Written by John R. Graham
I doubt that it surprises anyone that Senator Max Baucus did not read the ObamaCare bill that he navigated through the Senate, but we should all be surprised that he has no shame in admitting it in a town hall meeting that he hosted last week with the U.S. Secretary of Health and Human Services (HHS), Kathleen Sebelius. Indeed, he appears proud of the fact that he did not "waste" time reading the bill, but delegated it to "experts."
Many of the bill's supporters have been walking away from it recently. An August 19 report on "A Communications Perspective" for ObamaCare, prepared for the pro-ObamaCare lobbying group Families USA (and leaked to Politico.com), significantly reframes the mission of ObamaCare's supporters:
This is all understandable — but does it explain why Sen. Baucus and Sec. Sebelius are preparing to throw their own “expert” staff under the bus?
ObamaCare’s problems go well beyond “communications.” It is increasingly clear that the “experts” upon whom the politicians relied to write the bill didn’t read or understand it either. A perfect example is the rule that health plans must offer coverage on a guaranteed issue basis, without excluding any pre-existing conditions, to dependents up to 19 years old, regardless of whether they have had continuous coverage before joining a new group.
This strikes fear into every health plan and employer, because it means that parents do not have to sign up for coverage for their dependents until after their kids have fallen ill. Most kids between the ages of two and 19 are very healthy. Then, when a kid gets diagnosed with leukemia or taken to the ER after a motorcycle crash, his parents’ health plan must issue coverage without taking the illness or accident into account.
The provision takes effect on September 23, and is likely the biggest cause of the looming premium hikes that we are going to experience in next year’s renewal. You can find it in Section 10103 (e)(2) of the ObamaCare bill. Under this condition, the only way for a health plan to mitigate the selection risk at all is to limit the opportunity to enroll to an open enrollment period, say one month per year. While the legislation suggested this was possible, it was not clarified by the U.S. Department of Health & Human Services (HHS) when it published regulations governing this situation in the Federal Register on June 28. Finally, HHS published an unofficial “factsheet” on July 27, which asserted that health plans can impose an open-enrollment period on dependents after September 23.
Needless to say, health plans’ lawyers take little comfort from this “factsheet,” so their actuarial estimates are leaning towards assuming the worst, and are pricing plans accordingly.
When ObamaCare’s own godfather in the Senate disowns it, and attempts to shift responsibility to his “experts,” we can expect that the rest of the bill is stuffed with many more such landmines.
John R. Graham is Director of Health Care Studies at the Pacific Research Institute. He is the author of the U.S. Index of Health Ownership, the only project to rank all 50 states’ health laws and regulations according to free-market principles; and the editor of a book addressing What States Can Do to Reform Health Care: A Free Market Primer, to which he contributed a chapter on pharmaceutical cost containment. He is also the primary author of PRI's monthly Health Policy Prescriptions series, and contributes to PRI's Capital Ideas series of short articles on public policy in California. He has also written numerous articles covering diverse topics within health policy for periodicals including the Wall Street Journal and the Washington Post. Mr. Graham speaks frequently on health care reform on radio and television, and at conferences in the United States, Canada, and Europe. He has also worked as a management consultant and investment banker in Canada and Europe and has previously served as an infantry officer in the Canadian Army in Canada, Germany, and Cyprus. He received his M.B.A. from the London Business School (England) and his B.A. (with Honors) in economics and commerce from the Royal Military College of Canada.