Obama, the States' Rights President

Last week, Wendell Potter posted an op-ed about the Obama administration's pending decision on the minimum health benefits insurance companies will be required to cover under the Affordable Care Act (ACA). The ACA says that ten categories of benefits must be covered: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance abuse services; prescription drugs; rehabilitative and habilitative services; laboratory services; preventive medicine; and pediatric services. However, the bill left it up to the administration to specify exactly what services must be included within each category. Consumer groups were hoping for a specific and comprehensive list of benefits. Insurance companies and employers who pay for part of their employees' health insurance argued that “affordability” should be the primary consideration. They lobbied to make the list as narrow as possible. Guess which group had the most money to spend on lobbying? Do I need to tell you the outcome?

The decision was announced by Kathleen Sibelius, Secretary of Health and Human Services, in a 15-page “guidance” released on December 16. In a sense, the President decided not to decide. The list of essential benefits will be left up to the individual states.  Each state is supposed to choose an existing health insurance plan as a benchmark. All insurers are required to either provide the same benefits as the benchmark plan, or coverage of equal or greater value.

States have wide latitude in selecting a benchmark plan. It could be any one of the following:

• One of the three largest health plans for state employees.
• One of the three largest small group plans operating in the state.
• The largest commercial health maintence organization in the state.
• One of the three largest health plans for federal employees.

Complicating the states' decisions is the fact that some of the eligible benchmark plans do not provide coverage in all ten required categories. It's not clear how that problem will be resolved.

The decision was accompanied by a flurry of states' rights rhetoric straight out of the Elephant playbook. Sibelius said, “We want to give the states the flexibility to choose an essential health benefits package right for them.”

Although the outcome of these state-level deliberations is uncertain, I think we can make some predictions with confidence. First, the decision ensures that basic health insurance will vary a great deal from one state to another, with resulting inequality of health outcomes. Secondly, since most of the possible benchmarks are from within the state, states whose residents already have comprehensive coverage are likely to continue to have it, while states whose citizens are underinsured will continue to underinsure them. Finally, the result of this decision will probably be poorer health care for U. S. citizens generally than had the federal government made the decision. I say this for several reasons:

• The states will have to pay part of the expenses of any expanded health care coverage. Even blue states like New York, California and Illinois are strapped for cash right now.
• The Elephant Party controls most of the state governorships (29, compared to 20 Jackasses and one Independent). Some Elephant Attorneys General are participating in lawsuits to have the ACA declared unconstitutional. Among the states where we can expect hostility to the ACA is Pennsylvania, where the Elephants control all three branches of government and typically refuse to even consult with the Jackasses on pending legislation.
• This decision will lead to a predictable stampede. Health insurance and Chamber of Commerce lobbyists will descend on our state capitols wheeling barrows of cash into the waiting arms of our public servants. In fact, this may be the greatest fundraising bonanza for state legislators in the history of the country. Public interest  groups will be even less able to compete than they were at the federal level.

For the Obama administration, this decision represents yet another concession to corporate interests that opposed health care reform. It comes in the wake of their decision in October to ditch those provisions of the ACA that promised long term care insurance. It is yet another in the seemingly endless series of broken promises by the President who promised hope and change.

David Steil, the President of Health Care for All—PA, has suggested that, because states' geographies and cultures are different, states should determine the health care coverage their citizens receive. I disagree. States have less leverage than the federal government to bargain effectively with hospitals, insurance and drug companies. More importantly, the likely outcome of state variability is that those Americans who have the greatest need for expanded health care coverage are least likely to get it. If you live in a progressive state, you might be fairly well insured against most health emergencies, but if you live in Texas, now may be a good time to look into that cemetery plot you've been putting off buying.  (A new Harvard study has estimated that 45,000 Americans die each year from lack of adequate health insurance.)

Anyone who favors the policy of having states define essential health care benefits must answer this question: What exactly is it about the “cultures” of states like Alabama, Mississippi and Texas that makes them want less adequate health care coverage, especially for their poorest citizens, than states like Minnesota, Oregon and Vermont? Are these cultural differences that deserve our respect?