Obamacare “Essential Benefits” Rendered Most Insurance Policies Obsolete
The great bait-and-switch of Obamacare (“you can keep your plan and your doctor”) was intentionally orchestrated by the architects of the legislation. There were thousands of policies offered nationwide that were good and even very good but now they can’t be sustained under the new Obamacare policy requirements. These regulations are so narrow that it intentionally made obsolete or non-compliant the vast majority of health care policies in that were currently in existence, thereby requiring the insurers to cancel those offerings.
There are 10 essential benefits to Obamacare that every policy now must have. Most of them are routine and were likely found in some form on the vast majority of plans pre-Obamacare. Forbes recently compiled a list of these required items:
1) Ambulatory patient services – Care you receive without being admitted to a hospital, such as at a doctor’s office, clinic or same-day (“outpatient”) surgery center. Also included in this category are home health services and hospice care (note: some plans may limit coverage to no more than 45 days).
2) Emergency services – Care you receive for conditions that could lead to serious disability or death if not immediately treated, such as accidents or sudden illness. Typically, this is a trip to the emergency room, and includes transport by ambulance. You cannot be penalized for going out-of-network or for not having prior authorization.
3) Hospitalization – Care you receive as a hospital patient, including care from doctors, nurses and other hospital staff, laboratory and other tests, medications you receive during your hospital stay, and room and board. Hospitalization coverage also includes surgeries, transplants and care received in a skilled nursing facility, such as a nursing home that specializes in the care of the elderly (note: some plans may limit skilled nursing facility coverage to no more than 45 days).
4) Laboratory services – Testing provided to help a doctor diagnose an injury, illness or condition, or to monitor the effectiveness of a particular treatment. Some preventive screenings, such as breast cancer screenings and prostrate exams, are provided free of charge.
5) Maternity and newborn care – Care that women receive during pregnancy (prenatal care), throughout labor, delivery and post-delivery, and care for newborn babies.
6) Mental health services and addiction treatment – Inpatient and outpatient care provided to evaluate, diagnose and treat a mental health condition or substance abuse disorder (note: some plans may limit coverage to 20 days each year).
7) Rehabilitative Services and devices – Rehabilitative and habilitative services and devices to help you gain or recover mental and physical skills lost to injury, disability or a chronic condition. Plans have to provide 30 visits each year for either physical or occupational therapy, or visits to the chiropractor. Plans must also cover 30 visits for speech therapy as well as 30 visits for cardiac or pulmonary rehab.
8) Pediatric Services – Care provided to infants and children, including well-child visits and recommended vaccines and immunizations. Dental and vision care must be offered to children younger than 19. This includes two routine dental exams, an eye exam and corrective lenses each year.
9) Prescription drugs – Medications that are prescribed by a doctor to treat an illness or condition. Examples include prescription antibiotics to treat an infection or medication used to treat an ongoing condition, such as high cholesterol. At least one prescription drug must be covered for each category and classification of federally approved drugs.
10) Preventive and wellness services and chronic disease treatment – Preventive care, such as physicals, immunizations and cancer screenings designed to prevent or detect certain medical conditions. Also, care for chronic conditions, such as asthma and diabetes.
The bulk of this list consists of items that were not necessarily mandatory on any insurance plan, but were fairly common in some form or another. For instance, maternity care might have been an add-on some plans, included on others, but was relatively common in the industry. However, there are two items in particular on this list which are recent healthcare innovations not widely found. Therefore, their inclusion as criteria for assessing whether a health plan was “good” or “not good” rendered most current insurance plans incomplete — and therefore obsolete — for Obamacare. They are 1) “rehabilitative and habilitative care” and 2) “pediatric services”.
On the matter of rehabilitative and habilitative services, the new Obamacare essential makes a distinction between Rehabilitative Services (which help to recover lost capacities) and Habilitative Services (which “help people acquire, maintain, or improve skills and functioning for daily living”). Statereforum.org, a site devoted to health reform implementation, concurs that Habilitative services — a word not readily familiar to many people — are “a set of benefits not traditionally covered by private health insurance”.
When Health and Human Services made their final decisions this past November on the 10 Essentials for health plans, it “recognized that many health plans across the country do not recognize habilitative services as a distinct group of services. HHS proposed a flexible policy that allows states to define habilitative services if their benchmark plan fails to do so”. In the Federal Register published on November 26, 2013, it was specifically noted that this flexibility “will provide a valuable opportunity for states to lead the development of policy in this area and welcome comments on this proposed approach to providing habilitative services”. In other words, HHS created an benefit requirement that most insurance plans didn’t cover and isn’t even uniformly defined in the industry. Because nearly all plans lacked this “essential item”, most existing health insurance plans have been declared non-compliant.
With regard to pediatric services, it has typically been a matter in the healthcare industry that dental and vision coverage — particularly for children — are not to be included as part of a health insurance policy. Those that do have almost always have it as an add-on where you get services elsewhere, and only a few of the largest companies even bothered to offer it. This “must have” was never a part of a normal healthcare environment, and by making this one of the compliance items, it too has rendered nearly all plans incompatible with Obamacare regulations.
It has become clear that few existing health insurance policies pass the Obamacare litmus test. This carefully engineered attack on the “bad apple” health care industry was to induce a large-scale shift of citizens onto the exchanges (to pay for Obamacare) after their insurance was inevitably canceled. “If you like your plan you can keep it”, was a hollow promise all along. With the website calamity, Obamacare has utterly backfired — but the citizens are left holding the bag of higher costs, canceled plans, and an uncertain future. There is a sense of irony that the Obamacare “benefits” have done nothing to benefit anyone.
Crossposted at taxpolitix.com