HR 3218 - The Republican Version of Health Care Reform

The following is a link to thomas.loc.gov bill H.R. 3218. This bill is being touted nationally as the Republican health care reform bill. Representative Don Young supports this bill and is a co-sponsor.

http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.3218:

In addition to a tax credit that would be offered to insurance policy holders, this bill would allow states to create Individual Membership Associations or IMAs. The most identifiable weakness with this bill is that it basically duplicates a system that already exists under Title XXVII (Requirements Relating to Health Insurance Coverage), section 2745 of the Public Health Service Act (PHSA). The section of this act provides the structure and funding that currently allows states to create High Risk Pools to be used to provide health insurance to high risk individuals whose insurance rates are 150% higher than the standard in the state. The provisions in H.R. 3218 seem to mirror what is already covered under Title XXVII, section 2745. There is even a similarity in the mechanism of funding between the proposed house bill and the PHSA. The only addition seems to be the actual formation of the IMAs. The funding and structure for High Risk Pools already exist, and many of these High Risk Pools are already in place. Why then would there be a benefit in creating these IMAs? Conservatives generally tend to frown on excess government, so this bill makes little sense, unless one realizes that the IMAs will be run by private enterprise. Can we assume this bill merely serves the purpose of apportioning yet more out to the private sector? Health insurers already make a healthy profit from our premiums? Must we now provide profits for yet another corporation whose lobbying interests in Washington take precedence over the financial needs of the citizens of America?

Here is a section from H.R. 3218 that outlines the purpose and structure of the proposed IMAs.

SEC. 3101. DEFINITION OF INDIVIDUAL MEMBERSHIP ASSOCIATION (IMA). `(a) In General- For purposes of this title, the terms `individual membership association' and `IMA' mean a legal entity that meets the following requirements: `(1) ORGANIZATION- The IMA is an organization operated under the direction of an association (as defined in section 3104(1)). `(2) OFFERING HEALTH BENEFITS COVERAGE- `(A) DIFFERENT GROUPS- The IMA, in conjunction with those health insurance issuers that offer health benefits coverage through the IMA, makes available health benefits coverage in the manner described in subsection (b) to all members of the IMA and the dependents of such members in the manner described in subsection (c)(2) at rates that are established by the health insurance issuer on a policy or product specific basis and that may vary only as permissible under State law. `(B) NONDISCRIMINATION IN COVERAGE OFFERED- `(i) IN GENERAL- Subject to clause (ii), the IMA may not offer health benefits coverage to a member of an IMA unless the same coverage is offered to all such members of the IMA. `(ii) CONSTRUCTION- Nothing in this title shall be construed as requiring or permitting a health insurance issuer to provide coverage outside the service area of the issuer, as approved under State law, or requiring a health insurance issuer from excluding or limiting the coverage on any individual, subject to the requirement of section 2741. `(C) NO FINANCIAL UNDERWRITING- The IMA provides health benefits coverage only through contracts with health insurance issuers and does not assume insurance risk with respect to such coverage. `(3) GEOGRAPHIC AREAS- Nothing in this title shall be construed as preventing the establishment and operation of more than one IMA in a geographic area or as limiting the number of IMAs that may operate in any area. `(4) PROVISION OF ADMINISTRATIVE SERVICES TO PURCHASERS- `(A) IN GENERAL- The IMA may provide administrative services for members. Such services may include accounting, billing, and enrollment information. `(B) CONSTRUCTION- Nothing in this subsection shall be construed as preventing an IMA from serving as an administrative service organization to any entity. `(5) FILING INFORMATION- The IMA files with the Secretary information that demonstrates the IMA's compliance with the applicable requirements of this title. `(b) Health Benefits Coverage Requirements- `(1) COMPLIANCE WITH CONSUMER PROTECTION REQUIREMENTS- Any health benefits coverage offered through an IMA shall-- `(A) be underwritten by a health insurance issuer that-- `(i) is licensed (or otherwise regulated) under State law, `(ii) meets all applicable State standards relating to consumer protection, subject to section 3002(b), and `(B) subject to paragraph (2), be approved or otherwise permitted to be offered under State law. `(2) EXAMPLES OF TYPES OF COVERAGE- The benefits coverage made available through an IMA may include, but is not limited to, any of the following if it meets the other applicable requirements of this title: `(A) Coverage through a health maintenance organization. `(B) Coverage in connection with a preferred provider organization. `(C) Coverage in connection with a licensed provider-sponsored organization. `(D) Indemnity coverage through an insurance company. `(E) Coverage offered in connection with a contribution into a medical savings account, health savings account, or flexible spending account. `(F) Coverage that includes a point-of-service option. `(G) Any combination of such types of coverage. `(3) WELLNESS BONUSES FOR HEALTH PROMOTION- Nothing in this title shall be construed as precluding a health insurance issuer offering health benefits coverage through an IMA from establishing premium discounts or rebates for members or from modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention so long as such programs are agreed to in advance by the IMA and comply with all other provisions of this title and do not discriminate among similarly situated members. `(c) Members; Health Insurance Issuers- `(1) MEMBERS- `(A) IN GENERAL- Under rules established to carry out this title, with respect to an individual who is a member of an IMA, the individual may enroll for health benefits coverage (including coverage for dependents of such individual) offered by a health insurance issuer through the IMA. `(B) RULES FOR ENROLLMENT- Nothing in this paragraph shall preclude an IMA from establishing rules of enrollment and reenrollment of members. Such rules shall be applied consistently to all members within the IMA and shall not be based in any manner on health status-related factors. `(2) HEALTH INSURANCE ISSUERS- The contract between an IMA and a health insurance issuer shall provide, with respect to a member enrolled with health benefits coverage offered by the issuer through the IMA, for the payment of the premiums collected by the issuer. `SEC. 3102. APPLICATION OF CERTAIN LAWS AND REQUIREMENTS. `State laws insofar as they relate to any of the following are superseded and shall not apply to health benefits coverage made available through an IMA: `(1) Benefit requirements for health benefits coverage offered through an IMA, including (but not limited to) requirements relating to coverage of specific providers, specific services or conditions, or the amount, duration, or scope of benefits, but not including requirements to the extent required to implement title XXVII or other Federal law and to the extent the requirement prohibits an exclusion of a specific disease from such coverage. `(2) Any other requirements (including limitations on compensation arrangements) that, directly or indirectly, preclude (or have the effect of precluding) the offering of such coverage through an IMA, if the IMA meets the requirements of this title. Any State law or regulation relating to the composition or organization of an IMA is preempted to the extent the law or regulation is inconsistent with the provisions of this title. `SEC. 3103. ADMINISTRATION. `(a) In General- The Secretary shall administer this title and is authorized to issue such regulations as may be required to carry out this title. Such regulations shall be subject to Congressional review under the provisions of chapter 8 of title 5, United States Code. The Secretary shall incorporate the process of `deemed file and use' with respect to the information filed under section 3001(a)(5)(A) and shall determine whether information filed by an IMA demonstrates compliance with the applicable requirements of this title. The Secretary shall exercise authority under this title in a manner that fosters and promotes the development of IMAs in order to improve access to health care coverage and services. `(b) Periodic Reports- The Secretary shall submit to Congress a report every 30 months, during the 10-year period beginning on the effective date of the rules promulgated by the Secretary to carry out this title, on the effectiveness of this title in promoting coverage of uninsured individuals. The Secretary may provide for the production of such reports through one or more contracts with appropriate private entities. `SEC. 3104. DEFINITIONS. `For purposes of this title: `(1) ASSOCIATION- The term `association' means, with respect to health insurance coverage offered in a State, an association which-- `(A) has been actively in existence for at least 5 years; `(B) has been formed and maintained in good faith for purposes other than obtaining insurance; `(C) does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee); and `(D) does not make health insurance coverage offered through the association available other than in connection with a member of the association. `(2) DEPENDENT- The term `dependent', as applied to health insurance coverage offered by a health insurance issuer licensed (or otherwise regulated) in a State, shall have the meaning applied to such term with respect to such coverage under the laws of the State relating to such coverage and such an issuer.

In additional to being rather duplicative in its structure, the IMAs created by H.R. 3218 do little to help the under insured. The language of the bill does not clearly define what criteria will determine who can apply to the IMA. If the bill is based on the concept of the High Risk Pool, only those individuals whose rates are 150% higher than the standard rate for each state would be given the option to join the IMA (if I have misinterpreted this section of H.R. 3218, I would appreciate any input). The following excerpt outlines the funding for the proposed house bill.

H.R.3218 Improving Health Care for All Americans Act (Introduced in House) SEC. 301. FEDERAL MATCHING FUNDING FOR STATFEDERAL MATCHING FUNDING FOR STATE INSURANCE EXPENDITURESE INSURANCE EXPENDITURES. (a) In General- Subject to the succeeding provisions of this section, each State shall receive from the Secretary of Health and Human Services an amount equal to 50 percent of the funds expended by the State in providing for the use, in connection with providing health benefits coverage, of a high-risk pool, a reinsurance pool, or other risk-adjustment mechanism used for the purpose of subsidizing the purchase of private health insurance. (b) Funding Limitation- A State shall not receive under this section for a fiscal year more than a total of 50 cents multiplied by the average number of residents (as estimated by the Secretary) in the State in the fiscal year. (c) Administration- The Secretary of Health and Human Services shall provide for the administration of this section and may establish such terms and conditions, including the requirement of an application, as may be appropriate to carry out this section. (d) Construction- Nothing in this section shall be construed as requiring a State to operate a reinsurance pool (or other risk-adjustment mechanism) under this section or as preventing a State from operating such a pool or mechanism through one or more private entities. (e) High-risk Pool- For purposes of this section, the term `high-risk pool' means any qualified high risk pool (as defined in section 2744(c)(2) of the Public Health Service Act). (f) Reinsurance Pool or Other Risk-adjustment Mechanism Defined- For purposes of this section, the term `reinsurance pool or other risk-adjustment mechanism' means any State-based risk spreading mechanism to subsidize the purchase of private health insurance for the high-risk population. (g) High-risk Population- For purposes of this section, the term `high-risk population' means-- (1) individuals who, by reason of the existence or history of a medical condition, are able to acquire health coverage only at rates which are at least 150 percent of the standard risk rates for such coverage, and (2) individuals who are provided health coverage by a high-risk pool. (h) State Defined- For purposes of this section, the term `State' includes the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.

I am not 100% certain at this time (my eyes are watering), but the following section of the bill might potentially provide less funding for each state than is currently provided under Title XXVII.

(b) Funding Limitation- A State shall not receive under this section for a fiscal year more than a total of 50 cents multiplied by the average number of residents (as estimated by the Secretary) in the State in the fiscal year.

My gut feeling is that H.R. 3218 does not adequately address the following key concerns of many Americans who seek true health care reform.

1. It does not address the way in which insurance companies determine when and how much will be paid out in the event of an actual claim. According to Title XXVII, section 2701, protections already exist that stipulate an insurance company offering group insurance cannot deny anyone a policy. However, nothing within Title XXVII prevents an insurance company from excluding coverage for a pre-existing condition within that policy. In addition, I am not certain that the above protection includes individual insurance policy holders.

2. It does not help those who are currently under insured whose premiums do not meet the requirement of 150% above the standard for each state. As I mentioned above, I am not certain that the PHSA protects the individual policy holder from being denied a policy, and it certainly does not preclude an insurer from denying specific coverage within that policy.

(ii) CONSTRUCTION- Nothing in this title shall be construed as requiring or permitting a health insurance issuer to provide coverage outside the service area of the issuer, as approved under State law, or requiring a health insurance issuer from excluding or limiting the coverage on any individual, subject to the requirement of section 2741.

The language in this bill does little to limit the ability of the insurer to pick and choose what coverage will be available to the insured within each policy. Thus, if an insurance company decides not to cover a portion of the medical bill, the insured is still left with the responsibility of paying a potentially large bill. According this section from the bill, the IMAs claim no liability for payment of such charges. This bill does nothing to reduce the risk to the insured of bankruptcy due to financial strain caused by an unforeseen injury or illness.

(C)
NO FINANCIAL UNDERWRITING- The IMA provides health benefits coverage
only through contracts with health insurance issuers and does not
assume insurance risk with respect to such coverage.

3. It does nothing to address the current practice of unregulated adjustment of insurance premiums by health insurance companies. If anyone knows of any current act or law regulates the manner and extent to which an insurer can raise premiums, please reply to this post. As I have pointed out in my previous posts, premiums rates fluctuate in sync with the profit margin of the health insurance company. It might even be argued that the average cost of premiums per state may relate more to the earning potential of that state, than to the actual number of individuals within a coverage area.

4. It does not address the need for more efficient administration of health care costs. In fact this bill adds yet another layer of administration to an already complicated process. The AMA made the following statement in their 2009 Health Insurers Report Card.

The inefficient and inconsistent claims process adds as much as $200 billion annually to the health-care system.

For me, H.R. 3218 cannot stand alone as a solution to health care reform. It does not directly address what I consider to be the root of the health care problem - private, for profit, health insurance procedures and practices. It remains to be seen if bills supported by democrats will do better, and I fully intend to explore those bills as well. This bill has passed through committee, and has been formally introduced on the floor of the House. This tells me that, for the most part, Republicans are happy with its content. I am not, and I have stated my reasons. I welcome any and all comments.

For reference, and for those who would like to know how the government regulates our health insurance, I am pasting the link to "The Compilation of Selected Acts Within the Jurisdiction of the Committee on Energy and Commerce: Health Law."

http://energycommerce.house.gov/images/stories/Documents/PDF/publications/109_health.pdf

I must sleep now, but I part with "take that you big oaf."


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