How the Health Insurance Industry Will Circumvent the New Reforms

The Health Insurance Industry has proven itself to be the most heartless group of organizations in America. For decades, they’ve been denying coverage to those who need it most, blocking treatments in order to cut costs, taking more, and giving less over time. Does anyone believe they are going to change overnight? Without a public option or a percentage cap on profit margins, the Industry will find creative ways to circumvent the new rules.

Taking a look at the recent Credit Card Reforms enacted by Congress, we already see a template for what will happen with health insurance reform. When Credit Card Reform was passed, Congress gave a compliance date instead of requiring the changes to be implemented immediately. As a result, the credit card companies immediately began raising interest rates, raising fees, and completely cutting off people’s lines of credit, presumably those who would’ve been most protected by the changes. Welcome to reform in the age of corporate nepotism.

The Industry has already promised to raise rates. We know they will do this because they have a mandate from Wall Street to keep those profits up. The pressure to keep profits up is so enormous that HealthSouth executives committed capital crime, cooking their books for several years just to keep their stock prices from dropping.

The biggest change everyone’s been talking about is the new rule that insurance companies will no longer be able to deny coverage to those people who have pre-existing conditions. However, there is nothing in the bill that says they have to include every doctor into their PPO networks of providers and facilities. This is where the nuanced discrimination will happen. They cannot deny coverage for pre-existing conditions, but they can exclude top specialists or facilities that treat those conditions from their networks. Furthermore, there is no price cap so even if they offer coverage, it will be so expensive, they still cannot afford it.

Another new rule the Industry will have to face is the lifting of lifetime and annual caps. They will have a work-around for this. At this very minute there are Industry lawyers writing new rules of coverage in anticipation of reform. There will be new hoops to jump through before you can get that surgery or that expensive drug. We will see more bureaucratic intervention and delay tactics and again with the lower reimbursement rates for out-of-network specialists and facilities being worked into the new rules.

There will be probably be a compliance date written into the bill, just like in the Credit Card Reform bill. I’d bet the house that every single day leading up that date will be spent trying make as much profit as they can, while there are still no rules. People will be dropped. Rates will be raised. Coverage will be lowered.

Of course a Public Option would prevent this from happening, because it would force the Industry to compete. A cap on profit margins would also prevent this because they could only keep a small percentage of what they take in. Some advocate for a 7% cap. Personally, I’d be satisfied with a 10% cap with a limit on executive pay. I’m not talking about a doomsday scenario, here. I’m talking about what is likely to happen if Congress doesn’t get it right. The Republicans ironically pegged it when they said, “The American people want Congress to get it right”.