The Amazing Maze of US Health Care

An E-mail came across my desk recently.  It was from one of the many employee benefit-consulting firms and information services that have uncovered my e-mail address and bombard me with information.

This one had some startling advice.

It advised employers to deny all applicants for the COBRA subsidy.

Why, you ask.

Well, it seems that our federal government speaks with forked tongue on whether to make it easier for recently unemployed workers to continue their health insurance.

The American Recovery and Reinvestment Act (ARRA) says that employees who are involuntarily terminated can apply for COBRA continuation coverage.  If they have been involuntarily terminated, they become an Assistance Eligible Individual (AEI to the cognoscente).

An AEI (you are now part of the cognoscente) pays 35% of the normal COBRA premium – a fairly substantial premium subsidy, although for the unemployed, still a hefty burden. Read the rest of this entry »

When people think of HIPAA, they think of the privacy provisions of HIPAA.  Yet privacy is nowhere in the title – the Health Insurance Portability and Accountability Act, passed in 1997, was touted as a stake through the heart of one of the great evils of the health insurance market place – refusing to insure sick people.  The practice is called medical underwriting.

“Portability”, the P in HIPAA, offered the promise that an individual undergoing treatment for a medical condition, would not have their treatment disrupted because of a “pre-existing condition” if they changed jobs and employer sponsored health plans.

HIPAA has the same elements described in my recent post about Michelle’s Law: a good story line and a very narrow focus.  The Rube Goldberg fix over the simple, direct fix.

Anyone looking around at health care today might be surprised to learn that Congress even considered the subject. Read the rest of this entry »

Past efforts by the federal government to reform the health care system offer instructive guidance about future prospects for meaningful reform.

Forgeddaboutit.

Lesson learned – why go for the simple fix when the Rube Goldberg fix will do. Limit the fix to only a small hole in the system. Make sure it has a good story line. Congress gets some political mileage with little down side. In addition, it keeps bureaucrats and lawyers busy figuring out what Congress intended.

Let me illustrate with two examples.

Thirty state legislatures have attempted to address a real problem – health care coverage for young adults. Young adults generally lose coverage as dependents on their parents’ plan when they turn 19. The technical term we in the benefits profession use is “age off.” Young adults who continue as full time students can generally continue on their parents’ plan if they and their college or university jump through some administrative hoops.

These ideas evolved in a quainter world when young people could find jobs at 18 or 19 that offered health insurance. Rarely true today. Read the rest of this entry »