Most people agree that turkey is essential to any Thanksgiving meal. After that, there’s plenty of variety. Some might say cranberry sauce is essential; others hate the stuff. The same goes for dressing and other popular sides like sweet potatoes.
Americans often disagree on what’s essential in our lives, and that’s fine: We’re all free to cook what we like for our holiday tables, and omit the foods we don’t like.
But unfortunately we don’t have the same freedom when it comes to our health insurance: The federal government is still dictating which coverage pieces are essential and which are not. This necessarily creates winners (those who are happy with the government’s decisions) and losers (those who are not).
We can give thanks for some good news: Regulators at the Centers for Medicare and Medicaid Services do recognize that increased flexibility would ultimately offer consumers greater choice and more affordability in health insurance. That’s why they’re currently considering a rule change that would do just that: give states more wiggle room in complying with the federal government’s “Essential Health Benefits” regulation.
Yet policymakers are still making the mistake of trying to decree what is “essential” for everyone and thereby determine what must be in everyone’s insurance package.
For example, deep in the text of the new rule, regulators write, “For plan years further in the future, we are considering establishing a Federal default definition of EHB that would better align medical risk in insurance products by balancing costs to the scope of benefits … For instance, as part of this approach, we could establish a national benchmark plan standard for prescription drugs that could balance these tradeoffs and provide a consistent prescription drug default standard across States.”
First – since when did government regulators need to concern themselves with “balancing costs to the scope of benefits?” Isn’t this ultimately the job of insurance carriers and their actuaries? And what about consumers: Don’t we have the right to decide if a plan offers the benefits we want at the right price?
It should be simple: Government should have no business trying to micromanage the costs and benefits of a product offered in the marketplace, which individuals could choose to buy or not buy.
But sadly, because the government is deeply involved in paying for health insurance (as it is with the Affordable Care Act, where more than 80 percent of exchange customers use federal subsidies to buy their plans), the government cares very much about cost. Since government is now the one paying the bill, policymakers believe they get to make the important decisions about how the market must work. That’s what’s so dangerous about government-funded health care.
Second – what’s the point in offering states greater flexibility (the overall goal of the new rule) if the federal government only then plans to step in with national benchmark plan standards?
Regulators are on the right track in reducing the role of the federal government in narrowly defining Essential Health Benefits. They should stop while they are ahead and allow states true flexibility, without federal benchmarks. What starts as a benchmark today may become the only option tomorrow, as governments (both federal and state) are eager to hold down costs.
We’ve seen this before: This is always the story of government rationing of healthcare. “Recommendations” and “guidelines” and “benchmarks” come first. Hard and fast rationing follows.
The government is in charge of veterans’ health care, and the VA offers a very restrictive drug formulary. England and other countries with government-run healthcare face strict budget limits on drug coverage, too.
It’s no big deal if this Thanksgiving your favorite casserole doesn’t make the family menu, but if you happen to need a specific drug that’s not included in a national benchmark standard, what then? Or conversely: Who wants to be force-fed coverage that doesn’t suit our personal needs (or our personal budgets)?
The government should simply stay out of the health insurance business by allowing consumers to pick and choose what coverage pieces they want to buy. (Think of it as a buffet!) As well-meaning as regulators may be, there’s no way they can know all of the needs and preferences of millions of patients when it comes to drugs or other forms of healthcare.