Mike Kueber's Blog

October 7, 2011

ObamaCare takes shape

ObamaCare is technically known as the Patient Protection and Affordable Care Act (ACA).  The most troubling part of the ACA, other than its unconstitutional individual mandate, is the provision that requires the Secretary of Health and Human Services (HHS) to define a package of preventive, diagnostic, and therapeutic services and products that it deems “essential.”  The ACA provided that this package of essential coverage should be “equal to the scope of benefits provided under a typical employer plan.

This requirement doesn’t make sense.  As I previously blogged:

  • My concern is that employee health coverage, especially when unions are involved, is often gold-plated, and it is nonsensical to make gold-plated coverage the inimum standard for a welfare-type program like ObamaCare, especially if Aerican is trying to restrain over-utilization.

Today, the NY Times reported that a shocking display of common sense and good judgment may prevent my fears from materializing.  According to an article in the Times, the Institute of Medicine (IOM), in providing the Secretary of HHS with a framework for deciding what coverages should be deemed essential, recommended that (1) the cost of providing the coverage should be considered so that the policy remains affordable, and (2) “a typical employer plan” should be that of a small employer, not of medium or large employers, who tend to provide more generous (expensive) coverage.

In explaining (1), the IOM stated the obvious – “If the benefits are not affordable, fewer individuals will buy insurance.”  Unfortunately, this common sense is often not applied to Medicare – “By contrast, Medicare officials sometimes decide to cover new therapies without explicitly weighing the cost — and they have occasionally been blocked in court when they tried to.

In explaining (2), the IOM said, “federal officials should determine what the national average premium of typical small employer plans will be in 2014 and ensure that the national average cost of the minimum benefits does not exceed that amount.”  Wouldn’t it be great if common sense like this became more common?

Even the NY Times was surprised by the emergence of moderation – “This reading of the law was unexpected, but the panel said it was justified because small businesses ‘will be among the main customers for policies in the state-based exchanges.’”

ObamaCare deserves credit for tackling many of the underlying causes of exploding healthcare costs, and perhaps some of these solutions will prove to be effective if they are applied in a pragmatic, not doctrinaire fashion.  This work of the IOM on an important part of ObamaCare is a good start.

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