Qualification of participating providers.
Sec. 104. Prohibition against duplicating coverage.
TITLE II—FINANCES
Subtitle A—Budgeting and Payments
Sec. 201. Budgeting process.
Sec. 202. Payment of providers and health care clinicians.
Sec. 203. Payment for long-term care.
Sec. 204. Mental health services.
Sec. 205. Payment for prescription medications, medical supplies, and medically necessary assistive equipment.
Sec. 206. Consultation in establishing reimbursement levels.
Subtitle B—Funding
Sec. 211. Overview: funding the USNHC Program.
Sec. 212. Appropriations for existing programs.
TITLE III—ADMINISTRATION
Sec. 301. Public administration; appointment of Director.
Sec. 302. Office of Quality Control.
Sec. 303. Regional and State administration; employment of displaced clerical workers.
Sec. 304. Confidential Electronic Patient Record System.
Sec. 305. National Board of Universal Quality and Access.
TITLE IV—ADDITIONAL PROVISIONS
Sec. 401. Treatment of VA and IHS health programs.
Sec. 402. Public health and prevention.
Sec. 403. Reduction in health disparities.
TITLE V—EFFECTIVE DATE
Sec. 501. Effective date.

Sec. 101: "(a) IN GENERAL.—All individuals residing in the United States (including any territory of the United States) are covered under the USNHC Program entitling them to a universal, best quality standard of care."

"(c) PRESUMPTION.—Individuals who present themselves for covered services from a participating provider shall be presumed to be eligible for benefits under this Act, but shall complete an application for benefits in order to receive a United States National Health Insurance Card and have payment made for such benefits."

Meaning that undocumented workers and people on student and work visas are covered fully. A further provision covers tourists and visitors but provides some vague language about reimbursement and payment by the home country.

Sec. 102: " BENEFITS AND PORTABILITY.
(a) IN GENERAL.—The health care benefits under this Act cover all medically necessary services, including at least the following: (1) Primary care and prevention. (2) Inpatient care. (3) Outpatient care. (4) Emergency care. (5) Prescription drugs. (6) Durable medical equipment. (7) Long-term care. (8) Palliative care. (9) Mental health services. (10) The full scope of dental services (other than cosmetic dentistry). (11) Substance abuse treatment services. (12) Chiropractic services. (13) Basic vision care and vision correction (other than laser vision correction for cosmetic purposes). (14) Hearing services, including coverage of hearing aids. (15) Podiatric care. (b) PORTABILITY.—Such benefits are available through any licensed health care clinician anywhere in the United States that is legally qualified to provide the benefits. (c) NO COST-SHARING.—No deductibles, copayments, coinsurance, or other cost-sharing shall be imposed with respect to covered benefits."

I particularly like the "at least". Want weekly chiropractic and acupuncture visits? Designer prescription sunglasses? Six-months at the Betty Ford Clinic? You got it, and at ZERO out-of-pocket expense. Great for that undocumented landscaper with a bad back or for hypochondriacs, but ya think this might get kind of expensive overall?

"SEC. 103. QUALIFICATION OF PARTICIPATING PROVIDERS.
(a) REQUIREMENT TO BE PUBLIC OR NON-PROFIT.—
(1) IN GENERAL.—No institution may be a participating provider unless it is a public or not-for-profit institution. Private physicians, private clinics, and private health care providers shall continue to operate as private entities, but are prohibited from being investor owned."

Sorry Walgreens and Payless, goodbye Perle Vision, and oh yeah if you want to open a mental health clinic anywhere be sure to able to finance it on your own. And don't make a profit on selling any product or service. What about existing institutions? Not to worry-Uncle Sam will compensate you for "reasonable financial losses incurred as a result of the conversion from for-profit to non-profit status. "

"SEC. 104. PROHIBITION AGAINST DUPLICATING COVERAGE.
(a) IN GENERAL.—It is unlawful for a private health insurer to sell health insurance coverage that duplicates the benefits provided under this Act"

"TITLE II—FINANCES
Subtitle A—Budgeting and Payments
SEC. 201. BUDGETING PROCESS.
(a) ESTABLISHMENT OF OPERATING BUDGET AND CAPITAL EXPENDITURES BUDGET."

The government pays for everything including construction of health facilities and all equipment.

"Sec 202. SEC. 202. PAYMENT OF PROVIDERS AND HEALTH CARE CLINICIANS"

All health care institutions get paid a single monthly payment. Physicians, dentists, pharmacists, optometrists, nurse practioners can either be salaried or get payment on a single set fee schedule. Which allows no variation because it will be established with the following criteria.

"(B) CONSIDERATIONS.—In establishing such schedule, the Director shall take into consideration the following:
(i) The need for a uniform national standard.
(ii) The goal of ensuring that physicians, clinicians, pharmacists, and other medical professionals be compensated at a rate which reflects their expertise and the value of their services, regardless of geographic region and past fee schedules."

"Subtitle B—Funding"

"(c) FUNDING.—
(1) IN GENERAL.—There are appropriated to the USNHC Trust Fund amounts sufficient to carry out this Act from the following sources:
(A) Existing sources of Federal Government revenues for health care.
(B) Increasing personal income taxes on the top 5 percent income earners.
(C) Instituting a modest and progressive excise tax on payroll and self-employment income.
(D) Instituting a small tax on stock and bond transactions. "

Okay we will tax the top 5 percent of income at some unknown rate plus payroll at some unknown but graduated rate plus a similar unknown transaction tax. Good luck to the CBO in scoring that. Because they'll need it.

Title III: Administration

Set up bureaucracy

Title IV: Other provisions

"SEC. 401. TREATMENT OF VA AND IHS HEALTH PROGRAMS.

(a) VA HEALTH PROGRAMS.—This Act provides for health programs of the Department of Veterans’ Affairs to initially remain independent for the 10-year period that begins on the date of the establishment of the USNHC Program. After such 10-year period, the Congress shall reevaluate whether such programs shall remain independent or be integrated into the USNHC Program.
(b) INDIAN HEALTH SERVICE PROGRAMS.—This Act provides for health programs of the Indian Health Service to initially remain independent for the 5-year period that begins on the date of the establishment of the USNHC Program, after which such programs shall be integrated into the USNHC Program. "

Likely elimination of the VA system. Certain elimination of IHS.

Title V: Effective date

"TITLE V—EFFECTIVE DATE
SEC. 501. EFFECTIVE DATE.
Except as otherwise specifically provided, this Act shall take effect on the first day of the first year that begins more than 1 year after the date of the enactment of this Act, and shall apply to items and services furnished on or after such date."

Oh yeah and we will get the conversion of the entire health care delivery system from for-profit to non-profit including all necessary buy-outs in a single year.
_________________________________

Sorry, this is not a serious policy proposal, this is an aspirational manifesto that would take the U.S. health system far beyond even the British NHS. Under this system only the ultra-rich could ever dream of having a private room or a private nurse, everyone else is reduced to the lowest common denominator. It is common to hear commenters saying "no one is contemplating a government take-over of the medical system" or "no one is proposing an NHS system". Well sorry this is exactly that. The only terms that describe a system that makes all for-profit delivery of all medical, dental, mental health, substance abuse, vision and long-term care ILLEGAL and further makes any private insurance supplements ILLEGAL would set off all kinds of rhetorical alarms.

Progressives come on! I don't care how much of a bleeding heart you may have but do you really want to go to the country on the platform of "We provided universal free coverage to all illegal immigrants while abolishing the VA hospital system, oh and the Pharmacy section at your supermarket. Vote for us!" This is not serious policy, this is just posturing for effect. This bill demagogues itself.

Health Care Exchange: Eligibility vs. Enrollment

(cross-posted at Angry Bear)

In the near four months since it passed out of Committee there has been little discussion of the Senate HELP Bill and the reason is clear, Max Baucus made it clear that Senate Finance would write a bill from the ground up. What this has meant is that the basis for comparing and contrasting alternate bills has been HR3200, the House Tri-Committee Bill. There are three main bills that have been presented in opposition to HR3200 with the Senate Finance Committee coming at it from the center-right while Wyden's Free Choice Act and HR676, Single Payer, coming from the left.

The major critiques of HR3200 have focused around the Public Option, with SFC debating whether it should even be part of the bill, while the Free Choice Act and HR676 arguing that it is too weak. This latter set of arguments seems to me largely driven by a profound misreading of the bill that may in its turn be driven by ideology from the Single Payer Now folk that have combined into a toxic stew that has led both the original HR3200 and his successor to be labeled in the harshest possible ways.

In the eyes of many progressives the problem with the PO is that it is just too cramped and limited to a "small sliver" of the American people, that "200 million people" will find it unavailable, that only people who are currently uninsured can get it, and so on. Well none of that is right, but seeing why will take some lengthy quotation and parsing, which for those interested can be found under the fold.

During the campaign Obama promised people that if they liked their current insurance they could keep it, and the bill does that, but what too many people took away is the idea that if they had current insurance, particularly through their employer that they HAD to keep it, that only those people who didn't have coverage at all, mostly the young, the self-employed, and workers in small businesses, would be served by the Exchange and the PO. Well lets go to the text, in this case the new House Bill.

SEC. 302. 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. (p.156)

The key word here is "enrolled". Under the bill if your employer offers you insurance it has to be in the form of a Qualified Health Benefits Plan or QHBP, meaning that it has to meet all the accessibility, affordability and coverage provisions applicable to an Exchange plan which should mean in practice there would be little advantage to getting a QHBP Plan inside or outside the Exchange. So the bill writers and subsequently the CBO built in the assumption that most people who accept employer coverage, to the degree that they added a provision for employers to auto-enroll employees in the lowest cost plan offered by the employer. This process led many people to believe they were then simply locked into the company plan. Well not so fast, NOTHING permently locks you in, instead you have a number of different opt-out options.

Now one not acceptble option is simply not to have insurance at all, there are some religious exceptions but under the Individual Responsibility section there is a requirement for individuals to prove they have 'Acceptable Coverage'. And what is that?

(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 grand- fathered health insurance coverage (as defined in subsection (a) of section 202) or under a current group health plan (described in sub- section (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 10 United States Code.
(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.

Well that is clear enough, an individual meets his responsibility requirement by showing he is covered under his employer plan, his spouse's employer plan, perhaps a parent's family plan or by a range of other public insurance plans. And in any of those latter situations the employee can opt-out of new employer coverage offers. But one of these opt-out possibilities is somewhat hidden here, that is the one that allows any employee to opt-out of employer coverage altogether and get an individual or group plan through the Exchange, including the PO, because in doing so he would meet the requirement of (A), the Public Option is explicitly defined as a QHBP. So where did the idea that the PO was only for the uninsured and was so limited to a fraction of the population arise?

Well a couple of places. First as noted the expectation is that most new employees without health insurance would simply enroll in whatever employer supplied plan level that met their needs, and that those who failed to do so would simply be auto-enrolled by the employer as provided in Sec 412 (c)

(c) AUTOMATIC ENROLLMENT FOR EMPLOYER SPONSORED HEALTH BENEFITS.—
(1) IN GENERAL.—The requirement of this subsection with respect to an employer and an employee is that the employer automatically enroll such employee into the employment-based health benefits plan for individual coverage under the plan option with the lowest applicable employee premium.
(2) OPT-OUT.—In no case may an employer automatically enroll an employee in a plan under paragraph (1) if such employee makes an affirmative election to opt out of such plan or to elect coverage under an employment-based health benefits plan offered by such employer. An employer shall provide an employee with a 30-day period to make such an affirmative election before the employer may automatically enroll the employee in such a plan. (p. 273-4)

If the employee does opt-out during that 30 days he is not "enrolled" and so falls under the definition of "exchange eligible individual" as defined in Sec 302. At which point the provisions of Sec 411 (3) kick in:

(3) CONTRIBUTION IN LIEU OF COVERAGE.—
Beginning with Y2, if an employee declines such offer but otherwise obtains coverage in an Exchange- participating health benefits plan (other than by reason of being covered by family coverage as a spouse or dependent of the primary insured), the employer shall make a timely contribution to the Health Insurance Exchange with respect to each such employee in accordance with section 413.

In short you are 'exchange eligible' unless you ACCEPT enrollment or ALLOW yourself to be auto-enrolled. On my reading there is no such thing as a lockout for any given individual, if you want the PO you can get it, though not without taking some positive action.

But what about employers? Why are they locked out of the Exchange and the PO? Well the answer is that they aren't, at least not permanently, that is simply the result of misunderstanding the language governing 'transition'. Subject for another post.