For someone who has been talking for two decades about the need for universal health care, few words come to me easily about the health care reform passed by the House of Representatives and headed to the President’s desk.
The legislation unquestionably helps, by 2014, with subsidies for low income people to get health insurance and, by the same year, erases some of the insurance industry’s most pernicious practices. These include denials of coverage based on pre-existing condition, pricing based on medical condition, and cancellation of benefits for innocent omissions on an enrollment application.
On the other hand, the law requires all Americans to show proof of private health insurance by 2014 — or face tax penalties. The tax penalties could be larger, though they are not insignificant, and constitutional challenges might wipe out the individual mandate. Nonetheless, forcing Americans to buy private health insurance without regulating the price of their premiums is a recipe for a righteous consumer revolt.
Under the Congressional reform, insurers merely have to justify their premium increases on their web site, but they can charge as much as they want without a governmental right to reject premium increases. (The push for federal premium regulation, backed by Senator Feinstein, got left on the cutting room floor, by the parlimentarian, in the reconciliation process.) There are guidelines to establish parity between the cheapest and most generous benefit policies. Also insurers must spend 75% of a premium dollar on health care, rather than
on profit and administration, for individual policies and 80% in the group
market–either that, or pay a rebate to consumers. Most companies are already meeting those medical loss ratios today, which is why health insurer stocks have gone up since Congressional action. And insurers won the right to sell national plans that don’t meet minimum state benefit requirements, opening the door to junk insurance.
Bottom line, the legislation moves the cause of reform forward by casting new scrutiny on insurers, opening access to coverage to more low income individuals and beginning the dialogue about cost controls to lower health care costs overall. Strategically, the law gives reformers an opening to push forward that would not exist without its enactment. That’s what Consumer Watchdog will be doing in Washington D.C., California and states across the nation now.
Once the government requires people to buy health insurance, it will have to make health care and insurance more affordable. Premiums will have to be strictly regulated based on the prior approval model. State governments should make a public option to the private market available as well so that individuals can meet the mandate requirement without giving their money to private health insurers. More accountability for insurers will be necessary.
Many reform groups have proclaimed victory today. We are a little more sacrosanct. This is the beginning of reform, not the end. If the details don’t turn out right in the regulatory process, and in state implementation, then the devil will prevail. Consumer Watchdog will be on the job to hold insurers accountable, get the details right and move reform forward.
President Obama’s mass email last night said "This is what change looks like." It may be what change looks like on the horizon, but there won’t be real change without a host of new state laws and federal regulations before 2014. The race is on. The clock is ticking.