The Unintended Consequences of Healthcare Reform

(that are never properly considered)

Two healthcare reform proposals have dominated the debate to date; the public option and how to finance the additional cost for universal coverage. However, there are some other significant changes in the House Bill that the general public would find hard to understand that would nevertheless dramatically change the healthcare system if passed.

The new Health Commissioner that will oversee the Health Choices Administration will have enormous powers over the new healthcare exchange and private QHBPs (qualified health benefit plans). The healthcare exchange will act much as the Massachusetts Connector and provide a marketplace for individuals and small employers to purchase insurance. In essence, it will allow individuals and small employers to increase their purchasing power by forcing insurers to put them into large risk pools.

Some of the requirements in the House Bill for QHBPs are as follows:

• May not consider pre-existing conditions
• Guaranteed issue and renewability
• Premium rate variability:
  • Age – limited to 2-1 ratio from most expensive age group to least expensive
  • By area
  • By family make-up; ratio to individual premium must be consistent
• Parity in mental health and substance abuse benefits to medical benefits
• Must meet minimal medical loss ratio established by Commissioner; if does not meet it must make a refund to subscribers
• No annual or lifetime limitations
• No deductibles or co-pays for preventive services
• Limit to annual out-of-pocket expenses; $5,000  per individual, $10,000 per family
• Basic plan benefits must cover 70% of the expected cost of healthcare for the population; enhanced plan must cover 85% and premium plan must cover 95%

Some of the powers of the Health Commissioner are as follows:

• Commissioner has right to determine adequacy of network and force an insurer to pay in-network rates where their contracted network is deemed inadequate
• Commissioner can adjust premiums revenues among plans to adjust for adverse selection
• Under the public option, the provider payment mechanisms and policies may be changed from the Medicare methodology to include patient-centered medical home and other care organizations, value based purchasing, bundling of services, differential payment rates, performance or utilization based payments, partial capitation, and direct contracting with providers.

                The Unintended Consequences of Healthcare Reform – #1
                The Unintended Consequences of Healthcare Reform – #2
                The Unintended Consequences of Healthcare Reform – #3 Part 1
                The Unintended Consequences of Healthcare Reform – #3 Part 2
                The Unintended Consequences of Healthcare Reform – #4