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  • Micromanagement of Health Benefits Under Obamacare Begins Now

    The House of Representatives passed a measure to fully repeal Obamacare, but the negative effects of the law will continue to unravel until the legislation makes it to the President’s desk. These include the requirement under the new law that the Department of Health and Human Services (HHS) define “essential health benefits,” which must be included in all plans sold in the new health exchanges beginning in 2014. The process began last week.

    The legislation outlines general categories to guide the Administration, which is otherwise given unlimited authority to further define the vague guidelines and include others as HHS sees fit.

    This expansion of central authority presents several problems. First, the uniformity sought by the authors of Obamacare will be next to impossible for Administration officials to achieve. In determining the essential health benefits, they can take one of two approaches, as health policy expert John Hoff writes in recent Heritage research. The first would be to keep it general, defining required benefits as those that fall under the categories listed, as well as any other categories that HHS includes. This route would provide little useful information about what insurers must actually cover.

    The second approach, Hoff writes, would be to list specific services that must be covered. This, however, “starts down a road of infinite complexity and overwhelming detail. If, for example, diagnostic services are included, will the definition list MRI scans as a required diagnostic procedure? Even if it does, the definition would be meaningless unless it goes on to specify under which conditions an MRI must be covered. Which symptoms require an MRI scan rather than a less-expensive x-ray? How long must the patient have experienced the symptoms? Similarly, with respect to hospitalizations—for which conditions and under what circumstances would insurers be required to provide coverage? When it comes to cancer patients, are all chemotherapies included as part of the “essential health benefits”? Are only some included? It is impossible for HHS to define the circumstances for each and every treatment.”

    In reality, no central authority can determine what care must be provided and when for every patient. Furthermore, requiring all exchange plans to offer the “essential health benefits” will diminish the consumer’s ability to choose a plan that works best for them. Experts on both sides of the aisle agree that general guidelines would be the better approach for consumers. According to David Schwartz, health counsel for the Senate Finance Democrats, “Too many specifics won’t provide enough flexibility in the market.”

    Moreover, plans are likely to become unaffordable as a result of federally mandated benefits. First, Obamacare directs HHS to ensure that the “essential health benefits package” is “equal to the scope of benefits provided under a typical employer plan.” Of course, there is no way to define, in objective terms, a “typical” plan. The Administration could determine that the most comprehensive plans, offered by large, unionized industries, are the most “typical.” This would require individuals and small businesses to purchase generous packages that would likely be unaffordable.

    Then there’s the fact that the act of mandating benefits alone will bring advocacy groups out of the woodworks to lobby for particular items and services, leading to arbitrary and unnecessary inclusion of certain benefits. Benefit mandates at the state level have shown this effect. In its annual report, the Council for Affordable Health Insurance observed, “Mandating benefits is like saying to someone in the market for a new car, if you can’t afford a Cadillac loaded with options, you have to walk.” Existing state-mandated benefits include things like acupuncture, hair prosthesis, massage therapy, and other services that are unnecessary for most patients. Nevertheless, once mandated, all covered individuals must pay for these.

    Defining what kind of coverage Americans must have is just one way the Administration will have unchecked power to determine the direction of health care reform under Obamacare. To read more, click here.

    Posted in Obamacare [slideshow_deploy]

    16 Responses to Micromanagement of Health Benefits Under Obamacare Begins Now

    1. George Colgrove, VA says:

      This just shows the nightmare of centralized services of any kind and is a glaring example of what our founders were desperately trying to prevent. Government should be avoided in every case and where it is necessary by the definition found in the constitution should be as minimum as possible.

      The answer to healthcare is not legislation or government – it is choice fully available on the open market. The leaders should be the customers first and foremost and then the providers, be it insurance or medical services.

      Employer provided healthcare was an invention of the DoD back in FDR’s days to lure men into service. Prior to that, a doctor visit was not costly and often done by professionals who would provide services at the patient’s home. Federalized healthcare is nothing better than anything else that has been federalized – DMV, Flood “insurance” and so on. It is slow, cold, slothy, cumbersome and full of red tape.

      Employers shoudl not be providing healthcare benefits or any benefits for that matter – be it private sector or government. The federal government alone has removed 2.7 million federal employees from the open market. People who with their pocket books could make far better choices at lower costs than what a union who has the insurance company in their pocket.

      Employees should be allowed to shop for their benefits via an independent private sector benefits broker. This would include the common health, life, dental and glasses insurances as well as 401K’s and other investment strategies. An employee will engineer their own package to their liking using the full open market to decide from. This will enhance competition and will give small upstarts a better chance at getting customers. The employee will get a summary of benefits, which they will take to their employer. The employer will no longer have to provide an extensive HR department to take care of these tasks and therefore can focus on their trade. The employer would then have a negotiation chip on how much of that package they will pay for. Government bodies will be forced to use private sector averages, as they cannot be trusted to handle this on their own. The fact we are dealing with scares tax payer dollars and with rampant nepotism, favoritism, and political and corporate connections that exist in government, if given the chance they would simply pay 100% of a lucrative $50,000 package if for example they wanted their son or some contractor’s daughter to do well. The feds currently get an average $41,000 benefits package whereas the private sector package does not even reach $10,000!

    2. Bill Huber says:

      Recently I compared health insurance costs between Ohio and Massachusetts. I went to the Massachusetts Insurance Connector and found that the lowest price for a health insurance policy for my family would be $1,296 per month. Then I went to http://www.ehealthinsurance.com and found that the lowest price for a similar health insurance policy for my family in Ohio was $305 per month. My concern is that the difference in costs is due to the differences in the “essential health benefits package”. As a healthy person I do not want to pay for benefits I do not need. If this package is implemented in Ohio, I am looking at a $11,892 annual increase in health care costs.

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    7. Barbara Brown Russel says:

      What so many people miss is WHERE ALL THE laws on Obamacare are hid.

      For one instance the Electronical Medical Records are his in the Stimilus Bill.

      If a Small Hospital CAN NOT get the Records. We have a Population of around 4,500 with a Small Hospital., got my records mixed up with a another person with the same name. On all my reports from Medicare it showed that I had spent days and had EKG, Lab. work, etc. Very expensive , since I always check my reports from Medicare. I noticed the errors. They had another woman with the same name in my town, but her numbers should have been different.

      For some reason they had the same I.D. No. as I had. Needless to say it took about 1 YEAR to get the mess straightened out.

      What a mess with the Federal Gov. in charge.

    8. Dan Clamage, Pittsbu says:

      What Congress fails to understand is that insurance is risk-based. Premiums are set based on the risk of having to actually pay for a covered benefit. Just because a person doesn't actually use a covered medical service, that doesn't mean the premium can simply be lowered downward. Obamacare mandates an insurer actually spend 85% of its premium revenues on paying out claims. This is unheard of in any other industry. Imagine if beer manufacturers were required to spend 85% of their gross revenues on making beer; and if they fail to do so, pay the consumer a rebate. Preposterous!

    9. Bobbie says:

      Those in support of this ugliness are counting on the confusion of the people as government sees, the more confusion the government makes it, the more compliant we become. REPEAL! It is dishonest, falsely represented and UNCONSTITUTIONAL!

    10. Bobbie says:

      There is more threat of punishment than anything beneficial. And it's UNCONSTITUTIONAL!

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    12. Leon from Redding CA says:

      George is right-on. Employer-funded healthcare has always been nothing but a tax dodge. Somehow the general public has a twisted image that businesses are paying for employee healthcare. No, businesses are taking part of an employee’s earnings and directing them to buy health insurance to help the employee avoid paying income tax. What employers don’t understand is that the current tax code also allows employers to pay the employee for healthcare without buying insurance and still avoid the tax. Take a look at a group called Lyfebank to see how this is being done. When the consumer takes ownership, many of the problems with our third-party payor system will go away.

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    14. Gordon, Jacksonville says:

      Over half of all U.S. healthcare costs today are spent on often unnecessary or ineffective "lifestyle improvement" medications and procedures. And since the federal government "can't say no", everything will be included (e.g., electric scooters for obese people). IF Medicaid and Medicare only covered annual exams, generic medications and only life threatening or potentially debilitating medical issues, then MAYBE we could afford to offer healthcare support to the poor and the elderly .

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    16. Sara Smiles says:

      The answer to healthcare is not legislation or government – it is choice fully available on the open market. The leaders should be the customers first and foremost and then the providers, be it insurance or medical services. After comparing prices, I found that http://www.insuremonkey.com was able to offer very good rates compared to others I looked at. I think all-in-all a free market system for health care is a good thing…as long as the quality of service is monitored well.

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