Precept Employee Benefits Blog

I agree that our health care system needs reform. I believe that everyone should be able to buy insurance, and that they shouldn’t have to take out a loan to do it. However, Congress, while stating they are acting in the best interest of our country, is saddling true reform with special interest. Do we really need a 2,000+ page bill to reform health care? No. Instead, reform needs a KISS – Keep It Simple Senators! What if we put a 5 page cap on the bill, and just focus on the real issues:

Access to healthcare. Mandate coverage for everyone (sorry twenty-somethings, you are not invincible). The insurance industry has said for years that if everyone is required to have coverage, then they will drop pre-existing condition clauses. It also alleviates the costs associated with adverse selection. Allow people to purchase individual polices when an employer-sponsored plan is not available.

Drive out costs associated with health care. Many health plans, both employer-sponsored and individual, are loaded with mandated benefits, such as behavioral health, substance abuse, maternity, etc., but does everyone really need these benefits? Not necessarily. Further, it is very expensive, and often cost-prohibitive, to administer a different plan in each state. Reform should address this issue, either by allowing individual purchasers to select a plan from any state (like 529 plans), and/or allow insurers to offer plans that meet federal minimum guidelines (e.g., Medicare A and B). This drives out administrative costs from the carriers, and offers individuals more options from which to select a plan that truly meets their needs, both in terms of benefits and costs.

Affordability. If the pool of insureds increases, adverse selection decreases, which drives down premiums. If the costs of administering the plan decreases, so do premiums (assuming free markets are allowed to work). Further, if people have the option to only purchase what they need, and individual purchasers can deduct their health care premiums, thus receiving the same benefits as employee contributions processed through a Section 125 plan, affordability starts to become a reality.

So in conclusion, let’s keep it simple and focus on feasible solutions to the real issues. The individual market is the best place to start.

An article posted yesterday on the Kaiser Health News website, “Seven Things You Didn’t Know Were In The Senate Health Bill,” highlights some of the “pet interests” that are included in the Senate Health Care Bill, which went into debate yesterday in the Senate.

You already know about the big-ticket items: the public option, abortion, taxing Cadillac plans, prescriptions drugs, etc. One of the most interesting things about these big plans, though, is the little things that get added to win one vote or another.

So what are the seven interesting things?

1. Requiring employers to provide unpaid time to allow nursing mothers time to use a breast pump at work – now, 24 states (including the great employee-friendly state of California) already have laws that protect nursing mothers in the workplace; this new provision would require employers (over 50 employees) to provide a private location – other than a bathroom – to use a breast pump, and of course, the time to do so. Seems like such a common sense, decent thing to do for a returning mother, that it seems so sad that we require legislation to make it happen.
2. Personal Responsibility Education for Adulthood Training – I would actually be glad to have my taxes go towards this program. Besides “innovative youth pregnancy prevention strategies,” the program would provide education to help teenagers transition to adulthood – covering topics such as relationship dynamics, self-esteem, dating, marriage, family interaction, goal setting, decision-making, stress management, and my personal favorite, financial literacy. Unfortunately, many of our under-funded and overcrowded high schools just can’t seem to  reach the students that need this kind of training most. Wouldn’t it be nice to have young adults learn these things before they reach the workplace? Children are our future, my friends.
3. Retiree health benefits – both the House and Senate bills had similar provisions that would have the government paying for high-cost health claims for retirees who are under 65 and still get their insurance through their employers. Employers would then be required to use the savings to make the health plans more affordable for the retirees. This provision, which would cost $5 billion in the Senate bill and $10 billion in the House bill, gets big smiley faces all around from employer groups and labor unions. Sad faces abound, however, over another retiree provision – taxing companies on government subsidies for providing prescription coverage to Medicare-eligible retirees. The American Benefits Council and the AFL-CIO argue that companies may stop providing prescription drug coverage and will force retirees to get their coverage through Medicare, which would increase the cost for the government.
4. Increasing payments for bone density scans for Medicare patients – increasing the payments would make it easier for Medicare patients to get access to bone density scanning that would presumably reduce the effects of osteoporosis. Seems like a good thing to me.
5. Limiting cost of uninsured in the ER – seeing as how the health care bill is supposed to reduce the number of uninsured people to a negligible amount, it seems only fair that those who are uninsured not have to pay substantially more when they go to the ER. Doesn’t it?
6. Non-profit Blue Cross and Blue Shield Health plans would have to act like non-profit companies – sounds about right to me. If you want to have high revenues, then wouldn’t that make you a for-profit company?
7. Transparent drug pricing – the health bill wants pharmaceutical benefit managers – or PBMs to those in the know – to disclose all their hard work at getting discounts for drugs at retail pharmacies. PBMs don’t like it; they say that companies will now know what their competitors charge and will raise prices! It will decrease competition! In actuality, most companies already know what their competitors are charging. If they don’t, they will probably go out of business pretty quickly, unless they have a completely unique product that has hardly any competition, in which case they can charge whatever they want to for it *cough*iPod*cough*.

You’ve got to admit, it’s going to be pretty interesting to see what other little “pet interests” creep up in the health bill. Which one has you scratching your head the most?