The Most Important Amendments You Have Not Heard About

Baucus' bill creates a new ombudsman office that will “act as a consumer advocate.” This is a good idea. The problem is that Baucus makes the new ombudsman's office nearly worthless by dramatically restricting individual ability seek help with their insurance companies. According to Baucus' mark:

Policyholders whose health insurers have rejected claims and who have exhausted internal appeals would be able to access the ombudsman office for assistance.”

This is a huge problem just begging to be abused. You will be forbidden to get help until you have exhausted all internal appeals. This will create a strong finance incentive for insurance companies to make the appeal process a long painful bureaucratic nightmare. The more complex and time consuming the appeal process the better for the insurance company because it would deny the patient access to professional consumer advocate assistance.

In affect this will replace the problems of “recession” and “pre-existing condition” with the new problem of “death delay.” The hope is that the patient (who would normally be very sick or dealing with a severe medical issue) will either give up in frustration or die before the many complicate internal appeals are exhausted.

Fortunately, Senator Bingaman and Senator Menedez have offer different amendments to help improve the problem by allowing individual to seek help from the ombudsman's office before exhausting internal appeals.

Menedez C#7 is the better of the two amendments and is described as:

Allow policyholders to access the ombudsman for assistance in pursuing internal appeals with their health plans.

Bingaman C#5 is weaker but would be a much needed improvement. It is described as:

This amendment would authorize a policy holder to access ombudsman services: (1) if their internal appeal lasts more than three months or (2) if their appeal involves a life threatening issue.

All the consumer protections in the world are worthless unless there is a strong regulator and consumer advocate to enforce them. As it is currently written the ombudsman's office is a massive gift to the for-profit insurance companies and would encourage bad behavior.

Of course, If Baucus' bill gave people the option of buying a non-profit insurance plan overseen by the government (a public option), they would not need to worry about protecting themselves from a for-profit insurance industry which makes money by denying people's claims.

Obama Stops Democrats From Committing Political Suicide

The lack of the public option, insufficient subsidies, a disastrous “free rider” provision, a large individual mandate, junk insurance options, etc... These are all very bad ideas in Baucus' framework. But the single most politically disastrous part of Baucus' plan is the timeline.

According to Baucus' framework basically nothing happens until 2013 at the earliest. All the consumer protections (ending pre-existing conditions, community ratings, ending rescission) do not fully kick in for everyone until 2022. That is right, 2022. According to the draft, the new consumer protections start for the individual market in 2013. They are not mandated in the small group market (companies with 1-50 employees) until 2018 and not mandated for the larger group market (51-100 employees) until 2022.

Under Baucus' bill going into both the 2010 election and the 2012 election millions of Americans would still be uninsured, pre-existing conditions would still be used by insurance companies to screw Americans. The Democrats would face two elections without a single thing to show for their health care reform efforts. That is pure political suicide.

In the speech Obama promised two very important things last night. He promised that most of the important consumer protections would go into effect quickly: “As soon as I sign this bill, it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it the most.”

He also promised some form of catastrophic insurance until the real reform starts in 2013: “In the meantime, for those Americans who can't get insurance today because they have preexisting medical conditions, we will immediately offer low-cost coverage that will protect you against financial ruin if you become seriously ill.”

This will give Democrats at least something tangible to show voters between now and 2013. I still think it is a very bad idea to delay many of the important reforms for so many years, but at least there will be some noticeable improvements to brag about in the mean time.