The next healthcare reform battle involving health plans is now underway as the Department of Health and Human Services debates which diseases, procedures, and tests state-based insurers must cover.
Under a free-market system, health plans could excuse themselves from treatments they said were not scientifically validated, but that’s about to change. And if other recent rulings are any indication, insurers will find themselves on the losing end once again.
Over the next eight months or so, some of the industry’s brightest minds will expand on the predetermined 10 categories—including prescriptions, emergency care, rehabilitation, chronic disease management and preventative services—that were outlined in the Affordable Care Act.
The insurance industry says the 10 categories outlined in the bill are an adequate framework for which companies can build their benefits packages. “We believe that Congress has already specified an appropriate set of ‘essential’ items or services that should be included in the essential health benefits package, and there should be no further defining of specific service elements of the benefit package, such as the number and frequency of services that should be covered,” says Carmella Bocchino, executive vice president of America’s Health Insurance Plans (AHIP).
Representatives at HHS beg to differ and convened a 17-member panel via the Institute of Medicine (IOM) flesh out coverage details. Fortunately for health plans, they will have a say in the final rules, albeit not a very big one. UnitedHealth Group has a representative and the founder of WellPoint, who is now an educator with the University of Southern California, will lend their perspectives. The rest of the panel includes lawyers, doctors from various specialties, consumer advocates, heads of health-related nonprofits, and even a private equity investor.
Though their ruling is not due until next fall, health plans are likely to be unsettled about the potential outcome. Unlike other recent decisions by HHS such as the medical loss ratio (MLR) in which many health plans were already within the mandatory administrative spending limits, this one has the potential to become quite costly. With tighter restrictions on premium increases laid out by HHS, it’s sure to affect insurers' profits.
I doubt the panel will go too far. To ensure their viability, insurers will have to charge their members for the relative amount it costs to provide coverage for the determined medical services. And if consumers are required to purchase this coverage … well it’s not hard to figure that compromise is necessary.
See also:
HHS: Repeal of Reform Threatens Those with Pre-Existing Conditions