New Rule: Health Insurers Can No Longer Game the System

If you want to know why your vote on November 6 made a difference, you will not find a more humane example than the saving of health reform. Speaker Boehner threw in the towel on Republican attempts to repeal it last week, calling it the law of the land. And today, the Department of Health and Human Services issued preliminary guidelines to go into effect in 2014, taking a leap towards universal coverage and fulfilling the promise of health reform. The guidelines not only cover rules prohibiting discrimination on the basis on pre-existing health conditions, but also stops insurance companies from gaming the market by slicing it up.
Health insurance issuers in the individual and small group markets would only be allowed to vary premiums based on age (within a 3:1 ratio for adults), tobacco use (within a 1.5:1 ratio and subject to wellness program requirements in the small group market), family size, and geography.  All other factors – such as pre-existing conditions, health status, claims history, duration of coverage, gender, occupation, and small employer size and industry – would no longer be able to be used by insurance companies to increase the premiums for those seeking insurance.
But that's not all. Insurance companies make money by not providing health care, and they have figured out tons of ways to do endruns around market reforms. One of the ways insurance companies try to get around market reforms is to define the market themselves. That goes beyond just slicing and dicing small groups markets into smaller little groups. They simply define the higher risk populations as a separate market and rack up the premiums. Well, no more. The new rules will require insurance companies to spread the risks across the entire individual and/or small group market in a given state.
Health insurance issuers would be required to maintain a single statewide risk pool for each of their individual and small employer markets, unless a state chooses to merge the individual and small group pools into one pool.  Premiums and annual rate changes would be based on the health risk of the entire pool.  This provision prevents insurers from using separate insurance pools within markets to get around the market reforms and to charge people with greater health problems higher premiums by increasing their premiums at higher rates than other, healthier risk pools.
Combine these rules with the essential cost control measure in the Affordable Care Act: that insurers, in these individual and small group markets, must spend at least 80% of premium dollars on providing actual care, and you have a formula for true cost containment.

For anyone who is looking for ways to control costs within the health insurance system, this is how it's done. It starts with stopping insurance companies from gaming the system by slicing up the market to justify skyrocketing premiums. It starts with putting an end to letting insurers cherypick the healthiest, collect a hefty premium and then drop people when they get sick.

I am probably going to sound like a broken record now, but this is important. Health care reform wasn't the only thing the president accomplished in his first term, and it isn't the only thing we have protected by keeping him in office. But to me, there is nothing more important he, or any other president, could have delivered. Health care is not - should not be - a political pinata. It's easy to trash health reform (or run around claiming it isn't enough) until you need it.

Nobody should have to live in fear that if they lose their job, they will not be able afford their kid's chemo. No one should have to fight with their insurance company while they are fighting cancer or AIDS. And no one should have to be priced out of health care because insurance companies decide they won't be able to milk enough profit off of you. You shouldn't have to pay more because you're a woman, or because you work in construction, or because you work for (or own) a small business. You shouldn't have to be the victim of health insurance companies deciding that you and your neighbor, despite purchasing the same plan from the same insurance company, aren't in the "same risk market."

Whether you think of yourself as a health care consumer or a citizen or a patient, these are common sense reforms. These are a matter of simple fairness. But getting here wasn't simple. It took a tough fight. A fight against the status quo of insurance companies, a fight against a riled-up, obstructionist political opposition, and a fight against so-called advocates who did not think twice before being willing to throw all this out to chase after illusions of utopia.

Getting here wasn't simple. But we're here. Thanks to the grit, courage, conviction and stick-to-itiveness of a president, we're here. Thanks to the countless pragmatists who made the choice to make a change over waiting for utopia, we are here. Thanks to the president's political allies in Congress, many of whom lost their jobs because of their courage, we are here.

And we're not going back.