Fwd: qotd: AHIP asks for further reduction of minimum benefits

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-------- Original Message --------
Subject: qotd: AHIP asks for further reduction of minimum benefits
Date: Fri, 14 Sep 2012 11:56:09 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



House Ways and Means Committee
- Subcommittee on Health
September 12, 2012
Hearing: Implementation of Health Insurance Exchanges and Related Provisions
Testimony by Daniel T. Durham, Executive Vice President, Policy and
Regulatory Affairs, America's Health Insurance Plans (AHIP)

Minimum Coverage Requirements
Beginning in 2014, the ACA will require health plans to provide coverage
for an essential health benefits (EHB) package covering a broad range of
mandated benefits, some of which are not typically included in
individual and small group policies today. The ACA further requires that
coverage sold through the exchanges must be at one of four actuarial
value levels: 60% (bronze); 70% (silver); 80% (gold); and 90%
(platinum). As a result of these provisions, millions of people may be
forced to purchase health insurance that is more comprehensive – and
more expensive – than they currently have.
We believe that the EHB package must be affordable for families and
small businesses and that affordability should be the cornerstone of
consideration in defining the EHB package. The nonpartisan Institute of
Medicine – in its recommendations to HHS – underscored the need to
ensure affordability in defining the EHB standard and cautioned that "if
cost is not taken into account, the EHB package becomes increasingly
expensive and, individuals and small businesses will find it
increasingly unaffordable. If this occurs, the principal reason for the
ACA – enabling people to purchase health insurance, and covering more of
the population, will not be met."

The imposition of broader benefit packages than what consumers and small
businesses are purchasing today will force consumers to "buy up"
coverage that they may not want or need. In recent months, many state
departments of insurance and state exchange boards have requested formal
actuarial and economic forecasts of the impact of the new insurance
reforms on their state. These independent studies have found that
several provisions, including the EHB and actuarial value requirements,
will result in higher premiums.

Recognizing that these ACA provisions will have a major impact on the
cost of coverage, we believe that the important goals of the EHB package
can be met if HHS and the states place a high priority on offering
affordable coverage options to consumers. In addition, consideration
should be given to lowering the minimum actuarial value for coverage
sold in the exchanges to ensure the availability of affordable coverage
options and to allow smoother transitions to the new benefits packages.

http://waysandmeans.house.gov/uploadedfiles/durham_testimony_final_hl912.pdf


Comment: As the Affordable Care Act was being drafted, many of us in
the policy community were very disappointed with the decision to include
in the state insurance exchanges low actuarial value plans, as low as 60
percent (the plan pays 60 percent of covered costs and the patient pays
the other 40 percent plus 100 percent of all services and products not
covered). Even with the subsidies, the financial barriers to care will
be too great for many patients. Now AHIP - the all-powerful health
insurance lobby organization - is asking Congress to lower even further
the minimum required benefits and the actuarial values of the plans.

The reason is obvious. They explicitly state that "affordability should
be the cornerstone of consideration," but they are not referring to
affordability of health care, rather they are referring to the
affordability of their own private health insurance plans. They want
their premiums to be low enough for middle-income Americans to be able
to purchase their plans. They remain silent on the fact that reducing
minimum benefits and reducing actuarial values of the plans will shift
large portions of the costs to those who need care. (Again, the cost
sharing subsidies are not adequate for covered benefits, and the patient
is responsible for 100 percent of the costs of excluded benefits which
would increase with this proposal.)

The private insurance industry got virtually everything that they asked
for when the bill was written. Now they are coming along with a pitch
that appeals to members of both sides of the aisle - we should make
insurance affordable by allowing individuals to "buy only the insurance
you need." For people who are healthy on December 31, 2013, can they
really feel secure with a low actuarial value, minimal benefit plan that
begins on January 1, 2014, when they have absolutely no idea what health
problems they may face throughout 2014 and into the future? Of course
not, though the high premiums of plans with adequate coverage may serve
as enough of a deterrent that they would want to or may even have to
take the risk that they will remain healthy throughout the year - a safe
bet for the insurers but a big gamble for the patient. With time, it
becomes even more treacherous for individuals to bet that they will
remain healthy forever.

It is particularly appalling when they say that the principle reason for
the Affordable Care act was to enable people to purchase health
insurance. Some of us thought that the principle reason should have been
to remove financial barriers to essential health care for everyone.

Really, haven't we had enough of Congress and the Obama administration
supporting the private insurance industry? How about demanding support
for America's patients instead? Throw out the insurers and enact an
improved Medicare for all. We just might have to throw out the
politicians to get there.