OPINION: Giving thanks for regulation of insurance industry greed

Introduction

Although it’s a few days past Thanksgiving, I’m still feeling grateful, even to much maligned federal employees. Last week bureaucrats at the Department of Health and Human Services did us a big favor by resisting pressure from insurance company executives. Those executives wanted to keep charging some of us more than others and to keep selling policies that offer far less coverage than we need.

HHS Secretary Kathleen Sebelius reaffirmed last week that starting in 2014, insurance firms will not be able to discriminate against us nearly as much as they can now because of our age, gender and health status. And they won’t be able to sell policies with deductibles that are unreasonably high and benefits that are dangerously skimpy.

Among the long-awaited Obamacare regulations from HHS were those that further define the “essential health benefits” that health plans must offer in the future and that limit the amount of money we will have to pay out of pocket if we get sick or injured.

Even though HHS did give the insurance industry some wiggle room on the essential benefits and the upper limits of deductibles they will be able to charge, the integrity of the reform law was protected.

This is important for everyone but especially for those of us who have been around a bit longer. Many of us are now uninsured. That’s because we can’t get coverage at any price due to preexisting conditions or can’t afford what’s available to us because of our age. HHS reassured us that not only will we be able to join the ranks of the insured, we’ll be able get policies that are actually worth buying.

Shortly after the HHS announcement, I checked to see what I would have to pay today for policies offered on the individual market where I live now (Pennsylvania) or lived previously (Tennessee). In Philadelphia, a UnitedHealth care policy with a $1,000 deductible and an annual cap of $3,000 on out of pocket expenses would cost me $769.66 a month, more than five times more than if I were still 21 ($150.64 a month). There are many folks my age who cannot afford to pay that much every month and still put food on the table.

Philadelphia is a far more expensive place to live than Kingsport, Tennessee, where I grew up. So I expected the same level of coverage would cost me far less if I moved back to the Volunteer State. I was shocked to find that I would have to pay even more, regardless of my age. The policy would cost me $798.66 a month in Kingsport. It would cost a 21-year-old me $156.32 a month. It’s little wonder that the uninsured portion of the population in Tennessee (15.5 percent) is much higher than in Pennsylvania (10.9 percent).

But here’s the good news, locked in by these new regulations. The health reform law won’t let insurers charge me more than three times as much as 21-year-olds beginning in 2014 whether I live in Philadelphia, Kingsport or, for that matter, Kalamazoo.

Still, let’s not get too comfortable. The health insurance industry is not waving the white flag by any means. Karen Ignagni, president of America’s Health Insurers, said last summer that insurers would be spending the months before 2014 trying to “fix” the Affordable Care Act to make coverage more, well, affordable. The problem is that the insurers’ fixes would mean that coverage would continue to be out of reach for many of us.

After Sebelius announced the proposed new regulations, Ignagni said in a statement that “we remain concerned that many families and small businesses will be required to purchase coverage that is more costly than they have today.”

Ignagni and I agree that some people will be required to enroll in plans that cost more. That’s because the junk policies insurers have been able to sell to unsuspecting Americans for years — policies with very limited benefits or outrageously high deductibles — will soon be outlawed. Policies that offer real protection understandably have higher premiums.

What Ignagni didn’t acknowledge in her statement is that millions of us will be eligible for subsidies to help us pay for coverage that has real value. That will help both the young and the not so young afford policies that are worth paying money for. Having worked in the insurance industry for many years, I have much more confidence in the bureaucrats at the Department of Health and Human Services than I do in the bureaucrats that work for the insurance industry.