Saturday, April 17, 2010

New Health care bill not long enough ? we need more pages ? And are insurers now utilities or not?

Remember, we were told that we must pass health care reform or America will" go bankrupt" and the bill will bend the health care cost curve downwards.The seemingly inexorable increase in health care premiums which proponents used to help pass the bill may not be stopped by the current bill.We were told that the premiums we pay for insurance would go down.But now we are told that the bill really cannot make that happen nor can it keep premiums from going higher.

At least that is the case put forth by a noted Democratic Senator who tells us that we need more legislation to close that "loophole" and control health insurance premium increases. See here.Apparently 2,000 pages was not enough to get it right. After reading the relatively few relevant Google references to this loophole I could not learn what exactly this loophole is.

This is puzzling because I thought Obamacare turned health care insurance companies into utilities (see here) and that they would have their rates set by a federal office of health rate authority acting in conjunction of the state rate setting agencies.

It gets more complicated.See here for an interesting opinion by Richard Epstein, a law professor at University of Chicago.Epstein says that the legislation turns health insurance companies into public utilities. However, while state rate regulators have been instructed through case law by the Supreme Count that the regulation has be done in such a way as to allow market rates of return to the utility and those safeguards appear lacking in the new law.The court has required is that a firm in a regulated market be allowed to recover a risk-adjusted competitive rate of return on its capital investment. This came down in a unanimous 1988 decision ( Duquesne Light Co. v. Barasch). Epstein says that the law bumps up against this decision.

To summarize:

Is there a loophole in the new health care bill that does not allow the government control over health insurance premiums that the public was promised?

Does the bill in effect turn health care insurers into public utilities? Is that section of the bill unconstitutional?

Do the insurers really want to be utilities? (see here for the argument that they do, and here for the argument that insurers helped to get the bill passed)

Does anyone know what was made into law, including those who voted for the bill and those physician organizations that supported it?

Only the last question has an obvious answer.

On a related note, we are told that insurance companies are already gaming the system set up by the mammoth health care reconstruction bill.See here. Who would have thought?

1 comment:

Michael Kirsch, M.D. said...

Many of us were and are deep skeptics of the passed HCR legislation. I believe that our skepticism will be borne out by events in the coming years. Sure, it promises to deliever coverage to30 million uninsured, but costs and demand for care and taxes will all continue to rise. Who will take care of these folks? We don't have enough primary care already? Passing HCR was more about politics than health. www.MDWhistleblower.blogspot.com