After looking over H.R. 3962 Affordable Health Care for America Act a 2076 page document, which nearly caused me to scratch my head bald and swallow a bottle of antacids, I have more questions than answers. Something that I did find humorous on page 20 (2) Language – The standards shall ensure that the summary is presented in a culturally and linguistically appropriate manner and utilizes terminology understandable by the average plan enrollee. It is a shame that the legislators cannot do the same policy when it comes to writing legislation.

According to the bill, insurance companies will be required to provide four policy levels known as Bronze, Silver, Gold and Platinum. On page 112 of the bill, the Bronze level states the following. A plan in the Bronze level shall provide a level of coverage that is designed to provide benefits that are actuarially equivalent to 60 percent of the full actuarial value of the benefits provided under the plan.  Okay my first question was what in the world does that mean? So following the advice for the word of the day that Bill O’Reilly gives at the end of his show, I looked up actuarial. It means relating to statistical calculations especially of life expectancy. Oh my, not exactly clear on what they mean by using that terminology. Does the 60 percent mean instead of a 80/20 plan they pay 60 and you pay the 40.  I found the answer on page 224 and yes, that is what the 60 percent means. While one may save money on the monthly premiums, even a simple stay in the hospital would take a huge bite out of any savings.  Meanwhile Silver is 70 percent, Gold will be 80 percent and Platinum 90 percent. Of course, the Platinum level will have a nice little surcharge of 40% attached for those able to afford the premium. 

I also took note on page 228 Determination of High-Risk Individuals. This method shall provide for identification of individuals as high-risk on the basis of (i) a list of at least 50 but not more than 100 medical conditions that are identified as high-risk conditions and that may be based on identification of diagnostic and procedure codes that are indicative of individuals with pre-existing, high-risk conditions; or (ii) any other comparable objective method of identification recommended by the American Academy of Actuaries. (There’s that word again) I was unable to find a list of the so-called high-risk medical conditions, though I can guess what a few of them might be, and I have them, and so do many Americans currently and not currently covered by insurance.

Why is this being done? On page 229 states, (i) to provide a schedule of payments that specifies the amount that will be paid for each of the conditions identified under subparagraph (A) or (ii) to use any other comparable method for determining payment amounts that is recommended by the American Academy of Actuaries and that encourages the use of care coordination and care management programs for high-risk conditions.  All of this to start on January 1, 2014.  My question if no one is to be denied health insurance due to pre-existing conditions then why would individuals be targeted as “high-risk”?

On page 56, although the Public Option is out, at least for the moment, when comparative purchasing options for insurance will be as follows: eligibility, availability, premium rates, and cost sharing with respect to such coverage options and be consistent with the standards adopted for the uniform explanation of coverage as provided for in section 2715 of the Public Health Service Act. According to the legislation a website will be established so anyone, from any state may receive information on at least the following coverage options.  This site will also include information regarding Medicare and Social Security.

(A) Health insurance coverage offered by health insurance issuers, other than coverage that provides reimbursement only for the treatment or mitigation of –

      (i) a single disease or condition; or conditions; or

      (ii) an unreasonably limited set of diseases or conditions (as determined by the Secretary)

This to me makes absolutely no sense whatsoever, and nearly sent me to the nearest pharmacy for another bottle of antacids. Considering that insurance costs are actuarially based, my conclusion would be if treatment A costs X number of dollars, while treatment B is X amount, it costs less to treat and gets a higher rate of reimbursement. Which treatment will the patient be getting, even if treatment A is the better choice? That part is unclear.

So now who are The American Academy of Actuaries according to their website, they state they are a professional association with over 16,000 members, whose mission is to assist public policymakers by providing leadership, objective expertise, and actuarial advice on risk and financial security issues. The Academy also sets qualifications, practice, and professional standards for actuaries in the United States. In other words they are number crunchers.

The American Academy of Actuaries boggled my mind with their rhetoric, this plan will reduce the cost of premiums for some while others will be suffering from “rate shock”.  I thought the reform was to make health insurance affordable for everyone.

Rate shock doesn’t quite express my reaction when I found a letter from the CBO to Senator Bayh regarding the price of premiums in 2016. “Average premiums per policy in the nongroup market in 2016 would be roughly $5,800 for single polices (income $50,100) and $15,200 for family polices (income $102,100) in the proposal, compared with roughly $5,500 for single polices and $13,100 for family polices under current law.” How can Congress consider this affordable to middle-income America? However, I did find good news! With the tax subsidy received depending on the enrollee’s income relative to the federal poverty level the estimate would be single plans would now be $5,200 a year and the family plan drops to $14,100 a year. These costs are based on the second “cheapest” Silver plan. Seeing the prices of the Silver plan I fear that I would need a defibrillator upon seeing the premium prices of the Platinum plan.

With the cost sharing included, I am guessing this would include deductibles and out-of-pocket expenses. A single enrollee with the income of $14,700 the out of pocket/deductible would be $1,100 and a family of four with an income of four would be $9,000 which runs from $1,100 income of $14,700 single plan to $9,000 for incomes starting at $54,000 for a family of four.

Remember the promise of, if you like your current insurance policy you can keep it? Well that is true to a certain extent.  “As older and less healthy individuals leave the pool of grandfathered polices, these blocks of grandfathered policies could experience premium increases lower than medical trend. However, over time these blocks would likely shrink due to attrition, meaning that administrative expenses would have to be distributed over a smaller pool. In addition, policyholders in these blocks will age, and some will develop serious health conditions rise to the level of the new market, policyholders would move to avoid further premium increases.” Letter to the Senator Tom Harkin, November 23, 2009 from the American Academy of Actuaries.

Assuming that the requirement to purchase the required health insurance would in fact create a market for health insurance, at least in theory drive down the cost of said insurance. According to a letter written to Senator Harry Reid on November 20, 2009, stated: “For insurance markets to be viable, they must attract a broad cross section of risks. Implementing market reforms to prohibit insurers from denying coverage and to restrict how much premiums can vary will result in adverse selection and upward pressure on premiums unless lower-risk individuals have incentives to purchase coverage. To be effective, however, the penalties for not complying with the mandate must be meaningful relative to the premium faced. The penalties in the Patient Protection and Affordability Care Act are very low, which is especially problematic given the bill’s limits on premium variations by age, which will raise premiums for younger individuals. Strengthening the bill’s individual mandate through higher financial penalties is needed to reduce adverse selection that would arise due to the new issue and rating restrictions.

The bill contains incentives for lower-risk individuals to purchase coverage, but these incentives, especially those related to the individual mandate, are quite weak. In particular, the proposal would require individuals to have coverage or pay financial penalty of $95 for 2014, $350 for 2015 and $750 for 2016, and indexed thereafter. The letter goes on then makes the statement “Lower-risk individuals would be more likely to pay the penalty and forgo coverage or drop coverage they have, thus putting upward pressure on premiums.”

So if I was one of those people who don’t quite qualify for tax-credits, but still can’t muster payments for a premium on top of possible, home-mortgage payments, car payments, groceries, electric bills, etc etc. I might choose paying the penalties also. I am not sure if requiring someone to purchase health insurance would be constitutional. The example is everyone who owns a motor vehicle must have insurance if driven on public roads. However, federal and state laws do not require persons to purchase a vehicle.

The Patient Protection and Affordability Care Act includes provisions that would generate health care savings, particularly in the Medicare program. The majority of savings would derive from reductions in certain provider payments and reductions in payments to Medicare Advantage plans. Although these types of savings will help address short-term goals, options to more permanently reduce spending growth to address long-term goals.

I don’t know about you, but this sounds like a bad idea to me. Cutting payments to doctors would mean doctors either leaving the field, or not accepting more Medicare patients. While cuts to Medicare Advantage Plans would mean those on Medicare could be paying more out of pocket, unless they purchase gap plans, consequently more people buying insurance.

All in all unless you have no income, this is one very expensive health care bill. From what it looks like, be prepared to be fleeced

Candace Clark
Christian Political View