Correcting the Health Care Crazies -- Part 1

As you know, I've just about had it up to here with the misinformation surrounding the national health care debate. Well, last week I received a chain email from a conservative friend of mine that has just about put me over the edge. I'm not going to post the whole thing here (if you want to read the whole email, I've preserved a PDF of it), but here is the introduction:

If you don't have the time to read the whole health care bill, it's not a problem. The work has already been done for you. WAKE UP!

If you haven't seen any of this stuff, be prepared to be shocked. If this becomes widely known, there will be rioting in the streets a la Iran after the recent election.

I'm scared to death to know what the next 500 pages will say. This is worse than anything even I foresaw.

A few highlights from the first 500 pages of the Healthcare bill in congress....

I have highlighted a few of the items that are down right unconstitutional

It then goes on to list 48 provisions that are allegedly in the first 500 pages of the bill. Now, I realize that I probably shouldn't even try to argue with someone who starts by saying "The work has already been done for you." I mean, why not just take this guy's word for it, he's already read it! But I'm a sucker, I guess. So I pulled up the text of the house bill and actually read the sections that the email writer referenced. Funny, but I don't think it says what he or she thinks it says.

So over the next little while, I'm going to go through the email charge by charge and relate to you what it actually says. The first two charges (the text of the email is in bold):

Page 22: Mandates audits of all employers that self-insure!

Employers who self-insure essentially pay their employees' health care costs out of pocket (the premiums that the employees pay goes into a pool that the employer uses to pay claims). The suggestion here is that the government is trampling on the rights of these employers by auditing all of them.

Here is what the bill says (emphasis mine):

(1) STUDY.—The Commissioner, in coordination with the Secretary of Health and Human Services and the Secretary of Labor, shall conduct a study of the large group insured and self-insured employer health care markets. Such study shall examine the following:

(A) The types of employers by key characteristics, including size, that purchase insured products versus those that self-insure.

(B) The similarities and differences between typical insured and self-insured health plans.

(C) The financial solvency and capital reserve levels of employers that self-insure by employer size.

(D) The risk of self-insured employers not being able to pay obligations or otherwise coming financially insolvent.

(E) The extent to which rating rules are likely to cause adverse selection in the large group market or to encourage small and midsize employers to self-insure.

The bill doesn't mandate that all self-insured plans be audited, it calls for a study of both self-insured and fully insured to compare their effectiveness and to determine whether or not both approaches adequately cover employees. The bill does not require that all self-insured plans open their books (which would be an audit). What it does do is give the government the broad information necessary to determine whether or not self-insured plans are providing an adequate level of care.

Page 29: Admission: your health care will be rationed!

This is one of my favorite lies. Here is the offending text (emphasis mine):

(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.

The emailer is trying to make people believe that the "Annual Limitation" of $5,000 or $10,000 is referring to a limit on the amount of health care available to you. Thus, your "ration" would be $5,000 ($10,000 for your whole family). This is entirely 180 degrees backwards. The "Annual Limitation" is commonly referred to as an "out-of-pocket maximum" and is a feature of nearly all health insurance plans. It is literally the maximum an employee would pay out of pocket for health services in a particular year. So if you suffered a catastrophic event and needed hundreds of thousands of dollars in medical services, the most you would have to pay is $5,000. The insurance company would pick up the rest.

Instead of the government rationing health care, the out-of-pocket maximum ensures that a provider will not ration your health care because of your inability to pay. So rather than the government limiting the amount of health care you receive, it is limiting the amount you will have to pay for the health care you need. And it is doing so by requiring that private health insurance companies that want to be offered through the Health Care Exchange continue to offer reasonable out-of-pocket maximums, which most insurers already do.

Next time, the Health Choices Commissioner and illegal aliens.