UnitedHealth's spurious generosity
UnitedHealthcare Voluntarily Extends Important Health Reform Protections Regardless of Upcoming Rulings by Supreme Court
June 11, 2012
UnitedHealthcare, a UnitedHealth Group (NYSE: UNH) company, will continue to offer important health care insurance protections that were included in the 2010 health care reform law, no matter how the U.S. Supreme Court rules in cases currently pending before the Court.
UnitedHealthcare will continue provisions related to coverage of preventive health care services, coverage of dependents up to age 26, lifetime policy limits, rescissions and appeals.
"The protections we are voluntarily extending are good for people's health, promote broader access to quality care and contribute to helping control rising health care costs. These provisions make sense for the people we serve, and it is important to ensure they know these provisions will continue," said Stephen J. Hemsley, president and CEO of UnitedHealth Group. "These provisions are compatible with our mission and continue our operating practices."
These protections are effective immediately, and will remain available to current and future customers and members. The company is not establishing any sunset provisions.
UnitedHealthcare recognizes the value of coverage for children up to age 19 with pre-existing conditions. One company acting alone cannot take that step, so UnitedHealthcare is committed to working with all other participants in the health care system to sustain that coverage.
The specific provisions being extended by UnitedHealthcare are:
Preventive Health Care Services without Co-Pays
Providing Dependent Coverage Up to Age 26
Eliminating Lifetime Limits
No Rescissions, Except for Fraud
Providing Clear and Timely Options for Appeals
By Don McCanne, MD
You have to hand it to UnitedHealth's public relations department. No matter how the Supreme Court rules on the Affordable Care Act (ACA), this press release establishes UnitedHealth as a leader in patient advocacy, or at least it would seem so.
If ACA is upheld, this press release means nothing since these are already requirements of the Act. If ACA is struck down, these are very popular measures that are quite inexpensive and thus will not drive up premiums to non-competitive levels. The most expensive measure is the coverage of dependents up to age 26, but that adds only about one percent to the premiums. Besides, other insurers will likely follow suit in order to more effectively market to a greater number of young, healthy families. So no matter what happens, UnitedHealth takes credit for taking the lead.
UnitedHealth used one example of a policy that they will not follow, indicating that they will not unilaterally provide patients with some of the more important protections required in ACA. They are correct when they say that they cannot cover children with preexisting conditions unless the entire industry cooperates in distributing those higher cost risks. If one insurer generously accepts those risks, then their costs would skyrocket and they would be forced out of the market by the death spiral of insurance premiums.
UnitedHealth has remained silent on some of the more important requirements not yet in effect that could be overturned by the Supreme Court decision. Insuring preexisting conditions for adults in addition to children, guaranteeing issue of coverage to all individuals regardless of projected costs, and setting premiums based on community rating - driving up premiums for lower-cost, healthier patients - are more significant measures that could impair their competitiveness if they acted unilaterally. We won't see these policy changes unless ACA is upheld and all insurers are required to comply.
Also they are silent on keeping administrative costs and profits down to a level that complies with the medical loss ratios dictated by ACA. Turn ACA over then there would be no federal requirement to comply, though that would still be the prerogative of the states. States under the political control of anti-government, free-market advocates would likely leave medical loss ratios to the insurers and their Wall Street promoters (where low medical loss ratios - spending less on patients- is a business activity that is rewarded with higher stock valuations).
UnitedHealth's "generosity" in conceding the very modest positions they listed in their release applies only to the individual and small group markets - a relatively small proportion of their business. Most plans for large employers will be grandfathered, and most of the ACA provisions will not apply - certainly not the requirements specific to the exchanges since large employer plans will not be included in the state exchanges. Also, many large employers are self-insured, and for them UnitedHealth provides only administrative functions, while specific benefits are determined by the employers.
We can't blame UnitedHealth for trying to protect its market position, but we can blame our elected representatives for adopting policies that perpetuate and expand an industry which must comply with market demands for lower prices - a demand that can be met only by strategic decisions to avoid market segments such as children who are ill.
Is that what America is about? Let's take care of the kids, even up to age 26, but not the sick ones? What other country does that?