Supreme Court misunderstanding on health overhaul?

Apr 10, 2012, 5:34 PM

Associated Press

WASHINGTON (AP) – A possible misunderstanding about President Barack Obama’s health care overhaul could cloud Supreme Court deliberations on its fate, leaving the impression that the law’s insurance requirement is more onerous than it actually is.

During the recent oral arguments some of the justices and the lawyers appearing before them seemed to be under the impression that the law does not allow most consumers to buy low-cost, stripped-down insurance to satisfy its controversial coverage requirement.

In fact, the law provides for a cheaper “bronze” plan that is broadly similar to today’s so-called catastrophic coverage policies for individuals, several insurance experts said.

“I think there is confusion,” said Paul Keckley, health research chief for Deloitte, a major benefits consultant. “I found myself wondering how much they understood the Affordable Care Act. Several times the questions led me to wonder how much (the justices’) clerks had gone back into the law in advance of the arguments.”

Monthly premiums for the bronze plan would be lower, and it would cover a much smaller share of medical expenses than a typical employer plan.

“Bronze is a very skinny product,” said Keckley.

Starting in 2014, the health care law requires most Americans to obtain health insurance, either through an employer, a government program, or by buying their own policies. In return, insurance companies would be prohibited from turning away the sick. Government would subsidize premiums for millions now uninsured.

The law’s opponents argue that Congress overstepped its constitutional authority by issuing the mandate, while the administration says the requirement is permissible because it serves to regulate interstate commerce. The scope of the mandate was one of several key issues argued before the court.

“If I understand the law, the policies that you’re requiring people to purchase … must contain provision for maternity and newborn care, pediatric services and substance use treatment,” said Chief Justice John Roberts. “It seems to me that you cannot say that everybody is going to need … substance use treatment or pediatric services, and yet that is part of what you require them to purchase.”

That may be true, but the law’s bronze plan isn’t exactly robust coverage. It would require policyholders to spend thousands of dollars of their own money before insurance kicks in. That’s how catastrophic coverage works now.

It means anyone _ particularly younger, healthy people _ can satisfy the health care law’s insurance requirement without paying full freight for comprehensive coverage they may not need.

Solicitor General Donald Verrilli did not highlight the bronze plan in his defense of the law, an omission that may prove significant.

“I would definitely say that if you listen to the court proceedings it would be easy to come away with the impression that the health care reform law was requiring people to buy Cadillac insurance, which is certainly not the case,” said Larry Levitt, head of the Kaiser Family Foundation’s Initiative on Health Reform and Private Insurance. The foundation is a nonpartisan information clearinghouse.

The health care law does impose a minimum set of “essential health benefits” for most insurance plans. Those benefits have yet to be specified, but are expected to reflect what a typical small-business plan now offers, with added preventive, mental health and other services.

On the surface, the minimum benefits requirement does seem to mandate comprehensive coverage. But another provision of the law works in the opposite direction, and the two have to be weighed together.

This second provision allows insurance companies to sell policies that have widely different levels of annual deductibles and copayments. A “platinum” plan would cover 90 percent of expected health care expenses, but on the bottom tier a bronze plan only covers 60 percent.

“The minimum that people will be required to buy under the health reform law is clearly a catastrophic plan,” said Levitt.

In return for taking on more financial risk, you’ll pay lower monthly premiums for a bronze plan, making it easier to budget for. You’ll be covered for the same kinds of treatments as everybody else, but your plan won’t pay the hospital bill until you’ve spent a good chunk of your own money out of pocket.

A Kaiser study estimated that the annual deductible for a bronze plan could range from $2,750 to $6,350. The deductible is the amount a policy holder must pay directly before insurance payments kick in.

A separate study by the foundation found that people buying individual health policies in the current insurance market end up paying an average of 35 percent of their medical costs out of their own pockets, in line with the 40 percent consumers with a bronze plan would face.

While the bronze plan is available to anyone, the law also provides for another level of catastrophic insurance limited to people under age 30, and expected to be even skimpier.

Such nuances were seemingly lost before the Supreme Court. One of the lawyers representing the plaintiffs, Michael Carvin, asserted during the arguments that “Congress prohibits anyone over 30 from buying any kind of catastrophic health insurance.”

Verrilli did not challenge Carvin’s characterization, but it is raising eyebrows among insurance professionals.

“I don’t think that’s exactly right,” said benefits lawyer Mark Holloway, of the Lockton Companies, a major insurance broker serving mid-size companies. “It depends on what you call catastrophic coverage.”

Carvin says he stands by his statement in court that the law prohibits anyone over 30 from buying any kind of catastrophic insurance.

“The bronze plan is not catastrophic coverage,” said Carvin, who represents the National Federation of Independent Business.

“It’s got all the minimum essential benefits in it,” he added. “It’s got to have wellness, preventive, contraceptives _ all kinds of things a 30-year old would never need. It’s not remotely catastrophic.”

(Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.)

Health

Rich Morris of Toadflax Nursery helps to plant marijuana seedlings at Homestead Farms and Ranch in ...
Associated Press

New York’s 1st legal marijuana crop sprouts under the sun

CLIFTON PARK, N.Y. (AP) — New York’s recreational marijuana market is beginning to sprout, literally, with thin-leafed plants stretching toward the sun in farms around the state. In a novel move, New York gave 203 hemp growers first shot at cultivating marijuana destined for legal sales, which could start by the end of the year. […]
23 hours ago
FILE - Abortion-rights activists protest outside the Supreme Court in Washington, Saturday, June 25...
Associated Press

Clinics scramble to divert patients as states ban abortion

They call her, desperate, scared and often broke. Some are rape and domestic violence victims. Others are new mothers, still breastfeeding infants. Another pregnancy so soon, they say, is something they just can’t handle. “Heart wrenching,” said Angela Huntington, an abortion navigator for Planned Parenthood in Missouri, who is helping callers reschedule canceled abortion appointments […]
23 hours ago
Associated Press

California budget won’t cover out-of-state abortion travel

SACRAMENTO, Calif. (AP) — While Gov. Gavin Newsom has pledged to make California a sanctuary for women seeking abortions, his administration won’t spend public money to help people from other states travel to California for the procedure. Newsom’s decision, included in a budget agreement reached over the weekend, surprised abortion advocates who have been working […]
23 hours ago
FILE - This 2003 electron microscope image made available by the Centers for Disease Control and Pr...
Associated Press

US officials announce more steps against monkeypox outbreak

NEW YORK (AP) — Reacting to a surprising and growing monkeypox outbreak, U.S. health officials on Tuesday expanded the group of people recommended to get vaccinated against the monkeypox virus. They also said they are providing more monkeypox vaccine, working to expand testing, and taking other steps to try to get ahead of the outbreak. […]
23 hours ago
FILE - A person is silhouetted against a wall as they look down at their cell phone outside the Cla...
Associated Press

EXPLAINER: Abortion, tech and surveillance

With abortion now or soon to be illegal in over a dozen states and severely restricted in many more, Big Tech companies that vacuum up personal details of their users are facing new calls to limit that tracking and surveillance. One fear is that law enforcement or vigilantes could use those data troves against people […]
23 hours ago
Associated Press

Report: Lack of water access costs U.S. $8.6B each year

CHARLESTON, W.Va. (AP) — At least 2 million Americans don’t have running water or a working toilet at home, a crisis that costs the U.S. economy $8.58 billion each year, according to a report released Tuesday by nonprofit DigDeep. These water access issues disproportionately impact Indigenous tribes, people of color, immigrants, low-income people and those […]
23 hours ago

Sponsored Articles

...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

Vaccines are safe if you are pregnant or breastfeeding

Are you pregnant? Do you have a friend or loved one who’s expecting?
...
Arizona Division of Problem Gambling

Arizona Division of Problem Gambling provides exclusion solution for young sports bettors

Sports betting in Arizona opened a new world to young adults, one where putting down money on games was as easy as sending a text message.
...
Carla Berg, MHS, Deputy Director, Public Health Services, Arizona Department of Health Services

ADHS mobile program brings COVID-19 vaccines and boosters to Arizonans

The Arizona Department of Health Services and partner agencies are providing even more widespread availability by making COVID-19 vaccines available in neighborhoods through trusted community partners.
Supreme Court misunderstanding on health overhaul?