[lg policy] Obama's Health-Care Policy Pivots

Harold Schiffman hfsclpp at GMAIL.COM
Fri Mar 23 16:47:54 UTC 2012

Obama's Health-Care Policy Pivots
By Peter Gosselin on March 22, 2012

As the Obama administration wraps up its second year of deploying
provisions of the 2010 health-care overhaul law, a pattern has emerged.
When it comes to issues that matter to insurers, providers, and employers,
the president and his key aides show considerable flexibility, listening to
objections and modifying proposed regulations. When it comes to ones that
matter to consumers, they are usually less accommodating.

Example: The law requires insurers to spend as much as 85¢ of every premium
dollar covering consumers’ claims and improving care, or else pay rebates.
Insurers such as UnitedHealth Group (UNH) dislike the idea and have sought
exclusions from what counts as premiums. Among the exclusions the
administration has agreed to: the dollars insurers use to pay most of their
federal taxes. This, even though the chairmen of the congressional
committees that drafted the law have told administration officials they
never intended that.

Example: The law requires all Americans to have insurance by the beginning
of 2014 or face a fine. Because the cost of coverage is so high, it offers
to help families with annual incomes of up to about $90,000 pay their
premiums. To ensure the help doesn’t go to people who’ve been offered
affordable coverage through their employers, however, administration
officials rejected compromises suggested by consumer advocates and adopted
a stringent rule defining an offer as “affordable” if premiums cost
employees no more than 9.5 percent of family income for themselves alone,
even if including family members would push the price above the threshold.
A Bloomberg Government study estimated the rule could leave as many as 6
million Americans who’d otherwise qualify for help stuck in a no man’s land
between the measure’s requirement that everybody have insurance and their
inability to get the assistance needed to buy it.

Example: Given that the law requires Americans to have insurance, advocates
argued that consumers should have more rights to appeal decisions by their
insurers. Initially, administration officials agreed, issuing rules that
required most insurers to provide for independent review of appeals;
expanded the kinds of decisions that can be appealed to include clerical
errors; and even *required that documents be in beneficiaries’ native
language.* But after insurers and employers complained, the administration
reversed course. A Bloomberg Government analysis found the new rules weaken
the independence of reviewers and largely prevent appeals based on
administrative errors. *The language requirement was retained only for
English and Spanish.* [emphasis mine: HS]

Why has the administration gone to such lengths to accommodate insurers,
providers, and employers, but not consumers? In large part, the answer has
to do with the law, which for all the election year talk about a government
takeover is really a wraparound. Instead of rooting out and replacing
private insurers and medical providers, Congress and the president chose to
work with them to create an overhauled system. That means constantly
weighing how far reluctant players can be pushed before they bolt.

Supporters say Obama has managed the balancing act about as well as could
be hoped. “The president has been very practical about implementation. He’s
tried to be faithful to the basic pro-consumer orientation of the law at
the same time as accommodating” business, says Timothy Jost, a health law
professor at Washington and Lee University in Lexington, Va., and an ally
of the Democratic administration.

No doubt politics has played a part in determining the tilt. Republican
Gail Wilensky, a senior fellow with the medical charity Project HOPE and a
top health-care official under the first President George Bush, traces most
of the administration’s interest in accommodating business to “a very
strong desire not to disturb markets prior to the election.”

Perhaps the biggest question about Obama’s approach is: Will the resulting
health-care system be something an ordinary person can understand and use?
Some worry it won’t be. “If there’s a challenge to implementing the law,
it’s not that it will impose too much change on the old insurance system,
rather that it will provide too little help to get consumers the protection
they need,” says Judy Feder, a health-policy expert with the Urban
Institute and Georgetown University and a senior official under President
Bill Clinton. The answer will come with time, an impending decision by the
U.S. Supreme Court on the law’s constitutionality, and the results of the
November elections.

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