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Obama ignores ACA – won’t directly define “essential benefits that must be in every policy”

The Obama universal health care reform Welcomes you to the regulatory world of Medicaid for the poor being applied to the policy you buy from the Exchange in 2014. This means the state you live in determines whether you have good health protection, or really minimal health protection. In Medicaid this makes a little bit of sense because the State must contribute toward the Medicaid benefit, and if it lacks money it cuts the Medicaid benefit. But why apply this to the 2014 Exchange purchased policy that you will buy off your state’s “Exchange” and get only a Federal subsidy, if you are lucky?

But Obama has a reason for this surprise gift to the states to let them have the sole right to define the minimum benefits in their state, allowing de-minimiss minimum benefits – a political one of pleasing the insurance companies and showing his GOP friends that the Federal government does not impose “a rigid, bureaucrat-controlled health system on all Americans and thus threaten the quality of care” – and that it was an accident that Congress was “usurping state authority to regulate the health insurance industry given under the 1945 McCarran–Ferguson Act which exempts the business of insurance from most federal regulation, including federal anti-trust laws to a limited extent, and which was passed in reaction the Supreme Court ruled in United States v. South-Eastern Underwriters Association that the federal government could regulate insurance companies under the authority of the Commerce Clause”. It is not like Congress can change a a law it passed in 1945, if it wanted to do so, I guess. But then Obama has already tossed a part of the law that was passed as the ACA – announcing he will ignore the requirement to provide long-term care insurance, the pet program of the late Senator Edward M. Kennedy.

As passed the ACA law defined 10 categories of “essential health benefits” that must be provided by insurance offered in the individual and small-group markets, starting in January 2014, including preventive care, emergency services, maternity care, hospital and doctors’ services, and prescription drugs, with the Dept. of Health and Human Services (HHS) expected to provide details of what services and benefits must be provided in each category.

So Obama replaced the law as written with a procedure where each state would designate an existing health insurance plan sold in their state as a benchmark. The benefits provided by that plan would be deemed essential, and all insurers would have to provide benefits of the same or greater value. Plans could modify coverage within a benefit category so long as they did not reduce the value of coverage (actuarial equivalence, if followed, makes allowing this kind of flexibility not a problem – except State Ins Dept.’s have been known to accept in a policy form exhibit, in a request for permission to issue in the state , an “actuarial equivalence” claim for claim costs for a 70 year old being the same as the same benefits claim costs for a 25 year old, despite one being a large multiple of the other, with claims of equivalence between different types of incurred claims not being looked at).

So now under the Obama invented procedure, each state would choose one of the following health insurance plans as a benchmark:

1. One of the three largest small-group plans in the state.

2. One of the three largest health plans for state employees.

3. One of the three largest national health insurance options for federal employees.

4. The largest health maintenance organization operating in the state’s commercial insurance market.

So who knew that Obama was a states rights guy fighting rigid, inflexible Federal rules being imposed on the States?

Of course this HHS rule Obama had issued runs up against the plain wording of the ACA – our Constitutional Scholar President in requiring that the “essential health benefits…equal to the scope of benefits provided under a typical employer plan” which ignores the laws demand that benefits very rare in the market place now be offered – like “habilitative services” for people with conditions like autism or cerebral palsy. Indeed the law says that the definition of essential benefits must not “discriminate against individuals because of their age, disability or expected length of life”, but the current employer plan market place does just that

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