According to the rules of President Obama’s signature health care legislation, individual states, the site of the new “exchanges,” were required to choose a “benchmark” health insurance plan, one that contains the essential benefits that all other plans must include. The problem is most Americans will not be able to afford these plans.
Trudy Lieberman, at Columbia Journalism Review, unearthed an interesting situation in Connecticut, which will likely become more prevalent in other states as health insurance premiums rise due to the burdensome regulations of ObamaCare.
Lieberman discovered that, just before last Christmas, the governing board of Connecticut’s new health insurance exchange, called Access Health CT, asked the question: Can the public afford the policies that insurers will sell through these new state exchanges that the law requires?
The states were required to choose a “benchmark” health plan, one that includes items and services within, at least, ten categories as dictated by the Department of Health and Human Services (HHS).
Connecticut chose as its benchmark plan one of the most popular plans purchased by small employers. Sold by ConnectiCare, the plan offered “somewhat richer benefits” than others.
In December, however, Connecticut’s exchange board chairman, Kevin Counihan, announced, “We have a benchmark plan that is uncompetitive. When we adopted it, it was [competitive]. It isn’t now, because it’s too expensive.”
Lieberman writes, “In fact, according to board minutes, ConnectiCare currently doesn’t even sell it. What? The benchmark on which all other policies sold in the exchange will be based is too costly for people to buy?”
Jason Madrak, marketing director of Connecticut’s exchange, then told Lieberman that health insurance is unaffordable for “all the U.S.,” and “in Connecticut, it’s unaffordable for most residents.”
Lieberman asked Madrak about the specific problems with the benchmark plan.
Madrak explained, “The entire package is difficult for certain segments to afford. All the premiums are going to be expensive” for the 120,000 people in Connecticut expected to buy policies in the exchange next year.
Madrak elaborated on three factors that will “put upward pressure on prices.”
First, insurance companies will have fewer chances to segment the market by the age of policyholders, since ObamaCare requires that insurance carriers only charge older people three times more than younger ones, instead of six times as much, as had been the case in Connecticut.
Second, ObamaCare dictates that insurers not charge women more than men, and, third, that insurers no longer exclude sick people from coverage.
Lieberman then goes on to describe the lack of media coverage of the “benchmark” plan debacle, and some of the reasons for it:
My little investigation in Connecticut shows, however, what reporters are up against—bureaucrats who don’t particularly want to talk, and who must walk a fine line between the insurance industry’s needs to sell and make a profit and the public’s needs to buy at a reasonable price. Plus: reporters—and customers—are up against insanely complex products, which some insurers are not keen for the world to understand. Here is where you need an expert, perhaps a friendly actuary.
The fate of ObamaCare lies with the success of the state exchanges. With only six months until October 1st, when the exchanges are required to begin enrolling customers, major obstacles to the health care legislation are finally being reported. Breitbart News reported on the “glitch” in the law that will make health insurance unaffordable for many families. Now, it is likely that all the “required” essential benefits- whether needed by customers or not- will make the purchase of insurance plans prohibitive for many Americans.
Yet, in February, HHS Secretary Kathleen Sebelius announced the rule regarding the inclusion of mental health and substance abuse services as an “essential benefit:”
The Affordable Care Act helps people get the health insurance they need. People all across the country will soon find it easier to compare and enroll in health plans with better coverage, greater quality and new benefits.
Today’s rule outlines health insurance issuer standards for a core package of benefits, called essential health benefits, that health insurance issuers must cover both inside and outside the Health Insurance Marketplace. Through its standards for essential health benefits, the final rule released today also expands coverage of mental health and substance use disorder services, including behavioral health treatment, for millions of Americans.