Like Your Health Plan? Read This

August 26, 2009 • Commentary
This article appeared in the Orange Country Register on August 26, 2009.

In his most recent weekly radio address, President Barack Obama denounced “willful misrepresentations and outright distortions” in the debate over health care reform. He then went on to repeat one of the most outright distortions in the entire debate: “If you like your private health insurance plan, you can keep your plan. Period.”

No, Mr. President. No you can’t.

To go straight to the chapter and verse: under Section 59(B)(a) of HR3200, the bill making its way through the House, and Section 151 of the bill that passed out of a Senate committee, every American would be required to buy health insurance.

And not just any insurance: to qualify, a plan would have to meet certain government‐​defined standards. For example, under Section 122(b) of the House bill, all plans must cover hospitalization; outpatient hospital and clinic services; services by physicians and other health professionals, as well as supplies and equipment incidental to their services; prescription drugs, rehabilitation services, mental health and substance‐​abuse treatment; preventive services (to be determined by the Centers for Disease Control and Prevention and the United States Preventive Services Task Force); and maternity, well‐​baby, and well‐​child care, as well as dental, vision, and hearing services for children under age 21.

But that’s not all. Section 1239(b) of the bill also establishes a federal Health Benefits Advisory Committee, headed by the U.S. surgeon general, which will have the power to develop additional minimum benefit requirements. There is no limit to how extensive those future required benefits may be.

If your current health insurance doesn’t meet all those requirements, you won’t be immediately forced to drop your current insurance for a government‐​specified plan. But you would be required to switch if you lose your current insurance or “if significant changes are made to the existing health insurance plan.”

More critically, for the 70 percent of us who get our insurance through work, those plans would all have to satisfy the government’s benefit requirements within five years.

More likely, your employer will simply find that the increased cost and administrative burden is not worth it, and will dump you into the government‐​run “public option.”

The Lewin Group, an independent actuarial firm, estimates that under the House version of the bill, as many as 89.5 million workers will simply lose their current employer‐​provided plan and be forced into government‐​run insurance.

Seniors, too, could lose their current coverage, at least the 10.2 million seniors currently participating in the Medicare advantage program. That program offers many seniors benefits not included in traditional Medicare, including preventive‐​care services, coordinated care for chronic conditions, routine physical examinations, additional hospitalization, skilled nursing facility stays, routine eye and hearing examinations, and glasses and hearing aids But the House bill cuts payments to the Medicare Advantage program by roughly $156.3 billion over 10 years.

In response, many insurers are expected to stop participating in the program, while others increase the premiums they charge seniors. Millions of seniors will likely be forced off their current plan and back into traditional Medicare.

Finally, the bills would all but eliminate Health Savings Accounts (HSAs), currently used by nearly 10 million Americans. Section 122 of the House bill and 311 of the Senate bill set minimum payout levels for any insurance policy. Insurance payouts must cover 70 percent of claims under the House bill and 76 percent under the Senate bill. And the bills also prohibit any deductibles or co‐​payments for preventive care.

But virtually none of the high‐​deductible insurance plans in existence today, and required to accompany an HSA, can meet such a standard. They are simply not designed to work that way. The result will be that a plan designed to those specifications would offer few if any advantages over traditional insurance and would not be competitive in today’s markets.

As a result, insurers warn they would stop offering high‐​deductible policies.

Any way you look at it, under the bills currently before Congress, millions of Americans will be forced out of their current health insurance plan, even if they are happy with it. Period.

It is time for the president to stop spreading this particular “willful misrepresentation and outright distortion.”

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