Finance Bill Expected To Preempt State Health Benefit Mandate Laws Such As HIV Testing, Reconstructive Surgery, Home Health Services
WASHINGTON, D.C. — Under the U.S. Senate Finance health reform bill, approximately 87 million Americans are at risk of being sold junk insurance that does not cover key treatments and health services like HIV testing, reconstructive surgery, and home health services, Consumer Watchdog wrote in a letter today to Senate Majority Leader Harry Reid (D-NV). Similar provisions were added to the House of Representative bill shortly before it was passed.
Under the Finance committee bill, insurers could sell bare bones policies that skirt more protective state health benefit mandate laws. Those immediately at risk are 87 million Americans who are currently enrolled in individual policies or receive health coverage from private employers purchasing insurance (i.e. non-self insured employers).
In the letter, Consumer Watchdog wrote:
"Both the ‘Nationwide plans’ and ‘state compact’ pre-emption scenarios are similar to a failed 2006 bill, S. 1955, by Sen. Mike Enzi (R-Wyo.) who championed President Bush’s health reform agenda. Pre-emption of state health care laws was a bad idea in 2006, and it is a bad idea now. Instead, the final Senate health reform bill should be modeled on existing federal health care laws which provide for a federal-state partnership rather than federal pre-emption of more protective state standards. Minimum federal standards should set a floor, not a ceiling, on state health care protections."
17 states, which currently have more than 50 health benefit mandates in state law, have the most to lose under pre-emption provisions in the Finance legislation. Those states, representing 54% of the U.S. population, include: California, Colorado, Connecticut, Florida, Louisiana, Massachusetts, Maryland, Maine, Minnesota, New Mexico, Nevada, New York, Pennsylvania, Rhode Island, Texas, Virginia and Washington.
Patients purchasing Nationwide policies would likely be unaware that their insurance was riddled with holes until they needed to use it, according to Consumer Watchdog. The cheaper premiums offered by such plans would be achieved by degrading coverage and raising patient costs.
Under the Finance bill, health insurers could sell ‘Nationwide’ coverage policies that would override state health benefit mandates approved by state legislatures. In developing the new, less protective, federal guidelines, the National Association of Insurance Commissioners (NAIC), heavily influenced by health insurance companies, would merely "take into account how each benefit is offered in a majority of states." Therefore, many mandates appearing in fewer than 26 states would apparently not be covered by Nationwide policies.
The NAIC is a private organization with ties to insurance companies, including a "revolving door" of job opportunities in the industry for the state insurance officials who make up its membership. The NAIC is not subject to the transparency and public participation rules of a government body.
In the letter Consumer Watchdog wrote:
"States have traditionally been the laboratories of innovation in health care and insurance reform. Instead of taking away regulatory power from the states, Congress should recognize and promote successful state insurance regulation like California’s landmark insurance regulation initiative, Proposition 103. Proposition 103 has resulted in $61.8 billion in savings to California automobile drivers. Read more about that successful state reform and its application to health insurance in the House of Representatives bill at: http://www.consumerwatchdog.org/patients/articles/?storyId=30813."
Insurers claim that eliminating these patient protections is essential to reducing costs in the system. However, the data suggests otherwise. The Congressional Budget Office found that five of the state coverage mandates considered by insurers to be the most expensive have in fact only a marginal impact on premiums, ranging from 0.28 to 1.15 percent.[i] What insurers are not saying, according to Consumer Watchdog, is that state coverage mandates that ensure access to basic health care needs are necessary to prevent and manage disease, or to treat it before it becomes severe and more expensive to care for.
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Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, D.C. and Santa Monica, CA. Find us on the web at: www.ConsumerWatchdog.org.
[i] Congressional Budget Office, Increasing Small-Firm Health Insurance Coverage Through Association Health Plans and HealthMarts 21 (Washington, D.C. January 2000).