Benefit-capping decisions left up to insurers under Senate Bill

President Obama touted the Senate health care reform bill on Monday as a “victory” for the insured because their benefits cannot be curbed. He recently wrote in the New York Times:

“Insurance companies] will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or in a lifetime. And we will place a limit on how much you can be charged for out-of-pocket expenses. No one in America should go broke because they get sick.”

Obama is either being disingenuous or simply does not understand the bill. On page 16 of the Senate Bill under “Subpart II–Improving Coverage, we see the details in fine print that completely belie the President’s contention (emphases added):

”(a) IN GENERAL.–A group health plan and a health-insurance issuer offering group or individual health insurance coverage may not establish–(1) lifetime limits on the dollar value of benefits for any participant or beneficiary; or ”(2) unreasonable annual limits (within the meaning of section 223 of the Internal Revenue Code of 1986) on the dollar value of benefits for any participant or beneficiary.”

It is evident that insurance companies can set caps on the benefits for the insured so long as they are “reasonable”. There exists no specificity in the bill about what constitutes an “unreasonable” limit, but leaves these decisions solely to the insurers. Furthermore, the loophole regarding the dollar value of the benefits would let insurance companies limit or even discontinue certain types of care, such as physical rehabilitation sessions or mental-health treatment.

A spokesman for Harry Reid argued Monday that banning all such caps could lead to higher premiums. This is particularly disadvantageous to individuals with long-term illnesses such as cancer, heart disease or diabetes that may warrant expensive treatments. Caps on the dollar value of benefits received within a calendar year would be devastating to those afflicted by such diseases.

As we’ve seen so often in this health care reform debacle, the practical effects of the bill are often the exact opposite as claims put forth by the President and Democrats in Congress.

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