President Barack Obama is visiting North Carolina and Virginia today looking to shift the debate away from the massive new spending and government control in his health care plan, and to the “Security You Get” under Obamacare. But if “health insurance consumer protections” are what Obamacare is all about, then why is Congress fighting over massive expansion to Medicaid, the creation of a federal health board, and a public option? If these goals are what the President has in mind, why is Congress doing this other nonsense?
White House talking point #1: No Discrimination for Pre-Existing Conditions
Heritage response: We want all Americans to be able to join the insurance pool without facing discrimination. The federal government has rules on the books that limit the time frame in which employers can impose pre-existing condition exclusions. Congress could simply extend those same rules to the individual-level health insurance market as well.
That way, people who do the right thing by getting and keeping coverage won’t face pre-existing condition exclusions if they change coverage. At the same time, people will be discouraged from trying to “game” the system by waiting until they are sick to apply for coverage, which is what will happen if insurers and employers were prohibited from imposing pre-existing condition exclusions under any circumstances.
White House talking point #2: No Exorbitant Out-of-Pocket Expenses
Heritage response: The concern with this promise is you’re ultimately taking choices away from people. We don’t want government to use health-care cost-sharing as a means of income redistribution. When a politician says, “You’re paying a $2,500 deductible and I promise to lower it to $500,” consumers need to keep in mind what options are being taken away from them for that lower cost.
Government shouldn’t be defining those price points. Consumers and the marketplace should. If we subject health insurance premiums to this kind of government manipulation, Washington will take choices and liberty away from the American people.
In today’s market, consumers may pay lower health premiums because they’re willing to take the risk of a higher deductible, which can mean out-of-pocket costs. Often, that’s because they think their total cost will be less in the long run. Why would you want to take away that option from them?
White House talking point #3: No Cost-Sharing for Preventive Care
Heritage response: This is an easy promise to make, but in reality it will drive up health care costs for everyone. When you give people something for free, even preventive care, it will lead to over-utilization, because people aren’t associated with the actual costs.
Plus, where do you stop on the definition of “preventive care?” Do we want to promise everyone in America they can have their teeth cleaned for free twice a year as preventive care? Or are school jungle gyms really preventive care taxpayers should be paying for?
Furthermore, some experiments have found that patients actually value and use preventive care more when they have to pay for it (through co-pays or other means).
White House talking point #4: No Dropping of Coverage for Serious Illness
Heritage response: This is an outrageous issue that needs to be addressed. Now, current federal law already prohibits insurers or employers from selectively dropping the coverage of sick people.
However, it does permit exceptions to that general rule in cases where the policyholder engaged in fraud, either when applying for coverage or filing claims. Critics have pointed to the cases of insurers apparently abusing that fraud exception to deny coverage or payment.
This kind of behavior from insurers is unacceptable. However, the solution is to make sure the existing laws on the books are more accurately and fairly applied and enforced.
White House talking point #5: No Gender Discrimination
Heritage response: Again, the solution is that Americans are treated as part of the larger group. We don’t want health insurance companies looking at a consumer as just a man or woman. Now currently, most health insurance plans do not charge men and women different premiums for the same coverage.
Still, men and women should all be grouped together and viewed “blindly.” When you have everyone in the pool, spreading the risk and set the premiums accordingly, you’re less likely to run into discrimination based on gender or health type.
White House talking point #6: No Annual or Lifetime Caps
Heritage response: In your policy, you might have coverage for up to $1 million. Insurance companies typically do. The problem is that $1-million cap was set 40 years ago, when $1 million was considered to be a lot more than it is today.
Rather than regulating particular policies, the solution is expanding coverage by giving individuals access to that marketplace or exchange where they can freely pool their risk together.
White House talking point #7: Extended Coverage for Young Adults
Heritage response: We call them the “young immortals,” but they should be participating in the pool. But how do you get them there? We want these young people to join the health insurance pool, but you don’t want to create a situation where young adults can jump on and off an insurance plan. This is an issue for health plans on how they can be more competitive and innovative with their health plan products.
White House talking point #8: Guaranteed Insurance Renewal
Heritage response: Congress has already addressed this issue. Since 1996, federal law has required health insurers to provide guaranteed renewal of coverage for individual and group market plans. An insurer cannot decide to not renew you because of your use of medical care. We need to see how we can make sure these rules are justly enforced.
Ed Haislmaier co-authored this post.