Going Broke And Breaking Promises

by digby

Insurance companies will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or lifetime, and we will place a limit on how much you can be charged for out-of-pocket expenses – because no one in America should go broke just because they get sick. Barack Obama August 14, 2009.
I thought that one was long settled. Everyone agreed that no matter what happened with the public option, premium costs and subsidies etc, the insurance reforms concerning things like rescission, denial of coverage and caps were going to happen come what may. But apparently not:

A loophole in the Senate health care bill would let insurers place annual dollar limits on medical care for people struggling with costly illnesses such as cancer, prompting a rebuke from patient advocates.

The legislation that originally passed the Senate health committee last summer would have banned such limits, but a tweak to that provision weakened it in the bill now moving toward a Senate vote.

As currently written, the Senate Democratic health care bill would permit insurance companies to place annual limits on the dollar value of medical care, as long as those limits are not "unreasonable." The bill does not define what level of limits would be allowable, delegating that task to administration officials.

Adding to the puzzle, the new language was quietly tucked away in a clause in the bill still captioned "No lifetime or annual limits."
This is one of the reasons why people go bankrupt even though they have health insurance. Some illnesses last for years and are very expensive.

And guess what happens when sick people finally lose their insurance, lose their houses, basically lose everything they have? They go on Medicaid.

Here's a study done by Price Waterhouse on the impact of the lifetime caps:

The findings are based on public data, surveys of major insurers, and PwC actuarial modeling. Key findings from the report include:

* Approximately 55% of individuals with employer provided health insurance are subject to lifetime limits; the most common of which are $1 million and $2 million.
* It is estimated that approximately 20,000 to 25,000 people have exceeded limits with their current health insurance plans.
* Premiums would increase by less than one-half of one percent if limits were increased to $10 million.
* Removing limits would reduce Medicaid costs by $1 billion per year.

I wonder if anyone's told the CBO to add that extra billion a year back into the plan's costs?

President Obama has not really done much of anything to advance this health care bill except to tell everyone they ned to get along. But two specific goals that he personally promised were that nobody should lose what they have and that nobody should ever have to go broke just because they got sick. He should at least care about those two principles enough to insist that this is fixed before he signs the bill. It's really not too much to ask.

Update: Ezra Klein elaborates:
Hill sources explain that this was inserted because CBO said premiums would "go through the roof" if insurers couldn't cap benefits. The official quote from Jim Manley, Harry Reid's spokesperson, says much the same thing. "We are concerned that banning all annual limits, regardless of whether services are voluntary, could lead to higher premiums," he explained. "We continue to work with experts on how best to accomplish our goals of preventing insurance companies from imposing arbitrary coverage limits while providing the premium relief American families need and deserve.”

This, however, obscures the choice that's being made. The tradeoff here is slightly higher premiums for everyone versus total financial ruin for the people who absolutely need help the most. Politically, choosing "everyone" rather than "people with cancer" makes sense, because the first group has more votes than the second. But on a policy level, it's nuts. Health-care insurance literally exists to protect us from the worst-case scenarios. This provision says that the Senate bill will protect everyone but the truly worst-case scenarios. If you assume that people support the basic concept of health-care insurance, then they don't, or shouldn't, support this.

But the American people are much more likely to hear that premiums are going up than they are to get a detailed explanation of what they're getting in return for higher premiums, and so the Senate bill is watching its back.

So perhaps the CBO didn't factor in the additional costs to Medicaid? Or somehow, it was going to cost more if insurance companies spent the money? Unless they are saying that these people just need to go die, the money for their care will be spent by someone.

The problem is that insurance companies must make huge profits, so putting all these very ill people on the government program makes a lot more sense for them. Unfortunately, in order to do that, these poor sick people have to lose everything they have first.

This is reform?