June 25, 2010
They have not received an enormous amount of press, but the White House announced new interim health care regulations on Tuesday that implement Obamacare the Affordable Care Act. (See the Washington Times story.) Heres a micro-summary of what they do:
The new regulations will strengthen the laws so-called patients bill of rights, including the end of insurance companies denying coverage to children with pre-existing medical conditions and caps on lifetime coverage limits.
A friend of FRC wrote me a note about these new rules and the coverage limits annual as well as lifetime:
….the restriction on annual coverage limits (which applies even to grandfathered plans) was supposed to be phased in between now and 2014 to help minimize premium cost increases. These new regulations set $750,000 as the minimum annual individual limit starting September 23 of this year! This goes to $1.25 million the following year, and then $2 million until 2014 when no limits will be permitted at all. So much for limiting premium cost increases! Most policies I have seen have a lifetime maximum of $1 million, so this will blow costs through the roof, immediately.
This expert on employee benefit policy was clearly surprised and went on to make additional points. Many individually-purchased policies are affordable only because the insured is willing to limit the maximum policy payout for annual and total benefits. This is reasonable and beneficial policy purchasers then have an incentive to contain medical costs if there is a maximum payout that does not equal infinity and 00/100 dollars or the practical equivalent thereof. Also, insurance companies can plan for their maximum possible obligation under the current policy structure. All that said, the analyst predicted that many affordable individual policies now will not be renewed undermining the claim that if you liked your old insurance you can keep it. Well, you cant keep your health insurance policy if it is regulated out of existence by government rules that make it actuarially and economically untenable.