The Senate is going to be in session this weekend. Here’s hoping the senators spend some of their time fixing loopholes in their health-reform proposal that would limit how much insurance companies would have to pay if you get sick.
“[Insurance companies] will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or in a lifetime. And we will place a limit on how much you can be charged for out-of-pocket expenses. No one in America should go broke because they get sick.”
But as the Associated Press reported, the Senate bill, as currently written, would allow insurance companies to do exactly that. Take, for instance, the fine print on page 16 of the Senate bill under “Subpart II—Improving Coverage” (we’ve added boldface to highlight problem areas):
‘‘(a) IN GENERAL.—A group health plan and a health-insurance issuer offering group or individual health insurance coverage may not establish—(1) lifetime limits on the dollar value of benefits for any participant or beneficiary; or ‘‘(2) unreasonable annual limits (within the meaning of section 223 of the Internal Revenue Code of 1986) on the dollar value of benefits for any participant or beneficiary."
Apparently, according to this clause, insurers can set “reasonable” annual caps on coverage, just not “unreasonable” ones. But what’s a “reasonable” limit? The bill doesn’t say.
And that’s not the only problem with this text. See where it says “dollar value”? This is a loophole that would let insurers limit certain types of care, such as physical rehabilitation sessions or mental-health counseling.
A spokesperson for Harry Reid reportedly said that the language reflects a concern “that banning all annual limits, regardless of whether services are voluntary, could lead to higher premiums.” In other words, under the Senate bill, those who get seriously ill might have to face financial ruin so that most people can save a bit on their monthly premiums. That’s not a good bargain of you’re one of millions of people diagnosed with common, expensive-to-treat diseases like cancer, diabetes, or heart disease.
--Kevin McCarthy, associate editor
Correction: The original post also noted that the Senate version of
the health-care reform bill did not define “cost-sharing.” We said that
could have allowed insurance companies to exclude certain health care
costs, such as deductibles or co-payments for doctor’s visits or
prescription drug payments, toward a policy’s annual out-of-pocket
However the bill does define cost-sharing under a different section on page 111 of the bill:
“(A) IN GENERAL.—The term ‘‘cost-sharing’’ includes—(i) deductibles, coinsurance, copayments, or similar charges; and (ii) any other expenditure required of an insured individual which is a qualified medical expense…”The language in the Senate bill is similar to the House bill and would help prevent the types of tricks we’ve seen in junk health insurance plans that cause policyholders to pay significantly more out-of-pocket. We regret the error and have amended the post to reflect this information.