29. The Baucus Kludge

I need to go chase a few rabbits. I’m sure that will be more satisfying than the hour I have already spent trying to understand the Baucus Senate Health Care Plan at http://i2.cdn.turner.com/cnn/2009/images/09/08/baucus.framework.pdf . Now please note, the reference presents you with JUST an OUTLINE and leaves the MAJOR implementation activities a mystery, and, in my opinion impossible.

Did I like anything in the plan?

Mildly positive items:

• I got excited when on page 17 it stated “…The definition of qualified medical expenses for Health Savings Accounts (HSAs), Flexible Savings Accounts (FSAs), and Health Reimbursement Arrangements (HRAs) would be conformed to the definition used for the itemized deduction.” If this is true, Medigap insurance WILL be covered as a valid use of HSA withdrawals – I explained this in entry “15. The Medigap Trap.” However, I will guess the Baucus bill will change this; so, my tail is no longer wagging already.

• Standardizing plans across all insurance providers would sure be helpful as promised on page 3. But does this mean across only plans sold by the exchanges, or also existing (grandfathered) plans too? My tail isn’t wagging here either since I already have a plan I like.

Neutral Feelings:

• “Plans would be prohibited from applying annual or lifetime limits on benefits” appears on page 3. I’m sure existing limits today are being exceeded, but I have no idea how much the premium cost will increase to eliminate them. Again, you can’t tell if this applies ONLY to newly sold plans or that grandfathered ones must comply.

Negative Vibes:

• Non-Group Market (i.e., Individual Insurance plans, NOT employer plans or special group insurance plans) premium ratios are going to kill me! Older folk could pay premiums 5 times greater than younger folk as indicated by the 5:1 ration on page 2. Family also doesn’t get a break (2:1) which is higher than my wife and I would pay taking separate plans today! Add to these geographical differences at a 7.5:1 ratio. Will geographical still be STATES ONLY, or now a larger pool of people? The answer could be larger if a CO-OP plan is selected AND the CO-OP makes a deal with a CO-OP in another state. Slight bit of competitive unfairness with private companies still regulated at STATE-level. Conclusion, our premiums will skyrocket!

• Thought you were going to be covered when you have a preexisting condition as Obama promised? Not until 2013 in this plan (page 2).

• “Employees may opt out of employer coverage, however, if they are able to demonstrate that they have coverage from another source.” is stated on page 5. So, if I’m married and covered by my spouse and vice versa, we can opt out and go to the State exchange to get different insurance. If we are young, “a separate ‘young invincible’ policy would be available in addition to these benefit options. This policy would be targeted to young adults who desire a less expensive catastrophic coverage plan ….” Well, I am sure the young plan will highly benefit the young because they will be in a pool that does not have old fogies like us. Now, what do you suppose the remaining pool in the employer plan will be like if the young do this? I would venture to guess employer health care premiums will rise significantly. Another wise bill provision!
• Page 5 states: “Coverage offered by an employer of any size, including fully insured and self insured plans, is not required to comply with the list of benefits required of plans in the non-group and small group markets.” Now for non-group insurance plans, we have up to 4 “medal” plans (silver and gold must be offered) with common benefits for each “medal” plan and the “young invincible” plan that could or could not be standard across providers. But, for employer plans anything can be offered and accepted? How about if an employee loses his job? Will COBRA still be there? If so, which plan? At what cost? If longer than COBRA will cover, I assume the unemployed would have to go to exchange, or be fined (next item).

• Let’s fine people who don’t sign up for a plan. How long must they be uninsured BEFORE a fine kicks them in the behind? How about that newly unemployed person above? Did Baucus really think about implementing the fines to businesses? Somehow the Government must determine who is now covered by an exchange bought plan and match him with his place of employment. If this employee worked at three different businesses, which business gets fined? What a nightmare! A simple list of scenarios and answers to each would have caught this mess. There go the costs of managing health care.

• And what about the credits to those who can’t pay? How will this be determined? It seems to be simple as pie; just put them in a 100-300% poverty class. Does that mean all these people will be filling out net worth statements as in Medicaid? I would again venture to guess that these people do not have steady jobs and their income would vary each year AND a lot is under the table so they stay below the triggers. Another nightmare to manage, plus mucho costs. Btw, does anybody understand this section in the Baucus plan?

• Page 1. Medicare – “Part D Drug Discount Program … in order to have their drugs covered under Medicare, manufacturers must provide a 50% discount off the negotiated price for brand-name drugs … when beneficiaries enter the coverage gap. Beneficiaries are eligible provided they … not pay higher Medicare premiums under Part B or Part D.” Go figure! I can’t understand this.

• Page 1. “High Risk Pools. In 2010, the proposal would increase funding for state high risk pools, so long as the funds are not used to replace current premium assessments and are not distributed to high risk pools that have a waiting list.” Note: High risk insurance is AVAILABLE today to cover people who have a preexisting condition; albeit, the premiums are high. So, what is Baucus thinking here? If I read this right they cannot lower the premiums for these people because they cannot replace current premium assessments. So, what is the benefit to We the People?

• Page 11. “Physician Value-Based Purchasing. This provision would make improvements to the Physician Quality Reporting Initiative (PQRI) program, including requiring all eligible health professionals to participate by 2011, establishing payment incentives for physicians to appropriately order high-cost imaging services, expanding the Medicare physician feedback program, and penalizing physicians who utilize significantly more resources than their peers.” Actual case today with HMO insured: Surgery was done and required after-surgery physical therapy. The surgeon did not want it credited to his account and the general physician did not want it credited to his account because penalties already exist with HMOs. So, now what? This was a huge mess for the patient to get reimbursement. Also, we all know the detail and necessity of MRIs. How would you feel if your physician told you he “knows” what is wrong without a MRI? Who will determine the necessity? A doctor who will get penalized if he comes in above the average of the peers! Good heavens!

I surrender. I’ll buy anything you put before me. Just change everything I am now satisfied with – I enjoy jumping through new and now fiery hoops. Yeah, sure! You think I’m a circus lion or a dancing dog?

The Baucus plan is a kludge of many thoughtless ideas. Well, he just had to ignore the Republicans again and JUST GET SOMETHING OUT. I haven’t touched on another 80% of the other provisions that are totally confusing and for which no implementation plan is remotely discussed. Now, how do you ever estimate a cost like he did without these? Easy, plus or minus a little from what Obama said! Here’s another clown to throw out of Congress! Maybe I’ll peek at this again and comment some more. But, don’t hold your breath. It’s already a nightmare beckoning economic and moral destruction and bound to get ripped apart by both parties.