Will "Obamacare" Force Americans to Buy Junk Health Insurance in 2014?

The money that patients' rights advocates have to spend trying to convince the Obama administration that Americans should have decent health care benefits pales in comparison to the boatloads of cash insurers and their corporate allies have on hand to do largely the opposite. But at least the advocates are now in the game.

Bad faith insurance companiesLast week a broad coalition of patient-focused groups launched its "I Am Essential" campaign in an effort to make sure that when all of us have to buy health insurance in 2014, we will be getting good value.

When Congress passed the Affordable Care Act last year, it included a provision saying that all health insurance plans sold a little more than two years from now must contain "essential health benefits." It established 10 categories of required coverage: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management and pediatric services, including oral and vision care.

The Department of Health and Human Services (HHS) has the responsibility of determining, with input from the respected nonprofit Institute of Medicine (IOM), just how comprehensive the coverage must be in each of those categories.

Insurers and employers who offer coverage to workers have been lobbying both the IOM and HHS to make the coverage requirements as narrow as possible. They want to continue marketing plans with skimpy benefits because they are less costly to employers and potentially more profitable to insurers. The problem with that approach, of course, is that millions of Americans will be forced to the join the ranks of the underinsured -- already estimated at 30 million -- if coverage they must buy is inadequate to meet their needs.

That would not only be a nightmare for many American citizens, but I'm betting for any politician who is on the record supporting "Obamacare." If people find out that the coverage they have to buy is of limited value to them when they get sick, they're not going to be very inclined to vote for Democrats come 2016, especially if insurance firms continue their long-running streak of record-setting profits.

Insurers Lobbying to Make Primary Consideration "Affordability" (Note: not Quality)

I wrote last month that an insurance industry-backed astroturf group called the Essential Health Benefits Coalition had been formed to persuade Obama administration officials to consider "affordability" first and foremost -- not comprehensiveness -- as they flesh out the benefit requirements. As is typical of such industry groups, this one was set up and is being run out of a big PR firm, Ogilvy Washington. The budget for it is ample enough to pay the salary of its executive director and spokesman, Brendan Daly, a former aide to former House Speaker Nancy Pelosi.

In contrast, the "I Am Essential" coalition doesn't have a budget.

"Oh, no, no, we don't have any money at all," I was told by Carl Schmid, deputy executive director of The Aids Institute, one of the coalition members. "This is all pro bono."

Other members of the group, which last week sent a letter to HHS Secretary Kathleen Sebelius, include the Lupus Foundation of America, the Men's Health Network, Mental Health America, the National Association of Nutrition and Aging Services Programs and the National Minority Quality Forum. The only other action the coalition has taken so far is to send out a news release announcing the group and its letter to Sebelius.

The letter pointed out that the organizations comprising "I Am Essential" serve many of the nation's most vulnerable patient groups. "There are tens of millions of Americans who, like the people we advocate for, live with chronic disease and disability," they told Sebelius. "We are writing to urge you to make certain that the Essential Health Benefits package fully meets the needs of American health care consumers, particularly those who have chronic health conditions... A benefit package too narrowly drawn runs the risk of not adequately covering patient needs."

The group's letter came a few days after another group of patient advocates -- doctors and nurses -- sent a letter to Sebelius making the same plea. Sent by Physicians for a National Health Program, a group that supports a single-payer health care system for the U.S., the letter also blasted the IOM panel for siding with the insurers suggesting that HHS consider affordability first.

Author Wendell Potter, former head of PR for CIGNA"We protest the Institute of Medicine's recommendation that cost rather than medical need be the basis for defining the 'essential benefits' that insurance policies must cover," the doctors and nurses wrote. "The IOM proposal would base the required coverage on the benefits typical of plans currently offered by small businesses -- enshrining these skimpy plans as the new standard. These bare-bones policies come with a long list of uncovered services and saddle enrollees with unaffordable co-payments and deductibles... If adopted by the Department of Health and Human Services, this recommendation will sacrifice many lives and cause much suffering. We call on Secretary Sebelius and President Obama to reject them."

The group went on to suggest that IOM recommendations would shift costs from corporate and government payers onto families already burdened by illness, a strategy it contends will not lower costs because it would result in patients delaying or foregoing needed care. "Delaying care often creates even higher costs," they wrote.

When HHS will make a decision is not clear, although there is speculation that the department might already have sent at least preliminary rules to the Office of Management and Budget to review. If that proves to be true, we probably will find out before the end of the year which coalitions -- those representing insurers and corporate America or those representing patients and consumers -- will have had the greatest influence on the administration.


Facts are stubborn things and I'm not sure why Wendell Potter is so determined to paint a false picture of the Essential Health Benefits Coalition (EHBC). See for yourself at www.ehbcoalition.org. Everyone should care about how affordable coverage is for individuals and businesses purchasing in the new exchanges. We supported the IOM conclusion that the package should resemble that of a small employer. We think EHB coverage must be real -- reaching those 10 buckets of coverage prescribed by ACA -- but believe the cost of that coverage must be affordable for individuals as well as businesses. The "junk" coverage Potter cites (also known as limited benefit coverage or mini-med) phases out in 2014 as new coverage becomes available.

As a self-employed actual consumer of health care, I have found out the hard way that "affordable" health care coverage for an individual (yes, I am over 50) is either very expensive (over $1,200++ per month for family coverage; CIGNA was going to charge me over $1,500 per month for comparable coverage under their COBRA plan), or covers almost nothing (one plan presented by the insurance agent did not include mental health coverage, which I thought was not legal; most have no dental--now linked to heart disease--and deductibles were $1,000-$3,000 per year, then they pay 70%). "Affordable" is a misnomer; "profitable" is what they mean. So if you can afford it, they're not going to be paying for any care, or will just refuse to take you.