- You should also blame the industries who lobbied to force you to buy insurance for their products.
- Obamacare outlaws insurance plans that don't meet new standards set by the HHS.
- All individual plans and small-group plans must also meet Obamacare’s set of “Essential Health Benefits.”
- Congress gave HHS broad discretion on exactly what sort of coverage to mandate in those 10 areas.
If your health insurance plan was cancelled, or if your premiums jump more than normal, you shouldn't just blame President Obama and Congress. You should also blame the industries who lobbied to force you to buy insurance for their products.
Obamacare outlaws insurance plans that don't meet new standards set by the Department of Health and Human Services. For instance, insurance plans often have out-of-pocket maximums – Obamacare won’t allow an out-of-pocket max higher than $12,700.
All individual plans and small-group plans (that is, basically all insurance plans not provided by a large employer) must also meet Obamacare’s set of “Essential Health Benefits.” The law specifies 10 areas every insurance plan must cover, including emergency services, hospitalization, maternity care, prescription drugs and preventive care.
Congress gave HHS broad discretion on exactly what sort of coverage to mandate in those 10 areas. HHS in turn gave states broad discretion — each state would base its Essential Health Benefits on a “benchmark” plan sold in that state. To simplify a bit: Every health plan sold in a state must be at least as comprehensive as the most popular health plan sold in the state.
If your insurance plan didn’t cover hospitalization as thoroughly as your state’s benchmark plan, your plan is now illegal.
As a result, many low-premium plans are now illegal. This was part of the point of Obamacare. As liberal writer Henry Aaron put it in the New York Daily News: “Obamacare is removing insurance products from the market that are bad for your health.”
But in politics, never assume rules are written simply with the public good in mind. Almost always, the rules ended up how they ended up because special interests with insider access were able to tweak them. So it is with the coverage that Obamacare mandates.
HHS's first proposed rule on prescription drug coverage required insurers to cover at least one drug in every class of drug — in short, one drug for cholesterol, one drug for epilepsy, etc. Drugmakers wanted more. Led by the lobby group Pharmaceutical Research and Manufacturers of America, the industry argued that HHS should require all insurers to not only cover one drug per class, but also to match the benchmark plan in their state.
And Big Pharma won. HHS’s final rule, issued in late November 2012, required all plans to cover “the greater of” one drug per class or whatever the state’s benchmark plan covers.
So if your insurance plan met state mandates and covered one or more drug per class, it still might be illegal if it didn’t cover as much as the “benchmark” insurance plan. PhRMA and its member companies like Eli Lilly and Pfizer care about this in part because more bare-bones prescription drug plans may cover only generic drugs and not the more costly name brand drugs covered by the benchmark plans.
The more comprehensive the drug coverage, the more expensive the premiums — thus the cancellation of many low-premium plans.
This wasn’t the only win for drugmakers in Obamacare, of course. The industry famously got a prime seat at the drafting table of Obamacare (and thus a slew of subsidies and favors) in exchange for millions of dollars in ads supporting the legislation — and ads backing the Democratic senators endangered by voting for it. For all the Big Pharma goodies the White House and Senate Democrats packed into the text of the bill, the industry got even more favors as HHS implemented the law.
Most notoriously, HHS required all employer-sponsored health insurance to cover 100 percent of the cost of all prescription birth control.
If you wanted to buy insurance with basic drug coverage or a plan that didn’t cover contraception, you’re out of luck. You have to pay for it anyway — to the benefit of Big Pharma.
The drug industry spent more on lobbying in 2009 and 2010 than any other industry. Sally Susman, who oversaw Pfizer’s lobbying shop, was a top Obama bundler in 2008 and 2012. After the law passed, drug companies hired up plenty of the staffers who shaped the bill from both Congress and the White House.
So the more-comprehensive, more-expensive insurance Obama is forcing you to buy may or may not be better for you. But it's certainly better for the drugmakers.