Author: hankkalet

Advocates for moving ahead with health-insurance reform in its current form need to read this story from The Washington Independent:

At issue are employer-based wellness programs, which aim to prevent common conditions related to smoking, overeating, lack of exercise and other unhealthy behaviors — conditions such as diabetes, hypertension and high cholesterol. Both the House and Senate bills promote such programs, but the Senate bill, critics argue, would allow employers to raise rates on all of their workers, then lower them only for folks who meet certain wellness targets. Such a system would effectively force less healthy workers to subsidize the insurance plans of those more fit — an unfair penalty in the eyes of many medical groups.

“Incentives quickly become penalties for those who can’t meet the requirements,” said Sue Nelson, vice president for federal advocacy at the American Heart Association. “This would really become medical underwriting by another name.”

Current regulations allow group plans to offer rewards up to 20 percent of premium rates for employees who meet certain health goals. The Senate health-reform bill would effectively make that rule law, while also bumping up the variation allowance to 30 percent — roughly $4,000 for the average family plan. The Senate bill would also allow officials at the Health and Human Services Department to go even higher — up to 50 percent.

Outside of the group market, the Senate provision would also create a 10-state pilot program testing the advantages of the wellness incentives for individuals buying insurance on their own.

Health advocates are right, of course. Offering discounts for certain behaviors is a backdoor way of charging the less healthy more for their insurance. The insurance companies, after all, are not going to forego their profits; if they offer discounts to some, then others will have to pay more to offset the discounts.

“When you start picking people off on an individual basis [and] reducing their premiums individually,” Sen. John Kerry (D-Mass.) said during the Finance Committee markup, “you do not adjust for what else may be happening within that [coverage] universe, and then other people are picking up the overall costs.”

My fear is that this is not the only timebomb in the legislation and that many will detonate only after it is too late.

The reality is that we have allowed this debate to go off the rails. The primary goals — universal access to affordable insurance that covers most healthcare problems — have lost out to something that might be good for insurers and the elected officials who take their campaign contributions, but does little for the rest of us — a decision to keep the insurance industry whole.

Rather than challenge the industry’s monopoly, we are mandating coverage and helping lower-income folks pay for it with subsidies, essentially shovelling billions of tax dollars into the pockets of the insurance cartel.

At the same time, the handful of new regulations and restrictions that have been floated are rather weak, and riddled with loopholes like the wellness-program exemptions, which prompted this response from a “former insurance industry executive,” who told the Independent that “it will take little time for companies to exploit the loophole in the Senate bill.”

“Insurers can smell profits a mile away,” said Andrew Kurz, former chief financial officer at Blue Cross-Blue Shield Wisconsin. “This is a loophole they will drive right through on day one.”

This, and all of the other loopholes.

I hate to see reform fail, but I’d rather have real reform than reform in name only. Afterall, we may not get another bite at the apple on this for a long, long time.