What's the Real Deal on Banning Lifetime Limits in Health Insurance?

[2 Much Tribulation]

Below is the text of the Senate Bill - Manager's amendment, on the subject of lifetime limits. If this is not all that there is (which I believe it is) please advise. Note that the ban on lifetime limits is modified in several ways:

(1) There's a temporary period until 2014 in which limits are to be defined according to the text below

(2) the Ban on lifetime limits has a restricted scope, restricted to "essential health benefits"

(3) The "essential health benefits are somehow tied to cost, because the Secretary is tasked with keeping inflation in premiums in consideration when determining essential benefits, and

(4) The lifetime limit "ban" is, in all cases, a ban only on the "dollar value" of benefits, but not a ban per se on the NUMBER OF PROCEDURES of a given type, for example. Insurance companies or regulators, tasked with keeping an eye on cost control, will naturally look for holes in the language to help keep costs under control.

(5) Lifetime limits, per the last paragraph, are totally permissible and not affected at all, to the extent they limit something not defined as an "essential health benefit."

(6) Finally, whatever happens to be defined as an "essential health benefit" does not need to track my idea, or your idea, of what's essential or what's of benefit. The only criterion I see that is considered mandatory is cost. That may or may not be a valid consideration depending on the context, but here it applies globally:

‘‘SEC. 2711. NO LIFETIME OR ANNUAL LIMITS.

‘‘(a) PROHIBITION.—

‘‘(1) IN GENERAL.—

A group health plan and a health insurance issuer offering group or individual health insurance coverage may not establish—

‘‘(A) lifetime limits on the dollar value of benefits for any participant or beneficiary; or ‘‘(B) except as provided in paragraph (2), annual limits on the dollar value of benefits for any participant or beneficiary.

‘‘(2) ANNUAL LIMITS PRIOR TO 2014.—

With respect to plan years beginning prior to January 1, 2014, a group health plan and a health insurance issuer offering group or individual health insurance coverage may only establish a restricted annual limit on the dollar value of benefits for any participant or beneficiary with respect to the scope of benefits that are essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act, as determined by the Secretary. In defining the term ‘restricted annual limit’ for purposes of the preceding sentence, the Secretary shall ensure that access to needed services is made available with a minimal impact on premiums.

‘‘(b) PER BENEFICIARY LIMITS.—

Subsection (a) shall not be construed to prevent a group health plan or health insurance coverage from placing annual or lifetime per beneficiary limits on specific covered benefits that are not essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act, to the extent that such limits are otherwise permitted under Federal or State law.’’

So, what's your read on this language?

If the above, tentative read is correct, then what I would expect as an outcome is a great tendency or pressure for highly-inflating procedures and devices to be defined as not being "essential health services" since, as stated earlier but now rephrased for clarity, if the Congress or a regulator defines smallpox vaccines as not an essential health service on grounds smallpox is basically wiped out, that's enough of a rational basis or loose connection to cause a court to defer to the regulator's "expertise" in the subject, since it's not 'arbitrary and capricious.' Similarly, the mere fact something is increasing in price by a high percentage in the past year would be sufficient rational basis to keep it out of essential health benefits given the statutory command to keep premium costs down, unless perhaps it was the quintessential, most obvious-in-the-world essential health service.

What's essential to you and me need not be essential to the law. Sometimes it will be, sometimes it won't be. How much of each, nobody knows for sure but we do know the Secretary must keep premiums down.

This has the effect of turning the government, for this purpose, INTO THE INSURANCE COMPANY, defining what's in, what's out, and therefore what's limited, and what's not, and doing so on the basis of cost (read: profit) concerns. This applies at least through 2014, and it's not impossible to read it more broadly, if one goes outside the text above to other bill language.

If I'm reading this wrong, I trust ya'll will gently correct me. Right?

[pnwmom]

1. The bill also defines essential benefits somewhere, and I remember the list

was quite extensive.

I have no problem with certain medical procedures not being covered, for example, tummy tucks and chin lifts.

[2 Much Tribulation]

2. Sure, but no list can cover all procedures, so we're left wondering as to the rest

Also, this would likely be ready to preserve discretion in the Secretary given the language tasking the Secretary with keeping premium costs down. That could mean, if the Secretary decides, that certain listed things come off the list. Unless, of course, that other part of the bill expressly takes away any such discretion. Does it?

[pnwmom]

3. Until the final bill is approved, we won't know the exact wording anyway. n/t

[Land Shark]

4. So that makes it all ok? Most things in the bill won't change word-wise; controversial things will

be significantly more likely to change. There's not a lot of controversy about this one, so it's not very likely to change. But there's no reason to believe final language, if changed, will be for the better.

I fail to understand the upshot of your comment, given what's most likely (no change) combined with the fact that there's no real reason to expect change to improve things in any given favored direction we may have.

[pnwmom]

6. From what I understand, the House and Senate are still negotiating changes

and Obama himself has been involved in this. So what is the point of obsessing over exactly what the original Senate bill says?

[Land Shark]

8. If there's no pressure (I don't see any) there's little reason to think this will change.

[Motown_Johnny]

5. it is a step in the right direction, Should the insurance companies be the ones deciding what is

in and what is out and therefore what is limited and what is not and doing so on the basis of cost (read: profit) concerns???


We need to get something passed. No this isn't perfect but compared to the limits insurance companies have now it is a victory.

[Land Shark]

7. You may be right, but "banning' lifetime limits is misleading - not exactly what this does. n/t

[2 Much Tribulation]

9. kick for more comments n/t