Disappeared News

by Larry Geller

At the time the national health care plan was in flux, many of us pushed hard for single-payer, for some of the reasons the article below discusses. Progressive opponents of what has become the Affordable Care Act (ACA) looked upon the ultimately proposed legislation as a windfall gift to insurers that would enrich them and make implementation of single-payer more difficult or impossible any time soon.

I was told, even by members of our own Congressional delegation, that enactment of single-payer was not feasible because Democrats lacked the super-majority necessary. Well, the ACA was enacted without a super-majority. Single-payer and millions of Americans were thrown under the bus by the Democrats and the Obama administration. And yes, the winners are the insurers.

Some misconceptions about the ACA persist. For example:

It will cover people with preexisting conditions. Um, maybe, until you need costly care. The ACA preserved a loophole you can drive a truck through: But the bill has a giant loophole: insurers can continue to cancel policies in the case of “fraud or intentional misrepresentation” as they do now. And the bar for fraud, per established case law, is remarkably low. Forgetting to tell your insurer about a past ailment, no matter how minor, qualifies. Say you forget to tell your new insurer that you had acne or a concussion in your teen years. That will more than do.

[naked capitalism, Welcome to the Future of Your Health Insurance. It Sucks., 11/27/2012]

Hawaii has additional protection that other states do not, thanks to laws which advocates have fought long and hard for over the years (Prepaid Health Care Act, Patients Bill of Rights and Responsibilities). But the tide has turned, in part due to pro-insurer initiatives of the Abercrombie administration.

For example, in the previous legislative session the right to have the Insurance Commissioner review health insurance denials was stolen from public workers, state legislators and others who still had that right under Hawaii law. This was, pure and simple, a gift to HMSA and other insurers who could deny a procedure or medication without fear of reversal by the Insurance Commissioner. Before that right was taken away, after all internal appeals were exhausted, the patient could still get a denial reversed. Often, just the threat by an attorney of taking the case to the Insurance Commission was sufficient to gain reversal of the decision.

Employer insurance plans had lost that right in an earlier court case, but public workers and others still retained it. Consumer groups gathered together to oppose the law, but Gov. Abercrombie, in a move still resented by advocates, signed it into law just after his representatives met with a large group who offered to prove that it was not necessary, as claimed, to conform with federal law. The bill was signed quickly to stifle opposition, and now no one in Hawaii can appeal to the Insurance Commission. Oh, and the definition of “medical necessity” is also now left to insurers, without protection under the old law.

So when the ACA becomes effective, insurers in Hawaii will not be impeded by that protective law. It’s gone.

The article details its author’s personal experience with Cigna. We were also insured by Cigna for many years in the ‘90s, and had some of the same experiences. As an example, I remember sending off envelopes of claims to them and waiting, waiting, until finally a phone call elicited the reply that they had not received them. Sure.

Hawaii law allows the Insurance Commissioner to review health insurance rate increases and decide if they are reasonable. Some have been scaled back after review, and certainly the expectation of refusal curtails some excessive increase requests. But the article notes that the “cap” on insurance premiums in the ACA is really a huge windfall for insurers, and I am not certain how that will mesh with Hawaii’s law (a subject for research):

The health insurer have been engaged in price gouging over the last two decades. Health insurers as of the early 1990s spent 95% of health care premiums on medical expenditures. They now spend less than 85%. The ACA requires them to spend 80% on health care costs. So the bill institutionalizes an egregiously fat profit margin.

Remember, health insurers do not provide health care. Doctors, nurses, hospitals and other providers do. So the extra margin that insurers will be able to take, while medical professionals are still saddled with the cost of preparing and tracking claims, is money that does not go towards health care.

Even cursory discussion of the problems with the ACA evaporated during the pre-election period when Republicans insisted they would repeal it if they achieved the presidency. That didn’t happen, but the quandary now will be how to remove health insurers from the drivers seat with neither Republicans or Obama wanting to improve the ACA for the American people (including those millions who will still have no coverage). With their wallets fattened by the ACA, they will be able to add more muscle to their already overwhelming lobbying cadre in Washington.

Permalink posted by Larry @ 11/27/2012 02:19:00 PM