Saturday, May 01, 2010

Health Care in America: A Layman Reads the Health Care Bill - Part 3

Before we begin the almost uncomfortably exciting Subtitle B of Title I of the health care act, I believe some administrative activity is in order. It has come to my attention that the version of the legislation I linked to in the first post is technically the Senate version of the bill. While I believe that there is no difference between that and what is officially listed as law, I think in the name of authenticity that my source should be updated. As such, I found, through the government printing office website, the full text of the bill as enacted. I'll also update the original link to reflect this change. An unexpected upside to this adjustment - the bill is now a measly 906 pages! Not that anything is missing, the text is just mashed closer together with smaller spacing and, I believe, a smaller font. Good times!

And now, on to the the actual reading.

Subtitle B - Immediate Actions to Preserve and Expand Coverage is, as mentioned above, riveting stuff. So let's get to it.

Section 1101 starts out the subtitle dealing with granting those with preexisting conditions immediate access to health care. By sometime around June or July, a temporary "High Risk Pool" will be established to provide insurance to said folks. This pool will expire on January 1, 2014. The pool cannot restrict because of preexisting conditions - surprise! - and must meet specific requirements, such as covering at least 65% of costs and meeting a specific out-of-pocket limit which can be found in section 223(c)(2) of the Internal Revenue Code of 1986 (hereafter referred to as the "1986 Code"). Apparently one is supposed to be able to read section 223(c)(2) and understand just what that out-of-pocket limit is. Also apparently, one should be smarter than me to do so. I think it's $5,000 max, but I'm not guaranteeing that. Feel free to check my work on that one.

Other restrictions stipulated apply to how drastically rates can vary, specifically that there cannot be a 4 to 1 variance based on age. I'm assuming this means that at most, an older person who is more of a liability to the insurer can't pay more than 4x the amount a younger person would pay.

Eligibility for the pool is pretty simple - one must be a U.S. citizen or national, have a preexisting condition, and cannot have been insured for the prior 6 months. This last part inspires the next part - a stipulation against other insurers "dumping" risk, which is to say encouraging (or paying) folks enrolled on their plans to leave so they can be eligible for this new pool. That kind of activity will be illegal, so don't even think about it.

There will be a provision of $5 billion to cover the costs of the pool that exceed the income from premiums. It is also required that, in the next 4 years, procedures be devised to transition enrollees to a qualified health plan in one of those mysterious exchanges we've mentioned earlier. Those qualified health plans will be required to leave out coverage caps on this. It is also noted that the Secretary (presumably the Secretary of Health) can stop taking applications to the pool in order to stay within the $5 billion budget, and that this pool provision supersedes any state laws for high risk pools. So far, this is the closest thing I've found to infringement of the Constitution, and I'm not even sure it is. I believe that the Constitution explicitly states that the federal government can enact laws that will supersede state laws. I'm just saying this is the closest thing I've found so far. I'd be interested to know if anyone reads this differently.

Section 1102 provides for reinsurance for early retirees. This is a temporary gig, and expires January 1, 2014. After being confused about this one for a while and seeking input from none other than my brother, I believe this implies an expansion of Medicare. I also believe this because I'm pretty sure I saw in the table of contents that later on we'll see an expansion of Medicare. I'm good like that.

In any case, it's essentially reinsurance for folks who are retired, over 55, and not yet eligible for Social Security benefits if they're enrolled in an early-retirement insurance plan sponsored by a previous employer or employers. The plan appropriates $5 billion to reimburse those plans for claims of expenses between $15,000 and $90,000 in a plan year. It will reimburse up to 80% of the total expenses, but those reimbursements have to be used by the plan to lower the cost to the individual enrollees by lowering premiums, deductibles, co-payments, or out-of-pocket costs. This will be enforced by annual audits of the insurers.

Section 1103 tackles information that is supposed to allow consumers to identify affordable insurance. This one's pretty cool, actually. It has two parts. First, in May of 2010, a standardized format will be created for the presentation of information on coverage options. Think of it as the "Nutrition Facts" of health insurance, except, despite what you may see on certain auto insurance commercials, no insurance comes in a cardboard box. Sorry. Anyway, the format has to at least include info on:

  • the percentage of premium revenue spent on non-clinical costs
  • eligibility
  • affordability
  • premium rates
  • cost-sharing provisions
Second, by July 1, a web portal will be created through which anyone, in any state, can find "affordable health insurance options in their state." The aforementioned standard format will be used for the website.

The final section in Subtitle B, section 1104, covers "Administrative Simplification." I know, I'm excited, too, that the same folks who brought us the DMV and eleventy-billion different variations of the 1040 tax form are now putting on clinics for administrative simplification. But this section is surprisingly valid.

First off, we have the creation of what they're calling Uniform Standard Rules of Operation for, basically, paperwork. This Standard requires simplification of terminology and forms within the health care/health insurance industry. It "seeks to reduce the number and complexity of forms...for patients and providers." It clearly states that the goal of these uniform operating rules is ease of use and simple "uniformity."

These Standards must be adopted by July 1, 2011 for implementation on or before January 1, 2013, and must include special rules for dealing with electronic payments. Similar rules for health claims, enrollment, premium payments, etc. are required to be effective at least by January 1, 2016. It is disturbing that there exists an industry for which it seems understandable that the government should step in and effectively say, "Ok, folks, this is ridiculous - how can anyone understand all these forms?! Let's clean it up, for Pete's sake!" But, here we are.

My favorite part of this section is the "penalties" part at the end. Noncompliance, basically not implementing the standardized rules, will be incur a penalty payment of $1. Yep, just $1...per covered life in the noncomplying plan...per day that the plan doesn't comply! That could seriously add up, and that makes me happy. Oh, and the penalty for "misrepresentation" (i.e. being a dirty stinking liar) is double the standard penalty. There is, though, a limit on the penalties. They can't amount to more than $20 per person per plan annually. Or $40, if you're a liar.

So there you have it! Subtitle B, done and done. Next time, uncontrollable excitement with Subtitle C - Quality Health Insurance Coverage for All Americans. I know - all of us? But then how will we know who is important and who is worthless around here? Don't worry, I'm sure we'll still find a way. We're innovators, after all.

1 comment:

angiejean said...

Joe! Kudos on the humor you've deftly found a way to include! :) I love how you say things like, "let me know if you read that differently," as if any of us are going to read this thing. (no offense) Then again, maybe another over-achiever will find your blog and you can begin conversing on the points of clarification. (This is the only time I have or will refer to you as an over-achiever, so enjoy it briefly.)