The Obama administration said that it now will allow each state to specify the benefits provided by insurers. In other words, the federal government will not define a single uniform set of “essential health benefits”. This is summarized quite well in this NYT article but I will give you the high points here. Both supporters and critics of the law don’t know what to do with this move. They both have points. The Democrats wanted one big uniform security blanket that covers almost everything. This changes that. The Republicans think more and more mandates (from interest groups and lawyers) will appear that will bog down each state’s benefits. That will make it more expensive. Wow, this is getting crazy.
Here is how the government is explaining this. The new law lists 10 categories of “essential health benefits” that must be provided by insurance offered in the individual and small-group markets, starting in January 2014. Each state would designate an existing health insurance plan as a benchmark and the benefits provided by that plan would be deemed essential. Then all insurers would have to provide benefits of the same or greater value See how simple it is? Well, this certainly isn’t a single-payer system or even socialized medicine. It is some type of “Frankencare” trying to make everyone happy or unhappy equally. I actually think they should throw in the ability for people to shop for health insurance across state lines. Heck, if we are going to make thinks murkier let’s go all the way. Maybe, just maybe, real competition will come from this and then prices could come down. Or, more realistically, that list of 10 categories of essential health benefits will expand tenfold like everything else in the government and this thing will burst into flames. This is going to be a very interesting policy to watch.