Definition of Essential Health Benefits Good Politics, but Poor Policy

In an opinion piece for The Washington Post, Robert J. Samuelson discusses the extent to which the 2010 Patient Protection and Affordable Care Act may prove to be a political liability for President Obama in the 2010 presidential election. His discussion is based on what Samuelson calls Health and Human Services Secretary Kathleen Sebelius’ efforts to make the health care reform law “disappear” for the president. In particular, Samuelson cites Sebelius’ decision to pass the final decision on the definition of “essential health benefits” for minimum health insurance to the states.

Under the provisions of the act, all Americans will be legally required to carry “acceptable” health insurance by 2014. The specific meaning of that language, however, is left up to the Health and Human Services secretary, and its implications are enormous. By 2016, the Kaiser Family Foundation estimates that 35 million Americans will receive subsidized health insurance through Medicaid or via policies purchased through state insurance exchanges. The “essential health benefits” definition will apply to that coverage, as well as to unsubsidized policies purchased by individuals or in small-group insurance markets for pools of employees of 100 workers or less.

The conundrum is the same one that has plagued health insurance for decades. The broader the provisions of the policy, the more expensive the premium, which, in this case, would escalate government spending levels at a time when trimming the budget and resolving debt is central to the national debate. Sebelius essentially, as Samuelson termed it, “ducked this question.” Each state will define essential health benefits based on its own existing policies. Whether or not this adheres to the letter of the health care law is highly questionable, and it certainly does not provide for a comprehensible and enforceable national standard.

In immediate political terms, however, the decision could deflect a great deal of Republican criticism away from the President who has had to contend with charges that his reforms create a health care strait jacket that forces “one size fits all” coverage on all Americans. In dealing with the conservative opposition, it’s hard to politically err on the side of states rights. This historic pull between federal and state prerogatives, however, beyond directly contributing to a civil war, most normally creates the one element that already exists in over-abundance in the health care debate — confusion.

Under the present decision then, the states will have to make a choice on the “essential health benefits” definition based on one of ten existing insurance plans in the state. Samuelson quotes an example of how the directive explains the available choices, “The largest plan by enrollment in any of the three largest small group insurance products in the state’s small group market.” That alone proves that what is good politics for the president in terms of the coming election is not good policy for the average American. Of course, the whole thing could be rendered a moot point if, in March 2012, the Supreme Court renders that portion of the Affordable Health Care act which creates mandatory health insurance unconstitutional.

The only thing that’s clear about about the ongoing health care debate is that it will become more confusing, not less so between now and November, when the entire matter could fall to a completely new presidential administration.