Brokers take issue with Sebelius statement on health reform

In a move that probably surprised no one at all, Health and Human Services Secretary Kathleen Sebelius released a lengthy statement on the anniversary of the Patient Protection and Affordable Care Act this week—that just happened to coincide with the Supreme Court taking up the very constitutionality of that legislation.

Among other things, Sebelius said in the statement, “It’s helping seniors. New data shows that more than 5.1 million seniors and people with disabilities on Medicare saved over $3.2 billion on prescription drugs because of the health care law. That’s about $635 per person in average savings and money back in the pockets of America’s seniors."

She also pointed out its positive effects on women and young adults. "Because of the Affordable Care Act, 45.1 million women – including 20.4 million women with private health insurance and 24.7 million women with Medicare – can receive recommended preventive services without having to pay a co-pay or deductible. Important preventive services, like mammograms and Pap smears are free. And in 2014, insurance companies can no longer charge women higher premiums just because they’re women."

Because of the law, 2.5 million more young people have health insurance coverage, Sebelius said.

“It’s reducing premiums and lowering costs. Your insurance company can no longer raise your premiums by double digits without justification. And the law helps you get the most from their premium dollar: The health care law requires that premium dollars must be spent primarily on health care, not administrative costs like overhead or CEO salaries. So far, an estimated 74.8 million people have been protected by this new requirement," she said.

“And the law is protecting Americans with pre-existing conditions such as cancer or asthma. Already nearly 49,000 people have enrolled in the Pre-Existing Condition Insurance Plan, and it is now illegal for children under 19 to be denied coverage due to a pre-existing condition," Sebelius said. "The law also eliminated lifetime dollar limits on coverage for over 105 million Americans—they no longer have to live with the fear that if an illness strikes, they could max out their health coverage.”

The secretary failed to mention the death of the CLASS Act, a fundamental cost-saving component of the law, the hundreds of MLR waivers the department’s been handing out the last two years or the glacial pace at which the state-level exchanges are taking shape.

At least one broker – in Massachusetts, no less – took issue with her statement.

“My first comment is with regards to her choice of the word ‘free’ when referencing women’s preventive services such as Pap smears and mammograms," said Robert P. Miller with Pegaesus Advisors in Woburn, Mass. “In reality they are not free and the cost is merely shifted to another service, a redistribution of costs. The people who provide these services still get paid, and the equipment must be purchased and serviced. How can these services suddenly be free?

Young adults now have coverage. Whereas before they either skipped coverage or actually purchased their own coverage, they now can stay on their parents’ family plan. So instead of receiving premium dollars for healthy young people, the carriers still cover them but receive no additional premium for doing such."

“No double digit increases can occur without justification. My carriers must be quite busy justifying their double digit increases this year. Massachusetts has been a guarantee issue state for many years. There is nothing wrong with that, but it will drive up costs in states where they must now comply with the law," Miller said.

“Come now, Madame Secretary, there is no such thing as a free lunch.”

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