http://www.washingtonpost.com/wp-dyn/content/article/2011/01/14/AR2011011406172.html
By N.C. Aizenman
Washington Post Staff Writer
Friday, January 14, 2011; 8:24 PM
By N.C. Aizenman
Washington Post Staff Writer
Friday, January 14, 2011; 8:24 PM
Should health insurers have to cover treatment of Lyme disease? What about speech therapy for autistic children? Or infertility treatments?
This week an independent advisory group convened by the Obama administration launched what is likely to be a long and emotional process to answer such questions.
It's hard to overstate the stakes.
Draw up a package that is too bare-bones, and millions of Americans could be deprived of meaningful health coverage when they need it most - undercutting a central goal of the health-care law. Add in too many expensive benefits and premiums could spike to unaffordable levels.
At a two-day hearing Thursday and Friday held by the Institute of Medicine ,even ardent supporters of the health-care law stressed the dangers of this second scenario: If insurance were to be become too costly, many Americans could decide it makes more sense to pay a penalty rather than comply with the law's requirement that virtually everyone obtain coverage- undermining a cornerstone of the law. Indeed, the law exempts consumers from the mandate to buy insurance if the cost exceeds 8 percent of their income.
"That must be the number one thing in your minds," Gruber said. "To understand the trade-off between our desire to make insurance generous and our desire to make it affordable."
The 18-member panel, which includes researchers and physicians as well as representatives of both consumer groups and insurers, has already received more than 300 public comments.
The committee, which aims to offer its recommendations as soon as next fall, is not charged with drawing up a comprehensive list of services to be included in the essential benefits package. Instead, Sebelius has asked it to weigh in on a number of key questions - beginning with how detailed to make the package in the first place.
Speakers representing insurers and employers argued that Sebelius should simply ensure that plans are covering the broad categories already laid out in the law. Otherwise HHS risks micro-managing in ways that interfere with insurers' ability to offer consumers choice and stifle their use of incentives to encourage consumers to control costs.
Some consumer advocates countered that unless HHS spells out the specific services to be covered in each category and prohibits insurers from placing limits on their use, patients could be denied vital care for conditions raging from obesity to kidney disease. "Access to repeated [kidney] transplants should not be limited," pleaded Troy Zimmerman, of the National Kidney Foundation.
He and advocates also urged HHS to formally define terms such as "medically necessary," which they warned insurers could otherwise interpret in ways that enable them to deny appropriate care.
"When a 40-year-old obese woman comes to my practice . . .her medical needs dictate that I provide her with obesity education and direct her to nutrition counseling . . . to help her prevent diabetes. But when billed for, these services are usually denied," said Arnold Cohen, Chairman of the Department of Obstetrics and Gynecology at the Albert Einstein Medical Center in Philadelphia.
Also at issue is language in the law directing HHS to ensure that the essential benefits package is comparable to a "typical employer plan." Did Congress mean the benefits-rich plans sponsored by large businesses? The skimpy offerings purchased by many small businesses? Something in between?
Though several current and former congressional staff involved in drafting the law testified, their answers were too varied to give a clear sense of Congress's intent.
The panel also grappled with how much consideration to give existing minimum benefits required by various states.
In some case these mandates stem from the high incidence of a particular disease in that state - lyme disease in Connecticut, for example. But James Dunnigan, a member of the Utah House of Representatives complained that in others "it's a matter of local politics and not necessarily a reflection of what's medically necessary."
States can continue to impose whatever benefits they choose above the minimum essential benefits package. But they will have to cover the extra cost for those plans sold on state-based exchanges.
Dunnigan proposed that HHS allow insurers to offer an essential benefits package that is typical of what employers offer in the given state. Jon Kingsdale, who like Gruber was instrumental in designing the Massachusetts health plan, countered that this would create an workable patchwork of mandates.
After hours of testimony, the panel's chairman John Ball, seemed to find only one point on which everyone could agree: "We have an impossible job."
It's hard to overstate the stakes.
Under the new health-care overhaul law, beginning in 2014 all new insurance plans for individuals and small businesses will have to include a package of minimum "essential benefits" falling into 10 general categories - ranging from hospitalization, to prescription drugs, to rehabilitative and habilitative services. But Congress largely left it to Secretary of Health and Human Services Kathleen Sebelius to decide how detailed to make the essential benefits package and what exactly to put in it.
At a two-day hearing Thursday and Friday held by the Institute of Medicine ,even ardent supporters of the health-care law stressed the dangers of this second scenario: If insurance were to be become too costly, many Americans could decide it makes more sense to pay a penalty rather than comply with the law's requirement that virtually everyone obtain coverage- undermining a cornerstone of the law. Indeed, the law exempts consumers from the mandate to buy insurance if the cost exceeds 8 percent of their income.
Also, while poor people would still be able to use federal subsidies to buy plans on state-run marketplaces, the impact on the federal budget could be catastrophic, ultimately dooming one of President Obama's signature legislative achievements.
Jonathan Gruber, a prominent economist who helped create the state plan in Massachusetts, told the panel he estimated that a 10 percent rise in the cost of the essential benefits package would increase the cost of government subsidies by 14.5 percent, or $67 billion, while reducing the share of the insured by 4.5 percent ,or 1.5 million, through 2019. "That must be the number one thing in your minds," Gruber said. "To understand the trade-off between our desire to make insurance generous and our desire to make it affordable."
The 18-member panel, which includes researchers and physicians as well as representatives of both consumer groups and insurers, has already received more than 300 public comments.
The committee, which aims to offer its recommendations as soon as next fall, is not charged with drawing up a comprehensive list of services to be included in the essential benefits package. Instead, Sebelius has asked it to weigh in on a number of key questions - beginning with how detailed to make the package in the first place.
Speakers representing insurers and employers argued that Sebelius should simply ensure that plans are covering the broad categories already laid out in the law. Otherwise HHS risks micro-managing in ways that interfere with insurers' ability to offer consumers choice and stifle their use of incentives to encourage consumers to control costs.
Some consumer advocates countered that unless HHS spells out the specific services to be covered in each category and prohibits insurers from placing limits on their use, patients could be denied vital care for conditions raging from obesity to kidney disease. "Access to repeated [kidney] transplants should not be limited," pleaded Troy Zimmerman, of the National Kidney Foundation.
He and advocates also urged HHS to formally define terms such as "medically necessary," which they warned insurers could otherwise interpret in ways that enable them to deny appropriate care.
"When a 40-year-old obese woman comes to my practice . . .her medical needs dictate that I provide her with obesity education and direct her to nutrition counseling . . . to help her prevent diabetes. But when billed for, these services are usually denied," said Arnold Cohen, Chairman of the Department of Obstetrics and Gynecology at the Albert Einstein Medical Center in Philadelphia.
Also at issue is language in the law directing HHS to ensure that the essential benefits package is comparable to a "typical employer plan." Did Congress mean the benefits-rich plans sponsored by large businesses? The skimpy offerings purchased by many small businesses? Something in between?
Though several current and former congressional staff involved in drafting the law testified, their answers were too varied to give a clear sense of Congress's intent.
The panel also grappled with how much consideration to give existing minimum benefits required by various states.
In some case these mandates stem from the high incidence of a particular disease in that state - lyme disease in Connecticut, for example. But James Dunnigan, a member of the Utah House of Representatives complained that in others "it's a matter of local politics and not necessarily a reflection of what's medically necessary."
States can continue to impose whatever benefits they choose above the minimum essential benefits package. But they will have to cover the extra cost for those plans sold on state-based exchanges.
Dunnigan proposed that HHS allow insurers to offer an essential benefits package that is typical of what employers offer in the given state. Jon Kingsdale, who like Gruber was instrumental in designing the Massachusetts health plan, countered that this would create an workable patchwork of mandates.
After hours of testimony, the panel's chairman John Ball, seemed to find only one point on which everyone could agree: "We have an impossible job."
One critical aspect of healthcare reform that I think flies a little too far under the radar is the concept of Essential Benefits. The Affordable Care Act includes a provision stating that every health insurance policy will need to provide a set of Essential Benefits for the policyholder and their families. The theory is that if we mandate that Americans purchase Health Insurance, those that don’t really want to buy it might go get the cheapest policy they can just to comply with the mandate and not have any real coverage in the end. So, the government will need to define a set of minimum Essential Benefits to ensure that those that are covered are, in fact, covered.
ReplyDeleteSounds harmless enough right? Go figure out what constitutes a minimum healthcare policy, put it into law and off we go. Unfortunately, this piece of the package could make or break health care reform and there isn’t an easy answer.
For example, in this article we can see just how high the stakes really are.
“Jonathan Gruber, a prominent economist who helped create the state plan in Massachusetts, told the panel he estimated that a 10 percent rise in the cost of the essential benefits package would increase the cost of government subsidies by 14.5 percent, or $67 billion, while reducing the share of the insured by 4.5 percent ,or 1.5 million, through 2019. ”
Healthcare Reform isn’t immune to the forces of economics. The decisions yet to be made on Essential Benefits will have a significant impact on people’s lives and they will also have a significant impact on the costs.
The economist has it right. When the prices of inputs go up, suppliers raise their prices. And when the prices go up, consumers will need more help in the form of subsidies or they will opt out. It’s supply and demand in action.
In my opinion, it is too early to say how supply/demand gets affected with the new law. As it stands now, there are uncertainities and I agree with you that the reform is not immune to the forces of economics. But, it is a good start. AMA (American Medical Association), Medicare/Medicaid and other healthcare organizations have done significant studies on Essential Benefits for various categories of service. If you apply 80/20 principle, lot of research already went into this for an optimized set. Those findings can be used as a guidance for defining the essential benefits. As I understand, the law already outlines some of the broad categories of services that include :
ReplyDelete•ambulatory patient services
•emergency services
•hospitalization
•maternity and newborn care
•mental health and substance abuse disorder services, including behavioral health treatment
•prescription drugs
•rehabilitative and habilitative services and devices
•laboratory services
•preventive and wellness services and chronic disease management and
•pediatric services, including oral and vision care
I don't this list is exhaustive but it is a good start. Taking lead from this, I think there is an opportunity for the law makers to address the concerns raised by Jonathan Gruber in his findings on Essential benefits.