Sunday, March 20, 2011

With Health Reform, Some Health Plans Are More Equal Than Others

All animals are equal, but some animals are more equal than others.

George Orwell (1903-1950), Animal Farm (1945)

When Orwell, an avowed socialist, made this statement, he meant that the “haves,” the elites, felt that people in their class were equal, but the “have-nots” – working class and minorities- were less equal. Saying all people are equal was a way of making the “haves” look virtuous, although they don’t believe this in practice.

Orwell was being satirical. He was saying that equality of results didn’t work out that well when elites ran the country. Theoretically, the new health reform law should level the playing (and paying) fields between the haves and have-nots by redistributing health (and wealth) benefits – by covering more of the poor, children, young adults while taxing the rich – and giving all more or less equal care. But it doesn't work out that smoothly because some people always want more and to pay less than others.

As I read a Robert Pear piece in today’s March 20 New York Times, I thought of Orwell. The article “Health Law Waivers Draw Kudos and Criticism” concerns the offering of waivers to more than 1,000 health plans covering 2.6 million people. The reform plan, designed to cover 32 million more Americans and to protect and to make it more affordable for everybody, has a requirement to provide at least $750,000 in coverage to each person in their own health plans.

Regrettably, the reform plan raises costs significantly for many of the “have-nots,” who say they cannot afford it, and it drives insurers out of markets, leaving more uninsured in its wake.

In this case, those who claim to be “have-nots,” say the law is too strict, demanding, and expensive, and they want to opt out. They seek a reprieve, an exemption from the law. They need, they insist, to be classified as exceptions and to be “waivered out,” beyond the reach of the law.

To date, says Pear, “Such waivers have gone to entities as diverse as the Waffle House and Ruby Tuesday, health plans run by Aetna and Cigna, and labor unions representing Teamsters, electrical unions, carpenters and food and commercial workers.”

Without the waivers, says Kathleen Sebelius, Secretary of Health and Human Services, many employees would have to pay unaffordable premiums, employers would have to drop coverage, and health plans would have to withdraw from markets, leaving millions uninsured.

The law has a provision saying health plans must pay at least 80% of premium revenues for care and efforts to improve it. Maine was issued a waiver dropping this to 65%, and five other states – Florida, Georgia, Kentucky, Nevada, and New Hampshire – have requested similar waivers. A dozen other states may apply for waivers.

The need for waivers will continue to grow as Federal rules require health plans to increase the requirement of $750,000 in coverage to $1.25 million in coverage in 2012 and $2 million in 2013. By November, 2012, the date of the next Presidential election, we should know what health plans are more equal for what political animals.

Richard L. Reece, MD, blogs at Medinnovation and has a website under construction. He is the author of three recent books, Obama, Doctors, and Health Reform (Iuniverse, 2009), Innovation Driven Health Care (Jones and Bartlett, 2007), and an E-book, Pros and Cons of Accountable Care Organizations (Practice Support Resources, 2011). He works with but does not speak for The Physicians Foundation, a 501C3 organization representing physicians in state medical societies. Opinions expressed in his blogs are his alone. He can be reached at and 1-860-395-1501.

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